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2014/15 ADJUSTMENTS BUDGET 2
TABLE OF CONTENTS
PAGE PART 1 – ADJUSTMENTS BUDGET
1.1 Executive Mayor’s Report 3
1.2 2014/15 Adjustments Budget Resolutions 3
1.3 Executive Summary 4
1.4 Adjustments Budget Tables – Parent Municipality 5
1.5 Consolidated Budget Tables 25
PART 2 – SUPPORTING DOCUMENTATION
2.1Adjustments to Budget Assumptions 39
2.2Adjustments to Budget Funding 39
2.3Adjustments to expenditure on allocations and grant programmes 44
2.4Adjustments to Councillors and Employee Benefits 44
2.5Adjustments to Service Delivery and Budget Implementation Plan (SDBIP) 44
2.6Adjustments to Capital Expenditure 45
2.7Acting City Manager’s Quality Certification 45 3
PART 1 – 2014/15 ADJUSTMENTS BUDGET
1.1 Executive Mayor’s Report
1.1.1 Summary of reasons for the 2014/15 Adjustments Budget
In accordance with section 28 of the Municipal Finance Management Act, No 56 of 2003 (MFMA), a municipality must revise its approved annual budget through an adjustments budget, in the following circumstances:
(i) To adjust the revenue and expenditure estimates downwards if there is material under- collection of revenue; (ii) To appropriate additional revenues that have become available over and above those anticipated in the annual budget, but only to revise or accelerate spending programmes already budgeted for; (iii) To authorise the utilisation of projected savings in one vote towards spending under another vote; (iv) To authorise the spending of funds that were unspent at the end of the past financial year where the under-spending could not reasonably have been foreseen at the time to include projected rollovers when the annual budget for the current year was approved by the Council; (v) To correct any errors in the annual budget.
The Municipal Budget and Reporting Regulations stipulate that one adjustments budget may be tabled in the Municipal Council during a financial year. The Adjustments Budget must normally be approved by Council by the end of February.
In line with the MFMA and the Municipal Budget and Reporting Regulations, the 2014/15 approved Budget has been adjusted. The adjustment has been mainly necessitated as a result of the following:
The need to adjust revenue and expenditure estimates, in line with revenue collection levels. The need to appropriate additional revenues that became available over and above those anticipated in the approved 2014/15 Budget. The need to authorise the utilisation of projected savings in one vote towards spending under another vote. The need to authorise the spending of unspent funds at the end of the 2013/14 financial year.
1.1.2 The Executive Mayor recommends that the Council approves the 2014/15 Adjustments Budget.
1.2 2014/15 Adjustments Budget Resolutions
1.2.1 Approval of the Adjustments Budget
(i) The Executive Mayor recommends that the Council, by resolution taken by the majority of its full number, and in terms of Section 30(2) of the Local Government: Municipal Structures Act No. 117 of 1998 (as amended), read in conjunction with Section 28 of the Local Government: Municipal Finance Management Act, Act 56 of 2003, approves the 2014/15 Adjustments Budget as set-out in the following tables: 4
Table B1 Adjustments Budget Summary: page 6;
Table B2 Adjustments Budget Financial Performance (revenue and expenditure by standard classification): page 7;
Table B3 Adjustments Budget Financial Performance (revenue and expenditure by municipal vote): page 9;
Table B4 Adjustments Budget Financial Performance (revenue by source and expenditure by type): page 10;
Table B5 Adjustments Budget Capital Expenditure by vote and standard classification and funding source: page 16;
Table B6 Adjustments Budget Financial Position: page 18;
Table B7 Adjustments Budgeted Cash Flows: page 19;
Table B8 Cash backed reserves/accumulated surplus reconciliation: page 20;
Table B9 Asset Management: page 21;
Table B10 Basic Service Delivery: page 24.
1.2.2 That the 2014/15 Consolidated Adjustments Budget, which includes the financial impact of the municipal entity (MBDA), be noted.
1.3 Executive Summary
The 2014/15 Adjustments Budget amounts to R10,2 billion, comprising of R8,7 billion for the Operating Budget and R1,5 billion for the Capital Budget. The Operating Adjustments Budget reflects an increase of R386,9 million compared to the originally approved 2014/15 Operating Budget, whilst the Adjustments Capital Budget reflects an increase of R125,2 million, compared to the originally approved budget.
The increase in the Operating Budget of R386.9 million is made up as follows:
R’000 Reduction in Employee Related Costs (6,258) Reduction in Debt Impairment (2,581) Reduction in Depreciation (37,219) Reduction in Contracted Services (52,542) Total Expenditure Reductions (98,600)
Increase in Finance Charges 153 Increase in Bulk Purchases 67,719 Increase in Repairs and Maintenance 15,517 Increase in Transfers and Grants 21,546 Increase in General Expenses 380,580 Net Increase 386,915 5
In terms of funding the Capital Budget, the Municipality relies mainly on grant funding. The funding sources, supporting the Municipality’s capital expenditure, are summarised below:
2014/15 Original 2014/15 Adjustments Variance Budget Budget R’000 R’000 R’000 Total Capital Budget 1 342 700 1 467 888 125 188 Funded as follows: Grant funding 846 775 897 831 51 056 Internal funding 442 925 517 057 74 132 Public Contributions 53 000 53 000 - Total 1 342 700 1 467 888 125 188
The increase in the capital grant funding is mainly attributable to the roll over of unspent grant funding as at the end of the 2013/14 financial year, whilst certain amendments were made to the original gazetted allocations. The unspent grant funding relates to EU funding in the amount of R5,7 million, whilst the IPTS Infrastructure grant allocation was increased by R70 million by reducing the IPTS operational grant allocation by a similar amount. Furthermore, the increase in internal funding is mainly attributable to the planned spending of funds, which remained unspent as at the end of the 2013/14 financial year.
It is to be noted that the 2014/15 adjusted budgeted cash flow statement projects a cash and investments balance of R865,8 million as at 30 June 2015, compared to the amount of R1,18 billion as per the original budgeted cash flow statement.
A provision of R339,3 million has been set aside to cover potential bad debts arising from property rates and service charges not collected. This is based upon a level of payment of debtors’ accounts averaging 94%.
The Assistance to the Poor Programme currently, provides the following benefits to poor households in the Metro:
Free 8kl of water Free basic sanitation Free 75 kwh Electricity Free basic refuse removal Property rates subsidy Environmental charges
Out of a total of 276 850 formal households, some 85 022 households receive the aforementioned assistance.
1.4 Adjustments Budget Tables – Parent Municipality
The ten main budget tables, as required in terms of the Municipal Budget and Reporting Regulations, are included in this section. These tables set out the Municipality’s 2014/15 Adjustments Budget to be considered for approval by Council. Each table is accompanied by explanatory notes. 6
Table B1 - Adjustments Budget Summary
Budget Year 2014/15
Description Prior Multi- Unfore. Nat. or Original Accum. Other Total Adjusted Adjuste year Unavoi Prov. Budget Funds Adjusts. Adjusts. Budget d capital d. Govt 1 2 3 4 5 6 7 8 R thousands A A1 B C D E F G H Financial Performance 1,373,5 1,373,5 Property rates 33 – – – – – – – 33 4,325,0 (43,0 (43,0 4,282,0 Service charges 27 – – – – – 00) 00) 27 63,19 63,19 Investment revenue 2 – – – – – – – 2 1,327,2 233,09 233,09 1,560,3 Transfers recognised - operational 59 – – – – – 2 2 51 1,014,2 (15,8 (15,8 998,39 Other own revenue 87 – – – – – 96) 96) 1 Total Revenue (excluding capital 8,103,2 174,1 174,1 8,277,4 transfers and contributions) 98 – – – – – 96 96 94 2,184,4 (6,25 (6,25 2,178,1 Employee costs 15 – – – – – 8) 8) 57 60,97 60,97 Remuneration of councillors 6 – – – – – – – 6 862,35 (37,2 (37,2 825,14 Depreciation & asset impairment 9 – – – – – 19) 19) 0 179,58 15 15 179,73 Finance charges 1 – – – – – 3 3 3 2,994,4 83,23 83,23 3,077,6 Materials and bulk purchases 56 – – – – – 6 6 93 440,05 21,54 21,54 461,59 Transfers and grants 3 – – – – – 6 6 9 1,615,5 325,45 325,45 1,941,0 Other expenditure 97 – – – – – 7 7 54 8,337,4 386,9 386,9 8,724,3 Total Expenditure 37 – – – – – 15 15 52 (234,13 (212,7 (212,7 (446,85 Surplus/(Deficit) 9) – – – – – 19) 19) 8) 846,7 51,0 51,0 897,8 Transfers recognised - capital 75 – – – – – 56 56 31 Contributions recognised - capital & contributed assets – – – – – – – – – Surplus/(Deficit) after capital 612,6 (161,6 (161,6 450,9 transfers & contributions 37 – – – – – 63) 63) 73
Share of surplus/ (deficit) of associate – – – – – – – – – 612,6 (161,6 (161,6 450,9 Surplus/ (Deficit) for the year 37 – – – – – 63) 63) 73
Capital expenditure & funds sources 1,342,7 125,1 125,1 1,467,8 Capital expenditure 00 – – – – – 88 88 88 846,77 51,05 51,05 897,83 Transfers recognised - capital 5 – – – – – 6 6 1 53,00 53,00 Public contributions & donations 0 – – – – – – – 0
Borrowing – – – – – – – – – 442,92 74,13 74,13 517,05 Internally generated funds 5 – – – – – 2 2 7 1,342,7 125,1 125,1 1,467,8 Total sources of capital funds 00 – – – – – 88 88 88
Financial position 2,336,5 68,28 68,28 2,404,7 Total current assets 00 – – – – – 6 6 86 7
14,072,0 (194,5 (194,5 13,877,4 Total non current assets 26 – – – – – 88) 88) 38 2,158,3 (28,0 (28,0 2,130,2 Total current liabilities 49 – – – – – 71) 71) 78 3,175,5 (50,7 (50,7 3,124,8 Total non current liabilities 22 – – – – – 01) 01) 22 11,074, (47,5 (47,5 11,027, Community wealth/Equity 656 – – – – – 32) 32) 124
Cash flows 1,445,7 (355,6 (355,6 1,090,1 Net cash from (used) operating 79 – – – – – 67) 67) 12 (1,276,7 (394,3 (394,3 (1,671,0 Net cash from (used) investing 57) – – – – – 01) 01) 58) (112,96 7,18 7,18 (105,77 Net cash from (used) financing 8) – – – – – 9 9 9) Cash/cash equivalents at the year 1,176,9 (311,0 (311,0 865,8 end 31 – – – – – 94) 94) 37
Budget Year 2014/15
Description Prior Multi- Unfore. Nat. or Original Accum. Other Total Adjusted Adjuste year Unavoi Prov. Budget Funds Adjusts. Adjusts. Budget d capital d. Govt 1 2 3 4 5 6 7 8 R thousands A A1 B C D E F G H Cash backing/surplus reconciliation 1,176,9 (311,1 (311,1 865,83 Cash and investments available 51 – – – – – 14) 14) 7 908,80 (281,0 (281,0 627,70 Application of cash and investments 6 – – – – – 97) 97) 9 268,1 (30,0 (30,0 238,1 Balance - surplus (shortfall) 45 – – – – – 17) 17) 28
Asset Management 14,040,0 (174,7 (174,7 13,865,3 Asset register summary (WDV) 95 – – – – – 48) 48) 47 862,35 (37,2 (37,2 825,14 Depreciation & asset impairment 9 – – – – – 19) 19) 0 748,61 38,02 38,02 786,63 Renewal of Existing Assets 1 – – – – – 0 0 1 607,47 15,51 15,51 622,99 Repairs and Maintenance 4 – – – – – 7 7 1
Free services 276,30 7,64 7,64 283,95 Cost of Free Basic Services provided 3 – – – – – 8 8 2 Revenue cost of free services 440,22 7,64 7,64 447,86 provided 0 – – – – – 8 8 8 Households below minimum service level
Water: – – – – – – – – –
Sanitation/sewerage: 22 – – – – – – – 22
Energy: – – – – – – – – –
Refuse: 65 – – – – – – – 65
Explanatory notes to Table B1 – Adjustments Budget Summary
The aim of the Adjustments Budget Summary is to provide a concise overview of the proposed Adjustments Budget from all of the major financial perspectives (operating expenditure, capital expenditure, financial position, cash flow, and MFMA funding compliance). The table provides an overview of the amounts to be approved by Council within the context of operating performance, 8 resources utilised for capital expenditure, financial position, cash and funding compliance, as well as the Municipality’s commitment to eliminating basic service delivery backlogs.
Table B2 - Adjustments Budget Financial Performance (revenue and expenditure by standard classification)
Budget Year 2014/15 Standard Description Prior Multi- Unfore. Nat. or Original Accum. Other Total Adjusted Adjuste year Unavoi Prov. Budget Funds Adjusts. Adjusts. Budget d capital d. Govt 5 6 7 8 9 10 11 12 R thousands A A1 B C D E F G H Revenue - Standard Governance and 2,329, 49,0 49,0 2,378, administration 052 – – – – – 65 65 117 3 11 Executive and council 6 – – – – – 74 74 1 2,304,6 40,22 40,22 2,344,9 Budget and treasury office 96 – – – – – 3 3 20 24,3 8,76 8,76 33,08 Corporate services 19 – – – – – 7 7 7 471,0 179,5 179,5 650,6 Community and public safety 66 – – – – – 78 78 44 19,9 6,57 6,57 26,49 Community and social services 22 – – – – – 1 1 3 27,4 3,12 3,12 30,61 Sport and recreation 88 – – – – – 1 1 0 36,6 (27,1 (27,1 9,52 Public safety 41 – – – – – 19) 19) 2
Budget Year 2014/15 Standard Description Prior Multi- Unfore. Nat. or Original Accum. Other Total Adjusted Adjuste year Unavoi Prov. Budget Funds Adjusts. Adjusts. Budget d capital d. Govt 5 6 7 8 9 10 11 12 R thousands A A1 B C D E F G H 386,0 193,23 193,23 579,2 Housing 09 – – – – – 0 0 40 1,00 3,77 3,77 4,78 Health 6 – – – – – 4 4 0 Economic and environmental 690,9 53,8 53,8 744,8 services 20 – – – – – 89 89 08 387,5 9,87 9,87 397,3 Planning and development 11 – – – – – 1 1 82 298,2 32,63 32,63 330,8 Road transport 00 – – – – – 7 7 37 5,20 11,38 11,38 16,59 Environmental protection 9 – – – – – 1 1 0 5,442, (57,2 (57,2 5,385, Trading services 305 – – – – – 79) 79) 026 3,365,1 (40,3 (40,3 3,324,7 Electricity 31 – – – – – 75) 75) 56 883,7 (30,4 (30,4 853,2 Water 04 – – – – – 77) 77) 28 881,7 5,39 5,39 887,1 Waste water management 32 – – – – – 4 4 26 311,7 8,17 8,17 319,9 Waste management 38 – – – – – 8 8 15 16,7 16,7 Other 31 – – – – – – – 31 8,950, 225,2 225,2 9,175, Total Revenue - Standard 074 – – – – – 52 52 326 Expenditure - Standard Governance and 1,214, 47,2 47,2 1,262, administration 828 – – – – – 98 98 126 9
199,9 (1,33 (1,33 198,5 Executive and council 26 – – – – – 1) 1) 95 617,0 12,43 12,43 629,4 Budget and treasury office 61 – – – – – 2 2 93 397,8 36,19 36,19 434,0 Corporate services 40 – – – – – 7 7 37 1,387, 211,2 211,2 1,598, Community and public safety 280 – – – – – 77 77 558 174,5 (8,23 (8,23 166,3 Community and social services 98 – – – – – 9) 9) 59 181,5 14,41 14,41 195,9 Sport and recreation 19 – – – – – 8 8 38 424,5 (5,42 (5,42 419,1 Public safety 99 – – – – – 8) 8) 71 442,8 202,33 202,33 645,1 Housing 35 – – – – – 4 4 69 163,7 8,19 8,19 171,9 Health 29 – – – – – 2 2 21 Economic and environmental 1,142, 26,2 26,2 1,168, services 070 – – – – – 40 40 309 460,4 50,76 50,76 511,2 Planning and development 42 – – – – – 1 1 03 353,6 161,23 161,23 514,8 Road transport 62 – – – – – 7 7 98 327,9 (185,7 (185,7 142,2 Environmental protection 66 – – – – – 58) 58) 08 4,557, 123,4 123,4 4,680, Trading services 309 – – – – – 48 48 758 3,053,5 96,20 96,20 3,149,7 Electricity 10 – – – – – 6 6 17 666,9 18,51 18,51 685,4 Water 71 – – – – – 3 3 83 553,4 1,48 1,48 554,9 Waste water management 14 – – – – – 9 9 04 283,4 7,24 7,24 290,6 Waste management 14 – – – – – 0 0 54 35,9 (21,3 (21,3 14,6 Other 50 – – – – – 48) 48) 02 8,337, 386,9 386,9 8,724, Total Expenditure - Standard 437 – – – – – 15 15 352 Surplus/ (Deficit) for the 612,6 (161,6 (161,6 450,9 year 37 – – – – – 63) 63) 73
Explanatory notes to Table B2 – Adjustments Budget Financial Performance (revenue and expenditure by standard classification)
The ‘standard classification’ refers to a modified Government Finance Statistics (GFS) reporting structure. The aim of the standard classification approach is to ensure that all municipalities approve a budget in one common format, to facilitate comparison across all municipalities. It should be noted that the revenue by vote as reflected in this table, includes revenue attributable to capital grants. 10
Table B3 - Adjustments Budget Financial Performance (revenue and expenditure by municipal vote)
Budget Year 2014/15 Vote Prior Multi- Unfore. Nat. or Original Accum. Other Total Adjusted Adjuste year Unavoi Prov. Budget Funds Adjusts. Adjusts. Budget d capital d. Govt 3 4 5 6 7 8 9 10 R thousands A A1 B C D E F G H Revenue by Vote 2,304,7 40,22 40,22 2,344,9 Vote 1 - Budget and Treasury 13 – – – – – 1 1 33 325,2 23,33 23,33 348,5 Vote 2 - Public Health 15 – – – – – 3 3 48 594,8 197,5 197,5 792,4 Vote 3 - Human Settlements 78 – – – – – 40 40 18 Vote 4 - Economic 126,9 (5,24 (5,24 121,6 Development,Tourism and Agriculture 02 – – – – – 2) 2) 60 17,06 9,43 9,43 26,49 Vote 5 - Corporate Service 2 – – – – – 2 2 4 277,7 34,83 34,83 312,5 Vote 6 - Rates & General 10 – – – – – 7 7 46 883,7 (30,47 (30,47 853,2 Vote 7 - Water Service 04 – – – – – 7) 7) 28 881,7 5,39 5,39 887,1 Vote 8 - Sanitation 32 – – – – – 4 4 26 3,365,1 (40,37 (40,37 3,324,7 Vote 9 - Eletricity And Energy 31 – – – – – 5) 5) 56 56 78 78 1,35 Vote 10 - Executive and Council 3 – – – – – 8 8 1 60,95 (29,31 (29,31 31,63 Vote 11 - Safety and Security 4 – – – – – 9) 9) 5 Vote 12 - Nelson Mandela Bay 43,07 (4,07 (4,07 39,00 Stadium 5 – – – – – 5) 5) 0 Vote 13 - Strategic Programmes 35,13 14,87 14,87 50,01 Directorate 4 – – – – – 8 8 2 Vote 14 - Recreational and Cultural 33,30 8,31 8,31 41,61 Services 3 – – – – – 7 7 9 8,950, 225,2 225,2 9,175, Total Revenue by Vote 074 – – – – – 52 52 326
Expenditure by Vote 595,1 14,63 14,63 609,7 Vote 1 - Budget and Treasury 38 – – – – – 0 0 68 798,0 (169,3 (169,3 628,7 Vote 2 - Public Health 99 – – – – – 22) 22) 77 568,6 217,5 217,5 786,1 Vote 3 - Human Settlements 09 – – – – – 01 01 10 Vote 4 - Economic 159,5 (16,02 (16,02 143,5 Development,Tourism and Agriculture 53 – – – – – 4) 4) 29 412,5 1,78 1,78 414,3 Vote 5 - Corporate Service 51 – – – – – 2 2 33 489,3 170,9 170,9 660,3 Vote 6 - Rates & General 63 – – – – – 64 64 28 666,9 18,51 18,51 685,4 Vote 7 - Water Service 71 – – – – – 3 3 83 496,4 (1,74 (1,74 494,6 Vote 8 - Sanitation 09 – – – – – 0) 0) 69 3,053,5 96,20 96,20 3,149,7 Vote 9 - Eletricity And Energy 10 – – – – – 6 6 17 230,7 (7,19 (7,19 223,5 Vote 10 - Executive and Council 39 – – – – – 7) 7) 42 435,3 (5,05 (5,05 430,2 Vote 11 - Safety and Security 43 – – – – – 5) 5) 88 Vote 12 - Nelson Mandela Bay 136,9 29,31 29,31 166,2 Stadium 29 – – – – – 5 5 45 Vote 13 - Strategic Programmes 30,13 – – – – – 12,13 12,13 42,27 11
Directorate 8 8 8 6 Vote 14 - Recreational and Cultural 264,0 25,20 25,20 289,2 Services 83 – – – – – 5 5 88 8,337, 386,9 386,9 8,724, Total Expenditure by Vote 437 – – – – – 15 15 352 612,6 (161,66 (161,66 450,9 Surplus/ (Deficit) for the year 37 – – – – – 3) 3) 73
Explanatory notes to Table B3 – Adjustments Budget Financial Performance (revenue and expenditure by municipal vote)
1. The purpose of the format in which the Adjustments Budget is presented, is to enable the Council to enforce a vote in accordance with the municipality’s organisational structure, so as to assign responsibility for the revenue and expenditure recorded against these votes to the Municipal Manager and Executive Directors concerned. Operating revenue and expenditure is thus presented by ‘vote’. A ‘vote’ is defined as one of the main segments into which a budget of a municipality is divided into, for the appropriation of funds.
Table B4 - Adjustments Budget Financial Performance (revenue and expenditure)
Budget Year 2014/15
Description Prior Multi- Unfore. Nat. or Original Accum. Other Total Adjusted Adjuste year Unavoi Prov. Budget Funds Adjusts. Adjusts. Budget d capital d. Govt 3 4 5 6 7 8 9 10 R thousands A A1 B C D E F G H Revenue By Source 1,373,5 1,373,5 Property rates 33 – – – – – – – 33 Property rates - penalties & collection charges – – 3,182,1 (55,0 (55,0 3,127,1 Service charges - electricity revenue 51 – – – – – 00) 00) 51 558,22 7,00 7,00 565,22 Service charges - water revenue 0 – – – – – 0 0 0 384,58 5,00 5,00 389,58 Service charges - sanitation revenue 7 – – – – – 0 0 7 200,06 200,06 Service charges - refuse revenue 8 – – – – – – – 8 Service charges - other – – 22,32 (9 (9 22,22 Rental of facilities and equipment 7 9) 9) 9 Interest earned - external 63,19 63,19 investments 2 – – 2 Interest earned - outstanding 182,99 (39,3 (39,3 143,69 debtors 9 09) 09) 0 Dividends received – – 36,83 (26,0 (26,0 10,79 Fines 6 39) 39) 7 11,36 11,36 Licences and permits 5 – – 5 1,57 62 62 2,20 Agency services 5 7 7 2 1,327,2 233,09 233,09 1,560,3 Transfers recognised - operating 59 2 2 51 759,18 48,92 48,92 808,10 Other revenue 5 – – – – – 4 4 9 Gains on disposal of PPE – – Total Revenue (excluding capital 8,103, 174,1 174,1 8,277, transfers and contributions) 298 – – – – – 96 96 494 Expenditure By Type 2,184,4 (6,25 (6,25 2,178,1 Employee related costs 15 – – – – – 8) 8) 57 60,97 60,97 Remuneration of councillors 6 – – 6 12
341,91 (2,58 (2,58 339,33 Debt impairment 9 1) 1) 8 862,35 (37,2 (37,2 825,14 Depreciation & asset impairment 9 – – – – – 19) 19) 0 179,58 15 15 179,73 Finance charges 1 3 3 3 2,386,9 67,71 67,71 2,454,7 Bulk purchases 83 – – – – – 9 9 01 607,47 15,51 15,51 622,99 Other materials 4 7 7 1 374,83 (52,5 (52,5 322,29 Contracted services 7 – – – – – 42) 42) 4 440,05 21,54 21,54 461,59 Transfers and grants 3 6 6 9 898,84 380,58 380,58 1,279,4 Other expenditure 2 – – – – – 0 0 22 Loss on disposal of PPE – – 8,337, 386,9 386,9 8,724, Total Expenditure 437 – – – – – 15 15 352 (234,1 (212,7 (212,7 (446,8 Surplus/(Deficit) 39) – – – – – 19) 19) 58) 846,77 51,05 51,05 897,83 Transfers recognised - capital 5 6 6 1 Contributions – – Contributed assets – – 612,6 (161,6 (161,6 450,9 Surplus/(Deficit) before taxation 37 – – – – – 63) 63) 73 Taxation – – 612,6 (161,6 (161,6 450,9 Surplus/(Deficit) after taxation 37 – – – – – 63) 63) 73 Attributable to minorities – – Surplus/(Deficit) attributable to 612,6 (161,6 (161,6 450,9 municipality 37 – – – – – 63) 63) 73
Budget Year 2014/15
Description Prior Multi- Unfore. Nat. or Original Accum. Other Total Adjusted Adjuste year Unavoi Prov. Budget Funds Adjusts. Adjusts. Budget d capital d. Govt 3 4 5 6 7 8 9 10 R thousands A A1 B C D E F G H Share of surplus/ (deficit) of associate – – 612,6 (161,6 (161,6 450,9 Surplus/ (Deficit) for the year 37 – – – – – 63) 63) 73
Explanatory notes to Table B4 – Adjustments Budget Financial Performance (revenue and expenditure)
Revenue
1. The Financial Performance Adjustments Budget is required to be approved concurrently by revenue source and expenditure type, so as to ensure consistency with annual reporting format requirements. A key aim is to facilitate comparison between the annual results and the Adjustments Budget, so as to assess performance.
2. Total revenue amounts to R8,3 billion in the 2014/15 Adjustments Budget, compared to the amount of R8,1 billion in the original 2014/15 Budget. This represents an increase of R174,2 million or 2,1%.
3. The significant variations in revenue, compared to the original budget are as follows:
3.1 Service Charges 13
Service charges decreased by R43,0 million, compared to the original budget. The net decrease is made up as follows:
R’000 Increase in water revenue 7,000 Increase in sanitation revenue 5,000 Total increase in service charges 12,000 Less: Decrease in electricity revenue 55,000 Net Decrease in service charges 43,000
The increase in service charges relating to water and sanitation is mainly attributable to higher consumption patterns than initially anticipated in the 2014/15 original budget.
The reduction in electricity service charges is mainly attributable to lower consumption patterns than initially anticipated in the 2014/15 original budget.
3.2 Interest Earned – Outstanding debtors
Interest earned on outstanding debtors decreased by R39,3 million, compared to the original budget. The reduction is attributable to the interest charged on outstanding debtors reducing from 15,5% to 9% with effect from 1 August 2014, in line with the Prescribed Rate of Interest Act, No. 55 of 1975.
3.3 Fines
Fines decreased by R26,0 million compared to the original budget. This reduction in fines is attributable to the under collection of traffic fines, as evidenced by the low collection trends.
3.4 Transfers Recognised - Operating
This includes the local government equitable share and other operating grants from national and provincial government. Transfers increased by R233,1 million, compared to the original budget. This increase is mainly made up as follows:
R’000 Increased provision for housing top structures 178,860 National Lotteries Grant 4,704 Accreditation of the Municipality (Human Settlements) 7,870 EU Funding 7,796 Municipal Disaster Recovery 28,803 Off-Grid Electrification Grant 22,000 Expanded Public Works Programme (EPWP) 5,529 Infrastructure Skills Development Grant (ISDG) 560 Urban Settlements Development Grant (USDG) 25,700 Skills Development (LGSETA) 7,244 Integrated Public Transport System (IPTS) (61,532) Total 227,534
The National Lotteries grant will be spent on arts and cultural programmes.
The budget allocation for accreditation will be spent to enable the Municipality to achieve level three status, so as to perform all housing related functions.
The EU funding will be spent in support of the Motherwell Urban Renewal Programme. 14
The Municipal Disaster Recovery Grant, as allocated by the Provincial Government, will be spent on the repairs of sanitation, roads and water infrastructure that were damaged in the floods that occurred in late 2012. This amount represents the roll-over of the unspent grant as at 30 June 2014, which was approved by National Treasury.
The off-grid electrification grant, as allocated by the Department of Energy, will be spent on the acquisition of solar panels in order to provide electricity in informal areas where the sites are not yet serviced.
The EPWP grant will be spent on work creation efforts through the use of labour intensive delivery methods. The increased amount represents the roll-over of the unspent grant as at 30 June 2014, which was approved by National Treasury.
The ISDG will be spent to increase the pool of available technical and engineering skills in the Municipality. The increased amount represents the roll-over of the unspent grant as at 30 June 2014, which was approved by National Treasury.
The USDG will be spent to support the national human settlements development programme.
The IPTS operational grant will be spent on supporting the operations of the IPTS. It is to be noted that National Treasury approved a roll-over in the amount of R9,5 million, relating to the unspent amount as at 30 June 2014. Furthermore, the original gazetted operational grant of R130 million, was reduced by R70 million, based on an application by the Municipality, which was approved by National Treasury. 15
The amount of R70 million was transferred to the IPTS infrastructure grant to cover infrastructure related commitments. This resulted in a net decrease in the operational grant of R61,532 million.
3.5 Other revenue
Other revenue increased by R48,9 million, compared to the original budget. This increase is mainly attributable to the settlement of a dispute relating to the implementation of a new billing system. The settlement amounted to R46,1 million.
Expenditure
4. Total expenditure amounts to R8,7 billion in the 2014/15 Adjustments Budget, compared to the amount of R8,3 billion in the original 2014/15 Budget. This represents an increase of R386,9 million or 4,6%.
5. The significant variations in expenditure, compared to the original budget, are as follows:
5.1 Debt Impairment
Debt impairment decreased by R2,6 million, compared to the original budget. This decrease is attributable to a reduction in service charges, requiring a reduced budget provision for debt impairment.
5.2 Depreciation
Depreciation decreased by R37,2 million, compared to the original budget. This decrease is attributable to a review of assets’ useful lives, influencing the budget provision for depreciation.
5.3 Bulk Purchases
Bulk Purchases increased by R67,7 million, compared to the original budget. This increase is attributable to an increased budget provision being required for electricity bulk purchases, in line with current expenditure trends.
5.4 General Expenses
General expenses increased by R380,6 million, compared to the original budget. This increase is mainly attributable to the following:
R’000 National Lotteries Funded Projects 4,704 Increased Provision for housing top structures 178,860 Provision for consultants fees and operational expenses (IPTS) 66,002 EU Funded projects 7,796 Off-grid electrification 22,000 USDG funded projects 25,700 EPWP funded projects 5,529 Skills development (LGSETA) 5,094 Grant funded expenditure 315,685 Chippa United Football Club agreement 13,500 Provision for revenue enhancement and improvement of debt recovery 10 000 Provision for Financial Information System Blueprint 6 000 Provision for Supply Chain Management Unit (ISO 9001) 2 500 Increased provision for events (SRAC) 19,620 Total 367,305 16
The amount of R13,5 million relates to the relocation of the Chippa United Football Club to the Nelson Mandela Bay Stadium.
The budget provision of R10 million is intended for securing external capacity to deal with revenue enhancement and improvement of debt recovery.
The budget provision of R6 million is intended for data cleansing relating to the current financial system, before migrating to a Standard Chart of Accounts (SCOA) compliant system.
The budget provision of R2,5 million for the Supply Chain Management Unit is to implement a quality management system, so as to ensure a legally compliant supply chain management environment.
5.5 Contract Security
Contracted services decreased by R52,5 milion compared to the original budget. This decrease is mainly attributable to the following:
R’000 Increased provision for contract security 34 155 Reduced provision for IPTS (68 500) Reduced provision for community based refuse contractors (14 395) Total (48 740)
The following graphs explain the revenue and expenditure components in more detail:
2014/15 Statement of Financial Performance - Adjusted Revenue
Rental of facilities and Service charges - refuse equipment, 0.27% revenue, 2.42% Interest earned - external investments, 0.76% Service charges - sanitation Interest earned - outstanding revenue, 4.71% debtors, 1.74% Licences and permits, 0.14% Service charges - water revenue, 6.83% Fines, 0.13% Agency services, 0.03%
Transfers recognised - operating, 18.85%
Service charges - electricity revenue, 37.78% Other revenue, 9.76%
Property rates, 16.59% 17
2014/15 Statement of Financial Perfromance - Adjusted Expenditure
Transfers and grants, 5.29% Contracted services, 3.69% Other expenditure, 14.66%
Other materials, 7.14%
Employee related costs, 24.97%
Bulk purchases, 28.14%
Remuneration of councillors, 0.70% Finance charges, 2.06% Depreciation & asset Debt impairment, 3.89% impairment, 9.46% 18
Table B5 - Adjustments Capital Expenditure Budget by vote, standard classification and funding source
Budget Year 2014/15 Description Prior Multi- Unfore. Nat. or Original Accum. Other Total Adjusted Adjuste year Unavoi Prov. Budget Funds Adjusts. Adjusts. Budget d capital d. Govt 5 6 7 8 9 10 11 12 R thousands A A1 B C D E F G H Capital expenditure - Vote Multi-year expenditure to be adjusted 27,60 80 80 28,4 Vote 1 - Budget and Treasury 0 – – – – – 0 0 00 30,35 36,48 36,48 66,8 Vote 2 - Public Health 0 – – – – – 4 4 34 182,2 4,00 4,00 186,2 Vote 3 - Human Settlements 73 – – – – – 0 0 73 Vote 4 - Economic Development, 9,07 (5,40 (5,40 3,67 Tourism and Agriculture 9 – – – – – 5) 5) 4 34,65 5,10 5,10 39,7 Vote 5 - Corporate Service 0 – – – – – 0 0 50 250,0 67,77 67,77 317,8 Vote 6 - Rates & General 37 – – – – – 3 3 10 197,9 (26,000 171,9 Vote 7 - Water Service 00 – – – – – ) (26,000) 00 307,7 (19,900 287,8 Vote 8 - Sanitation 50 – – – – – ) (19,900) 50 202,3 15,00 15,00 217,3 Vote 9 - Eletricity And Energy 58 – – – – – 0 0 58 6,55 (78 (78 5,77 Vote 10 - Executive and Council 0 – – – – – 0) 0) 0 7,64 7,64 Vote 11 - Safety and Security 0 – – – – – – – 0 Vote 12 - Nelson Mandela Bay 20,00 20,00 20,0 Stadium – – – – – – 0 0 00 Vote 13 - Strategic Programmes 14,01 7,75 7,75 21,7 Directorate 0 – – – – – 6 6 66 Vote 14 - Recreational and 24,00 5,89 5,89 29,8 Cultural Services 0 – – – – – 4 4 94 Capital multi-year 1,294, 110,7 110,7 1,404,9 expenditure sub-total 197 – – – – – 23 23 20
Single-year expenditure to be adjusted 2,85 1,74 1,74 4,59 Vote 1 - Budget and Treasury 0 – – – – – 2 2 2 20,60 (1,51 (1,51 19,0 Vote 2 - Public Health 5 – – – – – 0) 0) 95 1,20 1,20 1,20 Vote 3 - Human Settlements – – – – – – 0 0 0 Vote 4 - Economic Development, 5,00 5,00 5,00 Tourism and Agriculture – – – – – – 0 0 0 40 40 40 Vote 5 - Corporate Service – – – – – – 0 0 0 6,15 3,02 3,02 9,17 Vote 6 - Rates & General 0 – – – – – 0 0 0 4,00 4,00 Vote 7 - Water Service 0 – – – – – – – 0 4,00 2,53 2,53 6,53 Vote 8 - Sanitation 0 – – – – – 6 6 6 5,02 5,02 Vote 9 - Eletricity And Energy 5 – – – – – – – 5
Vote 10 - Executive and Council – – – – – – – – – 5,87 2,07 2,07 7,95 Vote 11 - Safety and Security 3 – – – – – 7 7 0 Vote 12 - Nelson Mandela Bay Stadium – – – – – – – – – 19
Vote 13 - Strategic Programmes Directorate – – – – – – – – – Vote 14 - Recreational and Cultural Services – – – – – – – – – Capital single-year 48,5 14,4 14,4 62,9 expenditure sub-total 03 – – – – – 65 65 68 Total Capital Expenditure - 1,342, 125,1 125,1 1,467, Vote 700 – – – – – 88 88 888
Capital Expenditure - Standard Governance and 71,6 27,2 27,2 98,9 administration 50 – – – – – 62 62 12 6,55 19,22 19,22 25,7 Executive and council 0 0 0 70 30,45 2,54 2,54 32,9 Budget and treasury office 0 2 2 92
Budget Year 2014/15 Description Prior Multi- Unfore. Nat. or Original Accum. Other Total Adjusted Adjuste year Unavoi Prov. Budget Funds Adjusts. Adjusts. Budget d capital d. Govt 5 6 7 8 9 10 11 12 R thousands A A1 B C D E F G H 34,65 5,50 5,50 40,1 Corporate services 0 0 0 50 221,4 13,1 13,1 234,6 Community and public safety 61 – – – – – 71 71 32 13,00 2,00 2,00 15,0 Community and social services 0 1 1 01 11,00 3,89 3,89 14,8 Sport and recreation 0 3 3 93 13,51 2,07 2,07 15,5 Public safety 3 7 7 90 182,2 5,20 5,20 187,4 Housing 73 0 0 73 1,67 1,67 Health 5 – – 5 Economic and environmental 308,8 111,4 111,4 420,3 services 56 – – – – – 49 49 05 23,08 7,35 7,35 30,4 Planning and development 9 1 1 40 256,1 70,79 70,79 326,9 Road transport 87 4 4 81 29,58 33,30 33,30 62,8 Environmental protection 0 4 4 84 740,7 (26,69 (26,69 714,0 Trading services 33 – – – – – 4) 4) 39 207,3 15,00 15,00 222,3 Electricity 83 0 0 83 201,9 (26,000 175,9 Water 00 (26,000) ) 00 311,7 (17,364 294,3 Waste water management 50 (17,364) ) 86 19,70 1,67 1,67 21,3 Waste management 0 0 0 70 Other – – Total Capital Expenditure - 1,342, 125,1 125,1 1,467,8 Standard 700 – – – – – 88 88 88
Funded by: 846,7 42,40 42,40 889,1 National Government 75 4 4 80 Provincial Government – – District Municipality – – 8,65 8,65 8,65 Other transfers and grants 2 2 2 Total Capital transfers 846,7 51,0 51,0 897,8 recognised 75 – – – – – 56 56 31 Public contributions & 53,00 – – 53,0 20 donations 0 00 Borrowing – – 442,9 74,13 74,13 517,0 Internally generated funds 25 2 2 57 1,342, 125,1 125,1 1,467,8 Total Capital Funding 700 – – – – – 88 88 88
Explanatory notes to Table B5 – Adjustments Capital Expenditure Budget by vote, standard classification and funding source
1. Table A5 is a breakdown of the capital programme in relation to capital expenditure by municipal vote; capital expenditure by standard classification; and the funding sources necessary to fund the capital budget, including information on capital transfers from national and provincial departments.
2. The Adjustments budgeted capital expenditure was arrived at, taking into account budget adjustments and unspent funds as at the end of the 2013/14 financial year (refer Annexure “B” for the relevant project details).
3. The increase in the capital grant funding is mainly attributable to the roll over of unspent grant funding as at the end of the 2013/14 financial year, whilst certain amendments were made to the original gazetted allocations. The unspent grant funding relates to EU funding in the amount of R5,7 million, whilst the IPTS Infrastructure grant allocation was increased by R70 million by reducing the IPTS operational grant allocation by a similar amount. Furthermore, the increase in internal funding is mainly attributable to the planned spending of funds, which remained unspent as at the end of the 2013/14 financial year.
Table B6 - Adjustments Budget Financial Position
Budget Year 2014/15
Description Prior Multi- Unfore. Nat. or Original Accum. Other Total Adjusted Adjuste year Unavoi Prov. Budget Funds Adjusts. Adjusts. Budget d capital d. Govt 3 4 5 6 7 8 9 10 R thousands A A1 B C D E F G H ASSETS Current assets 200,0 200,0 Cash 00 – 00 976,9 (311,0 (311,0 665,8 Call investment deposits 31 – – – – – 94) 94) 37 673,4 425,49 425,49 1,098,9 Consumer debtors 49 – – – – – 1 1 40 373,1 (42,1 (42,1 331,0 Other debtors 16 07) 07) 09 Current portion of long-term ( ( receivables 5 5) 5) 0 113,0 (4,00 (4,00 109,0 Inventory 00 0) 0) 00 2,336, 68,2 68,2 2,404, Total current assets 500 – – – – – 86 86 786
Non current assets 31,9 (19,8 (19,8 12,09 Long-term receivables 11 20) 20) 1 2 (2 (2 Investments 0 0) 0) – 199,2 17 17 199,4 Investment property 62 7 7 39 Investment in Associate – – Property, plant and equipment 13,605,9 (171,6 (171,6 13,434,3 21
65 – – – – – 19) 19) 46 Agricultural – – Biological – – 234,8 (3,30 (3,30 231,5 Intangible 68 6) 6) 62 Other non-current assets – – 14,072, (194,5 (194,5 13,877, Total non current assets 026 – – – – – 88) 88) 438 16,408, (126,3 (126,3 16,282, TOTAL ASSETS 527 – – – – – 03) 03) 224
LIABILITIES Current liabilities Bank overdraft – – 104,0 104,0 Borrowing 93 – – – – – – – 93 93,1 7,18 7,18 100,3 Consumer deposits 59 9 9 48 1,712,8 43,27 43,27 1,756,1 Trade and other payables 71 – – – – – 7 7 48 248,2 (78,5 (78,5 169,6 Provisions 27 36) 36) 90 2,158, (28,0 (28,0 2,130, Total current liabilities 349 – – – – – 71) 71) 278
Non current liabilities 1,411,9 1,411,9 Borrowing 52 – – – – – – – 52 1,763,5 (50,7 (50,7 1,712,8 Provisions 70 – – – – – 01) 01) 70 3,175, (50,7 (50,7 3,124, Total non current liabilities 522 – – – – – 01) 01) 822 5,333, (78,7 (78,7 5,255, TOTAL LIABILITIES 871 – – – – – 71) 71) 100
11,074, (47,5 (47,5 11,027, NET ASSETS 656 – – – – – 32) 32) 124 COMMUNITY WEALTH/EQUITY 11,025,0 (47,5 (47,5 10,977,5 Accumulated Surplus/(Deficit) 56 – – – – – 32) 32) 24 49,6 49,60 Reserves 00 – – – – – – – 0 TOTAL COMMUNITY 11,074, (47,5 (47,5 11,027, WEALTH/EQUITY 656 – – – – – 32) 32) 124
Explanatory notes to Table B6 – Adjustments Budget Financial Position
1. The table presents Assets less Liabilities as Community Wealth. The order of items within each group is also aligned to the convention of showing items in order of liquidity; i.e. assets readily converted to cash or liabilities immediately required to be met from cash appear first.
2. Any movement on the Adjustments Budgeted Financial Performance or the Capital Adjustments Budget will invariably impact on the Adjustments Budgeted Financial Position. For example, the collection rate assumption will impact on the cash position of the municipality and consequently inform the level of cash and cash equivalents at year end. Similarly, the collection rate assumption informs the budget provision for debt impairment, which in turn impacts on the provision for bad debts. These budget and planning assumptions form a critical link in determining the applicability and relevance of the budget as well as the determination of ratios and financial indicators. In addition, the funding compliance assessment is directly informed by forecasting the statement of financial position.
3. The cash flow position requires close and ongoing monitoring. 22
Table B7 - Adjustments Budgeted Cash Flow Statement
Budget Year 2014/15
Description Prior Multi- Unfore. Nat. or Original Accum. Other Total Adjusted Adjuste year Unavoi Prov. Budget Funds Adjusts. Adjusts. Budget d capital d. Govt 3 4 5 6 7 8 9 10 R thousands A A1 B C D E F G H CASH FLOW FROM OPERATING ACTIVITIES Receipts 5,847,0 (35,5 (35,5 5,811,4 Ratepayers and other 75 – 96) 96) 78 1,327,1 8,44 8,44 1,335,5 Government - operating 49 – 7 7 96 965,32 49,83 49,83 1,015,1 Government - capital 4 – 9 9 63 63,19 63,19 Interest 2 – 2 Dividends – – Payments (6,484,1 (374,8 (374,8 (6,858,94 Suppliers and employees 27) 17) 17) 4) (181,34 1,61 1,61 (179,73 Finance charges 4) 0 0 3) (91,49 (5,15 (5,15 (96,64 Transfers and Grants 0) 0) 0) 0) NET CASH FROM/(USED) 1,445,7 (355,6 (355,6 1,090,1 OPERATING ACTIVITIES 79 – – – – – 67) 67) 12
CASH FLOWS FROM INVESTING ACTIVITIES Receipts Proceeds on disposal of PPE – – Decrease (Increase) in non-current 19,82 19,82 19,82 debtors 0 0 0 Decrease (increase) other non- current receivables – – Decrease (increase) in non-current investments 20 20 20 Payments (1,276,7 (414,1 (414,1 (1,690,89 Capital assets 57) 41) 41) 8) NET CASH FROM/(USED) (1,276, (394,3 (394,3 (1,671,0 INVESTING ACTIVITIES 757) – – – – – 01) 01) 58)
Budget Year 2014/15
Description Prior Multi- Unfore. Nat. or Original Accum. Other Total Adjusted Adjuste year Unavoi Prov. Budget Funds Adjusts. Adjusts. Budget d capital d. Govt 3 4 5 6 7 8 9 10 R thousands A A1 B C D E F G H CASH FLOWS FROM FINANCING ACTIVITIES Receipts Short term loans – – Borrowing long term/refinancing – – Increase (decrease) in consumer 7,18 7,18 7,18 deposits 9 9 9 Payments (112,96 (112,96 Repayment of borrowing 8) – 8) NET CASH FROM/(USED) (112,9 7,1 7,1 (105,7 FINANCING ACTIVITIES 68) – – – – – 89 89 79) 23
NET INCREASE/ (DECREASE) IN 56,05 (742,7 (742,7 (686,7 CASH HELD 4 – – – – – 79) 79) 25) Cash/cash equivalents at the year 1,120,8 431,68 431,68 1,552,5 begin: 77 6 6 62 Cash/cash equivalents at the year 1,176,9 (311,0 865,83 end: 31 – – – – – 94) 7
Explanatory notes to Table B7 – Adjustments Budget Cash Flow Statement
1. The budgeted cash flow statement represents the first measurement in determining whether the budget is funded.
2. It reflects the expected cash in-flows versus the cash out-flows that is likely to result from the implementation of the Budget.
3. The cash position of the Municipality declined by R311,1 million from R1,18 billion in the original 2014/15 Budget, to R865,8 million in the 2014/15 Adjustments Budget.
4. The Municipality will have to maintain its efforts of enforcing strict cash flow management and monitoring on an ongoing basis.
Table B8 - Cash backed reserves/accumulated surplus reconciliation
Budget Year 2014/15
Description Prior Multi- Unfore. Nat. or Adjuste Original Accum. Other Total Adjuste year Unavoi Prov. d Budget Funds Adjusts. Adjusts. d capital d. Govt Budget 3 4 5 6 7 8 9 10 R thousands A A1 B C D E F G H Cash and investments available Cash/cash equivalents at the year 1,176,9 (311,0 (311,0 865,8 end 31 – – – – – 94) 94) 37 Other current investments > 90 ( ( ( days 0 – – – – – 0) 0) 0) 2 (2 (2 Non current assets - Investments 0 – – – – – 0) 0) – 1,176, (311,1 (311,1 865,8 Cash and investments available: 951 – – – – – 14) 14) 37
Applications of cash and investments 2,14 30,00 30,00 32,1 Unspent conditional transfers 1 – – – – – 0 0 41 Unspent borrowing – – Statutory requirements – –
Budget Year 2014/15
Description Prior Multi- Unfore. Nat. or Adjuste Original Accum. Other Total Adjuste year Unavoi Prov. d Budget Funds Adjusts. Adjusts. d capital d. Govt Budget 3 4 5 6 7 8 9 10 R thousands A A1 B C D E F G H 771,3 (311,0 (311,0 460,2 Other working capital requirements 48 – 97) 97) 51 85,7 85,7 Other provisions 17 – 17
Long term investments committed – – – – – Reserves to be backed by 49,6 49,6 cash/investments 00 – – – 00 24
Total Application of cash and 908,8 (281,0 (281,0 627,7 investments: 06 – – – – – 97) 97) 09 268,1 (30,0 (30,0 238,1 Surplus(shortfall) 45 – – – – – 17) 17) 28
Explanatory notes to Table B8 - Cash Backed Reserves/Accumulated Surplus Reconciliation
1. The cash backed reserves/accumulated surplus reconciliation is aligned to the requirements of MFMA Circular 42 – Funding a Municipal Budget.
2. The table assesses the funding levels of the budget by firstly forecasting the cash and investments at year end and secondly reconciling the available funding to the liabilities/commitments that exist.
3. As part of the budgeting and planning guidelines that informed the compilation of the 2014/15 Budget, the end objective was to ensure that the budget is funded as required in accordance with section 18 of the MFMA.
4. It is to be noted that the 2014/15 Original Budget reflected a funding surplus of R268,1 million, which has decreased to R238,1 million in the 2014/15 Adjustments Budget.
5. The Adjustments Budget funding position indicates that the Municipality must continue to exercise strict fiscal discipline to maintain and improve its funding position.
Table B9 - Asset Management
Budget Year 2014/15
Description Prior Multi- Unfore. Nat. or Original Accum. Other Total Adjusted Adjuste year Unavoi Prov. Budget Funds Adjusts. Adjusts. Budget d capital d. Govt 7 8 9 10 11 12 13 14 R thousands A A1 B C D E F G H CAPITAL EXPENDITURE Total New Assets to be 594,0 87,1 87,1 681,2 adjusted 89 – – – – – 67 67 57 176,1 68,63 68,63 244,80 Infrastructure - Road transport 74 – – – – – 5 5 9 31,0 17,00 17,00 48,01 Infrastructure - Electricity 10 – – – – – 0 0 0 77,0 (24,400 (24,400 52,60 Infrastructure - Water 00 – – – – – ) ) 0 Infrastructure - Sanitation – – – – – – – – – 188,9 2,38 2,38 191,35 Infrastructure - Other 73 – – – – – 0 0 3 473,1 63,61 63,61 536,77 Infrastructure 56 – – – – – 5 5 2 23,0 6,57 6,57 29,57 Community 10 – – – – – 0 0 9 Heritage assets – – – – – – – – – Investment properties – – – – – – – – – 71,3 17,76 17,76 89,13 Other assets 73 – – – – – 2 2 5
Budget Year 2014/15
Description Prior Multi- Unfore. Nat. or Original Accum. Other Total Adjusted Adjuste year Unavoi Prov. Budget Funds Adjusts. Adjusts. Budget d capital d. Govt 7 8 9 10 11 12 13 14 R thousands A A1 B C D E F G H 25
Agricultural Assets – – – – – – – – – Biological assets – – – – – – – – – 26,5 (78 (78 25,77 Intangibles 50 – – – – – 0) 0) 0
Total Renewal of Existing 748,6 38,0 38,0 786,6 Assets to be adjusted 11 – – – – – 20 20 31 65,3 12 12 65,47 Infrastructure - Road transport 50 – – – – – 4 4 4 155,0 (4,700 (4,700 150,30 Infrastructure - Electricity 08 – – – – – ) ) 8 116,9 (1,600 115,30 Infrastructure - Water 00 – – – – – (1,600) ) 0 304,7 (19,100 285,65 Infrastructure - Sanitation 50 – – – – – (19,100) ) 0 4,78 4,78 20,86 Infrastructure - Other 16,079 – – – – – 5 5 4 658,0 (20,49 637,59 Infrastructure 87 – – – – – (20,491) 1) 6 21,5 56,78 56,78 78,28 Community 00 – – – – – 3 3 3 Heritage assets – – – – – – – – – Investment properties – – – – – – – – – 57,2 4,82 4,82 62,08 Other assets 52 – – – – – 8 8 0 Agricultural Assets – – – – – – – – – Biological assets – – – – – – – 11,7 (3,10 8,67 Intangibles 72 – – – – – (3,100) 0) 2
Total Capital Expenditure to be adjusted 241,5 68,75 68,75 310,28 Infrastructure - Road transport 24 – – – – – 9 9 3 186,0 12,30 12,30 198,31 Infrastructure - Electricity 17 – – – – – 0 0 7 193,9 (26,000 (26,000 167,90 Infrastructure - Water 00 – – – – – ) ) 0 304,7 285,65 Infrastructure - Sanitation 50 – – – – – (19,100) (19,100) 0 205,0 7,16 7,16 212,21 Infrastructure - Other 52 – – – – – 5 5 7 1,131,24 43,12 43,12 1,174,3 Infrastructure 4 – – – – – 4 4 67 44,5 63,35 63,35 107,86 Community 10 – – – – – 3 3 3 Heritage assets – – – – – – – – – Investment properties – – – – – – – – – 128,6 22,59 22,59 151,21 Other assets 25 – – – – – 0 0 5 Agricultural Assets – – – – – – – – – Biological assets – – – – – – – – – 38,3 34,44 Intangibles 22 – – – – – (3,880) (3,880) 2 TOTAL CAPITAL EXPENDITURE 1,342, 125,1 125,1 1,467, to be adjusted 700 – – – – – 88 88 888
ASSET REGISTER SUMMARY - PPE (WDV) 3,188,13 (141,347 3,046,7 Infrastructure - Road transport 2 (141,347) ) 86 1,695,67 (7,05 1,688,6 Infrastructure - Electricity 5 (7,052) 2) 23 1,656,79 1,637,1 Infrastructure - Water 6 (19,628) (19,628) 68 1,299,43 17,69 17,69 1,317,1 Infrastructure - Sanitation 6 9 9 34 2,437,69 8,30 8,30 2,446,0 Infrastructure - Other 9 9 9 08 10,277,7 (142,019 (142,019 10,135,7 Infrastructure 38 – – – – – ) ) 19 26
2,568,08 (9,631 2,558,4 Community 6 (9,631) ) 55 197,0 (18 (18 196,88 Heritage assets 63 0) 0) 3 199,2 199,26 Investment properties 62 – 2
Budget Year 2014/15
Description Prior Multi- Unfore. Nat. or Original Accum. Other Total Adjusted Adjuste year Unavoi Prov. Budget Funds Adjusts. Adjusts. Budget d capital d. Govt 7 8 9 10 11 12 13 14 R thousands A A1 B C D E F G H 563,0 (19,611 543,46 Other assets 78 (19,611) ) 6 (3,306 231,56 Intangibles 234,868 (3,306) ) 2 Agricultural Assets Biological assets – – TOTAL ASSET REGISTER 14,040, (174,7 (174,7 13,865, SUMMARY - PPE (WDV) 095 – – – – – 48) 48) 347
EXPENDITURE OTHER ITEMS Depreciation & asset 862,3 (37,219 825,14 impairment 59 – – – – – (37,219) ) 0 Repairs and Maintenance by 607,4 asset class 74 – – – – – 15,517 15.517 622,991 108,1 Infrastructure - Road transport 25 – – – – – 17,294 17,294 125,419 53,5 (38 (38 53,15 Infrastructure - Electricity 44 – – – – – 7) 7) 7 155,2 149,80 Infrastructure - Water 86 – – – – – (5,480) (5,480) 6 156,2 149,00 Infrastructure - Sanitation 83 – – – – – (7,275) (7,275) 8 9,41 10,95 Infrastructure - Other 9 – – – – – 1,533 1,533 2 482,6 Infrastructure 56 – – – – – 5,685 5,685 488,342 54,2 10,34 10,34 64,62 Community 63 – – – – – 2 2 0 Heritage assets – – – – – – – – – Investment properties – – – – – – – – – 70,5 (50 (50 70,04 Other assets 54 – – – – – 9) 9) 5 TOTAL EXPENDITURE OTHER 1,469, (21,7 (21,7 1,448, ITEMS to be adjusted 833 – – – – – 02) 02) 131
% of capital exp on renewal of 55.8% 0.0% 53.6% assets Renewal of existing assets as 86.8% 0.0% 95.3% % of deprecn R&M as a % of PPE 4.3% 0.0% 4.6% Renewal and R&M as a % of 9.7% 0.0% 10.2% PPE
Explanatory notes to Table B9 - Asset Management
1. The table provides a summarised version of the capital programme divided into new assets and renewal of existing assets; and also reflects the relevant asset categories. The associated repairs and maintenance and depreciation are also reflected.
It also provides an indication of the resources deployed for maintaining and renewing existing assets, as well as the extent of asset expansion. 27
2. National Treasury has suggested that municipalities should allocate at least 40% of their capital budget to the renewal/rehabilitation of existing assets, and allocations to repairs and maintenance should be 8% of PPE. In this regard the expenditure relating to the renewal/rehabilitation of existing assets amounts to 53,6% of the Capital Adjustments Budget, whilst repairs and maintenance constitute 4,5% of PPE. 28
Table B10 - Basic service delivery measurement
Budget Year 2014/15
Prior Multi- Unfore. Nat. or Original Accum. Other Total Adjusted Description Adjuste year Unavoi Prov. Budget Funds Adjusts. Adjusts. Budget d capital d. Govt 7 8 9 10 11 12 13 14 A A1 B C D E F G H Household service targets Water: 285,1 28 Piped water inside dwelling 56 – 5 Piped water inside yard (but not in dwelling) – – Using public tap (at least 31,10 3 min.service level) 8 – 1 Other water supply (at least min.service level) – – Minimum Service Level and Above 316,2 31 sub-total 64 – – – – – – – 6 Using public tap (< min.service level) – – Other water supply (< min.service level) – – No water supply – – Below Minimum Servic Level sub- total - – – – – – – – – 316,2 31 Total number of households 64 – – – – – – – 6 Sanitation/sewerage: Flush toilet (connected to 282,0 282,0 sewerage) 04 – 04 3,06 3,0 Flush toilet (with septic tank) 0 – 60 Chemical toilet – – Pit toilet (ventilated) – – Other toilet provisions (> min.service level) – – Minimum Service Level and Above 285,0 285,0 sub-total 64 – – – – – – – 64 22,20 22,2 Bucket toilet 2 – 02 Other toilet provisions (< min.service level) – – No toilet provisions – – Below Minimum Servic Level sub- 22,20 22,2 total 2 – – – – – – – 02 307,2 307,2 Total number of households 66 – – – – – – – 66 Energy: Electricity (at least min. service 27,44 27,4 level) 0 – 40 Electricity - prepaid (> min.service 284,5 284,5 level) 80 – 80 Minimum Service Level and Above 312,0 312,0 sub-total 20 – – – – – – – 20 Electricity (< min.service level) – – Electricity - prepaid (< min. service level) – – Other energy sources – – Below Minimum Servic Level sub- total - – – – – – – – – 312,0 312,0 Total number of households 20 – – – – – – – 20 Refuse: Removed at least once a week 259,1 259,1 (min.service) 56 – 56 29
Minimum Service Level and Above 259,1 259,1 sub-total 56 – – – – – – – 56 Removed less frequently than once 42,58 42,5 a week 2 – 82 15,66 15,6 Using communal refuse dump 2 – 62 Using own refuse dump – – 6,85 6,8 Other rubbish disposal 2 – 52 4 No rubbish disposal 40 – 0 Below Minimum Servic Level sub- 65,13 65,1 total 6 – – – – – – – 36 324,2 324,2 Total number of households 92 – – – – – – – 92
Households receiving Free Basic Service Water (6 kilolitres per household 72,03 72,0 per month) 1 – 31 Sanitation (free minimum level 72,31 72,3 service) 8 – 18 Electricity/other energy (50kwh per 63,25 63,2 household per month) 4 – 54
Budget Year 2014/15
Prior Multi- Unfore. Nat. or Original Accum. Other Total Adjusted Description Adjuste year Unavoi Prov. Budget Funds Adjusts. Adjusts. Budget d capital d. Govt 7 8 9 10 11 12 13 14 A A1 B C D E F G H Refuse (removed at least once a 66,66 66,6 week) 5 – 65
Cost of Free Basic Services provided (R'000) Water (6 kilolitres per household 69,335,8 69,3 per month) 90 – 36 102,948, 102,9 Sanitation (free sanitation service) 610 – 49 Electricity/other energy (50kwh per 42,947,9 (1,95 (1,95 40,9 household per month) 60 9) 9) 89 61,071,0 9,60 9,60 70,6 Refuse (removed once a week) 00 7 7 78 Total cost of FBS provided 276,303, 7,64 7,64 283,9 (minimum social package) 460 – – – – – 8 8 52
Highest level of free service provided Property rates (R'000 value 15,00 15,0 threshold) 0 – 00 Water (kilolitres per household per month) 8 – 8 Sanitation (kilolitres per household 1 per month) 11 – 1 Sanitation (Rand per household per 11 11 month) 1 – 1 Electricity (kw per household per 7 month) 75 – 5 24 24 Refuse (average litres per week) 0 – 0 Revenue cost of free services provided (R'000) Property rates (R15 000 threshold 29,092,4 29,0 rebate) 06 – 92 Property rates (other exemptions, 134,824, 134,8 reductions and rebates) 314 – 24 69,335,8 69,3 Water 90 – 36 102,948, 102,9 Sanitation 610 – 49 Electricity/other energy 42,947,9 (1,95 (1,95 40,9 30
60 9) 9) 89 61,071,0 9,60 9,60 70,6 Refuse 00 7 7 78 Municipal Housing - rental rebates – – Housing - top structure subsidies – – Other – – Total revenue cost of free services provided (total social 440,2 7,6 7,6 447,8 package) 20 – – – – – 48 48 68
Explanatory notes to Table B10 - Basic Service Delivery Measurement
1. Table B10 provides an overview of service delivery levels, including backlogs (below minimum service level), for each of the main services.
1.5 Consolidated Budget Tables
The ten main budget tables, as required in terms of the Municipal Budget and Reporting Regulations, are included in this section. These tables set out the Municipality’s and the Entity’s 2014/15 Adjustments Budget to be noted by Council. 31
Table B1 –Consolidated Budget Summary
Budget Year 2014/15
Description Prior Multi- Unfore. Nat. or Original Accum. Other Total Adjusted Adjuste year Unavoi Prov. Budget Funds Adjusts. Adjusts. Budget d capital d. Govt 1 2 3 4 5 6 7 8 R thousands A A1 B C D E F G H Financial Performance 1,373,5 1,373,5 Property rates 33 – – – – – – – 33 4,325,0 (43,0 (43,0 4,282,0 Service charges 27 – – – – – 00) 00) 27 65,79 70 70 66,49 Investment revenue 2 – – – – – 0 0 2 1,340,7 229,87 229,87 1,570,6 Transfers recognised - operational 39 – – – – – 7 7 15 1,014,4 (15,8 (15,8 998,60 Other own revenue 97 – – – – – 96) 96) 1 Total Revenue (excluding capital 8,119,5 171,6 171,6 8,291,2 transfers and contributions) 88 – – – – – 80 80 68 2,196,6 (6,25 (6,25 2,190,4 Employee costs 93 – – – – – 8) 8) 35 60,97 60,97 Remuneration of councillors 6 – – – – – – – 6 862,50 (37,1 (37,1 825,35 Depreciation & asset impairment 9 – – – – – 56) 56) 3 179,73 18 18 179,91 Finance charges 1 – – – – – 7 7 7 2,994,4 83,23 83,23 3,077,6 Materials and bulk purchases 56 – – – – – 6 6 93 375,65 85,94 85,94 461,59 Transfers and grants 9 – – – – – 1 1 9 1,636,3 325,45 325,45 1,961,8 Other expenditure 63 – – – – – 7 7 20 8,306,3 451,4 451,4 8,757,7 Total Expenditure 87 – – – – – 06 06 94 (186,79 (279,7 (279,7 (466,52 Surplus/(Deficit) 9) – – – – – 26) 26) 5) 846,77 51,05 51,05 897,83 Transfers recognised - capital 5 – – – – – 6 6 1 Contributions recognised - capital & contributed assets – – – – – – – – – Surplus/(Deficit) after capital 659,9 (228,6 (228,6 431,3 transfers & contributions 76 – – – – – 70) 70) 06
Share of surplus/ (deficit) of associate – – – – – – – – – 659,9 (228,6 (228,6 431,3 Surplus/ (Deficit) for the year 76 – – – – – 70) 70) 06
Capital expenditure & funds sources 1,392,2 167,88 167,88 1,560,1 Capital expenditure 30 – – – – – 8 8 18 851,77 46,05 46,05 897,83 Transfers recognised - capital 5 – – – – – 6 6 1 53,00 53,00 Public contributions & donations 0 – – – – – – – 0
Borrowing – – – – – – – – – 487,45 121,83 121,83 609,28 Internally generated funds 5 – – – – – 2 2 7 1,392,2 167,8 167,8 1,560,1 Total sources of capital funds 30 – – – – – 88 88 18
Financial position 2,328,2 125,31 125,31 2,453,5 Total current assets 67 – – – – – 7 7 85 32
14,157,7 (184,7 (184,7 13,972,9 Total non current assets 29 – – – – – 56) 56) 73 2,158,9 27,40 27,40 2,186,3 Total current liabilities 11 – – – – – 1 1 11 3,175,5 (50,7 (50,7 3,124,8 Total non current liabilities 22 – – – – – 01) 01) 22 11,151, (36,1 (36,1 11,115, Community wealth/Equity 564 – – – – – 39) 39) 425
Cash flows 1,506,5 (362,8 (362,8 1,143,6 Net cash from (used) operating 55 – – – – – 63) 63) 92 (1,339,6 (394,3 (394,3 (1,733,97 Net cash from (used) investing 75) – – – – – 01) 01) 6) (112,96 7,18 7,18 (105,77 Net cash from (used) financing 8) – – – – – 9 9 9) Cash/cash equivalents at the year 1,216,8 (302,2 (302,2 914,5 end 36 – – – – – 75) 75) 61
Budget Year 2014/15
Description Prior Multi- Unfore. Nat. or Original Accum. Other Total Adjusted Adjuste year Unavoi Prov. Budget Funds Adjusts. Adjusts. Budget d capital d. Govt 1 2 3 4 5 6 7 8 R thousands A A1 B C D E F G H Cash backing/surplus reconciliation 1,216,8 (302,2 (302,2 914,56 Cash and investments available 56 – – – – – 95) 95) 1 950,07 (270,9 (270,9 679,17 Application of cash and investments 3 – – – – – 03) 03) 0 266,7 (31,3 (31,3 235,3 Balance - surplus (shortfall) 83 – – – – – 92) 92) 91
Asset Management 14,125,7 (164,9 (164,9 13,960,8 Asset register summary (WDV) 98 – – – – – 17) 17) 82 862,50 (37,1 (37,1 825,35 Depreciation & asset impairment 9 – – – – – 56) 56) 3 784,09 81,19 81,19 865,28 Renewal of Existing Assets 1 – – – – – 8 8 9 607,47 15,51 15,51 622,99 Repairs and Maintenance 4 – – – – – 7 7 1
Free services 276,30 7,64 7,64 283,95 Cost of Free Basic Services provided 3 – – – – – 8 8 2 Revenue cost of free services 440,22 7,64 7,64 447,86 provided 0 – – – – – 8 8 8 Households below minimum service level
Water: – – – – – – – – –
Sanitation/sewerage: 22 – – – – – – – 22
Energy: – – – – – – – – –
Refuse: 65 – – – – – 91 91 156
Table B2 –Consolidated Budget Financial Performance
Budget Year 2014/15 Standard Description Prior Multi- Unfore. Nat. or Original Accum. Other Total Adjusted Adjuste year Unavoi Prov. Budget Funds Adjusts. Adjusts. Budget d capital d. Govt 33
5 6 7 8 9 10 11 12 R thousands A A1 B C D E F G H Revenue - Standard 2,329, 49,0 49,0 2,378, Governance and administration 052 – – – – – 65 65 117 3 11 Executive and council 6 – – – – – 74 74 1 2,304,6 40,22 40,22 2,344,9 Budget and treasury office 96 – – – – – 3 3 20 24,3 8,76 8,76 33,08 Corporate services 19 – – – – – 7 7 7 471,0 179,5 179,5 650,6 Community and public safety 66 – – – – – 78 78 44 19,9 6,57 6,57 26,49 Community and social services 22 – – – – – 1 1 3 27,4 3,12 3,12 30,61 Sport and recreation 88 – – – – – 1 1 0 36,6 (27,1 (27,1 9,52 Public safety 41 – – – – – 19) 19) 2 386,0 193,23 193,23 579,24 Housing 09 – – – – – 0 0 0 1,00 3,77 3,77 4,78 Health 6 – – – – – 4 4 0 Economic and environmental 707,2 51,3 51,3 758,5 services 10 – – – – – 73 73 82 403,8 7,35 7,35 411,15 Planning and development 01 – – – – – 5 5 6 298,2 32,63 32,63 330,83 Road transport 00 – – – – – 7 7 7 5,20 11,38 11,38 16,59 Environmental protection 9 – – – – – 1 1 0 5,442, (57,2 (57,2 5,385, Trading services 305 – – – – – 79) 79) 026 3,365,1 (40,3 (40,3 3,324,7 Electricity 31 – – – – – 75) 75) 56 883,7 (30,4 (30,4 853,22 Water 04 – – – – – 77) 77) 8
Budget Year 2014/15 Standard Description Prior Multi- Unfore. Nat. or Original Accum. Other Total Adjusted Adjuste year Unavoi Prov. Budget Funds Adjusts. Adjusts. Budget d capital d. Govt 5 6 7 8 9 10 11 12 R thousands A A1 B C D E F G H 881,7 5,39 5,39 887,12 Waste water management 32 – – – – – 4 4 6 311,7 8,17 8,17 319,91 Waste management 38 – – – – – 8 8 5 16,7 16,7 Other 31 – – – – – – – 31 8,966, 222,7 222,7 9,189, Total Revenue - Standard 363 – – – – – 36 36 100
Expenditure - Standard 1,214, 47,9 47,9 1,262, Governance and administration 828 – – – – – 34 34 762 199,9 (69 (69 199,23 Executive and council 26 – – – – – 5) 5) 1 617,0 12,43 12,43 629,49 Budget and treasury office 61 – – – – – 2 2 3 397,8 36,19 36,19 434,03 Corporate services 40 – – – – – 7 7 7 1,387, 211,2 211,2 1,598, Community and public safety 280 – – – – – 77 77 558 174,5 (8,23 (8,23 166,35 Community and social services 98 – – – – – 9) 9) 9 181,5 14,41 14,41 195,93 Sport and recreation 19 – – – – – 8 8 8 424,5 (5,42 (5,42 419,17 Public safety 99 – – – – – 8) 8) 1 34
442,8 202,33 202,33 645,16 Housing 35 – – – – – 4 4 9 163,7 8,19 8,19 171,92 Health 29 – – – – – 2 2 1 Economic and environmental 1,111, 74,5 74,5 1,185, services 020 – – – – – 97 97 617 429,3 87,27 87,27 516,66 Planning and development 92 – – – – – 7 7 9 353,6 173,26 173,26 526,92 Road transport 62 – – – – – 1 1 2 327,9 (185,9 (185,9 142,02 Environmental protection 66 – – – – – 41) 41) 5 4,557, 138,9 138,9 4,696, Trading services 309 – – – – – 46 46 256 3,053,5 96,20 96,20 3,149,7 Electricity 10 – – – – – 6 6 17 666,9 26,55 26,55 693,52 Water 71 – – – – – 8 8 9 553,4 8,94 8,94 562,35 Waste water management 14 – – – – – 2 2 7 283,4 7,24 7,24 290,65 Waste management 14 – – – – – 0 0 4 35,9 (21,3 (21,3 14,6 Other 50 – – – – – 48) 48) 02 8,306, 451,4 451,4 8,757, Total Expenditure - Standard 387 – – – – – 06 06 794 659,9 (228,6 (228,6 431,3 Surplus/ (Deficit) for the year 76 – – – – – 70) 70) 06 35
Table B3 –Consolidated Budget Financial Performance by Vote
Budget Year 2014/15 Vote Description Prior Multi- Unfore. Nat. or Original Accum. Other Total Adjusted Adjuste year Unavoi Prov. Budget Funds Adjusts. Adjusts. Budget d capital d. Govt [Insert departmental structure etc] 3 4 5 6 7 8 9 10 R thousands A A1 B C D E F G H Revenue by Vote 2,304,7 40,22 40,22 2,344,9 Vote 1 - Budget and Treasury 13 – – – – – 1 1 33 325,2 23,33 23,33 348,5 Vote 2 - Public Health 15 – – – – – 3 3 48 594,8 197,54 197,54 792,4 Vote 3 - Human Settlements 78 – – – – – 0 0 18 Vote 4 - Economic Development, 143,1 (7,75 (7,758 135,4 Tourism and Agriculture 92 – – – – – 8) ) 34 17,0 9,43 9,43 26,49 Vote 5 - Corporate Services 62 – – – – – 2 2 4 277,7 34,83 34,83 312,5 Vote 6 - Rate and General Engineers 10 – – – – – 7 7 46 883,7 (30,4 (30,4 853,2 Vote 7 - Water Services 04 – – – – – 77) 77) 28 881,7 5,39 5,39 887,1 Vote 8 - Sanitation Services 32 – – – – – 4 4 26 3,365,1 (40,3 (40,3 3,324,7 Vote 9 - Electricity and Energy 31 – – – – – 75) 75) 56 56 78 78 1,35 Vote 10 - Executive and Council 3 – – – – – 8 8 1 60,9 (29,3 (29,3 31,63 Vote 11 - Safety and Security 54 – – – – – 19) 19) 5 Vote 12 - Nelson Mandela Bay 43,0 (4,07 (4,07 39,00 Stadium 75 – – – – – 5) 5) 0 Vote 13 - Strategic Programmes 35,1 14,87 14,87 50,01 Directorate 34 – – – – – 8 8 2 Vote 14 - Recreational and Cultural 33,3 8,31 8,31 41,61 Services 03 – – – – – 7 7 9 8,966, 222,7 222,7 9,189, Total Revenue by Vote 363 – – – – – 36 36 100
Expenditure by Vote 595,1 14,63 14,63 609,7 Vote 1 - Budget and Treasury 38 – – – – – 0 0 68 798,0 (169,5 (169,5 628,5 Vote 2 - Public Health 99 – – – – – 05) 05) 94 568,6 217,50 217,50 786,1 Vote 3 - Human Settlements 09 – – – – – 1 1 10 Vote 4 - Economic Development, 128,5 15,57 15,57 144,0 Tourism and Agriculture 03 – – – – – 7 7 80 412,5 1,78 1,78 414,3 Vote 5 - Corporate Services 51 – – – – – 2 2 33 489,3 185,63 185,63 675,0 Vote 6 - Rate and General Engineers 63 – – – – – 8 8 02 666,9 26,55 26,55 693,5 Vote 7 - Water Services 71 – – – – – 8 8 29 496,40 7,97 7,97 504,3 Vote 8 - Sanitation Services 9 – – – – – 8 8 87 3,053,5 96,20 96,20 3,149,7 Vote 9 - Electricity and Energy 10 – – – – – 6 6 17 230,73 (6,56 (6,56 224,1 Vote 10 - Executive and Council 9 – – – – – 1) 1) 78 435,3 (5,05 (5,05 430,2 Vote 11 - Safety and Security 43 – – – – – 5) 5) 88 Vote 12 - Nelson Mandela Bay 136,9 29,31 29,31 166,2 Stadium 29 – – – – – 5 5 45 Vote 13 - Strategic Programmes 30,1 12,13 12,13 42,27 Directorate 38 – – – – – 8 8 6 36
Vote 14 - Recreational and Cultural 264,0 25,20 25,20 289,2 Services 83 – – – – – 5 5 88 8,306, 451,4 451,4 8,757, Total Expenditure by Vote 387 – – – – – 06 06 794 659,9 (228,6 (228,6 431,3 Surplus/ (Deficit) for the year 76 – – – – – 70) 70) 06 37
Table B4 –Consolidated Budget Financial Performance Revenue and Expenditure
Budget Year 2014/15
Description Prior Multi- Unfore. Nat. or Original Accum. Other Total Adjusted Adjuste year Unavoi Prov. Budget Funds Adjusts. Adjusts. Budget d capital d. Govt 3 4 5 6 7 8 9 10 R thousands A A1 B C D E F G H Revenue By Source 1,373,5 1,373,5 Property rates 33 – – – – – – – 33 Property rates - penalties & collection charges – – 3,182,1 (55,0 (55,0 3,127,1 Service charges - electricity revenue 51 – – – – – 00) 00) 51 558,22 7,00 7,00 565,22 Service charges - water revenue 0 – – – – – 0 0 0 384,58 5,00 5,00 389,58 Service charges - sanitation revenue 7 – – – – – 0 0 7 200,06 200,06 Service charges - refuse revenue 8 – – – – – – – 8 Service charges - other – – 22,32 (9 (9 22,22 Rental of facilities and equipment 7 9) 9) 9 Interest earned - external 65,79 70 70 66,49 investments 2 0 0 2 Interest earned - outstanding 182,99 (39,3 (39,3 143,69 debtors 9 09) 09) 0 Dividends received – – 36,83 (26,0 (26,0 10,79 Fines 6 39) 39) 7 11,36 11,36 Licences and permits 5 – – 5 1,57 62 62 2,20 Agency services 5 7 7 2 1,340,7 229,87 229,87 1,570,6 Transfers recognised - operating 39 7 7 15 759,39 48,92 48,92 808,31 Other revenue 5 – – – – – 4 4 9 Gains on disposal of PPE – – Total Revenue (excluding capital 8,119, 171,6 171,6 8,291, transfers and contributions) 588 – – – – – 80 80 268 Expenditure By Type 2,196,6 (6,25 (6,25 2,190,4 Employee related costs 93 – – – – – 8) 8) 35 60,97 60,97 Remuneration of councillors 6 – – 6 341,94 (2,58 (2,58 339,36 Debt impairment 9 1) 1) 8 862,50 (37,1 (37,1 825,35 Depreciation & asset impairment 9 – – – – – 56) 56) 3 179,73 18 18 179,91 Finance charges 1 7 7 7 2,386,9 67,71 67,71 2,454,7 Bulk purchases 83 – – – – – 9 9 01 607,47 15,51 15,51 622,99 Other materials 4 7 7 1 374,83 (52,5 (52,5 322,29 Contracted services 7 – – – – – 42) 42) 4 375,65 85,94 85,94 461,59 Transfers and grants 9 1 1 9 919,57 380,58 380,58 1,300,1 Other expenditure 8 – – – – – 0 0 58 Loss on disposal of PPE – – 8,306, 451,4 451,4 8,757, Total Expenditure 387 – – – – – 06 06 794 Surplus/(Deficit) (186,7 (279,7 (279,7 (466,5 38
99) – – – – – 26) 26) 25) 846,77 51,05 51,05 897,83 Transfers recognised - capital 5 6 6 1 Contributions – – Contributed assets – – 659,9 (228,6 (228,6 431,3 Surplus/(Deficit) before taxation 76 – – – – – 70) 70) 06 Taxation – – 659,9 (228,6 (228,6 431,3 Surplus/(Deficit) after taxation 76 – – – – – 70) 70) 06 Attributable to minorities – – Surplus/(Deficit) attributable to 659,9 (228,6 (228,6 431,3 municipality 76 – – – – – 70) 70) 06 Share of surplus/ (deficit) of associate – – 659,9 (228,6 (228,6 431,3 Surplus/ (Deficit) for the year 76 – – – – – 70) 70) 06 Table B5 –Consolidated Budget Capital Expenditure – Standard Classification
Budget Year 2014/15 Description Prior Multi- Unfore. Nat. or Original Accum. Other Total Adjusted Adjuste year Unavoi Prov. Budget Funds Adjusts. Adjusts. Budget d capital d. Govt 5 6 7 8 9 10 11 12 R thousands A A1 B C D E F G H Capital expenditure - Vote Multi-year expenditure to be adjusted 27,6 80 80 28,40 Vote 1 - Budget and Treasury 00 – – – – – 0 0 0 30,3 36,48 36,48 66,83 Vote 2 - Public Health 50 – – – – – 4 4 4 182,2 4,00 4,00 186,2 Vote 3 - Human Settlements 73 – – – – – 0 0 73 Vote 4 - Economic Development, 58,6 37,29 37,29 95,90 Tourism and Agriculture 09 – – – – – 5 5 4 34,6 5,10 5,10 39,75 Vote 5 - Corporate Services 50 – – – – – 0 0 0 250,0 67,77 67,77 317,8 Vote 6 - Rate and General Engineers 37 – – – – – 3 3 10 197,9 (26,0 (26,0 171,9 Vote 7 - Water Services 00 – – – – – 00) 00) 00 307,7 (19,9 (19,9 287,8 Vote 8 - Sanitation Services 50 – – – – – 00) 00) 50 202,3 15,00 15,00 217,3 Vote 9 - Electricity and Energy 58 – – – – – 0 0 58 6,55 (78 (78 5,77 Vote 10 - Executive and Council 0 – – – – – 0) 0) 0 7,64 7,64 Vote 11 - Safety and Security 0 – – – – – – – 0 Vote 12 - Nelson Mandela Bay 20,00 20,00 20,00 Stadium – – – – – – 0 0 0 Vote 13 - Strategic Programmes 14,0 7,75 7,75 21,76 Directorate 10 – – – – – 6 6 6 Vote 14 - Recreational and Cultural 24,0 5,89 5,89 29,89 Services 00 – – – – – 4 4 4 Capital multi-year expenditure 1,343, 153,4 153,4 1,497, sub-total 727 – – – – – 23 23 150
Single-year expenditure to be adjusted 2,85 1,74 1,74 4,59 Vote 1 - Budget and Treasury 0 – – – – – 2 2 2 20,6 (1,51 (1,51 19,09 Vote 2 - Public Health 05 – – – – – 0) 0) 5 1,20 1,20 1,20 Vote 3 - Human Settlements – – – – – – 0 0 0 39
Vote 4 - Economic Development, 5,00 5,00 5,00 Tourism and Agriculture – – – – – – 0 0 0 40 40 40 Vote 5 - Corporate Services – – – – – – 0 0 0 6,15 3,02 3,02 9,17 Vote 6 - Rate and General Engineers 0 – – – – – 0 0 0 4,00 4,00 Vote 7 - Water Services 0 – – – – – – – 0 4,00 2,53 2,53 6,53 Vote 8 - Sanitation Services 0 – – – – – 6 6 6 5,02 5,02 Vote 9 - Electricity and Energy 5 – – – – – – – 5
Vote 10 - Executive and Council – – – – – – – – – 5,87 2,07 2,07 7,95 Vote 11 - Safety and Security 3 – – – – – 7 7 0 Vote 12 - Nelson Mandela Bay Stadium – – – – – – – – – Vote 13 - Strategic Programmes Directorate – – – – – – – – – Vote 14 - Recreational and Cultural Services – – – – – – – – – Capital single-year expenditure 48,5 14,4 14,4 62,9 sub-total 03 – – – – – 65 65 68 1,392, 167,8 167,8 1,560, Total Capital Expenditure - Vote 230 – – – – – 88 88 118
Capital Expenditure - Standard 71,6 27,2 27,2 98,9 Governance and administration 50 – – – – – 62 62 12 6,55 19,22 19,22 25,77 Executive and council 0 0 0 0 30,4 2,54 2,54 32,99 Budget and treasury office 50 2 2 2 34,6 5,50 5,50 40,15 Corporate services 50 0 0 0 221,4 13,1 13,1 234,6 Community and public safety 61 – – – – – 71 71 32 13,0 2,00 2,00 15,00 Community and social services 00 1 1 1
Budget Year 2014/15 Description Prior Multi- Unfore. Nat. or Original Accum. Other Total Adjusted Adjuste year Unavoi Prov. Budget Funds Adjusts. Adjusts. Budget d capital d. Govt 5 6 7 8 9 10 11 12 R thousands A A1 B C D E F G H 11,0 3,89 3,89 14,89 Sport and recreation 00 3 3 3 13,5 2,07 2,07 15,59 Public safety 13 7 7 0 182,2 5,20 5,20 187,4 Housing 73 0 0 73 1,67 1,67 Health 5 – – 5 Economic and environmental 358,3 154,1 154,1 512,5 services 86 – – – – – 49 49 35 72,6 50,05 50,05 122,6 Planning and development 19 2 2 70 256,1 70,79 70,79 326,9 Road transport 87 4 4 81 29,5 33,30 33,30 62,88 Environmental protection 80 4 4 4 740,7 (26,6 (26,6 714,0 Trading services 33 – – – – – 94) 94) 39 207,3 15,00 15,00 222,3 Electricity 83 0 0 83 201,9 (26,0 (26,0 175,9 Water 00 00) 00) 00 311,7 (17,3 (17,3 294,3 Waste water management 50 64) 64) 86 40
19,7 1,67 1,67 21,37 Waste management 00 0 0 0 Other – – Total Capital Expenditure - 1,392, 167,8 167,8 1,560, Standard 230 – – – – – 88 88 118
Funded by: 846,7 42,40 42,40 889,1 National Government 75 4 4 80 Provincial Government – – District Municipality – – 5,00 3,65 3,65 8,65 Other transfers and grants 0 2 2 2 Total Capital transfers 851,7 46,0 46,0 897,8 recognised 75 – – – – – 56 56 31 53,0 53,00 Public contributions & donations 00 – – 0 Borrowing – – 487,4 121,83 121,83 609,2 Internally generated funds 55 2 2 87 1,392, 167,8 167,8 1,560, Total Capital Funding 230 – – – – – 88 88 118
Table B6 –Consolidated Budget Financial Position
Budget Year 2014/15
Description Prior Multi- Unfore. Nat. or Original Accum. Other Total Adjusted Adjuste year Unavoi Prov. Budget Funds Adjusts. Adjusts. Budget d capital d. Govt 3 4 5 6 7 8 9 10 R thousands A A1 B C D E F G H ASSETS Current assets 200,1 200,12 Cash 20 – – 0 1,016,7 (302,2 (302,2 714,44 Call investment deposits 16 – – – – – 75) 75) 1 673,4 425,49 425,49 1,098,9 Consumer debtors 49 – – – – – 1 1 40 324,9 6,10 6,10 331,08 Other debtors 78 7 7 4 Current portion of long-term ( ( receivables 5 5) 5) 0 113,0 (4,00 (4,00 109,00 Inventory 00 0) 0) 0 2,328, 125,3 125,3 2,453, Total current assets 267 – – – – – 17 17 585
Budget Year 2014/15
Description Prior Multi- Unfore. Nat. or Original Accum. Other Total Adjusted Adjuste year Unavoi Prov. Budget Funds Adjusts. Adjusts. Budget d capital d. Govt 3 4 5 6 7 8 9 10 R thousands A A1 B C D E F G H Non current assets 31,9 (19,8 (19,8 12,09 Long-term receivables 11 20) 20) 1 2 (2 (2 Investments 0 0) 0) – 199,2 17 17 199,43 Investment property 62 7 7 9 Investment in Associate – – – Property, plant and equipment 13,691,5 (165,4 (165,4 13,526,1 41
88 – – – – – 88) 88) 00 Agricultural – – Biological – – 234,9 39 39 235,34 Intangible 48 5 5 3 Other non-current assets – – 14,157, (184,7 (184,7 13,972, Total non current assets 729 – – – – – 56) 56) 973 16,485, (59,4 (59,4 16,426, TOTAL ASSETS 997 – – – – – 39) 39) 558
LIABILITIES Current liabilities Bank overdraft – – 104,0 ( ( 104,09 Borrowing 93 – – – – – 0) 0) 3 93,1 7,18 7,18 100,34 Consumer deposits 59 9 9 8 1,712,8 98,74 98,74 1,811,6 Trade and other payables 71 – – – – – 8 8 19 248,7 (78,5 (78,5 170,25 Provisions 88 36) 36) 2 2,158, 27,4 27,4 2,186, Total current liabilities 911 – – – – – 01 01 311
Non current liabilities 1,411,9 ( ( 1,411,9 Borrowing 52 – – – – – 0) 0) 52 1,763,5 (50,7 (50,7 1,712,8 Provisions 70 – – – – – 01) 01) 70 3,175, (50,7 (50,7 3,124, Total non current liabilities 522 – – – – – 01) 01) 822 5,334, (23,3 (23,3 5,311, TOTAL LIABILITIES 433 – – – – – 00) 00) 133
11,151, (36,1 (36,1 11,115, NET ASSETS 564 – – – – – 39) 39) 425
COMMUNITY WEALTH/EQUITY 11,101,9 (36,1 (36,1 11,065,8 Accumulated Surplus/(Deficit) 64 – – – – – 39) 39) 25 49,6 49,60 Reserves 00 – – – – – – – 0 TOTAL COMMUNITY 11,151, (36,1 (36,1 11,115, WEALTH/EQUITY 564 – – – – – 39) 39) 425 42
Table B7 –Consolidated Budgeted Cash Flows
Budget Year 2014/15
Description Prior Multi- Unfore. Nat. or Original Accum. Other Total Adjusted Adjuste year Unavoi Prov. Budget Funds Adjusts. Adjusts. Budget d capital d. Govt 3 4 5 6 7 8 9 10 R thousands A A1 B C D E F G H CASH FLOW FROM OPERATING ACTIVITIES Receipts 5,851,5 (21,7 (21,7 5,829,8 Ratepayers and other 75 10) 10) 64 1,336,6 11,36 11,36 1,347,9 Government - operating 16 6 6 81 970,32 44,83 44,83 1,015,1 Government - capital 4 9 9 63 65,59 70 70 66,29 Interest 2 0 0 2 Dividends – – Payments (6,518,1 (391,187 (391,187 (6,909,31 Suppliers and employees 27) ) ) 4) (181,34 1,79 1,79 (179,54 Finance charges 4) 4 4 9) (18,08 (8,665 (8,66 (26,74 Transfers and Grants 1) ) 5) 6) NET CASH FROM/(USED) 1,506,5 (362,8 (362,8 1,143,6 OPERATING ACTIVITIES 55 – – – – – 63) 63) 92
CASH FLOWS FROM INVESTING ACTIVITIES Receipts Proceeds on disposal of PPE – – Decrease (Increase) in non-current 19,82 19,82 19,82 debtors 0 0 0 Decrease (increase) other non- current receivables – – Decrease (increase) in non-current investments 20 20 20 Payments (1,339,6 (414,14 (414,141 (1,753,81 Capital assets 75) 1) ) 6) NET CASH FROM/(USED) (1,339, (394,3 (394,3 (1,733, INVESTING ACTIVITIES 675) – – – – – 01) 01) 976)
CASH FLOWS FROM FINANCING ACTIVITIES Receipts Short term loans – – Borrowing long term/refinancing – – Increase (decrease) in consumer 7,18 7,18 7,18 deposits 9 9 9 Payments (112,96 ( ( (112,96 Repayment of borrowing 8) 0) 0) 8) NET CASH FROM/(USED) (112,9 7,1 7,1 (105,7 FINANCING ACTIVITIES 68) – – – – – 89 89 79)
NET INCREASE/ (DECREASE) IN 53,91 (749,9 (749,9 (696,0 CASH HELD 2 – – – – – 76) 76) 63) Cash/cash equivalents at the year 1,162,9 447,70 447,70 1,610,6 begin: 24 0 0 24 Cash/cash equivalents at the year 1,216,8 (302,27 914,56 end: 36 – – – – – 5) 1 43
Table B8 –Consolidated Cash backed Reserves
Budget Year 2014/15
Description Prior Multi- Unfore. Nat. or Adjuste Original Accum. Other Total Adjuste year Unavoid Prov. d Budget Funds Adjusts. Adjusts. d capital . Govt Budget 3 4 5 6 7 8 9 10 R thousands A A1 B C D E F G H Cash and investments available Cash/cash equivalents at the 1,216,83 (302,27 (302,27 914,5 year end 6 – – – – – 5) 5) 61 Other current investments > 90 days 0 – – – – – 0 0 0 Non current assets - 2 Investments 0 – – – – – (20) (20) – Cash and investments 1,216,8 (302,29 (302,29 914,5 available: 56 – – – – – 5) 5) 61
Applications of cash and investments 2,1 30,0 30,0 32,1 Unspent conditional transfers 41 – – – – – 00 00 41 Unspent borrowing – – Statutory requirements – – Other working capital 812,6 (300,903 (300,903 511,7 requirements 15 – ) ) 12 85,7 85,7 Other provisions 17 – 17 Long term investments committed – – – – – Reserves to be backed by 49,6 49,6 cash/investments 00 – – – 00 Total Application of cash 950,0 (270,9 (270,9 679,1 – – – – – and investments: 73 03) 03) 70 266,7 (31,3 (31,3 235,3 Surplus(shortfall) 83 – – – – – 92) 92) 91
Table B9 –Consolidated Asset Management
Budget Year 2014/15
Description Prior Multi- Unfore. Nat. or Original Accum. Other Total Adjusted Adjuste year Unavoi Prov. Budget Funds Adjusts. Adjusts. Budget d capital d. Govt 7 8 9 10 11 12 13 14 R thousands A A1 B C D E F G H CAPITAL EXPENDITURE Total New Assets to be 608,1 86,6 86,6 694,8 adjusted 39 – – – – – 89 89 29 176,1 68,68 68,68 244,8 Infrastructure - Road transport 74 – – – – – 6 6 60 31,01 17,00 17,00 48,01 Infrastructure - Electricity 0 – – – – – 0 0 0 77,00 (24,400 (24,400 52,60 Infrastructure - Water 0 – – – – – ) ) 0 Infrastructure - Sanitation – – – – – – – – – 189,9 5,32 5,32 195,2 Infrastructure - Other 73 – – – – – 0 0 93 474,1 66,60 66,60 540,7 Infrastructure 56 – – – – – 6 6 63 35,51 2,36 2,36 37,87 Community 0 – – – – – 9 9 8 Heritage assets – – – – – – – – – 44
Investment properties – – – – – – – – – 71,82 18,09 18,09 89,91 Other assets 3 – – – – – 4 4 7 Agricultural Assets – – – – – – – – – Biological assets – – – – – – – – – 26,65 (38 (38 26,27 Intangibles 0 – – – – – 0) 0) 0
Total Renewal of Existing 784,0 81,1 81,1 865,2 Assets to be adjusted 91 – – – – – 98 98 89
Budget Year 2014/15
Description Prior Multi- Unfore. Nat. or Original Accum. Other Total Adjusted Adjuste year Unavoi Prov. Budget Funds Adjusts. Adjusts. Budget d capital d. Govt 7 8 9 10 11 12 13 14 R thousands A A1 B C D E F G H 81,35 11,75 11,75 93,10 Infrastructure - Road transport 0 – – – – – 9 9 9 155,0 (4,70 (4,70 150,3 Infrastructure - Electricity 08 – – – – – 0) 0) 08 116,9 (1,60 (1,60 115,3 Infrastructure - Water 00 – – – – – 0) 0) 00 304,7 (19,10 (19,10 285,6 Infrastructure - Sanitation 50 – – – – – 0) 0) 50 16,07 10,98 10,98 27,06 Infrastructure - Other 9 – – – – – 5 5 4 674,0 (2,65 (2,65 671,4 Infrastructure 87 – – – – – 6) 6) 31 27,50 63,11 63,11 90,61 Community 0 – – – – – 5 5 5 7,50 22,01 22,01 29,51 Heritage assets 0 – – – – – 1 1 1 Investment properties – – – – – – – – – 63,23 1,82 1,82 65,06 Other assets 2 – – – – – 8 8 0 Agricultural Assets – – – – – – – – – Biological assets – – – – – – – 11,77 (3,100 (3,10 8,67 Intangibles 2 – – – – – ) 0) 2
Total Capital Expenditure to be adjusted 257,5 80,44 80,44 337,9 Infrastructure - Road transport 24 – – – – – 5 5 69 186,0 12,30 12,30 198,3 Infrastructure - Electricity 17 – – – – – 0 0 17 193,9 (26,00 (26,00 167,9 Infrastructure - Water 00 – – – – – 0) 0) 00 304,7 (19,10 (19,10 285,6 Infrastructure - Sanitation 50 – – – – – 0) 0) 50 206,0 16,30 16,30 222,3 Infrastructure - Other 52 – – – – – 5 5 57 1,148,2 63,95 63,95 1,212,1 Infrastructure 44 – – – – – 0 0 93 63,01 65,48 65,48 128,4 Community 0 – – – – – 4 4 94 7,50 22,01 22,01 29,51 Heritage assets 0 – – – – – 1 1 1 Investment properties – – – – – – – – – 135,0 19,92 19,92 154,9 Other assets 55 – – – – – 2 2 77 Agricultural Assets – – – – – – – – – Biological assets – – – – – – – – – 38,42 (3,48 34,94 Intangibles 2 – – – – – 0) (3,480) 2 TOTAL CAPITAL EXPENDITURE 1,392, 167,8 167,8 1,560, – – – – – to be adjusted 230 88 88 118 45
ASSET REGISTER SUMMARY - PPE (WDV) 3,188,1 (141,34 (141,34 3,046,7 Infrastructure - Road transport 32 7) 7) 86 1,695,6 (7,05 (7,05 1,688,6 Infrastructure - Electricity 75 2) 2) 23 1,656,7 (19,62 (19,62 1,637,1 Infrastructure - Water 96 8) 8) 68 1,299,4 17,69 17,69 1,317,1 Infrastructure - Sanitation 36 9 9 34 2,437,6 8,30 8,30 2,446,0 Infrastructure - Other 99 9 9 08 10,277,7 (142,01 (142,01 10,135,7 Infrastructure 38 – – – – – 9) 9) 19 2,568,0 (9,63 (9,63 2,558,4 Community 86 1) 1) 55 197,0 (18 (18 196,8 Heritage assets 63 0) 0) 83 199,2 199,2 Investment properties 62 – – 62 648,7 (13,481 (13,48 635,2 Other assets 01 ) 1) 20 234,9 39 39 235,3 Intangibles 48 5 5 43
Budget Year 2014/15
Description Prior Multi- Unfore. Nat. or Original Accum. Other Total Adjusted Adjuste year Unavoi Prov. Budget Funds Adjusts. Adjusts. Budget d capital d. Govt 7 8 9 10 11 12 13 14 R thousands A A1 B C D E F G H Agricultural Assets Biological assets – – TOTAL ASSET REGISTER 14,125, (164,91 (164,91 13,960, – – – – – SUMMARY - PPE (WDV) 798 7) 7) 882 EXPENDITURE OTHER ITEMS Depreciation & asset 862,5 (37,15 (37,15 825,3 impairment 09 – – – – – 6) 6) 53 Repairs and Maintenance by 607,4 15,5 15,5 622,9 asset class 74 – – – – – 17 17 91 108,1 17,29 17,29 125,4 Infrastructure - Road transport 25 – – – – – 4 4 19 53,54 (38 (38 53,15 Infrastructure - Electricity 4 – – – – – 7) 7) 7 155,2 (5,48 (5,48 149,8 Infrastructure - Water 86 – – – – – 0) 0) 06 156,2 (7,27 (7,27 149,0 Infrastructure - Sanitation 83 – – – – – 5) 5) 08 9,41 1,53 1,53 10,95 Infrastructure - Other 9 – – – – – 3 3 2 482,6 5,68 5,68 488,3 Infrastructure 56 – – – – – 5 5 42 54,26 10,34 10,34 64,60 Community 3 – – – – – 2 2 5 Heritage assets – – – – – – – – – Investment properties – – – – – – – – – 70,55 (509 (509 70,04 Other assets 4 – – – – – ) ) 5 TOTAL EXPENDITURE OTHER 1,469, (21,63 (21,63 1,448, – – – – – ITEMS to be adjusted 983 9) 9) 344
% of capital exp on renewal of 56.3% 0.0% 55.5% assets Renewal of existing assets as % 90.9% 0.0% 104.8% of deprecn R&M as a % of PPE 4.3% 0.0% 4.5% Renewal and R&M as a % of 9.9% 0.0% 10.7% PPE 46
Table B10 –Consolidated Basic Service Delivery Measurement
Budget Year 2014/15
Prior Multi- Unfore. Nat. or Original Accum. Other Total Adjusted Description Adjuste year Unavoi Prov. Budget Funds Adjusts. Adjusts. Budget d capital d. Govt 7 8 9 10 11 12 13 14 A A1 B C D E F G H Household service targets Water: 285,1 28 Piped water inside dwelling 56 – 5 Piped water inside yard (but not in dwelling) – – Using public tap (at least 31,10 3 min.service level) 8 – 1 Other water supply (at least min.service level) – – Minimum Service Level and Above 316,2 31 sub-total 64 – – – – – – – 6 Using public tap (< min.service level) – – Other water supply (< min.service level) – – No water supply – – Below Minimum Servic Level sub- total - – – – – – – – – 316,2 31 Total number of households 64 – – – – – – – 6 Sanitation/sewerage: Flush toilet (connected to 282,0 282,0 sewerage) 04 – 04
Budget Year 2014/15
Prior Multi- Unfore. Nat. or Original Accum. Other Total Adjusted Description Adjuste year Unavoi Prov. Budget Funds Adjusts. Adjusts. Budget d capital d. Govt 7 8 9 10 11 12 13 14 A A1 B C D E F G H 3,06 3,0 Flush toilet (with septic tank) 0 – 60 Chemical toilet – – Pit toilet (ventilated) – – Other toilet provisions (> min.service level) – – Minimum Service Level and Above 285,0 285,0 sub-total 64 – – – – – – – 64 22,20 22,2 Bucket toilet 2 – 02 Other toilet provisions (< min.service level) – – No toilet provisions – – Below Minimum Servic Level sub- 22,20 22,2 total 2 – – – – – – – 02 307,2 307,2 Total number of households 66 – – – – – – – 66 Energy: Electricity (at least min. service 27,44 27,4 level) 0 – 40 Electricity - prepaid (> min.service 284,5 284,5 level) 80 – 80 Minimum Service Level and Above 312,0 312,0 sub-total 20 – – – – – – – 20 Electricity (< min.service level) – – 47
Electricity - prepaid (< min. service level) – – Other energy sources – – Below Minimum Servic Level sub- total - – – – – – – – – 312,0 312,0 Total number of households 20 – – – – – – – 20 Refuse: Removed at least once a week 259,1 259,1 (min.service) 56 – 56 Minimum Service Level and Above 259,1 259,1 sub-total 56 – – – – – – – 56 Removed less frequently than once 42,58 42,5 a week 2 – 82 15,66 15,6 Using communal refuse dump 2 – 62 Using own refuse dump – – 6,85 6,8 Other rubbish disposal 2 – 52 4 No rubbish disposal 40 – 0 Below Minimum Servic Level sub- 65,13 65,1 total 6 – – – – – – – 36 324,2 324,2 Total number of households 92 – – – – – – – 92
Households receiving Free Basic Service Water (6 kilolitres per household 72,03 72,0 per month) 1 – 31 Sanitation (free minimum level 72,31 72,3 service) 8 – 18 Electricity/other energy (50kwh per 63,25 63,2 household per month) 4 – 54 Refuse (removed at least once a 66,66 66,6 week) 5 – 65
Cost of Free Basic Services provided (R'000) Water (6 kilolitres per household 69,335,8 69,3 per month) 90 – 36 102,948, 102,9 Sanitation (free sanitation service) 610 – 49 Electricity/other energy (50kwh per 42,947,9 (1,95 (1,95 40,9 household per month) 60 9) 9) 89 61,071,0 9,60 9,60 70,6 Refuse (removed once a week) 00 7 7 78 Total cost of FBS provided 276,303, 7,64 7,64 283,9 (minimum social package) 460 – – – – – 8 8 52
Highest level of free service provided Property rates (R'000 value 15,00 15,0 threshold) 0 – 00 Water (kilolitres per household per month) 8 – 8 Sanitation (kilolitres per household 1 per month) 11 – 1 Sanitation (Rand per household per 11 11 month) 1 – 1 Electricity (kw per household per 7 month) 75 – 5
Budget Year 2014/15
Prior Multi- Unfore. Nat. or Original Accum. Other Total Adjusted Description Adjuste year Unavoi Prov. Budget Funds Adjusts. Adjusts. Budget d capital d. Govt 7 8 9 10 11 12 13 14 A A1 B C D E F G H 24 24 Refuse (average litres per week) 0 – 0 48
Revenue cost of free services provided (R'000) Property rates (R15 000 threshold 29,092,4 29,0 rebate) 06 – 92 Property rates (other exemptions, 134,824, 134,8 reductions and rebates) 314 – 24 69,335,8 69,3 Water 90 – 36 102,948, 102,9 Sanitation 610 – 49 42,947,9 (1,95 (1,95 40,9 Electricity/other energy 60 9) 9) 89 61,071,0 9,60 9,60 70,6 Refuse 00 7 7 78 Municipal Housing - rental rebates – – Housing - top structure subsidies – – Other – – Total revenue cost of free services provided (total social 440,2 7,6 7,6 447,8 package) 20 – – – – – 48 48 68
PART 2 – SUPPORTING DOCUMENTATION
2.1 Adjustments to Budget Assumptions
The budget assumptions, which informed the approved 2014/15 Budget, have been maintained.
2.2 Adjustments to Budget Funding
2.2.1 Funding the Adjustments Budget
2.2.1.1 Funding of Operating Expenditure
The Municipality’s operating expenditure is mainly funded from sources such as property rates, service charges and government grants. The table below reflects the funding sources: 49
2014/15 2014/15 Variance Description Original Adjustments Budget Budget R R R Revenue By Source 1,373,5 Property rates 1,373,533 33 - Service charges – electricity revenue 3,182,151 3,127,151 (55,000)- Service charges – water revenue 558,220 565,220 7,000- Service charges – sanitation revenue 384,587 389,587 5,000- 200,06 Service charges – refuse revenue 200,068 8 - 22,22 Rental of facilities and equipment 22,327 9 (29)- 63,19 Interest earned – external investments 63,192 2 0 Interest earned – outstanding debtors 182,999 143,690 (39,309) Dividends received - - - Fines 36,836 10,797 (26,039 11,36 11,3 Licences and permits 5 65 0- 2,20 Agency services 1,575 2 627 - 1,560,35 Transfers 49ecognized – operating 1,327,259 1 233,092 Other revenue 759,185 808,109 48,924 Gains on disposal of PPE - - - 8,277,4 Total Revenue (excluding capital transfers and contributions) 8,103,298 94 174,196
2.2.1.2 Reconciliation showing that operating and capital expenditure remain funded in accordance with section 18 of the MFMA
escription 2014/15 MFMA Section Original Adjustment R thousands Budget s Budget Funding measures Cash/cash equivalents at the year end - R'000 18(1)b 1,176,931 865,837 Cash + investments at the yr end less applications - R'000 18(1)b 268,145 238,128 Cash year end/monthly employee/supplier payments 18(1)b 1.9 1.3 Surplus/(Deficit) excluding depreciation offsets: 1,182,39 R'000 18(1) 7 804,179 Cash receipts % of Ratepayer and Other 18(1)a, revenue (2) 87.1% 87.6% Debt impairment expense as a % of total 18(1)a, billable revenue (2) 6.0%% 6.0%% Capital payments % of capital expenditure 18(1)c;19 95.1% 115.2% Borrowing receipts % of capital expenditure (excl. transfers) 18(1)c 0% 0% Grants % of Govt. legislated/gazetted allocations 18(1)a 100.0% 100.0% Current consumer debtors % change - incr(decr) 18(1)a -35,0% 63.2% R&M % of Property Plant & Equipment 20(1)(vi) 4.3% 4.5% Asset renewal % of capital budget 20(1)(vi) 55.8% 53.6%
The aforementioned table reflects the funding status of the Adjustments Budget.
2.2.2 Adjustments to estimated collection levels 50
The 2014/15 Original Operating Budget was based on a debtors’ collection rate of 94%. This debtors’ collection rate has been maintained in the 2014/15 Adjustments Budget. 51
2.2.3 Adjustments to NMBM’s monetary investments
Below is an analysis of the investments by type and maturity.
INVESTMENT PARTICULARS BY TYPE
INVESTMENT PARTICULARS BY TYPE Original Budget Adjustments Budget 2014/15 2014/15 R R Investment Type
DEPOSITS WITH BANKS 1,176,931,000 865,837,000
TOTAL INVESTMENTS 1,176,931,000 865,837,000
INVESTMENT PARTICULARS BY MATURITY
Period of Type of Expiry date Monetary of Name of Institution / Investment Investment Investment Investment Value 2014/15 Original Budget R DEPOSITS WITH BANKS 1 - 3 Months Fixed Term Various 1,176,931,000 1,176,931,000 2014/15 Adjustments Budget DEPOSITS WITH BANKS 1 - 3 Months Fixed Term Various 865,837,000 865,837,000
2.2.4 Adjustments related to the planned use of previous years’ cash backed accumulated surplus
No adjustments have been made pertaining to the planned use of the previous year’s cash backed accumulated surplus, in the preparation of the 2014/15 Adjustments Budget.
2.2.5 Adjustments made to proposed new loans to be raised in the budget year
In view of financial affordability considerations, no new loans will be raised in the 2014/15 financial year.
2.2.6 Adjustments related to allocations and grants to the Municipality
2.2.6.1 Adjustments related to capital allocations and grants to the Municipality
Below is a summarised version of the adjustments relating to grant funding, supporting the Municipality’s Capital Budget: 52
Adjustments Capital Expenditure Budget by grant funding
Budget Year 2014/15
Description
Original Budget Total Adjusts. Adjustments Budget
R thousands R R R
Funded by:
National Government 846,775 42,404 889,180
Other transfers and grants 0 8,652 8,652
Total Capital transfers recognised 846,775 51,056 897,831
The relevant details, reflecting the capital projects in question, are contained in Annexure “A”.
2.2.6.2 Adjustments related to allocations and grants to the Municipality
Below the adjustments pertaining to operating and capital allocations and grants:
Supporting Table SB7 Adjustments Budget - transfers and grant receipts –
Budget Year 2014/15
Description Prior Multi- Nat. or Adjuste Original Other Total Adjuste year Prov. d Budget Adjusts. Adjusts. d capital Govt Budget 7 8 9 10 11 12 R thousands A A1 B C D E F RECEIPTS:
Operating Transfers and Grants 1,317, 4,5 4,5 1,321, National Government: 135 – – 65 – 65 700 761,6 761,6 Local Government Equitable Share 06 – 06 10,0 10,0 Energy Efficiency and Demand Management 00 – 00 13,4 13,4 EPWP Incentive 39 – 39 130,0 (70,00 (70,00 60,0 Public Transport Network Operations 00 0) 0) 00 1,2 1,2 Finance Management 50 – 50 8,0 8,0 Infrastructure Skills Development 00 – 00 4,1 4,1 Integrated City Development Grant 33 33 37,7 37,7 Municipal Human Settlements Capacity Grant 07 – 07 348,0 48,8 48,8 396,8 Human Settlements Development Grant 00 65 65 65 25,7 25,7 25,7 Urban Settlements Development Grant 00 00 00 3,0 3,0 Other 00 – 00 8,7 3,7 3,7 12,5 Provincial Government: 52 – – 72 – 72 24 53
3,7 3,7 3,7 Health subsidy 72 72 72 5,0 5,0 DRPW (Maintenance of Road) 00 – 00 3,7 3,7 Libraries 52 – 52 1,3 1,3 Other grant providers: 72 – – – – – 72 42 42 Marine and Coastal Management 0 – 0
Budget Year 2014/15
Description Prior Multi- Nat. or Adjuste Original Other Total Adjuste year Prov. d Budget Adjusts. Adjusts. d capital Govt Budget 7 8 9 10 11 12 R thousands A A1 B C D E F 84 84 Groen Sebenza ( SANBI) 2 – 2 11 11 SALA/ IDA 0 – 0 1,327, 8,3 8,3 1,335, Total Operating Transfers and Grants 259 – – 37 – 37 596
Capital Transfers and Grants 965,3 49,8 49,8 1,015, National Government: 24 – – 39 – 39 163 828,8 (25,70 (25,70 803,1 Urban Settlements Development Grant 63 0) 0) 63 100,0 70,0 70,0 170,0 Public Transport Infrastructure Grant 00 00 00 00 18,4 (9,46 (9,46 9,0 Neighborhood Development Partnership Grant 61 1) 1) 00 18,0 18,0 Intergrated National Electrification Grant 00 – 00 15,0 15,0 15,0 Smart Grid Programmes 00 00 00 965,3 49,8 49,8 1,015, Total Capital Transfers and Grants 24 – – 39 – 39 163 2,292, 58,1 58,1 2,350, TOTAL RECEIPTS OF TRANSFERS & GRANTS – – – 583 76 76 759
Supporting Table SB8 Adjustments Budget - expenditure on transfers and grant programmes
Budget Year 2014/15
Prior Multi- Nat. or Description Original Other Total Adjusted Adjuste year Prov. Budget Adjusts. Adjusts. Budget d capital Govt 2 3 4 5 6 7 R thousands A A1 B C D E F EXPENDITURE ON TRANSFERS AND GRANT PROGRAM:
Operating expenditure of Transfers and Grants 1,317, 216,0 216,0 1,533, National Government: 135 – – 35 – 35 170 761,6 761,6 Local Government Equitable Share 06 – 06 Energy Efficiency and Demand Management 10,0 10,00 Grant 00 – 0 130,0 (60,5 (60,5 69,46 Public Transport Network Operations 00 32) 32) 8 1,25 1,25 Finance Management 0 – 0 8,00 56 56 8,56 Infrastructure Skills Development 0 0 0 0 54
3,00 7,24 7,24 10,24 LGSETA 0 4 4 4 4,13 4,13 Intergrated City Development 3 – 3 25,70 25,70 25,70 Urban Settlements Development Grant 0 0 0 28,80 28,80 28,80 Municipal Disaster Recovery Grant 3 3 3 348,0 178,8 178,8 526,8 Human Settlements Development Grant 00 60 60 60 Municipal Human Settlements Capacity 37,7 7,87 7,87 45,57 Grant 07 0 0 7 22,00 22,00 22,00 Off-Grid Electrification 0 0 0 13,4 5,52 5,52 18,96 EPWP 39 9 9 8 8,7 3,7 3,7 12,5 Provincial Government: 52 – – 99 – 99 51 3,75 3,75 Libraries 2 – 2 3,77 3,77 3,77 Health Subsidy 2 2 2 5,00 5,00 DRPW (Maintenance of Roads) 0 – 0 2 2 2 Other 7 7 7 1,37 12,9 12,96 14,33 Other grant providers: 2 – – – 63 3 5 4,70 4,70 4,70 National lotteries 4 4 4
Budget Year 2014/15
Prior Multi- Nat. or Description Original Other Total Adjusted Adjuste year Prov. Budget Adjusts. Adjusts. Budget d capital Govt 2 3 4 5 6 7 R thousands A A1 B C D E F 7,79 7,79 7,79 European Funding Grant 6 6 6 42 46 46 88 Marine and Coastal Management 0 4 4 4 11 11 SALA/ IDA 0 – 0 84 84 Groen Sebenza (SANBI) 2 – 2 Total operating expenditure of 1,327, 219,8 12,9 232,7 1,560,0 Transfers and Grants: 259 – – 34 63 97 56
Capital expenditure of Transfers and Grants 965,3 34,8 34,8 1,000,1 National Government: 24 – – 39 – 39 63 828,8 (25,7 (25,7 803,1 Urban Settlements Development Grant 63 00) 00) 63 100,0 70,00 70,00 170,0 Public Transport Infrastructure Grant 00 0 0 00 Neighbourhood Partnership Development 18,4 (9,46 (9,46 9,00 Grant 61 1) 1) 0 18,0 18,00 Intergrated National Electrification Grant 00 – 0 8,65 8,6 8,6 Other grant providers: – – – – 2 52 52 7,08 7,08 7,08 European Funding Grant 9 9 9 1,56 1,56 1,56 Mendi Bottle Store 3 3 3 Total capital expenditure of Transfers 965,3 34,8 8,65 43,4 1,008,8 and Grants 24 – – 39 2 91 15
Total capital expenditure of Transfers 2,292, 254,6 21,61 276,2 2,568,8 and Grants 583 – – 73 5 88 71 55
2.3 Adjustments to expenditure on allocations and grant programmes
2.3.1 The adjustments made to planned capital expenditure of allocations and grants received
The adjustments made to planned capital expenditure, including the capital projects in question, are reflected in Annexure “A”.
2.4 Adjustments to Councillors and Employee benefits
Below a summary of the adjustments made to Councillors’ Remuneration and Employee Related Costs:
Adjustments Original Description Budget Variance Budget 2014/15 2014/15 R thousands R R R Councillors’ Remuneration 60,976 60,976 0 Employee Related Costs 2,184,415 2,176,157 (6,258)
2.5 Adjustments to Service Delivery and Budget Implementation Plan (SDBIP)
In accordance with the MFMA, it should be noted that the service delivery targets and performance indicators in the 2014/15 SDBIP will be approved, following the approval by Council of the 2014/15 Adjustments Budget. 56
2.6 Adjustments to Capital Expenditure
Annexure “B” contains a listing of all the adjusted capital programmes and projects of the Municipality, which are aligned to the Integrated Development Plan of the Municipality.
2.7 City Manager’s Quality Certification
I, Trevor Harper, Acting City Manager of the Nelson Mandela Bay Metropolitan Municipality, hereby certify that the adjustments budget and supporting documentation have been prepared in accordance with the Municipal Finance Management Act and the regulations made under that Act, and that the adjustments budget and supporting documentation are consistent with the Integrated Development Plan of the Municipality.
Print Name : Trevor Harper
Acting City Manager of Nelson Mandela Bay Municipality (EC000)
Signature : ______
Date : ______