Residents of the Musina municipal area will have to pay, on average, 6,4% more for services in the coming year. This cash-strapped municipality announced some of the steepest increases in Limpopo when tabling its budget a fortnight ago.
Musina Mayor Mihloti Muhlope tried to project a positive image of the municipality when presenting her budget on June 30. She stated that "there is no doubt that Musina is becoming better financial year after another [sic]," but what became clear was that the municipality had some major obstacles to clear. When the auditor-general released his latest findings on the state of the country's municipalities, Musina was mentioned as one example where proper control systems are not in place and where the millions spent on consultants to improve the situation seem to go to waste.
The municipality is also still severely cash strapped, owing Eskom and Vhembe tens of millions in outstanding debt. To add to its woes, consumers owe the municipality more than R40 million. "We are continuously engaging with defaulting community members to [help them] understand the value of paying for the services they get from the municipality," said Muhlope.
The municipality once again received a qualified report from the auditor-general, with no fewer than 71 findings. "A comprehensive audit action plan has been developed to address the outstanding 24 findings … We are also working very hard to intensify sound financial controls in the municipality," Muhlope said.
The budget totals R379,3 million, of which R33,8 million for capital projects will be financed from a Municipal Infrastructure Grant. The Extended Public Works Programme allocation will add R1,6 million to the council's coffers, while R158 million will come from the Equitable Share Funding. To cover operating expenditure, the council will also rely on a R2,7 million Finance Management Grant.
The seven-page budget speech of Muhlope provided little information on the plans of the municipality. It only mentions some capital projects, such as the paving of roads in Nancefield, the completion of the Manenzhe Sports Facility, and the construction of a culvert and bridge along the Tshivhongweni/Tshipale road.
When the municipality's spokesperson, Wilson Dzebu, was requested to provide the newspaper with the complete budget, he responded by saying that the online summary "is the only document that outlines the reports and plans for the municipality in the new financial year".
To try and make sense of the budget, the only option was to revert to the draft budget, filed in March this year. Musina Municipality is understood to be prepared to honour the collective agreement with labour unions for a 6,25% salary increase, effective from 1 July 2020.
In the draft budget, electricity charges are set to increase by 8.1%, while waste removal charges are proposed to increase by 5.6%. The proposed increase for assessment rates is 6%. The final breakdown is unknown as the municipality did not divulge this.
Most of Musina's own income is derived from the re-selling of electricity for 2020/21. The municipality budgeted for an income of R150,35 million. Property rates are expected to bring in R21,69 million, while service charges for, among others, refuse, will bring in R19.16 million. The bulk of the income (R162,5 million), however, will come from transfers and subsidies. The Local Government Equitable Share grant is the largest, totalling R158,17 million.
"In the 2019/20 financial year, revenue from service charges totalled R158 660 million. This increases to R169 510 million," the draft budget reads.
Musina municipality's single biggest expense, comprising more than 41% of its expenditure, is salaries. The budget for employee-related costs increased to R155,15 million. Musina's councillors will also cost the taxpayer R11,86 million in the next year, which represents an increase of 6,5%.
The municipality also seems to spend an excessive amount on contracted services, and in the previous financial year, this cost the taxpayers R27,73 million. The expense was slightly reduced for the next year, with R22,46 million budgeted to pay consultants. "Contracted services such as research and development have been identified as a cost-saving area for the municipality," the draft budget states.
If the costs of salaries, councillors, and consultants are added up, the municipality spends almost half of its operating income on these three items.