ETHEKWINI NEWS FLASH
 
FOR IMMEDIATE RELEASE
 
30 October 2018
 
Executive Committee Decisions
 
CITY TO BORROW R1 BILLION TO FUND CAPITAL PROJECTS
 
The Executive Committee at a meeting held today, 30 October tabled a report outlining the process to issue a Request For Proposal (RFP) inviting tenders for the provision of long term debt finance for the amount of R1 billion to finance the Municipality’s Capital Budget for the financial year 2018/19.
 
The tabled report states that on 29 May 2018, Council approved the Capital Budget for the three year Medium Term Revenue and Expenditure Framework (MTREF) for R7.029 billion in 2018/19, R7.623 billion in 2019/20 and R7.747 billion for the 2020/21 financial year.
 
The report further states that the raising of external funding will be to ensure that critically needed expenditure continues and the service delivery programme is not disrupted or postponed.
 
The proposed brief timeline for the 2018/19 long term borrowing is;
 
• Advertise RFP on 1 November,
• Closing date for the RFP on 30 November,
• First report to the Executive Committee and Council in January 2019,
• Municipal Finance Management Act Section 46 requirements (advertise provincial and national treasuries and advertise Information Statement) in February 2019,
• Second report to the Executive Committee and Council in March 2019 and,
• Signing of loan agreement and relevant documentation as well as the Draw Down of Loan Funding in April/May 2019.
 
Deputy City Manager of Finance Krish Kumar told the Executive Committee that this was a loan budgeted for the 2018/19 financial year which was approved in the City’s budget earlier this year in May. This was the following through on the processes to acquire the loan, he said.
 
“This will not be the last time the Executive Committee will be hearing about the loan. Once it is advertised it will come back to the Committee in January and again in May. There is a need for this loan, if we don’t take it we will have to reduce capital expenditure. We only borrow for capital expenditure, nothing else,” he explained.
 
Kumar also touched on outstanding debt owed to the City saying “we are doing our best to collect outstanding debt”.
 
“We will continue to endeavour to improve on this. Our collection rates have improved since last year,” he said.
 
He added that the loan will be spent on infrastructure including upgrading substations and networks to ensure a stable supply of electricity to residents. He said growth in certain areas also necessitated the need to spend on water, electricity and sanitation infrastructure expenditure.
 
“This is what the loan will be spent on. We are trying to grow the economy and the rates base is not growing as much as we would like.
 
We are trying to grow the economy by attracting potential investors but we can’t do this without improved infrastructure,” he concluded.
 
EThekwini Mayor Zandile Gumede said the City was borrowing the loan in principle. She said the Executive Committee would be kept updated on the progress of acquiring the loan.
 
Chairperson of the Human Settlements and Infrastructure Committee Councillor Mondli Mthembu said Council approved the MTREF budget and it was clear the City had a shortfall of R1 billion.
 
“We resolved in principle that we would borrow R1 billion over the next three years. Officials are now unpacking how that process is going to unfold,” he said.
 
Chairperson of the Governance and Human Resources Committee Councillor Barbara Fortein said the City was being prudent in its approach to borrowing and was ensuring that it had liquidity and would be able to provide services that residents deserve.
 
NEW EPWP BENEFICIARY WAGE RATES APPROVED
 
New Extended Public Works Programme (EPWP) beneficiary rates were approved at an Executive Committee meeting held today, 30 October.
 
The tabled report states that during the audit of the annual financial statements of eThekwini Municipality for the year ending 30 June 2018 it was noted that the Council decisions dated 22 June 2016 gave guidelines for the minimum EPWP beneficiary daily wage rate, however there was no clear guidance on the maximum wage rate as well as a lack of categorisation of workers. The report stated that the ambiguity in the EPWP beneficiary wage rates system is a risk in terms of financial management of the Municipality hence the need to develop and implement appropriate procedures to regulate EPWP beneficiary daily rates.
 
The EPWP programme was launched in 2004 as a key government initiative that will contribute to government’s policy priorities in terms of decent work and sustainable livelihoods. The tabled report states that the programme provides an important avenue for labour absorption and income transfers to poor households in the short to medium term.
 
The report proposed the following wage rate be implemented effective from 1 October 2018. It states that the proposed daily rate is eThekwini Municipality’s salary scale and implementation of it will have no additional financial bearing as beneficiaries are currently on that rate.
 
• General worker daily rate of R149.37
• Supervisor daily rate of R295.88
• Data capturer daily rate of R497.41
• Receptionist daily rate of R497.81
• Security manager (grade A) daily rate of R574.38
• Site security daily rate of R240
• Administrator daily rate of R597.35
• Coordinators daily rate of R798.37 and,
• Project manager a daily rate of R1 091.31
 
The report concludes that the approval of the EPWP beneficiary rates is key to adhering to audit recommendations and ensuring that the municipal manager fulfils his role as per the Municipal Financial Management Act of 2003 in ensuring that systems are in place and are properly maintained for management of the EPWP programme.
 
Another report will be submitted to the Executive Committee detailing the grading outcomes.
 
ENDS
 
Issued by the eThekwini Municipality’s Acting Head of Communications Mandla Nsele.
 
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