25 May 2006 Statement by the executive mayor of the city of Johannesburg, Councillor Amos Masondo, on the budget for the 2005/6 financial year. I have great pleasure in announcing that today, we will table the City of Johannesburg Budget and the Integrated Development Plan (IDP) for 2005/06 under the theme: 'Working together for Service Delivery'. This budget affords us the opportunity to carry out our constitutional mandate to providing a democratic and accountable government for local communities and to ensuring that the provision of services to communities is done in a sustainable manner. We are committed to promoting the social, economic development, safe and healthy environment in our communities. We are also committed to encouraging the involvement of communities and community organizations in the matters of local government. We do all of this work within the financial and administrative capacity of the municipality. It is, however, no exaggeration to say that we are committed beyond legislative requirements to make public participation an integral part of the planning, budgeting and service delivery processes. The past four years has shown this in the way that we have conducted our outreach and consultation programme during the drafting of the IDP. On 7th May 2005, a Johannesburg Stakeholders meeting was held at the Orlando Communal Hall, in Soweto. This was a culmination of a year long process that translates the vision that the 'People Shall Govern' into reality. This meeting provided a platform for the elected public representatives, the community and the organisations of civil society to engage with both the City's 2005/2006 Budget and the IDP. We have listened and we have heard the concerns raised by the people of Johannesburg. I want to assure each resident and say that your voice counts. Every idea raised has been carefully considered and everything possible has been done to factor it into the equation. The needs are extensive and the resources are limited. In this Budget we have sought to ensure that the provision of services to all our communities will be delivered in a sustainable manner. The following is a short sample of issues raised by the different role players in the past year: Power outages, billing, additional lighting particularly in previously disadvantaged areas. Progress to eliminate gravel roads in Soweto. A number of requests were made for tarring of roads in other areas Demands for improvements in traffic light management and requests for speed humps, pavements and storm drains Response time and perceived lack of availability of emergency vehicles especially in previously disadvantaged areas The list goes on. Please refer to the actual budget speech. This budget like in the past four financial years, is informed by our six mayoral priorities, which provided sound guidance to our day-to-day work. They are good governance, economic development and job creation, inner city regeneration, public safety, service delivery excellence/batho pele and the fight against HIV and AIDS. We have also been guided by our vision to build Johannesburg into a World Class African City as well as our long-term plan, the 'Joburg 2030 Strategy. For the actual Budget, we will be presenting at Council today, a spending plan of R18.9 billion. This is made up of a capital budget of R2.8 billion and an operational budget of R16.1 billion. This budget is R1.7 billion more that the 2004/05 financial year. The capital budget represents a 31.5% increase and the operational budget represents a 6.8 % increase from the current budget. Here are some of the highlights of some of the important components of this budget: Capital budget increased with R672 million (31.5%) to R2.8 billion. It is the highest capital budget for the first time over 10 years The City anticipate to spend approximately R1.4 billion for the next four years towards the preparation of 2010 world cup Additional 100 fire fighters / emergency medical technicians and 15 fire safety inspectors to increase the staff capacity in Emergency Management Services R3 million will be spent to improve the communications between the control centre and the ambulance crew Property Rates tariff increase of 4% was kept below the estimated inflation of 4.7% Budgeting for a surplus of R87.7 million surplus - Medium Term Budget Framework (MTBF) seeks to eliminate accumulated operating deficit in 2005/06 financial year Continued increase in capacity / visibility of the Metro Police Force - 200 new Municipal Police Officers (MPO) as from 1 July 2005, 126 new MPO's as from 1 January 2006 and an additional 100 motor vehicles to capacitate newly appointed MPO's. The new company (which replaces the RSSC) has been accommodated in the budget. R5 million has been provided for additional Environmental Health Officers. R200 million additional surplus cash to address the power outages. Increase allocation for purchasing of library books (R2 million) OPERATION EXPENDITURE Our operating expenditure for 2005/06 has increased by 6.8% to R16.1 billion, an increase of approximately R1 billion over 2004/05 budget. The City's Utilities, Agencies and Corporate Entities (UACs) make up 54% of the City's total budget. City Power's allocation amounts R3.6 billion Joburg Water R3.1 billion Pikitup R621.9 million Joburg Roads Agency R391 million City Parks R334.8 Metrobus R315 million and the reminder goes to other service delivery functions. The core administration makes up 46% of the City's total operating budget. Metro police account for R719 million Emergency services account for R364 million, Housing R447 million, corporate services at R342 million, Social development at R310 million Health at R225 million and other support functions. Support functions have been again receiving below-inflation allocations. In real terms, they have experienced a decline in allocations. This approach has enabled the City to re-direct additional resources and to focus spending on service delivery. CAPITAL BUDGET Over the last four years the City has invested over R5.8 billion towards its capital infrastructure. In this budget the envisaged capital spending is approximately R2.8 billion. This will be financed through a combination of borrowing and surplus cash to the tune of R2.1 billion and R649.6 million from the Consolidated Municipal Infrastructure programme and other provincial and government transfers. The municipal infrastructure grant has increased by 26% from the 2004/05 financial year. The capital budget reflects 31.5% increase from the 2004/05 financial year. The increase is mainly due to the improved financial position of the City, hence more funds are redirected towards accelerating infrastructure development. The City will spend as follows on its capital investments; Power R675 million Water R556 million Roads R261 million Housing R234 million Development planning, transportation R253,5 million, this includes Cosmo City which accounts for R100million Social Development R123 million and the remainder will go towards other service delivery areas. The City has committed about R1.4 billion for the next four years towards the Soccer World Cup 2010 projects, this allocation forms part of an annual capital budget allocation of about R350 million per annum. TARIFFS The electricity will rise by 6.2%, water and sanitation by 7.7% and refuse removal will increase by 4.7%. The initial consultation led to a proposal of 6% increase on assessment rates. Due to improved collection levels, assessment rates have now been revised to 4%. All minor tariffs will increase between 3%-5%. The average tariff basket for the City is 5.7%. We want to assure everyone that as much as possible of the needs of the citizens of Johannesburg has found concrete expression in the budget of 2005/6. This budget has translated into rands and cents the wishes of residents into an improved and accelerated service delivery - more delivery of water and electricity, more accountability, and better customer service. This is our commitment to every citizen of Johannesburg. It is a commitment we intend to keep. Thank-you