Mayoral Speech on the Presentation of the 2007/2008 Budget to Council, Thursday 31 May 2007, Council Chambers, 11:00

State of the District Address 2007

Growth and Development Summit

Mr Speaker Honourable Councillors Municipal Manager and General Managers Distinguished guests in the public gallery Members of the media Ladies and gentlemen

Introduction

Mr Speaker, in terms of Chapter 57 of the Municipal Finance Management Act, Act no 56 of 2003, I'm honoured to deliver to this august house our budget for the 2007/2008 financial year. The total budget we are presenting here before this house amounts to R988,899,085, with a R603,489,090 capital and a R385,409,995 operational budget. This budget is a result of visionary thinking and it is highly geared for the challenging developmental agenda we wish to pursue. Mr Speaker, this is a bold and imaginative budget crafted with the very deliberate intentions to take a substantial leap forward. May I paraphrase Shakespeare as follows: There comes a tide in the affairs of men and women, when taken on the full can lead to great fortune. We believe that the tide is here and if we fail to catch it on the full, we may miss critical opportunities never to offer themselves again for decades or more. It is a budget made imperative by the outcomes of our public consultations, informed by national and even international economic conditions and inspired by a collective political and administrative effort, determined to achieve a significant difference in the quality of life for all our people. Mr Speaker, this budget is unprecedented in terms of its growth and to this end, is aimed at achieving the following broad objectives: to invest in the infrastructure with respect to water and sanitation programmes, to develop the three tiers of our local economy namely agriculture, tourism and manufacturing, in order to create jobs and fight poverty and To invest in building a wining organization, capable of serving its people with efficiency, pride and dignity. It is for this reason, Mr Speaker, that upon receiving a letter of commendation from the Provincial Treasury on the status of our growing operational and capital budgets, we immediately furnished the Treasury with the documentation outlining our intentions to seriously change the face of development in this district. I also want to indicate, at the outset, that this budget is truly a people's budget, drafted and compiled with the direct input of the thousands of people we met at the 24 consultative meetings we held through-out the district, in Nkalokazi, Gumatani, Mysland Farm, KwaJali, KwaNzimakwe to mention but just a few. Mrs Khambule of Ward 8 in Nyavini says they experience high level of drought in her area and they request the provision of water tanks. UBab Mhlungu of Dumaka in Nhlangwini Ward 2 eMzumbe asks the question: As the budget is being presented, does this mean we are going to get clean water. Mr Speaker, these are some of the people who said to us, during our consultative budget roadshows that, indeed, they want to see a difference in their lives and this budget we are presenting here today seeks to do just that.

Water

Water remains our core business and all our energies must be directed to ensuring that those people who still do not have access to clean portable water do so as soon as possible. In terms of the millennium development goals, every household should have access to clean drinking water by 2010. In terms of this budget, we have set aside R76,8 million of MIG funding to undertake this task, through the provision of bulk water supply including standpipes. Over and above this, we have, in terms of our equitable share, an allocation of R10,5 million to continue supplying free basic metered water. With regards to the availability of free basic water in the community standpipes, we have budgeted R24,2 million. To subsidize the water tariff, we have set aside R5,3 million for this particular purpose so that indeed many of our customers, who are on a fixed income, can afford to pay for their water. Mr Speaker, members of this house will recall that when we delivered the State of the District Address, at the beginning of March this year, we said we recognize the fact that we will not be able to adequately tackle our backlogs in respect of water with the current funding from MIG. We said there's an urgent need for us to explore other sources of funding including external loans so that indeed we can double our backlog budgets in respect of water and sanitation. In terms of the budget, Mr Speaker, we have made provision to raise R139,5 million in external loans with a view of addressing backlogs in areas like Umzumbe, Umdoni and Ezinqoleni while also improving the capacity of some of our regional schemes, so that uBabu Mhlungu of Damuka in Nhlangwini can rest assured that clean, portable water will be available in his community. An mount of R4,8 million has been set aside to provide relief during the drought season and we are sure that Mrs Khambule of Ward 08 in Nyavini will be happy in the thought that her concern will be addressed. When we also spoke, Mr Speaker, of building strong and progressive partnerships for growth and development in our State of the District Address we meant just doing that. We are indeed developing powerful partnerships with our communities. In terms of our flagship pipeline extension programme, a first for the province and the country, we have put aside a further R10 million to take the project to new heights. Already, other communities are eager to roll up their sleeves and dig trenches so that we can put pipes and ensure that water is available nearer to their homes.

Sanitation

Key to our rural sanitation programme is a need to restore dignity to many of our communities. Our VIP model for rural sanitation has received accolades in national engineering platforms and it is therefore our intention to continue rolling out this project, to benefit the people of Nkalokazi and Gumatani, amongst others who have never enjoyed the fruits of our democracy in terms of service delivery. We have made a total allocation of R16,2 million in this budget to aggressively roll out this programme in the family of our six local municipalities. Indeed, it is the spirit of the people of Msikaba, in the Hibiscus Coast, that makes us to continue to work hard in delivering sustainable development to our communities. While visiting the area on a tour with a delegation from Gert Sibande District Municipality, I was very encouraged to see the kind of appreciation for the VIP toilets we have installed in the area. Mr Speaker, I was amazed to see that our people have gone as far a painting these VIP structures to make them look nice and beautiful. To me this says people are happy and appreciative of the efforts we are making to improve their lives for the better. With regards to the urban sanitation programme, we outlined in the address to the people of this district, earlier this year that we are acutely aware of the very critical challenge of refurbishing and expanding our water borne sewerage system. This is obviously not only based on the environmental health point of view but also on the economic development perspective, with the coast, in particular seeing unprecedented levels of both domestic and commercial development. Mr Speaker, we therefore wish to indicate that we have made provision for a R100 million external loan to seriously address this matter within the framework of the hot-spots report we commissioned last year, which report indicated that some areas require urgent connection to the waterborne system for reasons stated here above. As indicated, however, in our address to the people of Ugu earlier this year, our internal resources, the grants we intend to secure, and the loans that we will raise will not be enough. The need for a special levy to help complete the funding requirements cannot be avoided. Our commitment to public consultations in this regard still stands and this will roll out early in the new financial year. We have also made a provision in this budget to subsidise the tariff in respect of sanitation charges and this amounts to R13,9 million.

LED

Agriculture

Agriculture is one of the main pillars of our local economy. With a district whose 84% area is rural, it's not difficult to see why this so. Our flagship agricultural market is taking shape, with trial runs progressing well. A provision of R1 million in the operational budget and R24,95 million in the capital budget has been made to ensure continuity of this flagship project.

Tourism

Tourism forms the other important pillar of the local economy. The establishment of the single tourism body by end of June this year will add impetus to the development of this sector. A total of R5,5 million has been set aside in this budget to support our initiatives and programmes in this sector. We hope to continue supporting world class events such as the Loerie Awards, the Sardine Festival with its series of various events, through this funding. We wish to reiterate our resolve with regards to rural tourism development. One of the performance areas of the single tourism body will be this matter and we will be keeping our eyes on the radar screen in this regard.

2010

Our 2010 plans are gaining momentum, with the recent signing of the sale agreement in respect of the land for this project. We have made a provision of R29,3 million for the Ugu Sports Complex, with R15 million coming from MIG. The balance is from provincial grants. Mr Speaker, the detailed designs for this project are at an advanced stage and we have taken a resolution that advocates the phased development approach with regards to the construction of this project. In this way, we will not commit this municipality to serious long-standing financial obligations that might compromise the financial standing of the district.

Poverty Eradication Programmes

Mr Speaker, when we conducted visits to destitute families late last year, as part of the World Aids Day activities, our eyes were opened by what we saw. We got to witness the high levels of poverty that many of our people, particularly in the rural areas experience. Similar levels exist also in urban areas. This justifies, therefore our interventions in developing entrepreneurs through cooperatives, stockvels and supporting self-help projects at ward level. Our comprehensive LED strategy will continue to guide us as we undertake this critical task of ensuring an improvement in the quality of life of our people. A budget allocation of R4 million has been set aside for supporting these LED projects. An allocation of R8 million has been made in this budget to extend social relief in respect of the indigent support programme. A policy discussion is currently underway with regards to extending the net to a wider society of poor people who can't afford to pay for their water and sanitation charges.

Special Programmes

Recognizing the need to pay dedicated attention to vulnerable sectors within our society, we have once again made provision in this budget for these special programmes in the following categories: Youth : R500 000 Women : R400 000 Elderly : R100 000 HIV/AIDS : R1 million Mayor's Fund: R500 000 Rights of the Child :R 50 000 Crime Prevention Initiatives: R400 000 Heritage : R200 00 Disability : R300 000 Ward Committees: R50 000 Mayor's Bursary Fund : R80 000 Farm Workers: R80 000

Building a winning organization

Mr Speaker, it has been said that the impact of our developmental programmes is dependent on the existence of an effective and efficient state machinery. But, for this kind of employee culture and ethic to exist, we would need to invest resources, both material and human thereby ensuring that our staff appreciate that they exist to services our people. Work is underway to fill vacant, foot-soldier positions in the Water Services Department, all 109 of them. We are mindful of the need to bring down the cost of doing our business and management will continue to implement cost saving measures, bring down the overtime ratio, reduce percentage of water loss and increase the collection ratio in respect of stratified debt. With regards to providing our staff with the requisite tools of the trade, we will invest R5,7 million on a new building to accommodate our Infrastructure and Economic Development Department, our key department in respect of development planning and project implementation. A further R21 million will go towards purchasing new motor vehicles in respect of our core function of water provision, in particular. This new fleet will add value to our response times and improve the level of our service. Lastly, recognizing the need for ongoing training and development of our employees, R620 000 has been provided for in this budget for this particular purpose.

Tariff increases

In order to ensure the continued provision of services and development as articulated in this budget, it has been necessary to adjust the tariffs with respect to water and sanitation. In the case of water, a 7,5% increase is proposed while for sanitation a 13% increase is proposed. It is important to reiterate that this increase is occasioned by the proposed infrastructure investment programme, referred to herein.

Conclusion

Mr Speaker, the budget we have tabled here today for approval by this august house is an attempt to invest in the infrastructure with respect to water and sanitation programmes, stimulate our local economy in order to create jobs and fight poverty and to invest in building a wining organization, capable of serving its people with efficiency, pride and dignity. Mr Speaker, I wish to express my sincere appreciation to members of the Executive Committee and the Budget and Monitoring Committee for their contribution in the formulation of this draft budget. I also wish to thank the Municipal Manager and members of Top Management for their hard work. Special thanks also goes out to the Budget Team and all officials involved on this project. Lastly, let me express my gratitude to all members of Council for their role in ensuring that this Council continues to be united behind a common developmental agenda. With this budget, Mr Speaker, we wish to say to Babu Mhlungu and Mam Khambule and all the 750 000 citizens of this district: Today is better than yesterday but tomorrow will be better than today I thank you Cllr S.B Cele Mayor: Ugu District Municipality

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