Comments on Kouga 2011/12 Draft Budget

The following comments on the Kouga Municipality draft budget refer to the page numbers in the draft budget, and should be read together with that document.

Comments on Kouga 2011/12 Draft Budget

Compiled by Trevor Watkins – Chairman – Jeffreys Bay Residents association.

Note: All figures in R,000.

Budget summary (Table A1 p7)

1)      Finance charges increase from 10,444 in 2010 to 26,628 in 2011 (255% increase). Does this represent a 255% increase in borrowing? What plans to repay this increased debt?

2)      Employee costs of 168,513 constitute 35.7% of total budget of 471,191, and a 17% increase on 2010 employee costs.  When and how will this trend be brought under control, if not reversed?

3)      Why are Total Current liabilities only 23,852, but finance charges 26,628. What are finance charges paying for, if not debt servicing?

4)      Please explain shortfall of 47,704 against cash backing?

5)      Revenue cost of free services provided of 393,441 is 14 738 greater than income from rates and services of 378,703.  In other words, more than half of Kouga’s potential income is not charged for (provided free). Is Kouga compensated for this major poverty relief from central government? How much? How long is this relief expected to continue?

Table A2 p10

6)      Police expenditure tripled from 3,308 in 2010 to 14,182 in 2011. What changed?

7)      Sewerage expenditure 26,734. Rumours that 40,000 needed. Why not budgeted?

Table A4 p 16

8)      Interest earned external investments in 2009/10 was 5,602, and only 555 in 2011/12. Are KM assets being sold to finance current expenditure?

9)      Interest earned – outstanding debtors in 2010 was 3,105 and more than doubled in 2011 to 7,689. What is expectation that this amount will actually be recovered?

10)  Income from fines (2,305) and licences (13,211) more than doubled since 2010. What is the cost to local tourism of these measures?

11)  What part of budget supplied by transfer from provincial and central government (transfers recognised 46,304?)

12)  Confirm that Remuneration of Councillors of 4,818 divided by 30 councillors gives annual payment of  R160,600 per councillor, or R13,383 per month?

13)  Debt impairment of 18,690 and finance charges of 26,628 in 2011 versus 10,444 in 2010. Is current expenditure being financed by borrowing in 2011?

Table A5 p17

14)  Capital expenditure of 500 on sport and recreation, on what? Centreton sports field?

15)  Capital expenditure - Waste water management 23,852. Is this sufficient to resolve sewage problems in J Bay – MM said 40,000 was needed.

16)  Is 14,000 surplus to be used on sewage system?

Table A7 p19

17)  Proceeds on disposal of PPE 26,000. What Plant, property or Equipment was this? Why? To who?

Table A10 p22

18)  Total cost of Free Basic Services 393,441. Do J Bay ratepayers bear this cost?

Inflation (p28)

19)   2011/12 inflation forecast 4.08%. Wage increase agreed for 2011/12 is 6.08%. Actual KM staff costs increase is 17%. Why?

20)  Eskom bulk tariff to increase by 26.71% on 1/7/2011.

4.2 Renewal and repairs of existing assets P32

Municipal councils are urged to ensure that allocations to repairs and maintenance and renewal of existing infrastructure is prioritised. Where municipality allocates less than 40% of its 2011/12 capital budget to renewal of existing assets it must provide a detailed explanation.

21)  IS KM within limits suggested in point 4.2?

Detailed budgets

22)   P52 Community Services – Vehicle rental  - 0 in 2010, 813,731 in 2011?

23)   P53 Disaster management – only 100,000?

24)   P55 Finance: budget & Treasury – bank charges 1,100,582 – doubled since 2010?

25)   P55 Finance: budget & Treasury – phone rental 160,000 – 0 in 2010?

26)  P55 Finance: Revenue – R18,000,000 provision for bad debt – 0 in 2010?

27)   P56 Finance: IT – Network connection – 1,208,741 – 200,000 in 2010?

28)   P56 Finance IT – printing & stationery – 500,000 – 30,847 in 2010?

29)   P57 Library – books & publications – 5,809 – 250,000 in 2010 – outrageous!

30)  P57 Library budget reduced by one third from 935,157 to 693,035 - !!

31)  P57 Mayors budget reduced from R4,244,765 to R206,884 – is he not expecting to be re-elected?

32)   P58 Municipal manager – audit fees – 5,000,000 – 2,150,000 in 2010???

33)  P59 – planning & development – printing & Stationery – 309,307 – 60,420 in 2010 – 5 fold increase.

34)   P59 – Refuse - external interest – 2,943,000 – 220,935 in 2010 – 10 fold increase?

35)   P60 – environmental management – equitable share allocation – 1,846,392 – 0 in 2010?

36)  P67 – Salaries 37% of ops budget – target 29%. Repairs & maintenance 5% of ops budget, target 9%.