The Ugu District Municipality approved its 2019/2020 budget at its monthly council meeting last week. It was presented by Deputy Mayor P.H. Mthiyane in the absence of Mayor Mondli Chiliza, whose resignation became effective at the end of May.
Cllr Mthiyane announced that the municipality would implement a tarriff increase of 18%, instead of the original 22% proposed in the draft budget, after listening to input during public engagements. She stated this decision would have a serious effect on the municipality’s financial position for the financial year en would require even more financial prudence. She also indicated that the employee related costs of the municipality required urgent attention as the continued increase thereof was a real threat to Ugu’s financial viability. The total budget amounts to R1 265 380 424 with an allocation of R330 738 000 for capital and an allocation of R916 395 929 for the operational budget.
The DA expressed its total rejection of the proposed water tariff increase, in spite of the originally proposed 22% being reduced to 18%. The DA said it was in favour of an increase phased in annually over the next three years at 9% per annum. DA Caucus Chairperson George Henderson informed the Speaker that he had brought along a petition signed by 3051 residents protesting against the increase, and the party wanted to hand it to the Speaker in council. However, it was ruled out of order by the Speaker, ‘because the petition should have been brought to Ugu through other channels.’
In a vote, the DA’s motion was defeated by the ANC’s 19 votes to 5. Another 6 opposition party members abstained.
Municipal Manager DD Naidoo said Ugu’s rates compared very favourably with other municipalities, and was in fact charging much less then them for water. It had no other option but to go for the current increase to ensure that its revenue situation remained sound. Besides, he argued, if Council should agree to lower the rate proposed in the final budget, how would the shortfall caused by this be funded? The DA should also indicate where the budget should be cut to fund this shortfall.
In reply to a question from Cllr Henderson about why the officials included the comments from Provincial Treasury for the past financial year 18/19, and not for the new financial year 19/20, the municipal manager apologised and said copies would be made available to Council. Cllr. Henderson’s view was this meant that the scathing comments from Provincial Treasury were not tabled with the Budget as instructed by the department, and could therefore not be considered by Council.
For more details, see the full budget speech below:
Madam Speaker;Thank you for affording me the honour to present the 2019/20 Budget
to this august house today.
Madame Speaker, this budget is tabled before this council during a
month after which our country had a successful fifth general elections of
the democratic South Africa.
These elections also marked the closing of the first quarter of a century
since we, the people of South Africa, successfully brought an end to
centuries of colonial domination and apartheid after the year 1994. And
accordingly, the people of South Africa took to the polls to re-affirm
themselves as the driving force behind the political success of postapartheid South Africa.
Madam Speaker, the renewed mandate given to the African National
Congress by the voters, under the leadership of President Ramaphosa
can never be taken for granted as it re-affirms the positive reception
with which the people of South Africa have understood the principal
message of Thuma Mina. And as a District, we ready to deliver to the
aspirations of this message.
Let me welcome the People of our District whose voices were heard
during the IDP/ Budget roadshows and who are joining us today via the
live broadcasts being conducted throughout the District on Ugu Youth
Madam Speaker, during the month of April 2019 we had conversations
with thousands of residents during the IDP/Budget roadshows in all four
local municipalities across the district, the purpose of which was to
solicit the views of our communities on this draft budget and also
measure our service delivery progress to date as well as to gather
information on the immediate community needs.
And during these public engagements, residents confirmed that Ugu
District Municipality is indeed at work in delivering water and sanitation
services, but more work still needs to be done.
This Draft Budget that I will be presenting to this sitting of council today
is meant to respond to the community needs which were expressed
during the Izimbizo.
Fellow Councillors, this budget we are tabling today also demonstrates
our commitment in addressing the challenges we face. This Budget puts
concrete figures to the programmes we have outlined in the Integrated
Over the course of this term of office we have made bold
pronouncements and commitments aligned to the identified priorities.
We have kept our word. We have done what we said we would do. We
have worked hard to improve and strengthen our finances and it is
indeed work in progress. And we are on course towards building a solid
foundation of financial sustainability. We have worked hard to increase
our investments in infrastructure to improves the quality of life of our
communities. We have worked hard to improve the quality of our
Madam Speaker, it gives me great pleasure to address this sitting of
Council today to present the draft budget of Ugu District municipality for
2019/20 financial year.
In addition, Section 87 sub-section (3) of the Municipal Finance
Management Act No. 56 of 2003 requires the Mayor of the parent
municipality to also table the proposed budget of the municipal entity at
the time when the annual budget of the municipality for the relevant
year is tabled. Therefore, in compliance with this legislative provision, I
will also be tabling the draft budget of Ugu South Coast Tourism,
together with that of Ugu South Coast Development Agency. Madam
Speaker, the documents that I will be tabling to this Council are
strategic tools with which to effectively manage public funds entrusted
to this Council for the purposes of service delivery.
In preparing for this draft budget, we have been fully conscious of our
legislative mandate (the provision of water and sanitation in a
sustainable environment) and we have ensured that the appropriate
resources were allocated to meet these strategic objectives.
Madam Speaker, the 2019/20 draft budget we are presenting here today
attempts to strike a balance between on-going service delivery
imperatives and responding to the developmental challenges confronting
The 2019/20 financial year tariff increases are driven by the following
major broad considerations:
o Input costs from our suppliers – Eskom tariff increase of 9.41%
and Umgeni Water tariff increase of above 9.6% on bulk water
o Staff Salary increment – 6,76%
During our public engagements with residents during the roadshows,
residents requested that we reconsider our initial tariffs increase
proposal of 22% (R15,98) and we did listen. In light of this
consideration, the proposed tariff increases we are presenting today for
council approval is 18% (R15.25) for water and sanitation services.
Madam Speaker, I must indicate that this increment will seriously impact
on our income position for the financial year 2019/20 as a year that will
require even more financial prudence.
To ensure financial sustainability which I have referred to earlier, the
employee related costs of the Municipality require urgent attention as
the continued increase thereof is a real threat to our financial viability.
Despite this, we are still required to deliver on our legislative mandate to
our community. This will require us as the Council to be extra vigilant in
the discharge of our role of political oversight and to ensure a more
stringent monitoring of public expenditure. We can do this by thorough
verification of the impact of our service delivery interventions to our
community. The impact of our service delivery must always address the
challenges of unemployment, poverty, and inequality.
Madam Speaker, We are thankful to the citizens of Ugu District for
giving us a clear mandate. This Council has a responsibility to respond to
the National Government directives; which directives are captured in the
National Development Plan. As this Council, this plan is a clear road map
which directs the delivery of services to our people in the District.
Madam Speaker, we have continued to play our pivotal role of
implementing our core functions of water and sanitation services, as a
result we have achieved a hundred percent coverage of the provision of
Ventilated Improved Pit latrines (VIPs) in two of our local Municipalities
and we are remaining with less than 30 % in the rest of the local
municipalities. In addition, we have commenced with sewer pipeline and
sanitation refurbishment projects which is intended to service all areas
within the Ugu District family of municipalities.
Madam Speaker, allow me to remind this house on the progress we
have made thus far on the implementation of major projects of water
and sanitation which are being funded from our capital budget.
We have completed the construction of Mhlabatshane phase 10 at
Umzumbe and the completion of this project marks the municipality’s
continued commitment of ensuring provision of basic water
infrastructure to all communities. This project provides more than 100
000 households with portable water in the areas of Umzumbe and Ray
Nkonyeni Municipalities. The objective of this project is to provide
potable water to ten (10) Tribal Authority areas and forty-nine tribal
wards which translate to 7 Municipal Wards.
This iconic multi-million rand project includes the construction of the
new dam, access roads, a pump house, water supply pipelines, a water
treatment works and reservoirs.
We have extended the implementation of water and sanitation projects
in other local municipality as follows:
• Umdoni – Maphumulo Water Supply, Umzinto Farm Isonti Water
and Sanitation, Pennington Waterborne Sanitation project,
Malangeni Low Cost Housing project
• Ray Nkonyeni – KwaXolo Bulk Water Supply, Umzimkhulu Off
Channel Storage Dam, Umtamvuna Water Works, Margate Sewer
Pipeline Replacement, Masinenge /Uvongo Sanitation project,
KwaXolo Bulk Water Supply,
• Umuziwabantu – Harding Sanitation Scheme Phase 3, Harding
Weza Regional Bulk
I must mention that, these are continued collective efforts aimed at
creating employment opportunities through the provision of
infrastructure, whilst also providing a conducive and sustainable
environment that promotes better livelihoods to the public that we
serve. These are indeed good stories to tell.
In terms of Chapter 57 of the Municipal Finance Management Act, No 56
of 2003, I am required to table before this Council meeting, our
municipal budget for the 2019/20 financial year for approval.
The total budget we are presenting here before this house amounts to
R 1 265 380 424 with an allocation of R330 738 000 for capital and
an allocation of R916 395 929 for the operational budget.
Water and Sanitation:
Fellow councillors, areas under the Umuziwabantu local municipality are
still facing drought with increasing severity and frequency and unless
our call for coordinated water conservation is met with decisive action by
all consumers, we face a risk of having no water for survival as we all
aware, that water is life.
We therefore urge the public not to become complacent amid the recent
rain showers and continue to conserve water to ensure that the current
reserves last longer. The recent rainfall may give the false impression
that the worst of the current drought is over. The impact of drought in
Umuziwabantu has been so severe that all this rainfall is simply
insufficient to relieve even the most urgent shortages of water in the
most affected areas. Our campaign to conserve water will therefore
We have then set aside an amount from the Municipal Infrastructure
Grant (MIG) of R241 038 000 for the water and sanitation
An additional amount of R82 806 762 from the Equitable Share will
be spent to ensure that we continue to provide our people with free
basic water via the communal standpipes.
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The National Government equitable share grant for an amount of R50
639 862 will be spent towards the cost of supplying free basic metered
And a further additional amount of R158 345 337 is allocated to
subsidise the water tariff, this is due to the difficult economic conditions
that our people within the District are facing.
An allocation of R10 000 000 has been made for rolling out the rural
Ventilated Improved Pit toilets, which is a programme that will advance
our work to eradicate rural sanitation backlogs from across the Ugu
District family of municipalities.
Ugu South Coast Tourism:
In compliance with the provisions of Section 87(3) Municipal Finance
Management Act, we are also tabling the budget of the Ugu South Coast
Tourism and South Coast Development Agency which has been
approved by the respective Entity Board.
The total operating revenue for the financial year commencing on 1st
July 2019 is R 20 241 973 which is made up of an Operational
Expenditure of R20 042 395 and a Capital Expenditure of R199 578.
As part of our ongoing commitment to growing our tourism industry, we
have, as a District Municipality, made an allocation of R13 341 956 to
the Ugu South Coast Tourism entity. We reiterate our commitment to
the Board to execute its mandate and manage any operational
challenges it may face. We will always be available to lend support
because ours is about building a better District which attracts the local
and international tourists.
South Coast Development Agency
The total operating revenue for the financial year commencing on 1st
July 2019 is R 10 603 753 which is made up of an operational
expenditure of R10 550 203 and a Capital Expenditure of R53 550
As part of our ongoing commitment to enhancing the economic
development of our district, we have, as a District Municipality, made an
allocation of R5 381 407 to the entity. We also reiterate our
commitment to the Board to execute its mandate and manage any
operational challenges it may face. We will always be available to lend
support because ours is about building a better District which enhances
the economic development of its people.
Relief for the Poor
Difficult economic conditions means people will find it difficult to make
ends meet. Within the provisions of our Indigent Support Policy, we will
continue to provide those who qualify for indigent support with rebates.
Regarding the provision of sanitation, indigent customers will receive a
full monthly subsidy on sanitation, both in respect of waterborne sewer
and conservancy tanks; except for additional draw requests, which must
be paid for separately by the customers.
In respect of water provision, an allocation of R46 888 761 indigent
support has been set aside to provide 6kl of water to deserving and
qualifying households, whose total gross monthly income of all members
of the household must not exceed two old age pension grants.
We have been making good progress with regards to addressing the
plight of our special interest groups within our District. The introduction
of the Operation Sukuma Sakhe Program (OSSP) which is a poverty
alleviation program driven by the Office of the Premier, presented us
with an opportunity to tap into other resources in pursuance of our
mandatory coordination role. We are continuing to work well as the Ugu
District Task Team of Operation Sukuma Sakhe.
Allocations in respect of the Special Programmes are as follows:
• Youth : R1 700 000
• Gender : R 320 000
• Elderly : R 400 000
• HIV/AIDS : R 500 000
• Rights of the Child : R 200 000
• Disability : R 400 000
• Public Participation : R 700 000
Madam Speaker, we are ready and capable through this draft budget we
presented here today, to continue not only to make a massive
contribution to the development of our district but also to spearhead,
champion and coordinate such development. We recommit ourselves to
overcoming the difficult challenges which impede our progress towards a
better life for all.
Ugu District Municipality in its quest to fast track service delivery will
continue to implement water and sanitation programmes, and also play
a pivotal role in fulfilling its mandate through the application of wellcoordinated service delivery approaches. This will enable us to
collectively ensure that our communities receive a better life for all.
Fellow Councillors, as we look back over the road traversed, we should
all, with pride, declare that our collective achievements are indeed
significant. In this Budget we build on our experience of the past 25
years as a governing party and commit to doing more. Together let us
grow our District.
I thank you.
Cllr PH Mthiyane