ETHEKWINI NEWS FLASH
 
FOR IMMEDIATE RELEASE
 
31 May 2018
 
Inaugural State of the City Address by EThekwini Mayor Highlights Development Taking Place in EThekwini
 
The first state of the City address, held today, 31 May, at the Durban City Hall started on a positive note as eThekwini Mayor Zandile Gumede led a procession through the streets of Durban with Speaker William Mapena and City Manager Sipho Nzuza accompanied by the Metro Police Brass Band.
 
The Full Council meeting also saw the tabling and adoption of the 2018/19 budget.
 
In her address, Mayor Gumede said this was a “new day and dawn for the Municipality.”
 
“We are taking this City, province and nation to greater heights. As we celebrate the centenary of the birth of one of the greatest leaders this world has ever known, Nelson Rolihlahla Mandela, we draw his wisdom. As a caring City - we focus all our efforts on improving the lives of our residents, especially the poor.”
 
She said to demonstrate the City leadership’s commitment to addressing all forms of violence, including sexual harassment and trafficking of women and girls in line with the Sustainable Development Goal 5, African mayors under her leadership as the Chair of the African Forum for Urban Safety resolved that in their next forum they will focus on Women Safety in Cities.
 
“This will be an opportune time to share lessons and approaches to address violence against women. It is my belief that safe cities for women are safe cities for all. I will soon share with all of you our plans and preparations for the coming Learning Exchange Programme including build-up campaigns that we will be doing as the mayors of Africa.”
 
Mayor Gumede said there was a concerted effort to clean up the inner city. She said this includes removing all illegal signs and billboards and clearing crime and grime.
 
“We have already demonstrated this successfully in cleaning up Isiphingo. We are going to address the issue of problem buildings in the City. We will turn these problem buildings into social housing, affordable and gap housing as well as students’ residences, business or for commercial usage and hotels.”
 
ROOTING OUT CORRUPTION
 
She also touched on corruption saying that they will clamp down on those “stealing from the poor”.
 
“When we deal with corruption, we will name and shame all those who steal from the poor.
 
We are prepared to fight corruption whenever it raises its head. We have institutional mechanisms such as the City Integrity and Investigations Unit (CIIU), the Municipal Public Accounts Committee, the Ethics committee as well as an independent Audit Committee which are in place to provide oversight of financial management and integrity of the Municipality. Legislation such as the Municipal Finance Management Act also provides us with guidance in this regard,” she said.
 
“Anyone who transgresses good business principles in the City, be it a member of the executive, an ordinary councillor, a member of our staff or private companies trading with the City, they will be dealt with using the full force of the law.”
 
Mayor Gumede said CIIU has completed 326 investigations over the past financial year.
 
“A new Disciplinary Committee and a Blacklisting Committee has also been formed to deter fraud and corruption. Already we have blacklisted 42 companies who are prevented from doing business with the City for five years.”
 
UNQUALIFIED AUDIT
 
Mayor Gumede was pleased to announce that eThekwini Municipality has once again received an unqualified audit while the two Municipal entities, the Inkosi Albert Luthuli International Convention Centre and uShaka Marine World, have both received clean audit outcomes for the 2017/18 financial year.
 
She said the Auditor General report for eThekwini Municipality reflected that the number of findings was significantly reduced by 60 percent with no major or material issues.
 
“We have implemented a zero-tolerance approach to non-compliance and an intense focus and commitment towards good governance.
 
Our City has been rated as the most liveable city in South Africa. We are ahead of Cape Town and Johannesburg. People find our City, our environment and people friendly and warm. Durban was also named by Brand SA, as the City with the most improved image. This proves that we are on the right track and I am very optimistic about the future of our City,” Mayor Gumede added.
 
2018/19 BUDGET
 
Mayor Gumede said the budget being tabled today is set against the backdrop of slow economic growth where tough choices had to be made to achieve the development outcomes of the City. She said economic challenges will continue to pressurise municipal revenue generation and collections in 2018/19 which is why a conservative approach has been adopted when projecting expected revenues and receipts.
 
Providing information from StatsSA, she said a report stated that the City’s quarterly unemployment rate decreased to 21.9 percent during the fourth quarter of 2017 after 23.3 percent in the 3rd quarter with approximately 1.9 million people living below the poverty line in 2017 in the eThekwini Metropolitan area.
 
“We need to work harder to address this challenge,” she said. “Therefore, I am proud to present to you today our balanced and fully funded budget which will ensure delivery in terms of the needs identified in our Integrated Development Plan (IDP) as well as to ensure the financial viability and sustainability of the Municipality. We have ensured that there is a good balance between economic, social and rehabilitation expenditure.”
 
Mayor Gumede said the total budget is R45.8 billion which comprises of an operating budget of R38.7 billion and a capital budget of R7.1 billion.
 
She said despite increasingly challenging circumstances, service delivery will continue to be sustained through this budget by reprioritising expenditure to ensure key objectives are achieved.
 
“Provisions in this medium term budget continue to support government’s commitment to broadening service delivery and expanding investment in infrastructure,” Mayor Gumede added.
 
“This budget has been developed to contribute to the Municipality achieving the strategic objectives of the IDP. The 2018/2019 Medium Term Revenue Expenditure Framework (MTREF) is informed by the Municipality’s long -term financial strategy with emphasis on affordability and long-term sustainability.”
 
TARIFF INCREASES
 
Rates: Residential properties valued up to R230 000 will be exempt from paying rates. All other properties valued above R230 000, no rates will be charged on the first R120 000. For pensioners, child-headed households, disability grantees and the medically boarded, in addition to the above exemptions, a rebate not exceeding R4 364 has been approved.
 
Water: The first 6kl of water is free to households with property value under R250 000.
 
Electricity: The first 50kwh of electricity is free to residents using less than 150kwh per month in Eskom reticulated areas. The first 65kwh of electricity is free to residents using less than 150kwh per month in eThekwini reticulated areas.
 
The tariff increases are as follows:
 
• Property Rates will increase by 6.9 percent, Electricity will increase by 6.84 percent while Eskom increases by 7.32 percent.
 
• Water will increase by 15 percent for domestic and 15.5 percent for business while the Umgeni Water Board increase is set as 13.7 percent.
 
• Refuse and Sanitation will increase by 9.9 percent.
 
Mayor Gumede said it was important to note that National Treasury has undertaken a benchmarking exercise of cities with the results showing that of all the big metros, eThekwini has the lowest monthly bill for middle income households.
 
She said the main driving costs relate to bulk purchases of water and electricity which make up R11.2 billion or 32.9 percent of the operating budget while staff related costs of R10.4 billion or 30.5 percent and contracted services which make up R5.08 billion or 14.9 percent of the operating budget. These three costs make up almost 80 percent of the budget.
 
“Unfortunately, we have little control over the bulk purchase costs and salary related costs as these are determined outside of the Municipality. NERSA and Eskom determine the electricity increase, Umgeni Water Board determines the water increase and the South African Local Government Association together with the labour unions determine the salary increase,” she elaborated.
 
AUSTERITY MEASURES
 
Mayor Gumede said they remain committed to reducing costs and ensuring value for money for ratepayers and have implemented numerous austerity measures. Some of these measures include:
 
• Utilisation of vehicles being closely monitored. Under-utilised vehicles being removed and pooled. Unauthorised use of vehicles is also being monitored;
 
• Cost benefit analysis being done in terms of lease versus purchase, as well as repair versus replacement;
• Fuel, overtime, security costs, catering and consultant costs are some of the costs that are being closely monitored;
• Benchmarking of costs undertaken by Management Services. SABS standards also being used;
• Productivity analysis to include value for money and staff redeployment;
• All travel being closely monitored with approval by the City Manager and;
• Cutting catering costs and T-shirts budget.
 
REVENUE
 
Mayor Gumede said the total revenue is R38.7 billion. The major sources of revenue are as follows:
 
• R13.1 billion or 34 percent from Electricity;
• R9.2 billion or 24 percent from Grants and Subsidies;
• R7.4 billion or 19 percent from Property Rates and;
• R4.4 billion or 11.4 percent from Water.
 
These four sources of income make up 88.4 percent of the total revenue, she said.
 
“The Municipality is committed to maintaining our excellent cash collection rate and liquidity. We have a strategy in place to maximise collections and ensure revenue completeness.”
 
JOB CREATION
 
She also touched on job creation in the City saying this budget’s key focus has been job creation.
 
“The year of 2018 is dedicated to jobs, unity and renewal. We have several programmes, including the Extended Public Works Programme (EPWP), which focuses on vulnerable groups especially women, youth and the disabled. We also have several catalytic projects, in particular the Go!Durban project, which will create corridors with nodal development, mixed use and densification. We are committed to job creation. We will be able to achieve our vision by working with private and public sector.
 
She said the City has created work opportunities. This includes 200 new Metro Police recruits starting training tomorrow, on 1 June.
Other opportunities include:
 
• 1 389 plumbing contractors to undertake water related services;
• 1 500 caretakers employed at ablution facilities with a further 50 to be employed;
• 366 community based contractors employing about 1 770 people for refuse removal services;
• 13 graduate engineers employed under the water mentorship programme and,
• 140 community based contractors utilised in the roll out of rural water and sanitation projects.
 
Further job creation through funding includes:
 
• The EPWP grant of R75.3 million creating an estimated 25 855 work opportunities;
• Zibambele Poverty Alleviation (R95.2 million) with over 6 500 jobs created;
• Sihlanzimvelo Stream Cleaning (R38.5 million) with over 500 jobs created;
• Vulnerable groups will be assisted through R22m provided;
• R107.8 million towards various youth skills development programs and;
• 85 community gardens through funding of R33.6 million. However this figure is expected to increase once planning for the Agripark is completed.
 
CATALYTIC PROJECTS
 
A highlight of the State of the City Address included the numerous catalytic projects underway across eThekwini. Mayor Gumede said they would continue to attract big business to the City and making Durban a premier investment destination.
 
“We are working with big business and we have about 25 catalytic projects which create investment, employment and business opportunities. We recently did a sod turning ceremony at the Point Waterfront promenade. The R300 million Beachfront promenade extension is a catalyst to the R35 billion Point Waterfront development to be undertaken in three phases over five to ten years. This project will unlock R35 billion development, R200 million annual rates revenue, 11 000 jobs and about 7 000 permanent jobs.”
 
Meanwhile, Go Durban! is set to provide people with cheaper, greener, more reliable and faster means of transport, thus improving their quality of life.
 
“In addition, we see the project as a stimulating nodal development and densification with mixed use leading to more economic development and job creation which will help address unemployment and inequality. Most importantly, it will help address the apartheid era spatial planning of the City that we have inherited. The project has a total investment value of R63 billion and will create 17 335 construction jobs and 1 659 permanent jobs,” said Mayor Gumede.
 
On radical economic transformation she said: “We are going ahead with our radical economic transformation programme. We will unbundle opportunities for the benefit of local contractors, black professionals and black business in general, and Africans in particular. We must all work together for the success of this programme. We will be building capacitating small business through our incubation programme. We have identified those areas that will be lucrative for the economic transformation. We have set aside R5 million for this incubation project.
 
We are also reviewing the City’s Economic Growth and Job-creation Strategy this year where we will devise creative ways in which to promote Durban as an ideal investor location for businesses.”
 
TOWNSHIP DEVELOPMENT
 
The City will continue to move forward with projects promoting township development, the audience heard.
 
“Yesterday we were in uMlazi for a sod turning ceremony at Sbusiso Mdakane Road which is being upgraded. Tomorrow, 1 June we are going back to do another sod turning ceremony at uMlazi Station where a flyover will be built,” said Mayor Gumede.
 
In true transparency, she also touched on the challenges facing the City including project stoppages, the effect of rapid urbanisation, land invasion and climate change.
 
She also expressed some concern with the RMS billing system saying in isolated cases a few residents received higher bills and were unable to pay.
 
“This has concerned us and we are investigating the system. Officials from key service delivery departments have been going out to malls across the City for residents to have their bills concerns addressed. We will also be introducing a new debt collection system known as 80/20. If you are in arrears for electricity, the City will install a prepaid meter and allow you pay the outstanding debt in instalments. We will announce soon with more details on this new system,” Mayor Gumede said.
 
To address some issues raised by communities a Mayoral Prioritisation Committee will be formed that will look into prioritising issues and projects. She said the committee will align with the Manifesto, IDP and Budget.
 
Also in the budget are blocksums totalling approximately R4 billion over the MTREF period, which covers Electricity, Water, Sanitation, Solid Waste, Roads, Housing Interim Services, Health, ETA, Parks and Recreation.
 
“Furthermore, zonal blocksums of approximately R1 billion over the MTREF period have been set aside for ward priorities. This will be used to address concerns relating to pedestrian bridges, traffic calming measures, health hazards, sidewalks, passages and other critical issues, especially in under developed areas and will be prioritised taking into account the areas with the most need,” said Mayor Gumede.
 
She concluded her address, thanking the treasury team for producing a balanced and credible budget that we all can be proud of.
 
“We cannot do everything we want with the budget, but believe we have our priorities right and there is a good balance between social, economic and rehabilitative spends in this tabled budget,” she added.
 
Speaking on the adoption of the budget, Chairperson of the Community Services Committee Zama Sokhabase outlined the programmes that would be rolled out by her committee in the budget.
 
This included a number of empowerment programmes as well as a clinic and pool being built in previously disadvantaged communities.
 
Councillor of the Human Resources and Governance Committee Barbara Fortein said the Governance and Human Resources Committee fully supports the 2018/19 financial year’s Budget.
 
“Our Committee has a crucial role to play with regards to the budget process by ensuring that we contribute to the growth of the City, ensuring service delivery well as uplifting our residents. We remain steadfast in promoting the interests of vulnerable groups and ensuring effective communication and community participation,” she said, “I would like to congratulate Mayor Gumede as well as the City’s finance team, led by our fiscally competent City Manager Sipho Nzuza, on a pro-poor, balanced and sustainable budget. I am confident we will continue to work together to improve the lives of all residents, especially the poor,” said Councillor Fortein.
 
Councillor Mondli Mthembu, Chairperson of the Human Settlements and Infrastructure Committee welcomed the “well presented budget speech of the Mayor”.
 
“The budget presented today is balanced, it balances the needs of the poor as well as the needs of the middle and upper class. I also appreciate the centrality of radical economic transformation in the budget as well,” he said adding that the City was turning the tide regarding keeping Durban clean.
 
Councillor Mthembu acknowledged that while the City has experienced challenges, the leadership was working hard to deal with this. He said great progress has been made regarding keeping the City clean and commended the acting head of the Cleansing and Solid Waste Unit for the work done.
 
Councillor Mthembu also said radical economic transformation would be prioritised by amendments made to supply chain management policies with the radical economic transformation decrease in tender values from R30 million to R5 million to ensure greater inclusivity.
 
Deputy Mayor Fawzia Peer, who is also the chairperson of the Security and Emergency Services commended the Mayor for a balanced budget which speaks to the needs of the community. She said R10 million would be injected into the Disaster Management in the 2018/19 financial year which would see the staff component increase by 30 percent.
 
ENDS
 
Issued by the Mayoral Spokesperson, Mthunzi Gumede, 071 412 7701
 
Please read this confidentiality disclaimer: http://www.durban.gov.za/Pages/edisclaimer.aspx