The City of Cape Town has started the process of preparing its budget for the 2010-2011 financial year, in which it will attempt to find a balance between moderating tariff increases and ensuring that services are adequately provided, while at the same time continuing the goal of infrastructure-led economic growth.
[ad#Google Adsense 125×125 Blog Post]The draft Budget will be tabled in Council at the end of March, and will then go through a public comment process before it is adopted by Council at the end of May and implemented from the beginning of the City’s next financial year on 1 July 2010, according to Johan Steyl, Director: Budgets.
As part of the preparatory phase, the Mayoral Committee recently adopted the Medium term Revenue and Expenditure Framework (MTREF), which will form the basis for the development of the draft Budget.
This framework takes account of budget and economic realities facing the City, and guides the Budget formulation for the next three years, setting the path for sustainable medium-term funding of service provision.
The previous MTREF has been adapted to take account of changed conditions, such as lower interest rates, the national three-year salary settlement, and lower collection ratios.
It has also indicated that the City needs a moderate slowing of capital expenditure to ensure long-term sustainability.
Major challenges facing the City include Eskom’s proposed tariff increase of 35% and the postponement of infrastructure projects as a result; the closure of localised refuse disposal sites which has necessitated the construction of transfer stations; and significant infrastructure provision and refurbishment in the Water and Sanitation service.
The final valuations of properties have been completed and were received at the end of January. The values of each of the 780,000 rateable properties were assessed, and will determine the City’s rates income. Modelling of the impact of the proposed rates and tariffs will be undertaken ahead of the Budget, so that the City can obtain a fuller understanding of how these will affect different income groups, and attempt to minimise the impact of the rate structure on those more vulnerable in society.
