The Nelson Mandela Bay municipality’s R12-billion budget, which mayor Athol Trollip described as prudent and fair and designed to appease some of the city’s destitute, was rejected by the opposition and thus not passed yesterday.
The council will have to reconvene within seven days and have a second go at trying to convince the opposition to support it.
In the budget presented by Trollip are proposals for tariff hikes of 5% for property rates, 8.5% for water and sanitation, 7.5% for refuse, and 5.48% for electricity, which is subject to approval by the National Energy Regulator of SA.
The new tariffs, if approved, would come into effect on July 1.
None of the opposition parties – ANC, EFF, UDM, AIC and United Front – supported the budget, saying it failed to make a meaningful contribution to the lives of the poor.
The DA, with its coalition partners COPE, the ACDP and Patriotic Alliance, only had 59 councillors in attendance – as DA councillor Pieter Terblanche is in hospital – and 61 votes out of the council of 120 seats are needed to pass a budget.
The DA-led coalition managed to pass the Integrated Development Plan (IDP), however.
In its present form, the budget has been divided into R10.3-billion for the operational budget and R1.7-billion for the capital budget.
As it stands, the budget presents a deficit of R11-million.
The big focus areas in the 2018-19 financial year would be the infrastructure development of roads and stormwater pipes, among other things.
About R465-million will go toward roads, stormwater and transport, while R280-million will be for sanitation.
Some of the other budget highlights for the year ahead include:
Human settlements to get R228.4-million, including the purchase of land in Seaview and Lorraine for housing projects;
The electricity and energy department will get R244.1-million towards electricity infrastructure;
The water services department will receive about R265.1million for infrastructure;
Loan funding of about R700-million will be taken up for what the city terms revenue-generating infrastructure; and
Three new multipurpose centres will be built in the metro. Trollip’s second budget since taking over the city was the product of a lengthy exercise and weeks of trying to accommodate the requests of all political parties.
The public participation process – where residents were meant to provide their wish-lists for their respective wards – was marred by violent disruptions in some of the wards.
Addressing the council, Trollip said the budget had been drawn up against the backdrop of the city’s low rates base coupled with a slow-growing economy.
The metro is also battling to curb its ballooning wage bill following the council’s decision to permanently hire 465 contract security staff.
“Positive negotiations have yielded competitive electricity tariffs for industrial users,” Trollip said.
“The issue of under- and unfunded mandates such as libraries, roads and housing remains problematic.”He said they hoped to assist the city’s financial position with the loan funding. Mayoral committee member in charge of budget and treasury, Retief Odendaal, said they had to create a balance between addressing community services and infrastructure needs.
“When you are sitting with a R21-billion infrastructure backlog, what takes preference?
“Many community services issues were raised and those are important.
“But because we have such a huge backlog in bulk services and housing lists, unfortunately with our capital budget community services are going to go on the tail-end of the receiving budget,” Odendaal said.
“The drought is probably the third biggest threat that we are facing – should the city run dry, we will destroy our economy and our people will be in dire straits.”
He said the major infrastructure projects were in previously disadvantaged areas.
Acting chief financial officer Jackson Ngcelwane said they had kept tariff increase proposals relatively low because of the VAT increase which came into effect on April 1. “Unfortunately, we can’t stop increases,” he said.
“Employee-related costs are also increasing. These things have to be taken into account.” Ngcelwane said the Bay had among the lowest tariffs compared to other metros.
Questioned about the fact that the tariffs were higher than inflation, which is at 4.5%, Ngcelwane said if they dropped the figures any lower, the city would be broke.
ANC councillor Litho Suka said it would not support the budget because the party felt it did not cater to the poorest of the poor.
“A budget for the poor is a tool to transform our society so that we are equal in bettering our lives,” Suka said.
ANC councillor Rory Riordan said the budget failed to add any meaningful contributions for young and poor people in the city.
Riordan, however, said they approved of the tariff proposals.
AIC councillor Thsonono Buyeye said he was concerned that the budget document had not been signed by city manager Johann Mettler.
He was echoed by UDM councillor Mongameli Bobani.
Odendaal said Mettler would sign the budget once it was approved by the council.
United Front councillor Mkhuseli Mtsila said he rejected the budget as it did not consider the party’s submissions.
“The lack of clear planning and focus on unemployment, in particular in our region, forces us to reject this budget,” he said.
Patriotic Alliance councillor Marlon Daniels, who is a coalition partner, said he did not support the budget in its present form as he believed it did not speak to the previously disadvantaged.
“There is no two ways about it, this budget must speak to the historically disadvantaged.
“When it does, I’m sure it will get the support it deserves,” Daniels said.
The EFF did not return to the council chamber after lunch, with EFF councillor Zilindile Vena saying its members had “emergency party business to attend to”.
They, too, felt the budget should have been signed by Mettler.