DA rejects Ugu’s 2020/21 budget: ‘Residents deserve better’

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STATEMENT BY DA CAUCUS – UGU DISTRICT MUNICIPALITY

The deputy mayor of the Ugu District Municipality presented the 2020/21 budget to the Council by way of a virtually convened meeting on 28 May 2020.

VIDEO: Ugu council approves budget for new financial year

The essence of the budget was an 8% increase in water and sanitation charges. The motion by the DA that the budget be rejected was unfortunately defeated by the ANC 19 votes to 10, with the other opposition Parties joining the DA in the vote.

The DA caucus opposed the budget for a number of reasons:

  •  The budget is unfunded. Clearly the stipulated expenditure exceeded the anticipated income by a staggering R157 million. The Municipal Finance Management Act stipulates that the annual budget may only be funded from realistically anticipated revenues to be collected, and cash-backed accumulated funds from previous years’ surpluses not committed for other purposes.
  • Submissions made by community members and organisations were ignored.
  • The Provincial Treasury’s assessment letter (dated 21 May 2020) was not presented to Council as per their instruction. It states, amongst other things, “Should the municipal Council approve the 2020/21 budget in its current format, the budget will not be sustainable as your municipality will be reporting expenditure against an unfunded budget. This will be a serious transgression that will impact on the financial viability of the municipality as well as its ability to deliver services to the community.” It further states, “an unfunded budget will not be supported by Provincial Treasury. Failure to comply might lead to the stopping of the Equitable Share Transfer of hundreds of millions to the Municipality in terms of Section 38 of the MFMA”
  • The budget did not reflect the medium-term expenditure framework as it did not set service delivery targets and objectives for the next two years.
  • The Tariff of Charges reflecting the 8% increase was not presented, effectively leaving readers of the draft budget to guess the proposed increase.
  • The MFMA Circular No 99 (dated 9 March 2020) issued by National Treasury, implores municipalities to adhere to the macro-economic performance and projections by limiting increases to the current CPI inflation figure of 4.5% in order to minimise the impact of Covid 19 on consumers. This was ignored by Ugu, although Ray Nkonyeni and Umdoni Municipalities heeded the call and only approved increases of 4.5%.

The DA caucus has stated repeatedly that the Ugu District Municipality is no longer a going concern and is technically bankrupt. We will continue to urge the MEC for Cogta to place the municipality under Sec 139 administration and for Umgeni Water to take over the bulk water supply and administration thereof, throughout the entire region.

The residents of Ugu deserve better services and a better municipality. The opportunity to vote for a better municipality is coming next year. We encourage all residents to exercise this right.

DA Caucus – Ugu District Municipality
Media Enquiries:
Cllr Leonard Ncgobo
Caucus Leader 0766341604
Cllr George Henderson
Caucus Chair 0827714276

Photo: DA Cllr George Henderson.

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