Western Cape Government 2013 | Budget to the People: Theewaterskloof Municipality 1 the Purpose of the Presentation Is To…

provide an overview of the current fiscal and socio-economic

reality within which the 2017 budget is set, including an overview of the impact of the recent credit downgrades on the Western Cape;

elaborate on the fiscal and budget policy principles that informed the 2017 Provincial Budget;

share the 2017 Provincial Budget with specific reference to infrastructure spending within the Overberg District and the Theewaterskloof Municipality; and

strengthen the working relationship and culture of intergovernmental cooperation between the Western Cape Government and the Municipality.

Global growth outlook Global growth slowed to 3.2% in 2016 (from 3.4% in 2015) led by a 10.0 moderation in economic output in 8.0 advanced economies while EM growth was flat at 4.3% in 2016 6.0 Global outlook optimistic as 4.0 advanced economies projected to 3.5 3.6 grow at 2% in 2017 and 1.9% in 2018; 2.0 EM at 4.6% for 2017 and 4.8% for 2018 - Support for global growth from BRICS will be much less in 2017 and 2018 - 2.0 than in previous periods - 4.0 Risks includes a downward correction

- 6.0 in US business sentiment; an EU 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 hard-line to the UK will weaken trade World prospects; Faster monetary policy Advanced economies “normalisation” in advanced Emerging market and developing economies economies

Consumer spending Indicator 2016 2017f 2018f Lower consumer confidence Consumer 0.8 0.6 1.4 Lower growth in private sector wage rate spending Moderating inflation Fixed investment -3.9 -2.1 -0.7 Investment Gross domestic -0.8 0.4 1.0 expenditure Policy uncertainty leading to lower business confidence Exports -0.1 1.2 1.7 Fiscal pressure to weigh on government investment

GDP 0.3 0.3 0.9 Uptick in housing investment in Q1 Other CPI (ave) 6.3 5.3 5.1 Rising agricultural output PPI (ave) 7.1 5.0 5.1 Rand to move in narrow band Risks Prime rate (eop) 10.50 10.50 10.50 Faster global growth, but could lead to increased Current account interest rates -3.3 -2.6 -3.3 (% of GDP) Political and institutional risks

R/$ (ave) 14.71 13.27 13.99 Further downgrades to sovereign rating Softer global commodity prices

GDPR Growth Employment (Net change)

District Trend Estimate Trend Estimate

2005 - 2015 2010 - 2015 2016e 2005 - 2015 2010 - 2015 2016e

Cape Metro 2.9 2.5 0.9 267 913 172 457 9 210

Cape Winelands 3.3 2.9 0.5 67 738 67 844 3 103

Eden 3.2 2.7 0.7 38 595 32 078 50

West Coast 3.0 2.8 -0.6 17 210 28 655 1 954

Overberg 3.6 3.1 0.6 24 913 23 303 727

Central Karoo 3.0 2.1 -1.2 2 076 2 649 6

Total Western Cape 3.0 2.5 0.7 433 495 326 986 15 050

GDP Trend 2010 - 2015

Sector Western Cape West Cape Central Eden Overberg Cape Metro Coast Winelands Karoo

Agriculture, forestry & fishing 2.7 4.1 2.2 1.7 1.1 1.3 1.1

Mining & quarrying 2.9 3.1 2.6 2.7 3.5 2.9 4.1

Manufacturing 1.1 1.2 1.3 -0.4 2.3 1.9 3.0

Electricity, gas & water -0.3 -0.5 -1.4 1.1 1.3 -0.5 -0.2

Construction 2.9 2.8 2.6 4.8 1.9 1.3 3.1

Wholesale & retail trade, 2.9 2.7 3.5 4.2 2.3 2.8 4.0 catering & accommodation Transport, storage & 2.4 2.2 1.1 3.6 0.3 3.2 4.0 communication Finance, insurance, real 3.3 3.0 3.6 4.7 2.6 4.2 3.9 estate & business services Community, social & 2.0 1.8 3.2 3.0 2.4 2.2 2.9 personal services

General government 3.5 3.8 3.5 2.9 4.0 2.5 2.4

Total GDPR Growth 2.6 2.5 2.8 2.9 2.1 2.7 3.1

Cape Cape West Central Eden Overberg 2015 Metro Winelands Coast Karoo

Agriculture, forestry & fishing 0.35 2.45 4.90 1.40 2.64 3.90

Mining & quarrying 0.86 0.70 3.81 1.29 0.37 0.17

Manufacturing 0.98 1.03 1.42 0.94 0.87 0.17

Electricity, gas & water 1.05 0.78 0.69 1.08 0.88 1.94

Construction 0.95 1.17 0.88 1.17 1.35 0.96

Wholesale & retail trade, catering 0.98 1.07 0.90 1.06 1.12 0.87 & accommodation

Transport, storage & 1.04 0.88 0.76 0.92 1.0 1.40 communication

Finance, insurance, real estate & 1.09 0.78 0.46 0.97 0.79 0.43 business services

Community, social & personal 1.04 1.11 0.91 1.01 0.99 1.42 services

General government 0.99 0.90 0.90 0.89 0.78 1.80

City of Cape Town BPO, oil and gas, film and tourism, ICT

West Coast Tourism, wheat, rooibos, tea farming, steel and iron ore processing

Eden Tourism, oil and gas, BPO, dairy, ostrich farming

Cape Winelands Wine industry, apple and pear farming, tourism and education

Central Karoo Sheep farming, transport and tourism

Overberg Canola, apple and barley production and tourism

Western Cape dam levels

% Full % Full Dam 28 August 2017 28 August 2016 Cape Town System Dams (Combined): Wemmershoek, Voëlvlei, 33.87 58.19 Steenbras, Theewaterskloof and Berg River Dams Berg River Catchment 44.28 67.67 Breede River Catchment 31.64 54.68 Gouritz River Catchment 17.38 46.70 Olifants/Doorn River Catchment 36.39 99.26 Western Cape state of dams 32.73 59.48 Source: National Department of Water and Sanitation Heavily and moderately water intensive businesses make up 30 per cent of the Western Cape economy in terms of Gross value added Oil and gas and agri-processing sectors are heavily water dependent While tourism is not a heavily or moderately dependent water sector, water is crucial for tourism experience The re-use potential of water in agriculture and agri-processing is regarded as high Potential impact on construction projects – delays, reduction in infrastructure delivery

Credit rating agencies measure the probability of debt default and the associated expected losses.

In terms of the 2017 ratings calendar, all three major credit ratings agencies, that is, Standard and Poor’s (S&P), Fitch Ratings and Moody’s, released their first sovereign credit rating reports for South Africa by June 2017.

• Standards and Poor’s: Long-term sovereign foreign currency rating

↓ Sub-investment grade, negative outlook (3 April 2017).

• Fitch Ratings: Long-term foreign and local currency ratings

↓ Sub-investment grade, stable outlook (7 April 2017).

• Moody’s: ↓ One notch above investment grade, negative outlook (9 June 2017)

South Africa is as such seen as being an risk for defaulting on its debt.

•

Execution of the Fiscal Strategy is done through three principles: • Balanced budget • Expenditure management • Revenue management Balanced Budget The Fiscal and Budget Policy approach is designed to manage risk and maintain fiscal sustainability in a constrained economic Fiscal Strategy and fiscal environment.

Expenditure Revenue

Allocative Efficiency: Allocation of resources towards priorities of

government to programmes that are effective. Fiscal Consolidation: Generally entails reducing government expenditure and/or increasing revenues. Fiscal Sustainability: Maintaining stability in key government programmes and managing risks. Fiscal Discipline: Financially accountability by ensuring that there is no irregular or wasteful spending by any department or entity.

PSG 1: Promoting investment and providing support to key economic sectors, artisan and technical skills, ease of doing business, green economy and toward infrastructure – led growth Project Khulisa Ease of doing business programme Saldanha Bay IDZ Agriculture Atlantis SEZ Energy Security Game Changer Catalytic Infrastructure Apprenticeship Game Changer

PSG 2: Improving Language and Mathematics, Matric pass rate, Quality education in poorer communities, e-Learning, Early Childhood Development, Grade R, Youth Development and After School Programme

No-fee schools and learner transport Youth Cafés scheme Chrysalis Academy Collaboration Schools eLearning Game Changer MOD programme After Schools Programme Year Beyond

PSG 3: Inclusive, healthy and safe communities and families and children, social development services for the poor and most vulnerable and alcohol harms reduction

WoW 1st1000 days Supporting arts and culture 90-90-90 campaign Community Safety Improvement Integrated Service Delivery Model Western Cape Police Ombudsman Services to persons with disabilities, Road safety children and older persons PSG 4: Integrated Human Settlements, Spatial and development planning, sustainable ecological (water and climate change) and agricultural resource-base and Better

Living Model Catalytic housing projects Water security/drought/climate change RSEP/VPUU Fire and disaster management Provincial Spatial Development Plan Better Living Model Game Changer

Good financial Management Data Governance Supporting Municipalities Broadband Game Changer

PSG 5: Enhanced Governance, Integrated Management, Inclusive Society and Broadband

Good financial Management Supporting Municipalities Data Governance Broadband Game Changer

Public value creation by spending public funds in a sustainable and effective way.

INCLUSIVE + SUSTAINABLE + SMART GROWTH

Revised Estimate 2017/18 2018/19 2019/20 2016/17 VOTE R’000 R’000 R’000 R’000

Community Safety 481 547 574 603

Education 366 071 387 553 408 715 430 487

Health 122 053 141 830 150 089 158 134

Social Development 8 912 9 465 10 023 10 584

Human Settlements 41 577 72 621 62 200 74 150

Transport and Public Works 70 486 90 899 20 997 71 193

Agriculture 5 702 5 531 5 852 6 180

Cultural Affairs and Sport 7 535 6 718 7 021 2 181

Local Government 530 523 546 580

TOTAL 623 347 715 687 666 017 754 092

R28 billion across next 3 years to develop infrastructure and housing PSG 1: To grow the economy and create jobs

Education Health R4.8 billion R2.5 billion

Human Social Settlements Development R7.2 billion R1.9 million

Transport and Environmental Public Works Affairs R11.6 billion R113.1 million

Broadband R1.7 billion PPP R230.8 million

Total 2017/18 Estimates: R8.6 billion

Across districts City of Cape Town R2.6 bn R2.4 bn 30.2% 28.1%

Central Karoo R128.0 m 1.5%

Cape Winelands West Coast R1.3 bn R731.5 m 14.8% 8.5% Overberg Eden R416.0 m R1.0 bn 4.8% 12.0%

Total 2017/18 allocation: R416.0 million

Overberg District Municipality: R89.4 million Swellendam

R5.4 million

Theewaterskloof

R200.0 million

Cape Agulhas

Overstrand R33.3 million

R87.9 million

Overberg Theewaterskloof Overstrand Swellendam Cape Agulhas Functional Area District

Cape Nature - - 16 961 - -

Education - 40 000 25 000 - -

Health - 352 1 300 1 000 10 879

Human Settlements - 72 621 31 670 3 350 20 450

Public Works - - - - -

Transport 89 383 87 000 13 000 1 000 2 000

Social Development - - - - -

TOTAL 89 383 199 973 87 931 5 350 33 329

Functional Area 2017/18 2018/19 2019/20 TOTAL

Cape Nature - - - -

Education 40 000 22 380 80 505 18 125

Health 352 1 050 13 902 12 500 Human Settlements 72 621 62 200 74 150 208 971

Public Works - - - -

Transport 87 000 17 000 67 000 171 000

Social Development - - - -

TOTAL 199 973 102 630 171 775 474 378

Project Description 2017/18 2018/19 2019/20 Total MTEF

Swartberg Primary School 2 000 2 000 - -

Umyezo Wama Apile Primary School 15 000 9 000 15 125 39 125

Umyezo Wama Apile SS (Grabouw SS) 25 000 13 380 1 000 39 380

TOTAL 40 000 22 380 18 125 80 505

Construction of new Umyezo Wama Apile High School, Grabouw

Project Description 2017/18 2018/19 2019/20 Total MTEF

CI820027: Villiersdorp Ambulance Station – Replacement 350 50 300 -

CI810095: Villiersdorp Clinic – Replacement 1 250 1 000 1 251

CH810022: Gansbaai Clinic - HT - Upgrade and Additions - - 1 500 1 500

CI830123: Caledon Hospital - Acute Psychiatric Unit and R & R 1 500 5 000 5 501

CI820001: Caledon Ambulance Station - Communications Centre Extension 300 - 5 000 5 300

TOTAL 352 1 050 12 500 13 902

Project Description 2017/18 2018/19 2019/20 Total MTEF 3192 - ISSP Botrivier New France (248 sites) UISP 500 - - 500 3266 - ISSP Caledon Site Saviwa 3 Riemvasmaak (1017 sites) UISP 1 500 - - 1 500 3248 - Villiersdorp Destiny Farm (2305 services - 1914 units) IRDP - (391 units) FLISP 2 000 - - 2 000 3522 - ISSP Grabouw Rooidakke Extension (2117 sites) IRDP 3 131 - - 3 131 2015-1092 - Caledon Sidesaviwa (220 units) IRDP4 3 840 - - 3 840 2043-1094 - Grabouw Hillside (438 red 357 services) UISP - 2 500 2 500 5 000 3193-01 - Riviersonderend Erf 289 Phase 1 (135 services) UISP 7 000 - - 7 000 3524-xx - Villiersdorp Farm 24 West Side (195 services) UISP - - 7 650 7 650 3193-xx - Riviersonderend Erf 289 Phase 1 (70 units) IRDP4 - 8 400 8 400 3193-02 - Riviersonderend Erf 289 Phase 1 (70 units) UISP PHP 5 400 3 000 8 400 2043-1093 - Grabouw Rooidakke (1169 services) UISP 9 750 - - 9 750 3522-xx - Grabouw Rooidakke Extension (Bulk Infrastructure - Stormwater) IRDP 10 000 - - 10 000 3192-xx - Botrivier New France (248 services) UISP - 11 300 11 300 3248-xx - Villiersdorp Destiny Farm (1914 units) IRDP - - 2 000 12 000 3248-xx - Villiersdorp Destiny Farm (2305 services) IRDP - 5 000 10 000 15 000 3262-xx - Grabouw Hillside (220 units) UISP PHP 3 000 6 000 6 000 15 000 3522-xx01 - ISSP Grabouw Rooidakke Extension (2117 services) IRDP - 7 000 12 000 19 000 3266-xx01 - ISSP Caledon Site Saviwa 3 Riemvasmaak (1017 services) UISP 2 500 7 000 12 000 21 500 2043-1119 - Grabouw Rooidakke - Rainbow (1169 units) UISP PHP 24 000 12 000 12 000 48 000 TOTAL 72 621 62 200 74 150 208 971

Hillside Housing Project

Rooidakke Extension, Grabouw

Project Description 2017/18 2018/19 2019/20 Total MTEF

C1030 Caledon-Bredasdorp reseal 2 000 2 000 - -

C1093 PRMG N2-Villiersdorp 25 000 25 000 - -

C1088 PRMG Standford-Riviersondered reseal 40 000 40 000 - -

C984 PRMG Grabouw-Villiersdorp reseal 85 000 17 000 2 000 104 000

TOTAL 87 000 17 000 67 000 171 000

Hemel en Aarde Valley

Overberg Cape Overstrand Swellendam Theewaterskloof Functional Area District Agulhas

Governance and administration 90 2 705 898 6 862 2 962

Community and public safety 1 005 26 908 4 053 38 382 3 164

Economic and environmental services 126 7 460 4 399 10 904 12 859

Trading services - 60 575 9 460 52 789 8 680

Other - - - - -

TOTAL 1 221 97 648 18 810 108 936 27 665

Transfers recognised 800 47 840 14 810 61 805 12 969

Public Contributions and Donations - - - - -

Borrowings - 30 000 - 32 244 5 661

Internally generated funds 421 19 808 4 000 14 887 9 034

2017 DORB MIG Allocation - 22 330 12 067 26 833 11 118

Functional Area Overberg District Overstrand Swellendam Theewaterskloof Cape Agulhas

Total New Assets 54 626 15 120 65 934 9 579 877

Total Renewal of Existing Assets 344 11 280 856 7 109 6 215

Total Upgrading of Existing Assets 31 742 2 834 35 894 11 870

TOTAL 1 221 97 648 18 810 108 936 27 665

R&M as a % of PPE 185,5% 4,9% 6,0% 11,4% 14,5%

Top 10 2017/18 Capital Projects (SA36)

Functional 2017/18 2018/19 2019/20 Description Area R’000 R’000 R’000 Low Cost Housing Project: Grabouw Rooidakke 1 Housing 10 000 - - Stormwater 2 Water Drought Relieve 9 298 - -

3 Sanitation Bulk outfall sewer 6 194 2 632 1 750

4 Roads Destiny access road 5 159 3 947 -

5 Electricity Upgrading of Bulk Electrical Infrastructure 4 500 - -

6 Sanitation Waste Water Treatment Works Upgrade 4 366 - -

7 Roads Stormwater Upgrade 4 035 439 1 000

8 Sanitation Bulk outfall sewer 3 405 - - Low Cost Housing Project: Grabouw Rooidakke 9 Housing 3 250 - - (1169) Phase 5 Low Cost Housing Project: Grabouw Rooidakke 10 Housing 3 250 - - (1169) Phase 5 Other 55 479 40 209 52 188

TOTAL 108 936 47 226 54 938

Botrivier Housing Project, construction of road infrastructure

Expansion of the Chavonnis Cemetery

Pump upgrade, Tesselaarsdal

Tesselaarsdal Storm water

Gaffley Street, Grabouw

Upgrade of the Greyton Waste Water Treatment Works

Upgrade of Tessleaarsdal drop-off.

Municipality Sites

Theewaterskloof 55

Overstrand 37

Cape Agulhas 27

Swellendam 27

TOTAL 146

Western Cape Travel Schedule

Town Date

Beaufort West 31 July – 4 August 2017

Beaufort West 7 – 11 August 2017 (Student Rotation)

De Doorns 14 – 18 August 2017

De Doorns 21 – 25 August 2017 (Student Rotation)

Oudtshoorn 28 August – 1 September 2017

Oudtshoorn 4 – 8 September 2017 (Student Rotation)

George 11 – 15 September 2017

Saldanha Bay 18 – 22 September 2017(Student Rotation)

Saldanha Bay 25 – 29 September 2017

Slow economic growth + fiscal constraints expected to persist over the medium term. Municipalities should continue to apply fiscal discipline and practice prudent financial management in order to ensure long term financial sustainability and resilience.

Careful consideration needs to be given to the efficiency of the staff establishment and the associated costs. If not managed strictly, this could result in additional pressure on the limited revenue sources.

Circumstances make it essential for municipalities to reprioritise expenditure and implement stringent cost-containment measures in order to keep balance between sustainability and affordability.

Internal revenue generating capacity: Hampers growth and development prospects.

Strategic plans all provide sufficient projects and initiatives, matter of application.

Commend Municipality for unqualified audit outcomes; attests of good governance and accountability, willingness to pursue excellence.

New planning cycle offers councils ideal opportunity to further build upon the culture of accountability, sound financial management and good governance practices.

Servant leadership required to achieve higher levels of governance maturity. Financial efficiency will capacitate service delivery and infrastructure development function to the benefit of greater community. Spill-over effect will stimulate socio-economic development by unlocking inclusive growth potential within game changers and niche opportunities i.e. agri-processing, tourism, arts and culture, sport and recreation.

Support Mechanisms

Legislative compliance: Guidance in terms of legislative prescripts (circulars, guidelines and regulations), provision of applicable reporting templates and frameworks.

In-house support and advice: Hands-on, on-location involvement i.e. assistance in compiling quarterly performance reports, mSCOA implementation, draft budget preparations (compilation of schedules, eGAP training.

Formal budget and governance reviews: LG MTEC, MGRO 1& 2, mid-year assessments.

Learning and training opportunities: Accredited training initiatives, interactive workshops and forums (MM Forum, CFO Forum, IDP Managers Forum), peer-to-peer engagements, pre- audit PDO discussions.

Financial support: Business plan development to qualify for Western Cape Financial Management Support Grant (WCFMSG) support.

Economic intelligence: Research to inform municipal planning processes i.e. Provincial Economic Review and Outlook (PERO), Municipal Economic Review and Outlook (MERO), Socio-economic Profiles (SEP-LG).

Way Forward

Provincial & Fiscal Policy Release of SEP-LG Budget Day Municipal Economic Seminar publications Review & Outlook

Nov 2017 Sep 2017 3 Nov 2017 Feb 2018 Tabling Bosberaad Bosberaad PERO/MERO

Nov 2017 Oct 2017 Oct 2017 Jan 2018 Feb 2018 Mar 2018 May 2018 Tabling PG MTEC 1 Strategic PG MTEC 2 SOPA Tabling Strategic Adjusted Integrated National Integrated Budget MTBPS Budget/MTBPS Budgeting Municipal Engagement Engagements

WC Medium Term Budget Policy Statement and Adjusted Estimates

Planning, Budgeting and Implementation