The Nelson Mandela Bay council will on Thursday debate the draft 2019/2020 budget that has a R22m deficit.
The National Treasury has warned against the continued tabling of a deficit budget, acting chief financial officer Jackson Ngcelwane said on Wednesday.
Ngcelwane presented the document at a joint mayoral and budget meeting.
He listed the R22m deficit, load-shedding and a high wage bill as among the major risks.
“The budget is not a budget without challenges.
“We have load-shedding, which we don’t know if it’s coming or going,” he said.
“We also have fuel prices which affects the budget.”
He warned that the collection rate of 94% was not where the city had hoped it would be.
Last Friday, the municipality missed a March 29 deadline that had been set by the Treasury for compliance in tabling a budget.
“Among the challenges is the underfunded mandates, a typical example is library services,” Ngcelwane said.
He said the city was expected to receive a government grant of R15.7m for libraries but was expected to spend R112.9m in the 2019/2020 financial year.
“This should be taken up with the province,” he said.
Other highlights in the draft 2019/2020 budget include:
● Employee-related costs at R3.5bn;
● Remuneration of councillors at R79.2m;
● Proposed rates increases of 5%;
● Electricity increases of 6.84% on average, subject to approval by the energy regulator; and
● Water, sanitation and refuse increases of 7.5%.
The draft budget will be presented to the National Treasury on April 29.
DA councillor Retief Odendaal said he was extremely concerned by the proposed electricity tariff increase.
“We worked on that figure last year, we know now that Eskom has asked for something close to 14% and we will only get the outcome closer to May, but I do want to say that this is creating an unreal anticipation with our residents.”
He further urged the appointment of a full-time CFO to avoid having the Treasury reject roll-over applications.
ANC councillor Andile Lungisa said the budget followed priorities.
“Our priorities have shifted because we have a younger population. Our priority now is sport.
“It will be our number one priority, followed by arts and culture and then crime. Our fourth priority will be education,” Lungisa said.
He said human settlements was fifth on the list.