Speech by the Executive Mayor, Alderman Patricia de
Lille, at the tabling of the adjustments budget for the
2013/14 financial year, at a special Council meeting on
21 August 2013
Good morning, goeiedag, molweni.
Mr Speaker,
Before we begin today’s proceedings, I am sure that we have all noticed
the heavy rainfall that the city has experienced over the past few days.
Because of where many of our communities are located, a lot of people
have been affected by flooding.
Many have lost their homes and their possessions.
I want to make an appeal to everyone in the city to help those in need.
And I want to make a special appeal to all Councillors and staff members
to please help our fellow residents as much as possible in this difficult
time.
But let me also thank the men and women of Disaster Risk Management.
Their hard work and tireless dedication have prevented a great deal of
suffering and have made sure that those affected are helped almost
immediately and with dignity.
Mr Speaker,
Every level of government has its own budget processes.
While the public may see the budget only once every year, they perhaps
do not realise that it takes an entire year to produce that budget.
Teams of people work on numerous versions of the budget in submissions
and re-submissions.
Throughout, technical exercises of costing and feasibility are conducted.
And there are numerous stages of approval.
There is internal consultation.
There is external consultation.
And there is the formal adoption.
And the larger the budgets and the greater their impact, the more
complicated and technical these exercises become.
This is something well known to those familiar with the budget processes
of the national government, where budget approval according to votes
takes weeks in Parliament.
But as rigidly defined as those processes are according to the Public
Finance Management Act (PFMA), the procedure for local government is
perhaps even more complex as prescribed by the Municipal Finance
Management Act (MFMA).
That is because local government is reliant on numerous partners before
it can determine its full spectrum of revenue sources.
These include the revenue we generate in service and tariff costs.
They include revenue offset against bulk purchase prices.
They are reliant on tariff determinations due to approval bodies such as
NERSA.
And they are contingent on the determination of grant funding from
numerous national government transfers; provincial government grants;
and Division of Revenue funds.
In addition to all of these determinations, ordinary business in the
government continues on a day-to-day basis.
That means that major projects continue, tenders are rolled out,
payments are made, and recalculations of costs are adjusted.
In an organisation of this size, such practices are the usual order of
business.
They are a reflection that service delivery does not happen according to
our financial calendar: it is a constant and ever-demanding reality of life.
And so we have to match the continuous needs of service delivery with
the formal budget management that is required of us as a trustee of
public funds.
But this complex scenario is nothing new.
It is a reality that is both anticipated and expected by ourselves and our
funding partners.
Indeed, this practice of shifting budget realities is prescribed in law as
determined by the national government.
Mr Speaker, Section 28 of the MFMA prescribes that a municipality may
revise an approved budget through an adjustments budget.
In terms of Section 28, an adjustments budget must be accompanied by:
‘an explanation of how the adjustments budget affects the annual budget;
a motivation of any material changes to the annual budget; an
explanation of the impact of any increased spending on the annual budget
and the annual budgets for the next two financial years; any other
supporting documentation that may be prescribed.’
That is the end of my lecture, Mr Speaker.
In terms of the law, Mr Speaker, Council has before it today a
consideration of an adjustments budget.
There are numerous reasons why it is being tabled.
In terms of the capital budget, all submissions received by directorates
have resulted in a total of R162 million for inclusion in the adjustments
budget.
These break down into the different components of capital funding of
which the budget is comprised, including EFF and the various types of
grant funding.
Among others, one of the reasons for adjustments to capital grants and
donations include roll-overs amounting to R7,4 million in respect of
unconditional grants.
The Urban Settlements Development Grant (USDG) has increased by a
total of R55,7 million primarily intended for land acquisition for future
developments and informal settlement upgrades.
There is also a move of R27 million from the Human Settlements
Development Grant (HSDG) from the capital to the operating budget.
This is because the majority of subsidy housing delivery top structures
appears on the operating budget and the HSDG is used for the provision
of all formats of integrated human settlements.
The HSDG funding that has a component on our capital budget relates to
rental stock while the rest of our housing modalities in HSDG are
accessed through operational allocations.
When the Langa hostel upgrades are complete, we will have additional
funds to use outside of city-owned rental stocks, including different top
structures for poor people thus pointing to enhanced service delivery.
And in terms of corporate services, enhanced delivery on the Western
Cape Government Broadband Connectivity Project has meant that we can
reduce the funds necessary in the capital budget for this financial year by
R5 million for this stage of the project as it has already been spent.
In addition to this, the City has received an additional R8,6 million from
National Treasury as an incentive for our enhanced performance, the best
in the country, in the Expanded Public Works Programme (EPWP).
And we are rolling over R2,6 million to the Cape Town Natural Resource
Management Project while we also make note of an additional R1,3 million
in revenue within Safety and Security from Traffic Free Flow.
Among others, further adjustments to the operating budget include a
transfer of R7 million from Safety and Security to Transport for Cape
Town for annual IRT licence fees, staff and maintenance costs in terms of
the ISERMS project.
We need to also amend Capital Grants and Donations to the sum of R34
million in line with revised project time-frames and funding allocations.
Mr Speaker, this adjustments budget comes on the back of an incredible
year in terms of financial performance for the City of Cape Town.
That is, a capital spend of 92,9% in the 2012/2013 financial year.
That is the highest spend of any metro in the country and means that we
remain the national leader in terms of infrastructure-led growth and
creating the enabling environment for opportunity through the delivery of
the highest level of services in the country.
It is the result of dedicated strategy that we put in place to improve
spending in the City.
These improvements include improved tender demand and supply chain
management; faster turn-around times for tender appeals; extensive
monthly reporting systems;
project management training; and improved due diligence processes.
But our capital spend is only one of the factors that establishes Cape
Town as the governance and financial leader of South African cities.
Eight unqualified audits in a row.
The highest capital expenditure of any metro in the country.
The highest credit rating.
The highest expenditure on the poor.
These are objective, critical factors that make Cape Town the benchmark
for excellence in South Africa.
And they are the reasons why the people of this city can rest assured that
we are using all the resources at our disposal to help them access
opportunities.
In conclusion, let me remind this Council that it is our duty to act as the
leaders of this organisation.
We have to ensure that it works hard to build the Cape Town of the future
on the five pillars: the Opportunity City; the Safe City; the Caring City;
the Inclusive City; and the Well-run City.
And so it is our duty to ensure that we provide the right resources to
achieve our objectives in terms of service delivery.
This adjustments budget helps us completely align all of our projects with
the financial resources at our disposal.
And in so doing, it will help us make a great city even greater.
Mr Speaker, I hereby table the adjustments budget.
Thank you, baie dankie, enkosi.