BUDGET SPEECH BY THE CITY'S EXECUTIVE MAYOR, PATRICIA DE LILLE, AT THE FULL COUNCIL MEETING ON 25 MARCH 2015

Mr Speaker,

In terms of the Municipal Finance Management Act (MFMA), a local government must submit a concept or draft budget to the public for its consideration and comment before a final budget can be presented to the Council.

This is an important legislative requirement.

It ensures that, across all departments, our intentions for how we spend all of our money in terms of both operating expenditure (opex) and capital expenditure (capex), are available for public scrutiny and correction where required.

It is during this phase of the budget process that all those claiming that we do not spend the majority of our budget on the poorer areas of Cape Town should make their public submissions based on proof.

In my years as Mayor, not once has any substantive proof to counter our evidence of pro-poor spending ever been offered.

The meaningful corrections that are offered must be in terms of ensuring that our budget aligns with our public mandate, as expressed in our corporate strategies and our Integrated Development Plan (IDP).

In compiling this draft budget, we have followed the process prescribed by legislation and adhered to the guidelines stipulated by the National Treasury.

Furthermore, we have enhanced these processes by adding in additional layers of strategy and internal oversight.

These layers began with a framework that was sent to all departments clarifying their strategic objectives, programmes and projects as well as transversal goals.

In addition, we laid out the restrictive criteria that departments would need to apply in their budget submissions.

These came in a series of questions and interrogations to ensure strategic alignment, maximum value-add and efficiencies.

As such, we asked directorates for:

What is needed to execute the City's strategy in that directorate

What resources are needed; what prioritisations are required

What exclusions need to be made; what expenditure repurposing is required

What revenue can be sourced

What efficiencies can be achieved

What additional revenues can be sourced

What business improvement processes can be undertaken

An indication of where staff vacancies have been cut

Indications of plans to adhere to service delivery standards with reduced resources

And capital spending programmes in the MTREF period, with indications of how capital spending is occurring sustainably with expenditure on asset maintenance as per National Treasury guidelines.

After a rigorous process of budget submissions and debate, we have arrived at the draft budget submitted to Council to release for public participation.

In total, for our service delivery budget, our proposed budget would see 67% of our spending be targeted towards the poor in the city - a powerful testament to this government's commitment to reconciliation through substantive redress measures.

In terms of our proposed rates and service charge increases, we have kept our increases as low as possible and as close to the Consumer Price Index of 5,9 as we can in order to ensure that, in difficult times, we do not pass on additional burdens to the consumer.

As such, we propose the following charges:

The City of Cape Town received correspondence from Eskom last week with respect to their application for a reopening of the current tariff fee so that an adjustment in the revenue requirement be considered during the 2015/16 financial year, which equates to a price adjustment of an additional 9,58%.

This is in addition to the already announced 12,69% for 2015/16.

The City of Cape Town is very concerned that this application has come so late in the process for the drafting of budgets by municipalities.

Our draft budget to be tabled today, including the City's electricity tariffs, is based on the approved 12,69% increase.

If Eskom's application is approved, this will result in a staggering 22,27% increase in bulk electricity tariffs in just one financial year, which the City will have no option but to pass onto our own customers.

This draft budget proposed today is fully balanced and fully funded.

In total, it amounts to over R37 billion - just under R6 billion in capex and around R31 billion in opex.

In conclusion, the document before us today is fully in line with our strategic vision for the City.

It adequately funds our five pillars and ensures that we commit ourselves to redress and reconciliation, while taking the lead in driving economic and social development in the metro region.

In the interests of meeting the needs of the people of Cape Town, I propose it for public participation.

Thank you, baie dankie, enkosi.

Issued by the City of Cape Town, March 25 2015

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