MBOMBELA – The municipality plans to introduce a once-off traffic-fine discount programme on outstanding traffic fines during May and June.
Mbombela Local Municipality (MLM) tabled its draft budget for the 2015/16 financial year, which commences in July, to council during a special meeting last month.
According to the report a 50 per cent discount on outstanding fines may be implemented. Through this MLM expects to achieve a 60 per cent collection rate which will result in the collection of R19 million.
Spokesman for the municipality Mr Joseph Ngala says the success of MLM’s payment incentive scheme Lishumi eShumini – Rand For Rand improved revenue collection and the same approach would be taken for outstanding traffic fines. The community is to be invited through an amnesty programme where a 50 per cent discount will be implemented during the amnesty period.
“After the amnesty period, strict debt collection measures will be enforced for the collection of outstanding traffic fines,” he says.
The municipality has also proposed an increase in rates and tariffs of 9,24 per cent for the financial year. This is largely due to the increase in electricity tariffs as of the beginning of the next financial year. It proposes that electricity will increase by 12,2 per cent as the main expenditure driver in 2015/16 is expected to be the bulk purchase of electricity.
“The recent reapplication by Eskom for an additional electricity tariff increase of 12,31 per cent in 2015/16 in addition to the 12,69 per cent approved by the National Energy Regulator of South Africa, poses a serious financial risk to the municipality,” it notes.
Water tariffs are also to increase by 38 per cent. This is calcualted in accordance with the consumer price index with a margin of three per cent and “other economic factors”.
A new water and sanitation cost structure, based on an activity based costing system, will however see tariffs for sanitation services decrease by an average of 18 per cent over the next five years.
The report noted that MLM’s revenue collection, which stood at 95 per cent last year, is expected to remain so in 2015/16. But Mbombela has also set out its 12-point plan to improve cash flow.
This includes reducing overtime expenditure by 25 per cent or R13 million per year. MLM also intends to incentivise debtors by giving good ratepayers a one per cent discount if accounts are paid in full by the 7th of each month. The report notes that curbing losses of water and electricity will generate R28 million in revenue.
“Each department will be given a specific limited amount to be spend on overtime expenditure for each financial year. The overtime will be managed by each head of department to ensure that the allocated amount is not overspent,” Ngala explains.
“Tight control measures will also be implemented to ensure that overtime worked is in line with the approved overtime and there is value for money for overtime worked.”
He adds that the projects to ensure a reduction in the loss of water and electricity include meter audits, installation of smart meters, formalisation of informal settlements, repair and replacement of bulk and domestic water meters, continuous implementation of the water conservation and demand management strategy.
“The municipality is also prioritising maintenance of its infrastructure to minimise current and future losses. The projects will result in reducing the electricity and water losses to the acceptable norm of 10 per cent and 15 per cent respectively.”
