Ten key points from Mayor Jordaan's maiden budget speech
New Nelson Mandela Bay Metropolitan Municipality Executive Mayor, Danny Jordaan, presented his long-awaited 2015/16 Municipal Budget speech on Thursday afternoon at a special council meeting at the Wool Centre in Port Elizabeth.
While disgruntled South African Municipal Workers Union (SAMWU) members tried to disrupt the meeting, the budget was passed and widely accepted. For the first time, the budget showed a surplus of R42 million due to major cuts on spending - revealing again Jordaan's reputed top notch administration skills.
Here are ten take home points from the Mayor's speech.
Integrated Development Planning (IDP)
“The IDP sets out the strategic plan for how we are going to make this city a better place to live for all our people. It also contains a spatial plan for how our city is meant to grow and develop, and for how we plan to integrate the different parts of our city which were so cruelly separated by apartheid spatial planning. We have updated the IDP based on a situational analysis, and a programme of consultations with people across the Metro,” Mayor Jordaan said.
“Three series of public meetings were held. First, meetings were held at ward level to identify and update key ward priorities. Second, there were meetings at cluster level to present the Annual Report and Mid-Term budget.
“Lastly, meetings were again held at ward level to present the ward budget, Spatial Development Framework and rate policy. The Offices of the Speaker and Chief Whip led the public participation programme, and I would like to extend my gratitude to them for their efforts in this regard. I would also like to thank fellow Councillors and the residents of the Metro for their participation in these public meetings.”
Transfer of constituency coordination function to Municipal Speaker’s Office
“As you are all aware, as part of the recently approved Mayoral Committee, we have recently agreed to move the constituency coordination function back into the Speakers Office where it belongs. I am looking forward to the Speaker playing an active role in strengthening our IDP and Budget consultation processes, so that next year we are able to table an even more participatory set of documents to this Council,” the Mayor said.
He said that it was significant that the municipality was tabling the amended IDP and Budget together.
“Budgets are not just a set of numbers, they are the concrete expression of how the municipality plans to allocate its resources in line with its priorities. This means that our strategic plan, i.e. our IDP, should lead the budget. The IDP priorities should be reflected in the Budget. And the IDP priorities should reflect the wishes and desires of residents. We have held two workshops to align the IDP and Budget, and I am confident that the priorities reflected in the budget are derived from the IDP,” Jordaan said.
Local economy shrinking
“There are a few key issues I would like to highlight relating to the amended IDP. Firstly the NMBM economy is shrinking. This is partly as a result of the global recession, and partly as a result of local factors relating to the decline of the motor industry. But we are also partly to blame,” the mayor said.
Nelson Mandela Bay Municipality run 'inefficiently'
“Our city is run inefficiently. We have been charging consumers progressively higher service charges and rates without a concomitant improvement in service quality. We have been using income from electricity to cross-subsidize budget expenditure, and this can no longer continue. We are making it unaffordable for businesses to invest and do business in this city,” he said.
“At the same time our unemployment levels are at an all-time high, and our relationship with our stakeholders is not good. If we are to move out of this trap, we have to radically overhaul our administration, cut out the graft and inefficiency which bedevils it, and invest in economic development and infrastructure.
“Significantly we are today putting in front of you for approval the agreement with the high energy users relating to the settlement of the case regarding our budget and the payment of electricity tariffs. This agreement puts to bed a difficult chapter in our history, during which we have learnt some important lessons. I would like to thank the high energy users group for their commitment and forbearance in finalizing this agreement, and I look forward to a far more cooperative relationship between us in the future as we tackle these thorny issues.”
“In terms of the tariff increases for the coming financial year, you will note that in our budget the average tariff increase for electricity is 12.2% and for water is 13%. These compare favourably with other metros, where the average increase electricity is 12.3% and for water is 14.5%. The electricity increase is also substantially less than the 14.4% increase in the bulk tariffs that we pay to Eskom, let alone the additional 14% increase that has been submitted by Eskom to NERSA for approval.”
“We put in the hard yards and made the difficult decisions to ensure that we cut expenditure to the bone to ensure that the budget focuses on service delivery. However, we would have loved to restrict tariff increases to single digits as we are painfully aware that our community cannot afford steep increases. We must remain committed that water and electricity losses should be contained to more acceptable levels and that we increase our revenue collection rates,” Jordaan said.
“The 2015/16 budget will not be business as usual. There are some significant constraints on our expenditure, mainly because of the broader economic climate we are in. This means that Directorates will have to manage their budgets better.
“Each rand that we spend must add maximum value to the wealth of the community, and we have to extract maximum value from our suppliers. I am also going to be very strict - no expenditure without budget will be tolerated, and I am afraid that I am not going to consider unbudgeted demands from councillors and officials.”
Revenue collection, water losses and wasteful expenditure
He said that he has instructed the Nelson Mandela Bay administration to put a programme in place for debt collection – the municipality has impaired debt of R1.610 billion – and to look for ways for revenue enhancement.
“Also, water losses need to be curbed – we lost water to the value of R326 million last year. There are ways such as smart metering that we should be exploring. Also electricity losses need to be curbed – we lost R208 million lost last year – and again, smart metering could help address this problem,” Jordaan said.
“Councillors, it goes without saying that the qualified audits that the Nelson Mandela Bay Municipality received must be addressed.
“I am shocked by the amount of unauthorized expenditure that has been taking place in the Metro and I must tell you, I am not going to tolerate it. Qualified audits are a reliable indicator of administrative inefficiencies and the gradual decline in the way we do things on a day to day basis.”
Jordaan said that it was worth noting that before the 2013 financial year, this Metro received positive, unqualified audits year after year.
“This simply means that there are many people in the administration who know what needs to be done correctly and efficiently. It may be that over the years these staff members have become demoralized for one reason or another.
“I want to hold a staff meeting with all the workers of the Municipality to share with them our vision and to solicit their advice on how we can improve things. I am fully aware that the overwhelming majority of our staff members are honest, dedicated people who take pride in their place of work,” he said.
On corruption in the municipality
“However for the few who are corrupt or those who continue to waste the resources of the Municipality - Heads will roll, and I intend to hold the responsible officials accountable and do so without fear or favour.
“There are a number of instances of corruption and mismanagement that have been revealed by forensic reports, and our own internal audit reports. I would like to pay tribute to the sterling work our internal auditors have been doing in this Metro, often in the face of indifference or even hostile attacks from politicians and officials. I commit myself to take your reports seriously, and to act on the findings that you put in front of me.”
Jordaan did not hide the fact that corruption has taken root in key functions of the city.
“The IPTS has been the most visible part of this corruption, but it has also infected other components of the administration. The Accountant General has been conducting a detailed forensic investigation into IPTS, and the Minister for Cooperative Governance and Traditional Affairs and myself met with the forensic team two weeks ago to get an update on their investigations.
“These are nearly complete, and I hope to be shortly placing in front of you a report with recommendations for action. In the mean time I am taking a number of actions to strengthen our fight against corruption. At my request the internal audit team is in the process strengthening the processes of reporting corruption. I am calling on members of the public and whistleblowers within the administration to make use of this anticorruption reporting system with any evidence relating to corrupt activities,” he said.
On the mayoral committee
“We have determined the challenges facing us, selected a team best suited to face those challenges and now focus squarely on the road ahead and how to reach our goals. We now need all hands on deck to get work done in this city. We cannot have officials or member illegally blocking our roads with municipal vehicles and force their will on us. It certainly is an indication that existing platforms to deal with labour-related matters are either not trusted by our employees or did not yield results over the years. This needs to be addressed as a matter of urgency as we cannot allow wildcat strikes to hinder service delivery and further deteriorate our fragile reputation,” the Mayor said.
“Officials must accept accountability for long outstanding matters and do the necessary to resolve them. As we focus on the road ahead we not only need to reconnect with the residents of Nelson Mandela Bay, we also need to assure workers that they are important enablers in our cause to restore and live up to the name that this city carries.”
“I have instructed my office to organize stakeholder engagement sessions where we will present our vision and receive your input on how we can work together to improve service delivery in our Metro. I look forward to fruitful engagements with our stakeholders in these stakeholder sessions,” Jordaan said.
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