Mogale City’s Draft Budget (Part 4): The operating revenue framework
The operating revenue framework in MCLM's latest budget has been simplified.
Part four of the Krugersdorp News simplifying the Mogale City Local Municipality’s (MCLM) recent Medium-Term Revenue and Expenditure Framework (MTREF), or the draft budget, focuses on the operating revenue framework.
• Also read: Mogale City’s Draft Budget (Part 3): Rising service costs and more
The budget cites that MCLM is navigating a challenging economic climate, with weak growth affecting residents’ ability to pay for services and national government transfers slowing down. Despite this, MCLM plans to enhance service delivery and financial stability through stronger revenue management.
It continues that for the 2025/ 26 financial year, MCLM has budgeted R5.6b in operating revenue, a 12% increase (R606m) from the current year. This includes funding for capital projects. A projected operating surplus of R41m marks an improvement from the previous year’s R34m. Over the next few years, the municipality aims to maintain and even increase this surplus.
It states that capital projects funded from internal resources amount to R135.6m, supported by a broader operating surplus of R464.9m. However, the budget stresses the need to control operational spending to keep the budget affordable. Revenue estimates include money from municipal billing and grants from national and provincial governments. Notable increases include a 7.5% rise in the Equitable Share allocation (R48.6m) and modest increases in capital grants.
Additionally, revenue projections are based on an 86% collection rate, which the municipality is working to maintain through strict credit control, improved water and electricity metering, and replacing faulty infrastructure.
The budget states that the consumer price index (CPI) doesn’t reflect the true cost pressures faced by municipalities, which are driven by rising costs of bulk electricity, water, fuel, and other essential inputs. Electricity tariffs, set by national regulators, have risen above inflation. Other tariffs increased by 4.4%, which is within CPI, but water and energy costs are climbing faster.
It concludes that MCLM is keeping tariff increases as low as possible to protect low-income households, while still ensuring long-term financial health.
