GEORGE NEWS - The final multi-year budget for 2024/25 to 2026/27 was tabled and approved by Council on Friday 31 May.
In his address to Council, Mayor Leon van Wyk said in view of the difficult economic circumstances being experienced in the country, tariff increases for water, wastewater, refuse, property rates and other general services have been limited to 6% - except for electricity.
Electricity rates increase
Nersa has granted Eskom an increase of 12,72%, which is the amount by which bulk purchases of electricity from Eskom will increase as from July 2024. "The effect of this is that George will need to increase tariffs to its customers by 12% to offset the increased purchase price and to be able to maintain the electricity distribution network within George," said Van Wyk.
The indigent package benefit for persons who qualify for free basic services will amount to R1 318 per month for 2024/25, which is an increase of 6,8% from R1 234 per month at present.
Underlying factors
Van Wyk gave a summary of the underlying factors forming the basis of the budget. Some of the points he raised are as follows:
- The current debtors collection rate for George is 93% whereas the norm expected by National Treasury is 95%;
- For every drop of 1% in the collection rate there is an impact on service delivery to the amount of R22m. This then means that if you are not collecting at 95%, you would need to cut back expenses on services by the amount not collected.
- There are amounts of old debt that are not collectable. The Directorate of Finance has systematically been working through that debt to write off uncollectable debt. In this way, about R50m was written off by Council in 2023 along with the monthly write-offs approved by Council.
- In recent years we have experienced an influx of citizens that has led to an increase in population of up to 295 000 by February 2022, as per census. This places additional pressure on our infrastructure and services.
Capital budget
George Municipality's capital budget for 2024/25 is R1 224m with a total of R3 114m to be spent over the MTREF (Medium Term Revenue and Expenditure Framework) period up to 2026/27.
"The growth materialising in George requires us to increase our levels of spending on infrastructure for the next five to seven years, which will require careful financial management," said Van Wyk.
The funding sources of capital projects for 2024/25 will come from: CRR (Capital Replacement Reserve) of R418m; loans of R466m; and grants of R341m.
Integrated Development Plan
The IDP (Integrated Development Plan) for 2022 - 2027 was also tabled and adopted. This is the 5th generation IDP in implementation since the inception of the IDP concept. Each generation, or IDP cycle, runs over a five-year period (but is reviewed annually) and represents Council's strategic plans for their term of office.
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