Table Of Content

ANNUAL BUDGET 2010/2011 ALBERT LUTHULI MUNICIPALITY Albert Luthuli Municipality Vision A transparent, innovative and developmental municipality that improves the quality of life of its people. Mission To provide a transparent and accountable government by rendering affordable and sustainable services; and encouraging economic and social development through community participation. Core Values and Principles  The municipality is driven by the aspirations of the people; we will respect and uphold the Constitution of the Republic of South Africa.  The municipality commits itself to the Code of Conduct for Councilors and Officials contained in the Municipal Systems Act, 2000.  The municipality commits itself to the principles of sound financial management  The municipality subscribes to the principles of Batho Pele: Consultation, Service Standards, Access, Courtesy, Information, Openness and transparency, Redress and Value for Money.  The municipality subscribes to Cooperative Governance. As a partner in governance we will promote and constructively participate in Regional, Provincial and National programmes. 1 Tableof Contents FunctionalCodes.......................................................................................................................5 PART1........................................................................................................................................9 ReportbytheExecutiveMayor.................................................................................................9 Schedule1–ResolutiononapprovaloftheAnnualBudget...................................................12 ExecutiveSummary.................................................................................................................14 TableA1–BudgetSummary...................................................................................................19 TableA2–Budgetedfinancialperformancebyvote..............................................................20 TableA2A–Detailbudgetedfinancialperformancebyvote.................................................21 TableA3-Budgetedfinancialperformancebymunicipalvote..............................................23 TableA4–Budgetedfinancialperformancebyrevenuesource&expendituretype............24 Chart1–Revenuebymajorsource........................................................................................25 Chart2–Otherrevenue..........................................................................................................26 Chart3–Operatingexpenditurebytype................................................................................27 Chart4–OperatingExpenditurebymunicipalvote...............................................................29 Chart5–Operatingexpenditurebystandardclassification....................................................30 TableA5–Budgetedcapitalexpenditurebyvote..................................................................31 Chart6–Capitalexpenditurebymainvote............................................................................32 Chart7–Othercapitalexpenditure.........................................................................................33 Chart8–Capitalfundingbysource........................................................................................34 TableA6–Budgetedfinancialposition...................................................................................35 TableA7–Budgetedcashflow...............................................................................................36 TableA8–Cashbackreserves/accumulatedsurplusreconciliation.....................................37 TableA9–Assetmanagement................................................................................................38 Chart9–Capitalexpenditurebystandardclassification........................................................39 TableA10–BasicServiceDeliveryMeasurement..................................................................40 PART2......................................................................................................................................42 Overviewofthebudgetprocess.............................................................................................42 TableSA1–Supportingdetailtobudgetedfinancialperformance........................................47 TableSA2–Matrixfinancialperformance–revenuesource&expendituretype.................48 TableSA3–Supportingdetailtobudgetedfinancialposition................................................49 TableSA4–ReconciliationofIDPstrategicobjectivesandrevenue......................................50 TableSA5–ReconciliationofIDPstrategicobjectivesandoperatingexpenditure...............51 TableSA6–ReconciliationofIDPstrategicobjectivesandcapitalexpenditure....................52 2 TableSA7–MeasurablePerformanceObjectives..................................................................53 TableSA8–Performanceindicatorsandbenchmarks............................................................54 TableSA9–Social,economicanddemographicstatisticassumptions..................................55 TableSA10–Fundingmeasurement.......................................................................................56 TableSA11–PropertyRatesSummary...................................................................................57 TableSA12and13–PropertyRatesbycategory(budgetyearandcurrentyear).................58 TableSA14–Householdbills..................................................................................................59 TableSA15–Investmentparticularsbytype..........................................................................60 TableSA16–Investmentparticularsbymaturity...................................................................61 TableSA17–Borrowing..........................................................................................................62 TableSA18–Transferandgrantreceipts...............................................................................63 TableSA19–Expenditureontransfersandgrantprogramme...............................................64 TableSA20–Reconciliationoftransfers,grantreceiptsandunspentfunds.........................65 TableSA21–Transfersandgrantsmade................................................................................66 TableSA22–Summarycouncillorandstaffbenefits..............................................................67 TableSA23–Salaries,allowancesandbenefits–councillorsandseniormanagers..............68 TableSA24–Summaryofpersonnelnumbers.......................................................................69 TableSA25–Budgetmonthlyrevenueandexpenditure.......................................................70 TableSA26-Budgetmonthlyrevenueandexpenditure(municipalvote).............................71 TableSA27–Budgetmonthlyrevenueandexpenditurebyclassification.............................72 TableSA28–Budgetedmonthlycapitalexpenditure(municipalvote)..................................73 TableSA29–Budgetedmonthlycapitalexpenditure.............................................................74 TableSA30–Budgetedmonthlycashflow.............................................................................75 TableSA31–Entities...............................................................................................................76 TableSA32–Listofexternalmechanism................................................................................77 TableSA33–Contractshavingfuturebudgetaryimplications...............................................78 TableSA34a–Capitalexpenditureonnewassets..................................................................79 TableSA34b–Capitalexpenditureonexistingassets............................................................80 TableSA34c–Repairsandmaintenancebyassetclass..........................................................81 TableSA35–FutureFinancialImplicationsofthecapitalbudget..........................................82 TableSA36–Detailedcapitalbudgetbyprogramme.............................................................83 TableSA37–Projectsdelayedfrompreviousfinancialyears.................................................87 Schedule2–ProposedTariffs.................................................................................................88 Schedule4–BudgetRelatedPolicies....................................................................................106 3 TariffPolicy........................................................................................................................106 RatesPolicy........................................................................................................................126 CreditControlandDebtCollectionPolicy.........................................................................138 CashManagementandInvestmentPolicy........................................................................184 FundingandReservesPolicy.............................................................................................193 Long-termFinancialPlanningPolicy..................................................................................196 IndigentPolicy...................................................................................................................198 FreeBasicServicesPolicy..................................................................................................204 BudgetPolicy.....................................................................................................................209 WaterandElectricityManagementPolicy........................................................................230 SubsistenceandTravellingPolicy......................................................................................233 OvertimePolicy.................................................................................................................238 SupplyChainManagementPolicy.....................................................................................243 AssetManagementPolicy.................................................................................................438 BorrowingPolicy................................................................................................................473 CapitalProjectsPolicy.......................................................................................................481 InfrastructureInvestmentPolicy.......................................................................................486 PART3................................................................................................................................489 PlanningandEconomicDevelopment–Executivesummary,operatingandcapitalbudget ...........................................................................................................................................489 CorporateServices–Executivesummary,operatingandcapitalbudget.........................505 CommunityServices–Executivesummary,operatingandcapitalbudget......................507 Finance–Executivesummary,operatingandcapitalbudget..........................................510 PublicSafety–Executivesummary,operatingandcapitalbudget..................................513 TechnicalServices–Executivesummary,operatingandcapitalbudget..........................527 InternalAudit–Executivesummary,operatingandcapitalbudget.................................529 CouncilGeneral–Executivesummary,operatingandcapitalbudget.............................530 QualityCertificate....................................................................Error!Bookmarknotdefined. 4 FunctionalCodes NationalTreasuryFunctions CouncilFunctions Council IDP Vote Objective Goal Code EXECUTIVEANDCOUNCIL ExecutiveandCouncil ExecutiveMayor 02 GC2 Council 03 GC2 MunicipalManager MunicipalManager 33 GC1 CorporateServices 32 GC1 BUDGET&TREASURYOFFICES Budget&Treasury AssessmentRates 01 FV1 PA1 FinanceServices 34 FV1 InformationTechnology-fin 35 FV1 SupplyChainManagement 38 FV1 InternalAudit 50 GC1 CORPORATESERVICES InformationTechnology CorporateServices-IT 31 GC1 PropertyServices Property:FixedAssets 09 SD1 FixedAssets:Padkamp 40 SD1 PersonnelHousing 48 SD1 OtherAdmin Workshop 44 GC1 RiskManagement 51 GC1 PLANNING&DEVELOPMENT Planning&Development IDP/LEDOffice 37 EG1 HEALTH Clinics HealthClinicCarolina 13 SD2 HealthClinicSilobela 14 SD2 COMMUNITY&SOCIALSERVICES Libraries&Archives Library 06 SD3 CommunityHalls&Facilities MunicipalBuildings 21 SD3 Cemeteries&Crematoriums Cemetery 05 SD3 OtherCommunity CommunityServices 12 SD3 PUBLICSAFETY Police Administration 16 SD4 Safety&Security 17 SD4 Licensing 18 SD7 Traffic 39 SD4 Fire FireBrigade 08 SD4 Other DisasterManagement 07 SD4 5 NationalTreasuryFunctions CouncilFunctions Council IDP Vote Objective Goal Code SPORT&RECREATION Parks&Recreation ParksandRecreation 25 SD3 WASTEMANAGEMENT SolidWaste Sanitation 30 SD6 PA4 ROADTRANSPORT Roads PublicWorks 24 SD7 TechnicalServices 36 SD7 ENVIRONMENTALPROTECTION Other Refuseremoval 29 SD5 PA5 WATER WaterDistribution ProjectManagementUnit 04 SD8 WaterDWARF:OldScheme 128 SD8 WaterGeneral 129 SD8 PA3 ELECTRICITY ElectricityDistribution Electricity 123 SD9 PA2 OTHER AirTransport Airstrip 41 SD3 IDPObjectives: IDP Goal StrategicObjective Objective Goal Code PA1 PovertyAlleviation PropertyRates:IndigentSupport PA2 PovertyAlleviation Electricity:IndigentSupport PA3 PovertyAlleviation Water:IndigentSupport PA4 PovertyAlleviation Wastewater:IndigentSupport PA5 PovertyAlleviation WasteManagement:IndigentSupport SD1 ServiceDelivery PropertyServices SD2 ServiceDelivery ProvideHealthandEnvironmental Services SD3 ServiceDelivery CommunityandSocialService Provision SD4 ServiceDelivery Provideandensuresafeenvironment SD5 ServiceDelivery WasteManagementInfrastructure DevelopmentandServiceDelivery SD6 ServiceDelivery WasteWaterManagement InfrastructureDevelopmentand servicedelivery 6 IDP Goal StrategicObjective Objective Goal Code SD7 ServiceDelivery RoadInfrastructureDevelopmentand ServiceDelivery SD8 ServiceDelivery WaterInfrastructureDevelopmentand ServiceDelivery SD9 ServiceDelivery ElectricityInfrastructureDevelopment andServiceDelivery FV1 FinancialViability SustainableandEconomicalMonetary Management EG1 EconomicGrowthandDevelopment LocalEconomicDevelopment EG2 EconomicGrowthandDevelopment IntegratedEnvironmental,Socialand EconomicSpatialPlan GC1 GoodCorperativeGovernance MunicipalTransformationand OrganisationalDevelopment GC2 GoodCorperativeGovernance Goodgovernanceandpublic participation 7 8 PART 1 Report by theExecutiveMayor ONTHETABLEDANNUALBUDGETFORTHE2010/2011;2011/2012&2012/2013 FINANCIALYEARS 1. As a result of the community participation through the Integrated Development Plan process and subsequent planning processes, the 2010/2011 to 2012/2013 annual budgetisherewithtabledforfinaladoptionafterpublicconsultation. 2. The State President in his 2010 State of the Nation Address indicated that government needstodomorewithexistingresourcesby: 2.1. Deliveringmoreandbetterservicesinacaringandefficientmanner. 2.2. Holdingpoliticalofficebearersandpublicservantsaccountable. 2.3. Shiftingresourcestonewpriorities. 2.4. Movingfromdebatetoeffectiveimplementationanddecisiveaction. 2.5. Working in partnership with communities, labour and business to achieve the nationsharedobjectives. 3. The challenge for the municipality is to do more within its existing resources by reprioritizing money from low-priority programmes to high-priority programmes. Municipalities play a critical role in furthering government objective of providing servicestoallwhilefacilitatinglocaleconomicdevelopment. 4. The National Budget Review for2010 outlines that the South African economy is slowly recovering, with economic growth of 2,3% projected for 2010. However, it will take sometimefortheeconomicupturntoflowthroughandisitconsequentlyexpectedthat revenues and cash flows will remain under pressure. National Treasury has advised municipalities to adopt a conservative approach when projecting revenues and cash receipts and to pay particular attention to managing revenue effectively, especially debtors. 5. Giventhecurrentconstraintssomeverytoughdecisionsinthecourseofconsideringthe 2010/2011 budgets and Medium Term Revenue and Expenditure Framework (MTREF) weretaken.Prioritymustbegivento: 5.1. Ensuringthatdrinkingwatermeetstherequiredqualitystandards. 5.2. Managingallrevenuestreams,especiallydebtors. 5.3. Protectingthepoorfromtheinputsoftheeconomicdownturn. 5.4. Secure the health of the municipal asset base by monitoring the spending on repairsandmaintenance. 5.5. Expeditingspendingoncapitalprojectsthatarefundedbyconditionalgrants. 5.6. Ensure that capital budgets reflect consistent efforts to address the backlogs in basicservicesandtheupgradingofexistinginfrastructure. 9