BUFFALO CITY

1
BUFFALO CITY

• POPULATION 900 000
• URBAN 650 000
• RURAL 250 000
• REVENUE BUDGET R1,1bn
• DOMESTIC 50 BUSINESS 50
• CAPITAL BUDGET R352 million
• Nb. ONLY ACTUAL FUNDED ITEMS ARE INCLUDED IN THE
  CAPITAL BUDGET

2
NATURE OF CITY 1

• SECONDARY CITY
• PROVINCIAL CAPITAL
• REGIONAL LABOUR AND BUSINESS HUB
• MAJORITY OF POPULATION IN FORMER R293 TOWNS
• HAS ALL CHARACTERISTICS OF METROPOLITAN AREA

3
NATURE OF CITY 2

• MULTIPLE CBDs
• INTENSE POPULATION MOVEMENT
• INTERDEPENDANCE OF COMPONENTS OF CITY
• DIVERSIFIED ECONOMY WITH NATIONAL INFLUENCE IN
  MOTOR INDUSTRY
• HARBOUR EXPORTS NATIONALLY FOR MOTOR INDUSTRY
• REGIONAL EDUCATIONAL AND ADMINISTRATIVE HUB
• IDZ PROCLAIMED AND DEVELOPING

4
VISION AND STRATEGIES 1

• VISION A PEOPLE CENTRED PLACE OF OPPORTUNITY
  WHERE THE BASIC NEEDS OF ALL ARE MET IN A SAFE,
  HEALTHY AND SUSTAINABLE ENVIRONMENT.

5
VISION AND STRATEGIES 2

• STRATEGIC LEADERSHIP WITH INSTITUTIONAL
  STABILISATION TRANSFORMATION
• SUSTAINIBLE FINANCIAL MANAGEMENT
• ECONOMIC DEVELOPMENT AND JOB CREATION
• FOCUSED AND SUSTAINIBLE SERVICE DELIVERY
• PRIMARY HEALTH AND HIV /AIDS

6
RESTRUCTURING

• APPLICATION PROCESS WELL ADVANCED
• KEY ISSUES R293 TOWNSHIPS
• REPAIRS BACKLOG
• RATES BASE
• RURAL DEVELOPMENT
• SUSTAINIBLE SERVICE
• DELIVERY
• UNIFORM RATES AND TARIFF
• POLICY WITH PRO POOR
• FOCUS

7
EQUITABLE SHARE

• ALLOCATION 2002/3 2003/4
• FREE BASIC WATER 15 16
• FREE BASIC ELEC. 7 14
• POOR RELIEF 27 30
• R293 SALARIES 32 26
• RURAL WATER COSTS 4 5
• RURAL INFRASTRUC 15 9
• TOTAL R126m
  R175m

8
INDIGENT DISCUSSION POINT

• PRESENT DISPENSATION FOR POOR RELIEF IS BASIC
  SERVICES FOR EXISTANCE SHOULD IT NOT BE
• BASIC SERVICES FOR COMFORT
• 6 kl vs 12 kl AND 50 kwh vs 100 kwh

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INDIGENT

• PROVISION FREE BASIC SERVICES
• R100 SUBSIDY FOR
• OTHER SERVICES
• REGISTERED 2003 31 000 FAMILIES
• 2004 40 000 FAMILIES
• Nb THIS EXCLUDES RURAL HOMES
• NATIONAL AVERAGE POOR HOUSEHOLDS IS 22
  BUFFALO CITY IS 32

10
REVENUE STRATEGY COMPONENTS

• REVENUE PERFORMANCE
• TAX AND TARIFF RATES
• INTER-GOVERNMENT TRANSFERS
• DEBTORS
• SUBSIDIES
• CUSTOMER CARE

11
GRANT ALLOCATION

• SEE HANDOUT

12
ABILITY TO USE GRANTS

• THIS IS BASED ON BUDGETRY PERFORMANCE BCM BUDGET
  IS BASED ON
• A CASH BASED BUDGET
• ALL CAPITAL PROJECTS HAVE IDENTIFIED FUNDING
  SOURCES
• DELIVERY IS PLANNED FOR BUDGET PERIOD

13
GRANT PERFORMANCE AS AT 1 MARCH 2003

• SOURCE PROJECTS IN PROGRESS
• CLF 145 122
• BCMET 9 9
• CMIP 43 41
• LGH/PHB 38 21
• NEP/NER 5 5
• RESTRUC 8 7
• TRANSITION 11 8
• ADM 42 33
• THESE FIGURES INDICATE ABILITY TO DELIVER

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COMMENT ON GRANTS

• FROM THE PREVIOUS SLIDES IT WILL BE NOTICED THAT
  PERFORMANCE IS EASIER WHEN THE CHANNEL BETWEEN
  THE SOURCE OF FUNDS AND THE USER OF FUNDS IS A
  DIRECT ONE. IN TERMS OF THE CONSTITUTION THE IS
  NO HIERACHY OF SPHERES OF GOVERNMENT. THIS
  PARTICULARLY APPLIES TO CMIP
• BCM IS UNDERFUNDED IN TERMS OF INFRASTRUCTURE
  GRANTS. R934 BEING RECEIVED PER POOR HOUSEHOLD
  COMPARED TO NATIONAL AVERAGE OF R1634 IN THE
  2002/3 YEAR

15
FISCAL CONSTAINTS

• A VERY IMPORTANT PROBLEM IN THE MUNICIPAL
  FINANCIAL SPHERE IS THE INEQUITABLE IMPOSITION OF
  INCREASES ON MUNICS.
• TREASURY LIMITS BUDGET INCREASE TO 5.5..but
• PARASTATALS INCREASE 8 to 80
• INFLATION 10 to 13
• SALARIES 10 to 12