Speech by the Executive Mayor of Cape Town,
Alderman Patricia de Lille on the occasion of the
tabling of the City’s final budget for the 2013/14
financial year, Wednesday, 29 May 2013
Good morning, goeie more, molweni.
Mr. Speaker,
Two years ago we committed to build this city on five pillars: the
opportunity city; the safe city; the caring city; the inclusive city; and the
well-run city.
To do that, this government has laid out an expansive programme of
action.
We have committed ourselves to creating the economic enabling
environment that will allow investment to grow and jobs to be created,
while providing immediate social relief for those who need our help the
most.
Ours is an ambitious platform.
It is an agenda of that seeks market encouragement with social
compassion.
It is a strategy of social upliftment tied to private sector growth.
It is a belief in a City that partners with its residents for a better future.
It is the idea of a Cape Town that belongs to everyone.
But all of our plans, all of our goals, would mean little if we did not plan
for their delivery.
Cape Town has been the test for excellence when it comes to metro
governance.
Part of the reason for that is because of the way we handle our finances
and do not make public commitments that we have not planned, mapped
and made ready to manage and implement.
But don’t take my word for it.
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Ask Moody’s, which gives us the highest credit rating in local government
in the country- indeed, the only thing keeping our rating down is the
sovereign credit rating.
Ask the National Treasury, that regards Cape Town as the benchmark for
financial excellence.
We seek to maintain that reputation, not because of what it means for our
egos but because of what it says about the quality of services our citizens
receive.
Mr. Speaker, it is on that note that I want to present the final budget for
the 2013/2014 financial year to Council for consideration.
The proposed total budget for 2013/2014 year is R31, 5 billion.
Of that, the Operating budget is R26, 144 billion, or just over 82% of the
total while the capital Budget is R5, 45 billion, or 17.25% of the total.
In the proposed budget, operating revenue has increased from R23, 9
billion in 2012/13 to R25, 89 billion in 2013/2014.
This is a growth in revenue of just over 8%.
Among other factors, this has been the result of an increase on transfers
recognised in respect of national equitable share from just over R1 billion
in 2012/2013 to R 1,2 billion in 2013/2014; and interest earned on
external investments increase from R244 million to R284 million due to
City’s projected favourable cash position.
In terms of generating revenue, as a local government, we are able to
charge a fee for the use of services that we provide.
The approach that we follow in Cape Town is to ensure that we generate
enough revenue to be able to cross-subsidise services for the poor, more
than any other municipality, while maintaining the highest standard of
service possible for our ratepayers.
At the same time, we do not believe that it is enough to just shift the
burden of costs onto ratepayers, especially not during these difficult
economic times.
The service charge increases we propose have therefore been calculated
after conducting numerous cost-cutting exercises within the City to
reduce unnecessary expenditure.
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This includes the cutting of old vacancies that have remained on the
books and a raft of austerity measures applied to every department,
including the reduction of catering and entertainment costs.
Depending on the type of charge, tariffs and rates differ according to the
size of a property as well as volumes of consumption, typically over block
increases.
Averaged per category, the proposed tariff increases for 2013/2014 are:
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A rates increase of 6,10%;
A refuse increase of 6, 32%;
A disposal increase of 7,06%;
A sanitation increase of 9,53%;
A water increase of 9,53%;
An electricity increase of 7,86%.
We will maintain the provision of an excellent standard of service to
private consumers, both individual households and commercial properties.
At the same time, we will be strongly pro-poor to ensure that this whole
city succeeds and moves forward together.
Mr. Speaker, it is proposed that free basic services are given to those with
properties valued at less than R400 000.
In addition, it is proposed that free basic services are also given if there is
a gross monthly household income of R3000 or below.
And it is proposed that senior citizens qualify for rates rebates where their
gross monthly household income is less than R12 000.
Mr. Speaker, these service charges, and the assistance given to poorer
households, was also the result of our extensive public participation
process on the draft budget.
This process yielded a few key changes to the proposed budget, which is
further evidence to our commitment to participatory democracy.
Among other changes, The Indigent Assistance was increased from
granting a 100% rates rebate, the additional 4.5 kilolitre of water and the
240 L refuse bin for all households with gross monthly income of R3 000
or less is increased to an income level of R3 500 for 2013/14.
Further changes included the final proposal that the 50% rebate on rates
for all residential households with gross monthly incomes between R3 000
and R4 000 is amended as follows: a 75% rates rebate for such incomes
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between R3 500 and R4 000; a 50% rates rebate for such incomes
between R 4 000 and R4 500 and a 25% rates rebate for such incomes
between R4 500 and R5 000 for 2013/14.
It is estimated that this assistance to our vulnerable residents would cost
an additional R20 million and this has been included in the operating
budget.
As this Council knows, since 2007, Cape Town has taken the lead in
driving infrastructure-led growth.
While other South African cities have faced a generation of underinvestment in critical infrastructure, we have taken the long-term view
that this city’s long-term development depends on maintaining high rates
of capital investment today.
In the capital budget, the most significant expenditure is in the following
areas:
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Utility Services, at just over R 2 billion;
Transport, Roads and Stormwater, at just over R 1, 4 billion;
And Human Settlements, at just over R600 million.
These three directorates constitute the core component of our delivery
mandate for the city.
The Utility Services Directorate provides the basic services that are at the
heart of our constitutional mandate.
Breaking down the spending, the most significant projects in electricity, to
mention a few, are:
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The Backyarders programme- R63 million;
Electrification of informal settlements- R127 million;
Facilities Upgrading- R150 million;
General System infrastructure- R106 million.
The most significant projects in solid waste, to mention a few, are:
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New transfer station infrastructure- R105 million;
General Solid Waste Management Infrastructure- R50 million.
The most significant projects in water and sanitation, to mention a few,
are:
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The Borchards Quarry programme- R20 million;
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The Replacement and upgrade of the sewer network, citywide- R60
million;
The replacement and upgrade of the water network, citywide- R79
million.
The TRS Directorate is responsible for maintaining the road network that
supports the city and the public transportation network that is
transforming our metro.
The most significant capital project in TRS, is the continued roll-out of
Integrated Rapid Transport (IRT) at R803 million this financial year.
This is in addition to a headline project of our redress programme which is
the replacement of the old apartheid-era concrete roads in our
communities, such as is being rolled-out in Gugulethu and Bonteheuwel,
for example.
In continuing to roll-out the kind of infrastructure that will help facilitate
economic growth, it is proposed that the Broadband project within
Corporate Services gets a capital budget of R82 million in the next
financial year.
And to ensure that we maintain the same levels of service that have
served our residents in times of emergency, we propose R30 million of
the capital budget of Safety and Security for an Integrated Emergency
Contact Centre.
And in Human Settlements, which is the key delivery agent for creating
the kind of integrated communities that help bridge the divides of the
past, the most significant proposed capital projects are:
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The Manenberg Community Residential Upgrade (CRU) projectR100 million;
The Langa Hostels CRU project- R87 million;
The Hanover Park CRU project- R61 million;
In Delft, the Hague Housing project- R20 million;
The Heideveld CRU Project- R31 million;
And to help meet the challenges of urbanisation, the backyarders
and informal settlements upgrade- R38 million.
Mr. Speaker, as a category, while Repairs and Maintenance is not a direct
expenditure driver, it is the outcome of other expenditures.
I believe that the measure of a municipality’s commitment to
infrastructure can be assessed by the level at which it chooses to spend
money on repairs and maintenance, especially given the backlogs in
South Africa.
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As I have repeatedly told businesses interested in investing in Cape Town,
we are focused on meeting our backlogs and eventually overtaking them
so that we can maximise our spending patterns to leverage private sector
investment by creating a crowding-in effect.
That is why, once again, we propose repairs and maintenance allocations
above CPI-level increases.
However, a great deal of repairs and maintenance costs goes to repairing
the costs of vandalism, which severely hampers our ability to effectively
deliver services.
By February of this year the City has spent almost R130 million repairing
vandalism related to water and sanitation, sewer and electricity
infrastructure.
Let me appeal once more to councillors to tell their communities that
every time we have to fix that which is intentionally broken, we face
opportunity costs in terms of money having to be diverted from elsewhere
in the city.
The proposed total allocation for 2013/14 equates to R2,9 billion and is a
13% growth on the 2012/2013 budget.
Mr. Speaker, I believe that the proposed budget gives sufficient resources
to each of our directorates.
Dealing with them by vote, it is proposed that City Health receives an
opex of R839 million and a capex of just under R24 million.
This will ensure that we continue to provide primary health care to those
who need it most while ensuring that the environmental health standards
of the entire city are maintained.
The City Manager would receive an opex of R101 million and a capex of
just under a million.
This will allow his office to provide the kind of strategic guidance and
direction that the administration needs.
Community Services would get an opex of just over R 1, 3 billion and a
capex of just over R222 million.
Using these funds, we will be able to create the kind of shared spaces and
amenities that bring people of different communities and cultures
together.
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The new directorate of Compliance and Auxiliary Services would receive
an opex of R485 million and a capex of just over R10 million.
This will enable them to conduct the functions of probity upon which this
City’s credibility lies.
It is proposed that the Corporate Services Directorate receive an opex of
just over R1, 5 billion and a capex of just under R259 million.
This money is an investment in the kind of networks that make the
organisation run efficiently, whether in terms of human or technological
resources.
The Deputy City Manager would receive just over R115 million opex and
capex of just over R48 million.
These funds will activate the City’s transversal approach to servicedelivery coordination and area-based management as well as driving our
goal of urban regeneration.
Environmental, Economic and Spatial Planning will receive an opex of just
over R516 million and a capex of approximately R58 million.
This money will go directly towards our repurposing of the City to making
it more user-friendly for planning, business and zoning applications while
preserving our unique bio-diversity.
It is proposed that Finance receive an opex of just over R1,8 billion and a
capex of just over R11 million.
This will allow us to continue managing our resources with maximum
transparency and in the interests of the public good.
Human Settlements will receive an opex of just over R1, 12 billion and a
capex of just under R627million.
These resources will directly contribute to improving the living conditions
of people in informal settlements and living in backyards while also
building new communities that create the kind of living spaces that tear
down the artificial boundaries of the past.
Safety and security has a proposed opex of R1, 5 billion and a capex of
just under R67 million.
These resources will used to keep our streets safe while giving us the
ability to respond to and plan for emergencies wherever they might occur.
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The Directorate of Social Development and Early Childhood Development
(SDECD) will receive an opex of just over R77 million and a capex of over
R5 million.
In the value chain of human development, this will allow the directorate
to assist with the pressing social needs of residents in the city by
complementing the social work of the provincial and national spheres of
government.
Tourism, Events and Marketing will receive a proposed opex of just over
R531 million and a capex of just over R28 million.
This budget allocation will go a long way towards our broader economic
efforts to position ourselves as the events capital of the region, which has
multiplier effects for the economy.
The budget allocation proposed for Transport, Roads and Stormwater is
approximately R1, 89 billion at opex, with a proposed capex of R1,4
billion.
In addition to the IRT, which will include an express service to Mitchell’s
Plain and Khayelitsha by the end of this year, this directorate plays a
direct role in rolling-out and maintaining the infrastructure that supports
our economy, specifically our road network.
And finally, the largest allocation will go to Utility Services, with an opex
of just under R15 billion and a capex of just over R2 billion.
This budgetary commitment is the very real expression of our
commitment to making sure that the lights are on, the water is running
and the refuse is collected- for all residents.
While this Council knows that we have limited resources to deal with the
challenges that we face, it is also important to bear in mind that this
budget seeks to manage the balance between our priorities.
But in as much as we recognise that we sometimes may not have all the
resources that we require, we are committed to using all of the resources
that we do have.
Because it is unacceptable to complain that we have capacity or funding
issues in the face of so many socio-economic pressures and then fail to
use everything that we have at our disposal.
It is up to this Council, its leadership and the leadership in the
administration to deliver outcomes with the resources we have.
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And let everyone be on notice that I will not accept excuses when it
comes to a failure to deliver.
In conclusion, this Council knows that of the total budget, the vast
majority goes towards the direct provision of services.
The total service provision of this budget is approximately R19,6 billion.
Of that R19,6 billion, R11,17 billion is being spent in the poorer areas of
the city.
That is a total service investment of around 56,8% in previously
disadvantaged areas.
It is further proof that, despite what critics say, the evidence is clear: this
City has an overwhelming focus on the poor.
So let us all agree that while we are creating the conditions for business
to thrive, we understand that we can only succeed as a city if we provide
for all of our residents, no matter what their income.
That was the pledge that we made to the electorate.
And it is the promise upon which we are delivering.
Because in our city, a better life for all is not just a poster- it’s a reality.
Thank you, baie dankie, enkosi.
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