Good news for consumers is that the Thulamela Municipality will implement below-inflation increases when the new financial year starts.
Refuse removal and general tariffs will rise by 3.4%, while property rates remain unchanged. A new valuation roll, however, will come into effect from July this year, meaning consumers whose properties are revalued higher may still see increases in their monthly bills despite the 0% tariff adjustment.
The municipality also appears determined to collect outstanding debt and use this income to offset possible shortfalls. In the latest budget, tabled on Friday (19 June), it is estimated that the municipality will recover R287.3 million in outstanding debt in the new financial year.
Government grants provide bulk of revenue
The municipality budgeted for income of nearly R1.4 billion, but the majority comes from government grants. Projected income is R173 million higher than the previous year.
The Equitable Share Grant will contribute R634.8 million, with a further R130.6 million coming from the Municipal Infrastructure Grant (MIG) and the Neighbourhood Development Partnership Grant.
Own revenue sources are led by property rates, expected to generate R132.9 million. Interest on investments is budgeted at R82.7 million, while service charges (mostly refuse removal) will bring in R26.9 million.
Thulamela has launched a focused campaign to collect outstanding debt. In the previous financial year, the municipality expected to collect only 45% of billed revenue, and it is now seeking to improve that performance.
One aspect of the strategy, highlighted in the budget documentation, is the recovery of R100 million in long-outstanding government debts.
Ongoing data cleansing exercises are being used to ensure properties are correctly billed. A new valuation roll (effective July 2026) is also expected to broaden the property rates base.
However, the budget for debt impairment remains high at R61 million for the 2026/27 financial year.
Salaries and contractors consume bulk of spending
For many years, the Achilles heel of Thulamela has been its salary bill. When councillor remuneration of R39.47 million is included, the total remuneration bill rises to R466.3 million, or 42% of operating expenditure. This is above the National Treasury norm of 25–40%, which the municipality acknowledges needs to be addressed.
The picture becomes more concerning when outsourced services, contractors and consultants are included.
Contracted services increased by 17% to R288.2 million, driven mainly by rising security costs for completed sites, labour litigation, and professional conveyancer fees linked to property registrations.
Outsourced services are budgeted at R119 million. This includes business and advisory services (ICT, finance, risk and audit committees), security services (R39 million), and conveyancing services.
Contractors are expected to account for R110.2 million in expenditure, with the main driver being repairs and maintenance (R98.6 million). The municipality notes this has increased sharply to address infrastructure damaged by recent floods.
Consultants and professional services are budgeted at R59 million, covering legal advice and litigation (R32.5 million) as well as research and advisory services.
Other operating expenditure items include general expenditure (R360.8 million), repairs and maintenance (R118.7 million) and depreciation (R105.3 million).
Capital projects prioritised
Capital expenditure, set aside for infrastructure development, is budgeted at R278.3 million, an increase of 25% from the previous year. Road transport projects account for the majority (74%) of the capital budget due to a significant infrastructure backlog and the high cost of road surfacing.
The increase in repairs and maintenance from R91.2 million to R118.7 million (a 30% rise) is attributed to the need to repair infrastructure damaged by recent floods.
The municipality has prioritised several multi-year and new infrastructure projects:
Reconstruction of Itsani to Shayandima road: R17 million
Reconstruction of Hollywood to Sibasa road: R14 million
* Disaster projects: R15 million (funded from own revenue, pending roll-over approval)
* Matavhela streets: R6 million
* Construction of Gundani landfill: funded through MIG
* Hollywood to Nandoni Dam access road: R5 million
* Purchase of vehicles: R3 million