PRESENTATION TO THE SELECT COMMITTEE ON FINANCE AND APPROPRIATIONS

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PRESENTATION TO THE SELECT COMMITTEE ON FINANCE AND APPROPRIATIONS

CITY OF MANGAUNG

Sandile Msibi

CITY MANAGER

8 September 2011

Outline of the Presentation

Purpose of the Presentation

Municipal Overview

Alignment of IDP and PGDS

Performance of Grants

Budget Performance

Compliance with the MFMA

Service Delivery and Capacity Constraints

Intergovernmental Relations

Purpose of the Presentation To engage with the Committee on the following issues:

Development and Implementation of Mangaung Budget

Compliance with MFMA

Spending and Performance with Regards to Conditional

Grants

The Relations Between the MMM and Various National and

Provincial Departments.

Service Delivery and Capacity Constraints.

Alignment of MMM’s IDP with the Provincial Growth and

Development Strategy(PGDS)

• Covers three towns, with rural surroundings– Bloemfontein– Botshabelo (55km east of Bloemfontein), and – Thaba Nchu (12km east of Botshabelo)

• Dec 2000, led to formation of Mangaung Local Municipality, Category B

• May 2011, elevated from category “B” municipality to a category “A” metropolitan municipality

• Mangaung covers 6 863 km²

55

OVERVIEW OF MANGAUNG METRO

• Provincial Capital of Free State• Gateway to Central Region• Judicial Capital of South Africa• Bloemfontein is the sixth largest city in South Africa

66



CITY OF BLOEMFONTEIN

BOTSHABELO

THABA NCHU

Mangaung

6 604 square kms

• More than 50% of the people earning less than R1000 per month.

– Botshabelo, Thaba-Nchu and Mangaung township residents are the worst affected.

• Mangaung economy driven by service industry

88

60%

70%

40%

0%

10%

20%

30%

40%

50%

60%

70%

80%

2001 2007

Employed

Unemployed

0.1%3.5% 1.3%1.9%

16.0%

11.8%

26.8%

35.3%

2.2%Mining

Manufacturing

Electricity

Construction

Trade

Transport

Finance

Community Services

Agriculture

UNEMPLOYMENT LEVEL

• MMM consists of 97 Councilors:– 49 ward councilors;– 48 councilors representing political parties

appointed on a proportional basis

• 1 Executive Mayor (full-time)– Councilor Thabo Manyoni

• 1 Deputy Executive Mayor (full-time)– Councilor Mxolisi Siyonzana

99

COUNCIL STRUCTURE

• 1 Speaker (full-time) – Councilor Connie Rampai

• 10 Members of the Mayoral Committee (full-time)

1010

COUNCIL STRUCTURE

There are 10 Portfolio Committees each chaired by a Mayoral Committee member:

• Infrastructure & Services• Rural Development & Environment• Finance• Planning• Transport, Security & Emergency

1111

COUNCIL STRUCTURE

• Economic Development & Tourism• Human Settlement• Corporate Governance• Health & Social Development• Community participation and IDP

1212

COUNCIL STRUCTURE

Alignment of IDP and PGDS Planning and budgeting in the Municipality takes place

within the framework of a number of strategies

These include the IDP which plays a critical role in

informing the Municipality’s medium-term planning and

the PGDS informing the municipality and the province’s

long range planning

The Municipality’s Spatial Development Framework is also

crucial in providing a spatial context within which IDP

programmes and projects are contextualized

Alignment of IDP and PGDS (2) While the PGDS charts the long-term strategic course and

makes overarching decisions about what emphasize if the Municipality is to accelerate growth and development, the IDP defines where we want to be after five years, and how we intend to get there

The PGDS is consciously aligned to the Municipality’s IDP

(medium-term plan)

This practice will remain ensuring that the PGDS is

translated effectively into medium-term pragmatic

operational planning and budgeting

Grants Performance Name of Grant Rollover Allocation

2010/11SpendingJune 2011

Balance

R’000 R’000 R’000 R’000

National Government

Financial Management Grant 62 1 189 1 238 13

Municipal Systems Improvement Grant 685 750 1 435 -

National Electrification Programme Grant - 13 000 11 041 1 959

MIG Grant Capacity Building 641 - 399 242

DWAF Grant – Selosesha Sewerage 3 - 3 -

DWAF Grant 2 023 - 2 023 -

PTIS Grant 121 121 151 000 172 005 100 115

MIG Grant 38 063 169 729 145 103 62 689

Restructuring Grant 124 - 124 -

2010 WC Cup Host City Operating Grant 19 000 - 19 000 -

Demand Side Management Grant 1 041 5 000 4 462 1 579

GOGTA Grant Fire Suppression 83 - - 83

Total National Grants 182 846 340 668 356 383 166 680

Grants Performance (2) Name of Grant Rollover

Allocation 2010/11

Spending June 2011 Balance

R’000 R’000 R’000 R’000

Provincial Grants

Housing Accreditation Subsidy 3 422 - - 3 422

Prov. Administration Grant 16 623 - 8 780 7 843

Prov. Grant Planning & Survey 574 - 81 493

Local Government & Housing Infrastructure Grant 3 965 - - 3 965

White City Hostels Grant 1 215 - 1 173 42

Urban Renewal Grant 569 - 288 281

Prov. Grant Land Use Scheme 749 - 749 -

Prov. Grant Transfer Grassland 4 500 - - 4 500

Prov. Grant Batho Project - Housing 2 083 - 334 1 749

Prov. Grant Batho – Roads - 32 335 5 911 26 423

Prov. Grant CCTV BFN CBD, Stadium & Naval Hill 131 - - 131

Prov. Grant Du Plessis & Muller Intersections 579 - 24 555

Prov. Grant Township Establishment Caleb Motshabi 1 344 - 1 197 147

Urban Settlement Development Grant 916 5 589 - 6 505

Total Provincial Grants 36 670 37 924 18 537 56 056

Grants Performance (3)

Name of Grant RolloverAllocation 2010/11

Spending June 2011

Balance

R’000 R’000 R’000 R’000

Others

Motheo District Municipality Grant Environmental Health

13 787 6 000 9 106 10 680

Motheo District Municipality Grant Tourism

- 100 89 11

DBSA Capacity Building Grant 234 - - 234

Motheo Grant – upgrading Roads - 1 259 - 1 259

Total Others 14 021 7 359 9 195 12 184

Total Conditional Grants 233 535 385 951 384 565 234 921

Reasons for Variance

Infrastructure

MIG Capacity Building - R242 468,48

MIG Grant - R62 689 011,12

Prov. Grant: Operation Hlasela - R26 423 366,74

Prov. Grant: Du Plessis & Muller Intersection - R554 639,58

Prov. Administration Grant - R7 845 754,58

Motheo Grant: Upgrading Roads - R1 259 252,19

Reasons for Variance (2)

Economic Development & Planning

PTIS - R100 115 219,01

Prov. Grant: Planning & Survey - R493 143,56

Urban Renewal Grant - R280 553,14

Prov. Grant: Township establishment Caleb Motshabi -

R147 238,87

Prov. Grant Transfer: Grasslands - R4 500 000,00


Housing

Housing Accreditation Subsidy - R3 422 275,42

White City Hostels - R 42 208,12

Prov. Grant: Batho Project – Housing - R1 749 275,48

Urban Settlement Development Grant - R6 505 054,35


Community & Social Development

Provincial Grant: CCTV BFN CBD, Stadium & Naval Hill -

R130 850,75

Motheo District Municipality Grant Environmental Health

- R10 680 300,94

COGTA Fire Suppression - R82 816,58

Centlec

National Electrification Programme - R1 959 038,99

Demand Site Management - R1 578 868,90

Achievements

Financial Management Grant

Support of five (5) Finance Interns

Caseware support for Accounting and Compliance Division

Budget and Treasury Office Support:

Credit Rating

Budget Reforms

Achievements (2)

Municipal Systems Improvement Grant

Asset Management Division ( R685 144,86)

Training for the ASM personnel

Created twenty (20) temporary jobs for unemployed

matriculates for a period of 6 months as asset counters

Facilitated out movable asset project count

Achievements (3)

Supply Chain Management (R750 000)

These funds were used for the implementation of the

e-filing system

The system was commissioned to address the problem

of lost documents during Auditor General audits

In terms of the system all documentation is scanned

and stored electronically

Original documents are stored outside the municipality

Budget Performance Revenue per Source (actual versus budgeted revenue)

Operating Expenditure per Type (actual versus budgeted

expenditure)

Growth in Budget and Factors contributing to growth

Capital Budget by funding Source

Grant Dependency - Capital

Grant Dependency - Operating

Revenue Collection - Rates and Debtors

Salaries Percentage

Repairs and Maintenance

Revenue Per SourceRevenue Per Source Budget

2010/11Adj Budget

2010/11Total for the

YearYTD

Variance% of Budget

R’000 R’000 R’000 R’000 %

Assessment rates 394 830 394 830 405 477 10 647 102.70%

Electricity Tariffs 1 167 997 1 285 090 1 189 385 -95 705 92.55%

Water Tariffs 338 520 338 520 371 967 33 447 109.88%

Sanitation Tariffs/ Refuse Removal 150 667 150 677 144 124 -6 552 95.65%

Rent of Facilities and Equipment 18 227 18 227 14 909 -3 319 81.79%

Interest earned-Internal Investments 52 046 52 046 28 185 -23 861 54.15%

Interest Earned-Outstanding Debtors 27 642 27 642 22 269 -5 374 80.56%

Interest on Shareholder Loan 99 485 99 485 99 485 - 100.00%

Fine s 5 385 5 385 1 640 -3 745 30.45%

Licenses and Permits 753 753 203 -549 27.00%

Income for Agency Service 17 121 17 121 17 793 673 103.93%

Seconded Personnel Salaries & Allowances

117 427 117 427 104 673 -12 754 89.14%

Capital Grants & Subsidies 211 520 502 242 368 090 -134 153 73.29%

Operating Grants & Subsidies received 558 409 545 137 551 024 5 887 101.08%

Other Revenue 159 066 200 012 67 811 -132 201 33.90%

Total Revenue Per Source 3 319 105 3 754 594 3 387 035 -367 559 -9.79%

Operating Expenditure per TypeRevenue Per Source

Budget 2010/11

Adj Budget 2010/11

Total for the Year

YTD Variance

% of Budget

R’000 R’000 R’000 R’000 %

Employee Related Costs 774 955 797 019 729 205 -67 813 91.49%

Remuneration of Councillors 25 271 25 271 22 962 -2 309 90.86%

Seconded Personnel Salaries 116 539 116 539 104 673 -11 866 89.82%

Bad Debt Provision 87 557 91 557 173 065 81 508 189.02%

Depreciation 183 119 178 104 101 622 -76 482 57.06%

Repairs and Maintenance 159 971 166 555 132 214 -34 341 79.38%

Interest Paid 50 967 50 967 4 085 -46 882 8.01%

Interest on Shareholder Loan 99 485 99 485 116 889 17 404 117.49%

Bulk Purchases –Water 215 232 215 232 250 334 35 103 116.31%

Bulk Purchases –Electricity 771 691 771 691 661 702 -107 989 85.97%

Contracted Service 153 469 178 936 138 841 -40 095 77.59%

Grants and Subsidies Paid 2 033 2 033 1 750 -283 86.08%

Contributions to (from) Provisions 7 324 7 324 8 219 896 112.23%

General Expenditure –Other 341 711 382 234 337 217 -45 017 88.22%

Total Operating Expenditure per Type

2 988 324 3 080 947 2 782 779 -298 166 90.32%

Growth in Budget

Operating Expenditure 2010/11 – 2011/12

2010/11 2011/12 Increase%

Increase

Bulk Purchases 986 922 1 2600 365 273 443 27.71

Personnel Costs 798 197 886 816 88 619 14.43

Remuneration of Councillors 25 270 43 689 18 419 72.89

Contracted Services 153 469 162 868 9 399 6.12

Repairs and Maintenance 158 971 216 940 57 969 36.46

Other 907 151 1 080 899 173 748 19.15

Total 3 080 947 3 691 530 610 583 23.53

Growth in Budget

Notes on the increase of the operating expenditure:

Personnel costs increase is based on an 8% salary increase

and include salaries of ninety (90) staff members from the

former Motheo District Municipality

Clr remuneration includes an increase in the number of clrs

Repairs and maintenance has increased by a massive 36%

in order to address the ageing roads and infrastructure

R5m has been provided to cover outstanding commitments

of the former Motheo e.g auditing costs and building lease

Growth in Budget

Revenue 2010/11 – 2011/12

2010/11 2011/12 Increase%

Increase

Assessment Rates 394,83 445,41 50,58 12.81%

Service Changes 1 657,19 2 023,41 366,26 22.10%

Fuel Levy - 175,98 175,98 -

Grants and Subsidies

1 100,07 1 270,24 170,17 15.46%

Other 601,91 522,96 -79,95 -13.28

Total 3 754 4 438 683,04 33.72%

Growth in Budget

The revenue is based on the following:

Tariff increases: water 10%, Electricity 26%, Rates 12%

and General tariffs 10%

Fuel levy of R175m. First time inclusion as a result of our

status as a metro

Grants and subsidies of more than R1 billion

Rates Levy constitutes 65% of total revenue

Capital Budget by Funding Source

Budget 2010/11

Adj Budget2010/11

Actual Spend

June 2011Balance

% ofAdj

Budget

R’000 R’000 R’000 R’000 %

External Loans 69 970 69 970 22 259 47 711 31.81%

Capital Replacements 71 799 196 776 82 518 114 258 41.94%

Public Contributions and Donations 19 968 20 884 13 195 7 688 63.19%

National Government 207 745 472 938 331 282 141 656 70.05%

Provincial Government - 33 193 16 303 16 890 49.12%

Motheo District Municipality 3 775 3 950 298 3 652 7.53%

TOTAL 373 257 797 711 465 855 331 855 58.40%

Grant Dependancy - Revenue

Budget 2010/11

ADJ Budget2010/11 Actual

Budget 2011/12

R’000 R’000 R’000 R’000

Capital Grant 211 520 502 242 368 089 571 745

Operating Grant 558 409 545 137 551 024 560 857

Other Revenue 2 549 176 2 707 216 2 467 922 3 305 848

Total Revenue 3 319 105 3 754 595 3 387 035 4 438 450

Budget 2010/11

ADJ Budget2010/11 Actual

Budget 2011/12

Grants 23.20% 27.90% 27.14% 25.52%

Own Revenue 76.80% 72.10% 72.86% 74.48%

Total Revenue 100.00% 100.00% 100.00% 100.00%

Grant Dependency - Capital Budget

2010/11Adj Budget

2010/11Actual

Budget 2011/12

R’000 R’000 R’000 R’000

External Loans 69 970 69 970 22 259 110 546

Government Grants 207 745 506 131 347 585 570 362

District Municipality 3 775 3 950 298 1 383

Own Funds 91 776 217 660 95 714 141 856

Total Capital 373 256 797 711 465 856 824 147

Budget 2010/11

Adj Budget2010/11

ActualBudget

2011/12

External Loans 18.74% 8.77% 4.78% 13.41%

Government Grants 55.66% 63.45% 74.61% 69.21%

District Municipality 1.01% 0.50% 0.06% 0.17%

Own Funds 24.59% 27.29% 20.55% 17.21%

Total Capital 100.00% 100.00% 100.00% 100.00%


PER SERVICE CURRENT 30 DAYS 60 DAYS 90 DAYS 120 + DAYS TotalELECTRICITY 97,913,470.61 27,222,823.65 14,485,075.76 10,507,353.88 108,478,581.37 258,607,305.27 SUNDRY LOANS 3,379.25 4,484.11 4,757.31 4,757.31 982,743.23 1,000,121.21 RATES 28,012,842.46 11,879,100.50 9,257,018.75 10,062,232.08 241,431,632.37 300,642,826.16 SANITATION 11,331,516.25 5,351,347.98 4,305,909.64 4,426,174.83 126,357,456.32 151,772,405.02 SUNDRIES 1,941,053.73 1,104,018.00 344,673.60 496,724.80 34,250,777.88 38,137,248.01 WATER 44,293,914.77 25,797,888.91 22,387,856.29 17,164,115.46 362,569,170.01 472,212,945.44

183,496,177.07 71,359,663.15 50,785,291.35 42,661,358.36 874,070,361.18 1,222,372,851.11 15% 6% 4% 3% 72%


PER CLASSIFICATION CURRENT 30 DAYS 60 DAYS 90 DAYS 120 + DAYS Total

BUSINESS 81,295,413.74 22,360,891.09 13,954,159.77 10,086,677.89 124,070,690.58 251,767,833.07

GOVERNMENT 10,474,722.04 5,979,202.23 3,417,698.58 4,419,104.46 47,877,473.43 72,168,200.74

DOMESTIC 90,051,445.50 42,076,566.40 33,082,185.86 27,667,458.51 668,925,839.06 861,803,495.33

OTHER 1,674,595.42 943,003.43 331,247.12 488,117.45 33,196,358.55 36,633,321.97 183,496,176.70 71,359,663.15 50,785,291.33 42,661,358.31 874,070,361.62 1,222,372,851.11

15% 6% 4% 3% 72%

Government DebtMonth Electricity Water Sanitation Rates Other TOTAL

10-Jul 22,497,698 11,829,874 45,485,078 17,472,665 - 97,285,315

10-Aug 25,748,929 12,126,363 34,958,000 19,522,580 - 92,355,872

10-Sep 25,078,783 21,610,803 35,515,288 24,812,018 - 107,016,892

10-Oct 28,683,418 22,002,018 36,469,835 27,381,460 - 114,536,731

10-Nov 25,341,949 10,994,319 37,676,752 20,786,940 2,138,791 96,938,751

10-Dec 24,130,211 10,994,319 38,094,785 22,149,973 2,134,297 97,503,585

11-Jan 24,767,171 11,395,048 37,443,755 21,275,868 2,139,804 97,021,645

11-Feb 23,969,376 11,351,164 38,007,082 22,203,585 2,201,553 97,732,760

11-Mar 19,616,414 10,018,937 26,733,707 24,350,715 2,223,083 82,942,855

11-Apr 21,098,638 7,966,775 23,439,010 21,191,584 2,081,637 75,777,643

11-May 22,905,174 8,081,031 23,439,447 21,857,660 2,049,289 78,332,601

11-Jun 19,465,012 6,085,023 22,062,246 22,509,087 2,046,833 72,168,201

Revenue Collection - Rates and DebtorsMeasures employed to reduce debt

Government debt• On-going reconciliation are being effected monthly for payments

made to the municipality and how they were allocated on the system.

• Currently, when the Department of Public Works effects a lump sum payment to the municipality they also send through an allocation in order to ensure that the amounts are allocated accordingly to the correct accounts. There is a continuous reconciliation of records conducted frequently.

• Also, there has been an engagement between the Department of Education and the municipality to address the debt owing by schools.


Other Debt

• Audits of households and businesses are being performed to verify

existance of meters and readings.

• Indigents are identified and registered as they become identified

during the audits.

• Disconnections of electricity supplies are actively implemented.

• We are introducing the installation of pre-paid water meters. These

have already been installed in municipality owned properties.

Salaries Percentage

Budget 2010/11

Adj Budget

2010/11Actual

Budget 2011/12

R’000 R’000 R’000 R’000Employee Salaries 774 955 797 019 729 205 886 816

Operating Expenditure

2 988 324 3 080 947 2 782 779 3 691 530

Salaries % Budget 25.93% 25.87% 26.20% 24.02%

Repairs and MaintenanceRepairs and Maintenance

Budget / Open Balance YTD Movement Balance

% ofBudget

R’000 R’000 R’000 %

Municipal Facilities 29 080 20 544 8 536 71.64%

Landfill Sites & Quarries

Landfill Site - Rehabilitation 3 494 8 313 -4 818 237.90%

Quarry Rehabilitation 657 534 122 81.34%

Total 4 151 8 847 -4 696 213.14%

Roads & Stormwater

Roads 13 455 13 567 -113 100.84%

Roads – Rehabilitation Program 2 586 2 499 90 96.52%

Roads – Sundry Rehabilitation 2 353 2 194 159 93.22%

Water Mains 8 158 6 900 1 258 84.58%

Sewer Mains 4 269 2 573 1 696 60.26%

Total 30 821 27 733 3 090 89.98%

Repairs and Maintenance (2)

Repairs and Maintenance (Cont)Budget / Open

BalanceYTD

Movement Balance% of

Budget

R’000 R’000 R’000 %

Infrastructure - Other

Street Lighting 27 927 27 115 812 97.89

Maintenance and Overlay Work 1 231 922 309 74.90

Material 18 587 13 604 4 982 73.19

Traffic Lights 819 819 - 100

Substations – Upgrading & Maintenance 626 586 40 93.61

Metering & Material 3 671 2 293 1 379 62.46

52 861 45 339 7 522 85.77%

Fleet Maintenance

Tyres & Tubes 5 577 3 773 1 804 67.65%

Vehicles 42 396 25 979 16 417 61.27%

47 973 29 752 18 221 62.02%

Total Repairs and Maintenance 164 886 132 215 32 673 80.18%

Compliance with MFMA Supply Chain - All bid committees are in place and

functioning properly

Each directorate have a specification and evaluation

committee. The bid adjudication committee is centralized

and is comprised of Executive directors as members and is

chaired by the CFO

SCM policy is in place and was approved in 2005 and

amended in 2010. The policy complies with the

regulations in terms of sec 68 of the MFMA

Compliance with MFMA (2) Reporting

Sec 71 reports have been submitted regularly to

National Treasury

Quarterly sec 52 reports and SCM quarterly reports

have been submitted to Council meetings

Budget was approved before the beginning of new

financial year and Annual Financial Statements have

been submitted on time for the past five years

Compliance with MFMA (3) All executive positions have been filled. Finance directorate

consists of the following sub-directorates; Financial Management, Supply Chain Management, Revenue Management, Asset Management and Compliance Division.

Audit committee is in place and functioning.

Challenges

MFMA compliance deadlines are not met.

Oversight committee not sitting.

Past three years receiving disclaimers opinion mainly as a

result of lack of compliant asset register. Service provider

has been appointed to compile the register.

Service Delivery and Capacity Constraints

Electricity

Water and Sanitation

Refuse Removal

Roads

Indigents

Targeted Backlog vs Actual Achieved per Area

ELECTRICITY Electricity is supplied by Centlec, a wholly owned entity of the

Mangaung Metropolitan Municipality.

Challenges faced by the entity are:

Maintenance backlogs and the rising refurbishment costs

Annual growing Eskom account. The entity will not be

sustainable in the long term. For example

2006- Bulk purchases accounted for 55% of opex

2011- bulk purchase account for 70% of opex

2016-Bulk purchases will account for more than 95%

Entity loosing money as a result of high number of

Illegal bridging and poor management

Water and Sanitation

Water and sanitation bulk services need to be extended beside the connection backlogs as follows:

• There are 14

reservoirs in the

Botshabelo area of

which 4 are

owned by Bloem

Water. Six of

MMM reservoirs

have a storage

shortfall of 15ML

• There are 5

reservoirs in the

Thaba Nchu area

of which 4 are

owned by Bloem

Water. The 4

Bloem Water

reservoirs has a

total shortfall of

23.2Ml but will be

augmented by an

internal MMM

reservoir –

currently with a

shortage of 24,5

ML

• MMM has 9

Waste Water

Treatrement

Works (and 1 at

the Air Force Base

owned and

operated by Public

Works) of which 5

are Activated

Sludge (AS) type, 3

are Bio Filter (BF)

type and one an

Oxidation Pond

(OP) type.

Bloemspruit and

Sterkwater are

overloaded to the

equivalent of 17

740 and 23 220

(17 480 + 5740)

stands

respectively

Refuse RemovalChallenges that are experienced with refuse removal:

Unreliability of older compaction vehicles and heating

problems with new compaction vehicles that results in an

average availability of less than 50% of the compaction

vehicle fleet

Long turn-around times for repair of solid waste

management fleet at Mechanical Workshop

Number of vacancies amongst solid waste staff (both

operational and supervisory staff)

Low % of vehicle availability and high level of vacant posts

leads to increased overtime which increases costs of

prescribed level of service delivery

Refuse Removal (2) Number of compaction vehicles and staff have not

increased equally in relation to increase in households that needs to be serviced placing additional pressure on already over-stretched resources

Volatile labour environment which is characterized by

wildcat strikes and go-slows

Ageing workforce that finds physical work more

demanding

Continued focus on waste collection due to lack of

resources leaves little room for focus on other legislative

issues such as separation at source and recycling

Roads

26 % (367 km) of our current paved roads are in a poor to very poor structural condition.

Aside from the 1 186 km of roads that are still unpaved

Huge capital investment required to address this,

together with the stormwater backlogs

9% (127 km) of surfaced roads in poor to very poor

condition due to potholes, surface cracks, etc.

.

Indigents We currently have 36 000 indigents on our indigents

register

We provide the following free basic services to indigents:

6kl of water

50kw of electricity

Free installation and conversions to prepaid electricity

Exemptions from rates and taxes

Burials, on application, R1250 for adults and R750 for children

Biggest challenge is for people coming forth to register.

Water Service Levels and Backlogs

WaterNo. of Erven (Bfn)

Botshabelo Thaba Nchu Total

Water Connection 85,980 47,245 20,569 153,794Connection (no. meter) 479 479No Services 89 2,761 2,850Water Network Only 89 89Communal Standpipes 2,996 3 881 3,880Not Developed 6,955 1,093 8,048Parks 451 119 47 617Total Water 96,471 50,696 22,590 169,757Water Connection Backlog 10,040 2,853 1,974 14,867Est installation unit cost (R) 5,000 5,000 5,000 5,000Estimated Upgrade Cost (R'000)

50,200 14,265 9,870 74,335

Other stands 4 4 877 885Total Erven 96,475 50,700 22,374 169,549

Sanitation Service Levels and Backlogs

Sanitation Bloemfontein

Botshabelo Thaba Nchu

Total

Waterborne 84,453 15,695 6,874 107,022VIPs 2,819 16,261 13,241 32,321Pit Latrines 2,913 14,772 503 18,188Buckets 344 1,131 4 1,479Not Developed 5,559 2,761 790 9,110Parks 383 76 85 544Total sanitation 96,471 50,696 21,497 168,664Waterborne Backlog 11,635 34,925 14,538 61,098Est installation unit cost (R) 20,000 20,000 20,000 20,000

Est Upgrade Cost (R'000) 232,700 698,500 290,760 1,221,960Other stands 4 4 877 885Total Erven 96,467 50,692 20,620 167,779

Roads and Stormwater Backlogs

Existing Developments No House Units Length (m) Unit costTotal estimated

CostMangaung Road backlog 167,779 1 186 400 R 5,500 R 6,525,200,000Mangaung Stormwater Backlog

830 480 R 2,500 R 2,076,200,000

Informal settlements No House Units17 232

Length (m)170 000

Unit cost Total estimated Cost

Bloemfontein 31 627 Roads 790 675 R 5,500 R 4,348,712,500Stormwater 553 472.5 R 2,500 R 1,383,681,250Botshabelo 6 928 Roads 138 560 R 5,500 R 762,080,000Stormwater 110 848 R 2,500 R 277,120,000Thaba Nchu 3 284 Roads 65 680 R 5,500 R 361,240,000Stormwater 52 544 R 2,500 R 131,360,000Stormwater 218736 R 2,500 R 546,840,000

Roads and Stormwater Backlogs

Future Developments No House Units Length (m) Unit costTotal estimated

Cost

7 Land Parcels 13 671 492 156 R5,500 R 2, 706, 858, 000

Roads 273 420 R 5,500 R 1,503,810,000

Stormwater 218 736 R 2,500 R 546,840,000

Summary Costs of Bulk Infrastructure Backlogs

Water Services Short-term Cost Long-term costReservoirs R 271,020,515 R 94,522,457Piping R 165,069,450 R 91,066,200Booster Pump Stations R 0 R 710,000

TOTAL R 436,089,965 R 186,298,657Sanitation ServicesWWTW's R 596,250,000 R 607,500,000Gravity lines R 217,029,374 R 29,510,341Pump Stations R 9,508,512 R 0Rising Mains R 8,926,222 R 0

TOTAL R 831,714,108 R 637,010,341Roads

TOTAL R 438,620,000 R 866,408,200StormwaterStatus quo upgrades R 355,000,000New Developments R 280,974,500 R 49,100,000

TOTAL R 635,974,500 R 49,100,000

TOTALS R 2,342,398,573 R 1,738,817,198

Summary of costs

Intergovernmental Relations

Centlec

Centlec was created as separate municipal entity –

company

This entity is wholly owned by the Municipality and

primarily provides electricity services originally provided

by the Municipaliyu

Intergovernmental Relations (2)

The municipal entity model defines the relationship between the Centlec and the Municipality as follows:

Centlec is wholly owned by the Municipality as per the

Companies Act

The Municipality maintains policy and implementation

direction while allowing Centlec directors and management

to exercise relative autonomy in the execution of their

fiduciary duties, as prescribed by the Companies Act; and

Oversight of Office of the City Manager ensures closer

alignment within the portfolio concerned.


Eskom

• The Mangaung Metropolitan is the major client of Eskom

in the Free State

• As such, the Municipality is in arrears of R143 million

• R70 m was paid to Eskom this month. Municipality has

committed to pay current account monthly and the

balance on the account will then be settled in three equal

installments


Eskom

• The Municipality has requested Eskom for assistance to

review its tariff structure for the next budget cycle.

• Technical assistance


Bloemwater

Bloemwater is the service provider of the Municipality

meeting almost 80% of municipal water needs

The municipal water service account for Bloemwater is

current

Dispute between Bloemwater and MMM has since been

arbitrated and resolved by National Treasury


DBSA

• The Municipality has credit facility of R200 000 000 to finance

the infrastructural projects of the municipality – water related

• Draw-down on the loan facility up to the end June 2011 is R28

m

• The delay in implementation is caused by the EIA studies not

finalized yet.

• The Municipality has agreed with provincial government to

fast-track the process by engaging national government.


Municipalities

The Mangaung Metropolitan has also established a

number of formal and informal relationships with other

municipalities locally and internationally on:

Information sharing, best practice and capacity building

Co-operating on municipal development challenge; and

Any other issues of strategic importance which affects the

interests of the participating municipalities or cities

Intergovernmental Relations (9)Participation of Sector Departments in IDP Processes

The Municipality is committed in making public

participation an integral part of its planning, budgeting

and service delivery processes through ongoing public

participation initiatives

The Mangaung Metropolitan is committed to ensuring

community participation in the interests of participative

democracy at a local government level

Intergovernmental Relations (10)Participation of Sector Departments in IDP Processes

The commitment to community participation is

underpinned by adherence to the MSA and the MFMA,

which require municipalities to consult with local

communities through appropriate mechanisms, processes

and procedures

These include the community based planning approach;

mayoral roadshows, regional and stakeholder summits;

sectoral engagements; as well as participation in the

annual cycle of the IDP and Budget


On the 23rd June 2011, Mangaung held IDP and budget Conference whereby different stakeholders (i.e. government departments, Youth Organisations, Organised Labour, Woman Organisations and Ward Committees) were invited to make inputs to the IDP and Budget documents before they are submitted to Council


Regional and Stakeholder Summits

Regional summits were held from 20 Apr 2011 to 04 May

2011 in all three regions.

These sessions ensure community participation in terms

of:

Mangaung Metropolitan processes;

Project progress in all wards; and

Municipal plans and development.

The culmination of this process was the hosting of the

budget conference summit on the 23rd June 2011.

Intergovernmental Relations (13)Sectoral Engagements

The Municipality recognizes that co-operative governance

should contribute towards seamless service delivery from

all spheres of government.

The process through which the Municipality enhances

harmonization and alignment plans with other spheres of

government included:

Participation in the Free State forums for

intergovernmental planning and budgeting


Sectoral Engagements

Municipal directorates regularly engage with

their counterparts at provincial and national

level as part of the efforts to enhance

alignment in order to ensure that the outcome-

based plans of PGDS are integrated and aligned

with the Municipality’s plans; and

Extensive engagement around the

development of the Municipality’s IDP

including discussions, IDP workshops and

meetings between the Municipality and

provincial government.

THANK YOU

PRESENTATION TO THE SELECT COMMITTEE ON FINANCE AND APPROPRIATIONS

Documents

Transcript of PRESENTATION TO THE SELECT COMMITTEE ON FINANCE AND APPROPRIATIONS