Verslag Ingxelo Report

Transcription

1 Verslag Ingxelo Report Kantoor van die Direkteur: Finansiële Dienste 18 Mei /1/1/1 2016/17 5/1/1/2 2016/17 5/1/4 ITEM 3.3 VAN DIE AGENDA VAN N SPESIALE RAADSVERGADERING WAT GEHOU SAL WORD OP 26 MEI 2016 ONDERWERP: A: GOEDKEURING VAN DIE MEERJARIGE KAPITAAL EN BEDRYFS- BEGROTINGS, GEWYSIGDE BEGROTINGSVERWANTE BELEIDE, EIENDOMSBELASTING, TARIEWE EN ANDER HEFFINGS VIR 2016/2017; 2017/2018 EN 2018/2019 SUBJECT: A: APPROVAL OF THE MULTI YEAR CAPITAL AND OPERATING BUDGETS, AMENDED BUDGET RELATED POLICIES, PROPERTY RATES, TARIFFS AND OTHER CHARGES FOR 2016/2017; 2017/2018 AND 2018/2019 A: GOEDKEURING VAN DIE MEERJARIGE KAPITAAL EN BEDRYFS-BEGROTINGS VIR 2016/2017; 2017/2018 EN 2018/ WETGEWENDE RAAMWERK 1.1 Die goedkeuring van die begroting moet beoordeel word ingevolge die wetgewende raamwerk en moet daar dus spesifiek gelet word op die volgende bepalings. 1.2 Artikel 16(2) : MFMA "... die Burgemeester van die munisipaliteit moet die jaarlikse begroting ten minste 90 dae voor die aanvang van die begrotingsjaar by n raadsvergadering ter tafel lê. Section 16(2) : MFMA "... the Mayor of the municipality must table the annual budget at a Council meeting at least 90 days before the start of the financial year." 1.3 Artikel 24(1) : MFMA "Die raad van n munisipaliteit moet ten minste 30 dae voor die aanvang van die begrotingsjaar goedkeuring van die jaarlikse begroting oorweeg." Section 24(1) : MFMA "The municipal Council must at least 30 days before the start of the budget year consider approval of the annual budget." 1.4 Artikel 160(2)(b)(c): Grondwet Die volgende funksies mag nie deur die Munisipale Raad gedelegeer word nie:... die goedkeuring van begrotings en tariewe. Section 160(2)(b) (c): Constitution The following functions may not be delegated by a Municipal Council: the approval of budgets and tariffs. 1.5 Artikel 160(3)(a) Grondwet Dat die meerderheid Munisipale Raadslede teenwoordig moet wees voordat stemming geneem word oor enige saak. 2. Documentation/... Section 160(3)(a) Constitution A majority of the members of a Municipal Council must be present before a vote may be taken on any matter.

2 2. DOCUMENTATION Attached hereto (Annexure B: 2016/ /19 Final Budget and Tariff File) find the multi-year Capital and Operating budget for 2016/2017, 2017/2018 and 2018/ BUDGETS AND MEDIUM TERM REVENUE AND EXPENDITURE FRAMEWORK 2016/2017 REFORMS Attached hereto (Annexure C: Budget Report and A-Schedules 2016/ /19) find the prescribed budget reforms as prescribed by MFMA Circular No 79 in accordance with the regulations. Note: The A-schedules does not include departmental charges. 2.3 OUTSTANDING DEBTORS Pages of Annexure B contains the outstanding debtors (150 days and older) as at 31 March INVESTMENTS & EXTERNAL LOAN REGISTER Pages of Annexure B contain the Investments and External loan register as at 31 March BUDGET RELATED POLICIES Also attached hereto (Annexure D: Budget Related Policies 2016/17) find the DRAFT budget related policies to be approved as FINAL and listed below: Credit control and debt collection policy (amended policy attached); Tariff policy (amended policy attached); Property rates policy (amended policy attached); Supply chain management policy (the amended policy was tabled via the EMC) Cash management and investment (amended policy attached) Asset management policy(amended policy attached) Budget implementation policy (New) The Budget Implementation Policy is a newly developed policy with the following objectives: (a) (b) (c) (d) The principles which the municipality will follow in preparing each medium term revenue and expenditure framework budget (MTREF); The responsibilities of the mayor, the accounting officer, the chief financial officer and other senior managers in compiling the budget; To control and inform the basis, format and information included in the Budget documentation; and To establish and maintain procedures to ensure adherence to the Municipality s IDP review and budget processes. The Budget Implementation Policy must be read, analysed, interpreted, implemented and understood against the legislative background. The budget is a tool for planning, control and it plays a critical role in the day to day operations of the municipality in a bid to give effect to diverse community needs. Central to this, the formulation of a municipality s budget must take into account the government s macro-economic and fiscal policy fundamentals. The aforementioned policy must be adopted and implemented to ensure compliance with the Municipal Finance Management Act, No 56 of 2003, effective from 1 July MFMA CIRCULAR NO COST CONTAINMENT MEASURES Attached hereto find MFMA Circular No. 82: Cost Containment Measures (Annexure E) which was released in March The purpose of this Circular is to guide municipalities on cost containment measures that must be implemented in an effort to address the impact of the country's economic challenges and to promote growth, address unemployment and equality, amongst others.

3 2.6/ 3 In order to achieve the above, Cabinet resolved that all spheres of government must implement measures to contain operational costs and eliminate all non-essential expenditure as to further ensure that the limited resources and public funds are appropriately utilize. In both the 2016 State of the Nation Address, and the budget speech of the Minister of Finance on 24 February 2016, Mayors of municipalities were urged to exercise and oversee the elimination of potential wasteful expenditure in local government. A request was received that municipalities must make clear and quantified commitments in this regard when tabling budgets and that these measures must form part of the budget documentation to be submitted to National and Provincial Treasuries, as required by the MFMA. During a workshop held on 14 April 2016 the Circular was discussed in detail with members of the Executive Mayoral Committee, municipal manager, directors and divisional heads with a view of addressing the above. A spreadsheet has been compiled indicating what measures are already in place and those where improvement is required. Actions plans with set due dates and responsible persons have been agreed for all areas where improvements have been identified and are listed in (Annexure F). 3. COMMENTS RECEIVED ON THE IDP AND BUDGET Letter received from Mr W Badenhorst (Annexure A1); Letter received from Agri Malmesbury (Annexure A2); Letter received from Grottobaai Homeowners Association (Annexure A3); Letter received from Yzerfontein Residents Association with attachments (Annexure A4). The responses of the Municipality to the comment received from the public on the IDP and Budget, will be attached as a separate addendum (Annexure A5). 4. COMMENTS: DIRECTOR: FINANCIAL SERVICES That the Executive Mayoral Committee recommends the approval of the final capital and operating budgets, amended budget related policies, property rates, tariffs and other charges for the 2016/2017; 2017/2018 and 2018/2019 financial years to council. To ensure compliance with the Budget and Reporting Regulations, the Budget Steering Committee will gave effect to their technical advisory role by considering the 2016/ /19 MTREF and associated tariffs and policies, at a meeting held on 10 May This was done in order for the mayor to be in a position to effectively discharge his responsibilities set out in Sec 53 of the MFMA. 5. OPERATING BUDGET (a) That Council takes note that the operating budget does not include figures in respect of fixed and actual capital contributions and sale of land to have enabled the Director: Financial Services to calculate and model tariffs in respect of service accounts and rates; (b) That Council takes note that the detail of the external loans of the WCDM s water infrastructure transfer between Swartland and the other two B municipalities (Bergrivier and Saldanha Bay) are known and included in the 2017/2018 budget. The depreciation for 2017/2018 was based on the same percentage allocation as the external loan because the actual amounts are not yet known. The balance of the external loans as at 1 July 2017 will be R with interests of R (c) That, due to a lack of sufficient funds, no provision could be made for the redemption shortage in respect of the overlapping of the redemption of loans to external banks and the life span of assets;

4 5./ (d) 4 That Council takes note of the increase in personnel costs, as follows: in respect of all personnel, excluding the Municipal Manager and section 56- appointments, an increase of 6% for the 2016/2017, 2017/2018 and 2018/2019 financial years, excluding the increase in associated other personnel benefits that are applicable and determined via national collective bargaining over which council has no influence; in respect of the Municipal Manager and section 56-appointments, based on a market related increase that is determined annually by a professional expert, Work Dynamics (PE Corporate Services). The results vary between 7% % with an average increase of 7.20% for implementation from 1 July 2016; Provision has also been made for a 6% increase for councillors as per NT directives. (e) In an effort to keep the municipal basket of main services affordable and to ensure financial sustainability, as well as to enhance the credibility of multi-year budgets, the average increase on households for the 2016/2017 financial year will be more or less between 5% and 9%. The average increase on tariffs for the 2016/17 financial year is as follows: Electricity 7.64% (as determined by NERSA) Water 9.95% Sewerage 10% Refuse Removal 6% Property Rates Tariff Reductions and phasing-in of geographical areas: Agricultural Areas % Residential % Business % Government properties % Pensioners % Geographical areas 10.85% For purposes of clarity it must be noted that the property rate/tariff (reflected as rand-inthe-rand) was reduced for all categories of owners ( excluding properties in the geographical areas) in a bid to reduce the burden brought about by the increase in property values as a result of the implementation of the new General Valuation effective from 1 July AANBEVELING (soos aanbeveel deur die Uitvoerende Burgemeesterskomitee op 11 Mei 2016) A: GOEDKEURING VAN DIE MEERJARIGE KAPITAAL- EN BEDRYFSBEGROTINGS VIR 2016/2017; 2017/2018 EN 2018/2019 (a) Dat die Uitvoerende Burgermeesterskomitee, inaggenome die insette van die Begrotingsbeheerkomitee, die meerjarige kapitaal- en bedryfsbegroting aan die Raad aanbeveel vir goedkeuring soos hieronder opgesom: Histories: Tans: (1) Kapitaalbegroting : 2015/2016 R R Aansuiwerings Kapitaalbegroting 1 : 2015/2016 R R Aansuiwerings Kapitaalbegroting 2 : 2015/2016 R R Dae Konsep : 2016/2017 R R Dae Finaal : 2016/2017 R R : 2017/2018 R R : 2018/2019 R R (2) Bedryfsbegroting/...

5 5 (2) Bedryfsbegroting Inkomste : 2015/2016 R R Aansuiwerings Inkomstebegroting 1 : 2015/2016 R R Aansuiwerings Inkomstebegroting 2 : 2015/2016 R R Dae Konsep : 2016/2017 R R Dae Finaal : 2016/2017 R R : 2017/2018 R R : 2018/2019 R R Uitgawe : 2015/2016 R R Aansuiwerings Uitgawebegroting 1 : 2015/2016 R R Aansuiwerings Uitgawebegroting 2 : 2015/2016 R R Dae Konsep : 2016/2017 R R Dae Finaal : 2016/2017 R R : 2017/2018 R R : 2018/2019 R R Surplus/Tekort : 2015/2016 -R R Aansuiweringsbegroting 1 : 2015/2016 R -R Aansuiweringsbegroting 2 : 2015/2016 R -R Dae Konsep : 2016/2017 R -R Dae Finaal : 2016/2017 R -R : 2017/2018 R -R : 2018/2019 R R (b) Dat die Raad kennis neem van die aanpassings wat plaasgevind het tussen die 90 dae en 30 dae begroting soos gelys in Aanhangsel B; (c) (d) (e) Dat die Raad volstaan met die voorgestelde elektrisiteitstariewe wat tydens 31 Maart 2016 aan die Raad voorgelê was, aangesien Nersa tans steeds ingebreke bly om die finale goedkeuring te gee t.o.v. voormelde tariewe soos voorgelê was tydens die 90 dae begroting; Dat die finaal voorgestelde meerjarige kapitaal- en bedryfsbegroting ten aansien van die 2016/ /19 finansiële jare ingevolge artikels 16 en 17 van die MFMA goedgekeur word; Dat die eiendomsbelasting tariewe, tariefstrukture en heffings vir water, elektrisiteit, vullisverwydering, riool en ander diverse hefffings soos uiteengesit in Aanhangsel B, goedgekeur word; (f) Dat die jaarlikse begrotingstabelle soos vereis deur die Begrotings- en Rapporteringsregulasies en uiteengesit in die tabelle in Aanhangsel C, goedgekeur word; (g) (h) (i) (j) (k) (l) Dat die begrotingsverwante beleide soos vervat in Aanhangsel D, goedgekeur word; Dat die Raad goedkeuring verleen vir die salarisverhogings ten opsigte van die Munisipale Bestuurder en artikel 56-aanstellings wat wissel tussen 7%-7,28%; Dat kennis geneem word van die inhoud van MFMA Omsendbrief No. 82: Cost Containment Measures (Aanhangsel E); Dat die aksieplanne (Aanhangsel F), ten einde uitvoering te gee aan die voorgestelde besparingsmaatreëls goedgekeur word; Dat die Raad kennis neem dat die aanbevelings( waar van toepassing) in Omsendbrief 82 in ag geneem was met die hersiening van die begrotingsbeleide; Dat toepaslike oorsig meganismes ingestel word om besparingsmaatreëls te monitor, ten einde te voldoen aan artikel 62 en 167 van die MFMA om te verseker dat redelike stappe geneem word vir die effektiewe, doeltreffende en ekonomiese gebruik van openbare hulpbronne en in die beste belang van die plaaslike gemeenskap; (m)/

6 (m) 6 Ten aansien van die voorgestelde oorname van die ontbondelde bates van die grootmaatwatervoorsiening van die Weskus Distriksmunisipaliteit: (i) Dat daar kennis geneem word dat die besonderhede bekend is van die eksterne lening en waardevermindering van die Weskus Distriks-munisipaliteit se waterinfrastruktuur, en die potensiële oordrag tussen Swartland Munisipaliteit en die ander twee B-munisipaliteite, synde Bergrivier en Saldanhabaai, en ingesluit is in die 2017/18 begroting; Dat daar kennis geneem word dat die waardevermindering vir 2017/18 gebaseer is op dieselfde persentasie toedeling as die eksterne lenings, aangesien die werklike bedrae nog nie bekend is nie; (iii) Dat daar kennis geneem word dat die balans van die eksterne lening soos op 1 Julie 2017, R gaan beloop met n rentekomponent van R4,7 mil; (n) Ten aansien van die infasering van die belasting van die geografiese gebiede, te wete Grottobaai en Jakkalsfontein: (i) Dat daar kennis geneem, en aldus goedkeuring verleen word dat die wysigings aan die eiendomsbelastingwet wat 75% korting toegelaat het aan geografiese gebiede, oor n tydperk van sewe jaar uitfaseer word, waarvan die eerste 10% fasering reeds in die 2015/16 finansiële jaar gedoen is, en waarna die oorblywende 65% heffing oor die daaropvolgende jare infaseer sal word teen die volgende persentasies: 2016/17 : 55% (10%) 2017/18 : 44% (11%) 2018/19 : 33% (11%) 2019/20 : 22% (11%) 2020/21 : 11% (11%) waarna die tarief gelykstaande aan die residensiële tarief sal wees in die 2021/22 finansiële jaar, m.a.w.gelyk aan 100% van die goedgekeurde residensiële tarief; (o) Dat, ten einde die risiko aan uitstaande debiteure te beperk, die sogenaamde Aqua Loc-waterbestuursmeganisme/meter installeer word by huishoudings wat nie hulle verpligtinge nakom nie, of huishoudings wat ingevolge die waterbeperkingsmaatreëls meer as 50kl per maand gebruik, en dat daar kennis geneem word dat die kredietbeheer- en skuldinvorderingsbeleid reeds daarvoor voorsiening maak (meer spesifiek klousules 8(j), 8(2) en 11(3)); (p) Ten aansien van die kommentaar van AGRI, Malmesbury (skrywe van 26 April 2016 van mnr Koot Claassen: (i) Dat weens die feit dat die Weskus gedurende Januarie 2016 deur die Nasionale Departement van Samewerkende Regering, ingevolge die Rampbestuurswet (Wet 57 van 2000), tot n droogtegeteisterde rampgebied verklaar is, n verdere eenmalige 2% (m.a.w. vanaf 78% na 80%) vir die 2016/17 finansiële jaar toegeken word; Dat daar kennis geneem word dat verdere gesprekke met die Landbouers met ingang van September 2016 volvoer sal word, aangaande die droogte, al dan nie; (q) Ten aansien van Grottobaai Huiseienaarsvereniging (e-pos gedateer 19 April 2016): (i) Dat daar kennis geneem word van die voorskrifte van Waterwese ten aansien van uitsuigtenks, maar dat alvorens die vereistes afgedwing word, die volgende handelinge eers volvoer word: Bepaling van die hoeveelheid ontwikkelingsgeleenthede wat nog beskikbaar is te Grottobaai, Jakkalsfontein en Tygerfontein; Dat, gebaseer op voormelde bepaling (par (i) hierbo) die risiko van besoedeling van grondwater eers bepaal word; Dat gesprekke met die onderskeie Huiseienaarsverenigings (HEV s) gevoer word voor die afdwinging van die Waterwese voorskrifte; Dat die tarief soos vervat in die tariewelêer wat op die landelike gebied van toepassing is, behou word om ook vir Grottobaai van toepassing te wees, indien die diens benodig word;

7 7 (r) Ten aansien van mnr Willem Badenhorst se versoek oor afslag op belasting: (i) Dat daar kennis geneem word van mnr Willem Badenhorst se versoek om afslag eerder as n % te hanteer in teenstelling met die bestaande vaste bedrag wat van tyd tot tyd deur die Raad bepaal word; Dat mnr Badenhorst bedank word vir sy insette, maar dat die status quo ten aansien van die 90 dae begroting gehandhaaf word; (s) Ten aansien van die Yzerfontein Inwonersvereniging (skrywe van die Voorsitter mnr Edward Brittain, gedateer 28 April 2016): (i) Dat daar, ten aansien van die formaat van die begroting waar die koste van verkope en depresiasie steeds nie bygewerk is nie, kennis geneem word dat departementele koste intern as n uitgawe te boek gestel word en dat die twee formate dus van mekaar verskil. Lg. is die wetlik afdwingbare formate van hoe plaaslike begrotings opgestel moet word en verskil van Provinsiale en Nasionale Regering wat op die cash basis of accounting werk, terwyl munisipaliteite op die sg. accruel basis werk; (iii) Dat daar met verwysing na par 17(3)(a) vanaf die MFMA volstaan word met die bestuurskommentaar soos in die skedule vervat; Dat daar ten aansien van die korting vir die Landbouers volstaan word met die besluit in par (p) hierbo, veral weens die droogte in die verklaarde rampgebied; (iv) Dat daar kennis geneem word dat paragraaf 4(p) in Swartland Munisipaliteit se konsepbeleid wat verwys na geografiese gebiede behou word, omdat die gebiede van Grottobaai en Jakkalsfontein vir belastingdoeleindes nog sal bestaan totdat die 100% heffing op eiendomsbelasting oor 7 jaar infaseer is, welke infasering met ingang van 1 Julie 2015 geskied het; Dat daar verder kennis geneem word dat hierdie infasering geskied ingevolge artikel 93B van die Wet op Eiendomsbelasting en dat Swartland Munisipaliteit se vorige beleid en die wetgewing (Wet 6 van 2004, voor wysiging in 2015) wel toegelaat het, om gedifferensieerde belasting te hef op geografiese gebiede, maar met die wysigings in 2015 (Wet 29 van 2014) dit nie meer toelaatbaar is nie, maar laat dit wel toe dat dit ingevolge die nuwe Artikel 8 (wat nou geografiese gebied uitsluit) ingefaseer word oor n maksimum tydperk van 7 jaar en dat genoemde infasering reeds in die 2015/2016 finansiële jaar n aanvang geneem het; Dat daar kennis geneem word dat die Wysigingswet, No 29 van 2014, al die wysigings voorgestel het en bepaal artikel 35 van hierdie Wysigingswet spesifiek wat die oorgangsreëlings t.o.v. Artikel 17 Publieke Dienste Infrastruktuur en Artikel 8 gedifferensieerde belasting is en dat dit ingevoeg moet word in Artikel 93 in die hoofwet, Wet 6 van 2004 vandaar Artikel 93A en 93B onderskeidelik; Dat daar kennis geneem word dat dit Swartland Munisipaliteit se interpretasie is dat die wysiging van Artikel 8 (verwydering van geografiese gebiede) oor 7 jaar ingefaseer moet word, welke infasering van die addisionele heffing met ingang van 1 Julie 2015 beslag gekry het; Dat daar verder kennis geneem word dat dit nie nodig is om spesiale toestemming vanaf die Minister te verkry nie, aangesien Grottobaai en Jakkalsfontein nie ingevolge Artikel 8(4) hanteer word nie, aangesien dié gebiede nie omskryf word in Artikel 8(2) nie, maar soos reeds genoem, ingevolge Artikel 93B; (v) Dat daar kennis geneem word dat Swartland volstaan met R soos tydens die 90 dae begroting besluit;

8 (s)/... (vi) (vii) 8 Dat daar kennis geneem word dat ingevolge wetgewing 'n belastingkoers tot 'n maksimum van 25% van die residensiële belastingkoers gehef mag word, maar die Raad mag ook 'n laer koers bepaal. Hierdie heffing kan wissel juis omdat die Wet die Raad magtig om gedifferensieerde koerse te hef vir die eiendomme toegelaat in Artikel 8. Verder bestaan 'n afslag vir die nielewering van dienste nie meer nie, maar kan ander faktore, soos rampe, bv. die heersende droogte dan juis hierdie koers bepaal; Dat met verwysing na die "LED maturity assessment, soos in die kommentaar hierbo ge-illustreer, daar kennis van geneem word, dat Swartland Munisipaliteit een van die beste drie munisipaliteite is ten aansien van die resultate en dit bewys dat die strategieë en inisiatiewe vrugte afwerp. Verder moet daar kennis geneem word dat Swartland Munisipaliteit met sy skaars hulpbronne en beperkte begroting verplig is om LED anders te benader om vir beleggings te kompeteer; (viii) Ten aansien van die korting aan persone ouer as 65 jaar daar kennis geneem word dat die konsepbeleid reggestel was en sal enige verandering in die basis van kortings toegestaan aan pensioenarisse gedurende die volgende begrotings oefening ondersoek en oorweeg word; (ix) (x) (xi) (xii) Dat daar ten aansien van die tariewe op vakante erwe kennis geneem word dat artikel 8(3) wel die Raad magtig om vakante grond teen n gediffirensieerde tarief aan te slaan, maar oorweeg die Raad dit nie op die stadium nie; Dat daar kennis geneem word dat sodra die huidige 5kl gratis water uitfaseer is, kan n basiese tarief op water oorweeg word. Die uitfasering binne twee jaar is nie bekostigbaar vir alle huishoudings nie en was die besluit om dit met 1kl jaarliks te verminder; Dat ten aansien van die verlies op water, daar verder kennis geneem word dat die oorname van bates vanaf die WKDM, sowel as die lenings, veroorsaak dat die huidige tekort oor n langer periode uitfaseer word gegewe die huidige swak ekonomiese omstandighede; Dat met verwysing na die riooltarief se 10% styging, daar kennis van geneem word dat die verhoging van 10% ingestel is om te verseker dat die diens volhoubaar gelewer word en om voorsiening te maak vir grootmaat uitbreidings. Verder moet daar kennis geneem word dat daar geen verband is tussen die water- en riooltarief nie; (xiii) Dat met verwysing na die sg. vry rioleringsdiens wat met 'n vorige ontwikkeling plaasgevind het, daar kennis geneem word dat ondersoek in voormelde geval en die aangeleentheid as 'n prestasie indikator van die Direkteur: Siviele Ingenieursdienste geformuleer was in die 2015/16 finansiële jaar, welke uitslag teen jaareinde op gerapporteer sal word; (xiv) Dat met verwysing na die hef van n basiese tarief op die vullisverwydering, plus n gebruikerstarief, die aanbeveling nie oorweeg word nie en dat die status quo vir die 2016/17 finansiële jaar behou word; (xv) Dat met verwysing van die ongelukkigheid aangaande die sluiting van die stortingsterrein, daar volstaan word met die kommentaar soos vervat in die skedule; (xvi) Dat daar met verwysing na die kapitale besteding op Yzerfontein daar volstaan word met die departemetele kommentaar, soos in die skedule vervat en dat kapitaalprojekte na die wyksplanne verwys moet word om vir befondsing mee te ding. Recommendation/

9 9 RECOMMENDATIONS (as recommended by the Executive Mayoral Committee on 11 May 2016) A: IN RESPECT OF THE APPROVAL OF THE DRAFT MULTI YEAR CAPITAL AND OPERATING BUDGETS FOR 2016/2017; 2017/2018 AND 2018/2019 (a) That the Executive Mayoral Committee recommend the multi-year capital and operating budgets as summarized below to the Council for approval after considering the input of the Budget Steering Committee: Historical Currently (1) Capital Budget : 2015/2016 R Adjustment Capital Budget 1 : 2015/2016 R R Adjustment Capital Budget 2 : 2015/2016 R R Day Draft : 2016/2017 R R Day Final : 2016/2017 R R : 2017/2018 R R : 2018/2019 R R (2) Operating Budget Total Revenue : 2015/2016 R Adjustment Revenue Budget 1 : 2015/2016 R R Adjustment Revenue Budget 2 : 2015/2016 R R Day Draft : 2016/2017 R R Day Final : 2016/2017 R R : 2017/2018 R R : 2018/2019 R R Expenditure : 2015/2016 R Adjustment Expenditure Budget 1: 2015/2016 R R Adjustment Expenditure Budget 2: 2015/2016 R R Day Draft : 2016/2017 R R Day Final : 2016/2017 R R : 2017/2018 R R : 2018/2019 R R Surplus/Deficit : 2015/2016 -R Adjustment Budget 1 : 2015/2016 R -R Adjustment Budget 2 : 2015/2016 R -R Day Draft : 2015/2016 R -R Day Final : 2016/2017 R -R : 2017/2018 R -R : 2018/2019 R R (b) (c) That Council takes note of the adjustments between the 90 day and 30 day Budget as listed in Annexure B; That Council adhere to the proposed electricity tariffs that were submitted to Council on March 31, 2016, as Nersa currently still fails to give final approval regarding the said tariffs that were submitted during the 90 day budget; (d) That the final multi-year capital and operating budgets with respect to the 2016/ /19 financial years be approved, in accordance with sections 16 and 17 of the MFMA; (e) (f) That the property rates tariffs, tariff structures and charges for water, electricity, refuse removal, sewerage and other sundry charges be approved as set out in Annexure B; That the annual budget tables as required by the Budget and Reporting Regulations be approved as set out in Annexure C; (g) That the budget related policies be approved as set out in Annexure D; (h) That Council gives approval for the salary increases in respect of the Municipal Manager and section 56-appointments ranging between 7% %. (i) That the content of MFMA Circular No. 82: Cost Containment Measures (Annexure E) be noted;

10 10 (j) (k) (l) (m) That the action plans (Annexure F) in order to give effect to the proposed cost containment measures be approved; That Council takes note that the budget policy reviews were influenced by the recommendations in Circular 82; That appropriate oversight mechanisms be implemented to monitor cost containment measures in order to comply with sections 62 and 167 of the MFMA to ensure that reasonable steps are taken for public resources to be used effectively, efficiently, economically and in the best interests of the local community; With respect to the proposed takeover of the unbundled assets of the bulk water supply from the West Coast District Municipality: (i) That congnisance is taken of the fact that the details of the external loan and depreciation in respect of the West Coast District s water infrastructure are known, and the potential takeover between Swartland Municipality and the other two B municipalities, namely Berg River and Saldanha Bay, and have been included in the 2017/2018 budget; (iii) That cognisance is taken that the depreciation for 2017/2018 is based on the same percentage allocation as the external loans, because the actual amount is not yet known; That congnisance is taken that the balance of the external loan as at 1 July 2017 will amount to R with an interest component of R4,7 million. (n) With respect to the phasing-in of the taxation in geographical areas namely Grotto Bay and Jakalsfontein: (i) That cognisance is taken, and approval be given in light of the amendments to the Municipal Property Rates Act which allows for a 75% discount to geographical areas, be phased-out over a period of 7 years, of which the first 10% phasing was done in the 2015/2016 financial year, and whereafter the remaining 65% levying will be phased-in over the following years at the following percentages: 2016/17 : 55% (10%) 2017/18 : 44% (11%) 2018/19 : 33% (11%) 2019/20 : 22% (11%) 2020/21 : 11% (11%) thereafter the tariff will be equal to the residential tariff in the 2021/2022 financial year, in other words leving rates equal to 100% of the approved residential tariff at the time; (o) That in order to limit the risk of outstanding debtors, to install the so-called Aqua-loc water management mechanism/meter in households which do not fulfil their obligations, or households which use more than 50kl per month as per the water restrictions, and that cognisance is taken of the fact that that the credit management and debt collection policy already makes provision for same to be enforced (more specifically in clauses 8(j), 8(2) and 11(3). (p) With respect to comments from AGRI, Malmesbury (letter dated 26 April 2016 from mr Koot Claassen: (i) That as a result of the fact that the West Coast was declared a drought stricken area during January 2016, by the National Department of Co-operative Governance, in accordance with the Disaster Management Act (Act 57 of 2000), a further 2% (in other words from 78% to 80%) once-off discount for the 2016/2017 financial is granted; That cognisance is taken that further discussions will take place with the farmers during September 2016 with a view to access the drought situation; (q)/

11 (q) (r) 11 With respect to Grotto Bay Home Owners Association ( dated 19 April 2016): (i) That cognisance is taken of the directive from Water Affairs in respect of conservancy tanks, but that before the requirements are enforced the following must be dealt with: Establishment of the number of development opportunities that are still available in Grotto Bay, Jakalsfontein and Tygerfontein; That, based on the above mentioned assessment (par (i) above) the risk of groundwater pollution is determined; That discussions with the various Home Owners Associations (HOA s) will take place before enforcing the Water Affairs directive; That the tariff applicable to the rural areas included in the tariff register, is retained, to be applicable also to Grotto Bay, in case the service is needed; With respect to mr Willem Badenhorst s request for discount on taxation: (i) That cognisance is taken of mr Willem Badenhorst s request to rather deal with discount as a % rather than with the existing fixed amount which is determined by the Council from time to time; That mr Badenhorst is thanked for his input, but that the status quo in respect of the 90 day budget is maintained; (s) With respect to the Yzerfontein Home Owners Association (letter from the chairman mr Edward Brittain, dated 28 April 2016): (i) That in respect of the budget format in which the cost of sales and depreciation are still not included, that cognisance is taken that the departmental costs are accounted internally as an expenditure and that the two formats thus differ from each other. The latter is the legal enforceable format as to how local budgets must be drawn up and this differs from Provincial and National Governments which prepare reports and budgets on the cash basis of accounting, whilst municipalities prepares in terms of National Treasury legal prescripts on the socalled accrual basis of accouning; (iii) That with reference to par 17(3)(a) of the MFMA the management s comment referred to in the schedule is affirmed; That in respect of the discount for farmers the decision made in par (p) above is affirmed, especially in view of the declared drought disaster area; (iv) That cognisance is taken that paragraph 4 (p) in SM s draft policy which refers to geographical areas is maintained and legally correct, because the areas of Grotto Bay and Jakalsfontein will still exist for tax purposes until the 100% levy on property rates and taxes have been phased in over 7 years from 1 July 2015; That cognisance is also taken that this phasing-in is being carried out in accordance with section 93B of the Property Rates and Taxes Act and that Swartland Municipality s previous policy and the act (Act 6 of 2004, before 2015 revision) did allow for differentiated tax to be levied on geographical areas, but that the amendment in 2015 (Act 29 of 2014) no longer allows this, but makes provision in the new Section 8 (which now includes geographical areas) for a phasing in over a maximum period of 7 years which commenced in the 2015/2016 financial year; That cognisance is taken that the Amendment Act, No 29 of 2014, proposed all the amendments, and laid-down section 35 of this Amendment Act specifically determining the transitional arrangements in respect of section 17 Public Services Infrastructure and Section 8 differentiated taxation and that it must be included in section 93 in the main Act, Act 6 of 2004 hence sections 93A and 93B respectively; That cognisance is taken that Swartland Municipality s interpretation is that the revision of Section 8 (removal of geographical areas) must be phased in over a period of 7 years, which has been accepted;

12 (s)(iv)/ 12 That cognisance is also taken that it is not necessary to get special permission from the Minister, because Grotto Bay and Jakalsfontein are not dealt with according to Section 8(4), because these areas are not designated in Section 8(2), but as already stated, according to Section 93B; That cognisance is taken that Swartland affirms R as decided upon during the 90 day budget; (v) (vi) (vii) That cognisance is taken that according to the legislation, a tax rate to the maximum of 25% of the residential tax rate may be levied, but that the Council may also determine a lower rate. This levy can therefore vary as the Act enables the Council to levy a differentiated rate for properties recognised in Section 8. A discount for the non delivery of services no longer exists, but other factors such as disasters, for example the present drought, can accordingly determine this rate; That with reference to the LED maturity assessment, as illustrated in the comment above, cognisance must be taken, that - SM is one of the three best municipalities with regard to the results and this indicates that the strategies and initiatives are bearing fruit. It must also be noted that SM with its meagre resources and limited budget is forced to approach LED differently in order to compete for investments; That in respect of the discount for persons over 65 years of age it is noted that the draft policy was amended and any basis for the change in discount for pensioners will be investigated and considered during the next budgeting exercise; (viii) That in respect of tariffs on vacant erwen it is noted that section 8(3) empowers the Council to levy differentiated tariffs on vacant land, but the Council is not considering this at present; (ix) (x) (xi) (xii) (xiii) (xiv) (xv) That cognisance is taken that when the present 5kl free water has been phased-out, a basic water tariff may be considered. The phasing-out over 2 years is not affordable for all households and it was decided to phase it out at 1kl per annum; That in respect of the deficit on water it is also noted that the takeover of assets from the WCDM as well as the loans have resulted in the present defecit being phased out over a longer period given the weaker economic climate; That in respect of the 10% increase in the sewerage tariff, cognisance is taken that the increase of 10% has been introduced in order to ensure that provision of the service is sustainable over the longer period and in order to make provision for bulk extensions; That in respect of the so-called free sewerage services, which happened during a previous development, cognisance must be taken that the envisaged investigation, was included as a performance indicator for the Director: Civil Engineering Services in the 2015/2016 financial year and will be reported on at year-end; That in respect of the levying of a basic tariff for refuse removal, plus a user tariff, the recommendation will not be considered and that the status quo will be maintained for the 2016/2017 financial year; That in respect of the unhappiness with respect to the closing of the dump site, the comment referred to in the schedule is affirmed; That in respect of the capital expenditure in Yzerfontein the departmental comment referred to in the schedule is affirmed and that capital projects be referred to the ward area plans for purposes of fundin assessment. (get) J J Scholtz MUNISIPALE BESTUURDER MUNICIPAL MANAGER