NEWCASTLE – The approval of the 2016/2017 operational and capital Budget came down to a show of hands.
During a meeting of the local Council on Tuesday afternoon, opposing parties failed to veto approval of the Budget and supporting documents, including the Integrated Development Plan (IDP).
Also see: Gauging the state of Newcastle
It took 31 votes to seal the proverbial deal.
The Federal Congress (FedCon), Royal Loyal Progress (RLP), Democratic Alliance (DA) and Inkatha Freedom Party (IFP) all turned down support for the budgetary items, while Azapo supported the IDP, not the Budget itself.
When it came time to vote, however, the ANC had enough clout to negate this.
Prior to the contentious approval of the Budget, Mayor Afzul Rehman said this year the municipality had revised the way it budgeted.
“We took our Budget further back, in memory of when the draft Budget was approved. We had a cash flow of R9-million.”
Cllr Rehman said the Budget was later referred back to the Finance Department for cutting of further expenses, to the tune of R50-million.
“With that said, we decided that in order to continue with the capital programmes and funding of these, it was necessary to take a long-term loan to finish off.”
Bearing this in mind, Cllr Rehman said it was requested for all capital projects be completely rolled over until July 1, with the Finance Department asked to look at external sources of fundings in terms of the R90-million current loan.
Thus, no new capital projects will be added this financial season.
“All projects will only be started this season when funded through the Municipal Infrastructure Grant (MIG) or grant funding. None will be budgeted through internal reserves or external loans.”
This excludes a loan taken out in respect of the current loan, which is slated to ‘release the municipality of all pressure’.
Cllr Rehman called this an honest approach to municipal funding.
Working on a collection rate of 82 per cent, he said income in terms of monthly collections came to approximately R92-million, while operational expenses totaled around R88-million.
This left a cash surplus of R4-million.
“This should leave a R48- or R49-million complete cash surplus at the end of this financial year, which is after finance and capital charges on the existing R90-million loan, already under operational expenses, is paid.”
It was understood, Cllr Rehman said, it would be difficult to complete both the new building, with staff set to move in as of this week, and all capital programmes as it stood.
“We knew this building and infrastructure development programmes in Madadeni and oSizweni, surrounding areas and Newcastle would mean the municipality taking strain. If we tighten our belts and go through this financial year, we would come out better and stronger, with a R50-million cash flow surplus, which can be put into our internal reserves.”
According to Cllr Rehman, this would set the municipality on a path of growth.
With the presentation of the Budget for 2016/2017 to council, councillors were then invited to make their comments.
They responded as follows:
FedCon – Councillor, Alex Liu said concerns on the Budget were expressed previously. Once the party saw the Budget document, it felt there was no change, and Cllr Liu commented this was very concerning.
“Therefore, we reserve comment on the IDP.”
RLP – party representatives agreed with the points raised by Cllr Liu, stating the party had rejected the Budget.
Azapo – members said the mandate from local leadership was to support the IDP, but cast a dissenting vote against the Budget. This was met with amusement by speaker, Mandla Zikhali, who said IDP and Budget were like magnets together, and encouraged the party to choose a vote for or against both. His request was ignored.
DA – Councillor, Bertie Meiring said it was decided, in view of various recommendations regarding financial management and implementation of remedial actions required, the party did not support approval of the Budget.
“The DA’s opinion is that the ANC has failed the people of Newcastle.”
National Freedom Party (NFP) – Councillor, Sibusiso Lukhele raised concerns on the IDP, including a failure to ‘nail’ a brief from the South African Local Government Association (SALGA), regarding energy efficiency and a green economy. The party approved the IDP regardless. Coming to the Budget, Cllr Lukhele reminded councillors this was likely the last they would approve as a Council, and urged reflection.
“We must reflect and critically review our role as public representatives, tasked with the responsibility of the community’s welfare. The question is, can we look back at our time with pride?”
Lambasting the Budget and Treasury Department for not taking councillors into confidence this Budget season, Cllr Lukhele said it was difficult to make an informed decision on the approval of the Budget. However, the party reluctantly approved the item.
IFP – Councillor, Doctor Koos Vorster said the party’s caucus had decided not to support the Budget, based on negative comments from Provincial Treasury, doubts over if revenue would be realised, and projects not being ‘cash-backed’.
African Nationa Congress (ANC) – Members said the mayor had elucidated on the situation the municipality was in, and called for measures to help keep the ship afloat. Beyond that, the party accepted and approved the Budget as presented.
