Index Executive Mayor addresses Council
Date Added: 17 February 2014

Honourable Speaker, Chief Whip, Mayoral Committee Members, Councillors, Municipal Manager, Directors, Officials and the Media, it is my pleasure to welcome you to our first Council meeting in 2014.

PASSING OF MADIBA

Since our last Council meeting, our country suffered the loss of its greatest leader and hero of our nation, Nelson Rolihlahla Mandela. May the spirit of the great man rest in peace and may his example continue to guide and inspire us as we carry his torch forward.

ANNUAL REPORT 2012/2013

The annual report of Cacadu District Municipality for the financial year 2012/2013, is being tabled today prior to being circulated for public viewing and comment. The report is prepared in the format required by National Treasury and the Provincial Department of Local Government and Traditional Affairs.

A meeting of the MPAC must be convened to carry out a detailed analysis and review of these reports, and to draft an oversight report for discussion at the next Council meeting on 27 March 2013.

AUDIT OUTCOME

It is with great pride that I can announce that the Cacadu District Municipality received its seventh unqualified audit opinion, this time with no matters of emphasis. We did not quite achieve a clean audit because the Auditor General's Office found that we had categorized certain heritage assets as "property". They also found that our performance report lacked certain information. These two issues were termed as material misstatements which had to be corrected, and are the only reasons why we did not receive a clean audit.

I am also very proud of the fact that there were no new incidents of irregular expenditure in the financial year under review.

AUDIT OUTCOMES OF LOCAL MUNICIPALITIES

Our Finance Department has embarked upon a project aimed at improving audit outcomes of local municipalities. Local municipalities were requested to provide the Department with copies of their audit reports. Unfortunately, there are three municipalities, namely Sundays River Valley, Makana and Ndlambe, that have not responded to this request, and therefore currently only six municipalities are part of the programme.

Initial findings from the audit reports of these six municipalities is that two municipalities have improved from 2011/2012 to 2012/2013. These are Baviaans and Camdeboo Municipalities. The remaining four municipalities' audit outcomes have remained unchanged over these two financial years.

The purpose of the project is to assist local municipalities to improve their audit outcomes. It is therefore very important that all local municipalities participate. I appeal to the councillors who represent Makana, Ndlambe and Sundays River Valley to take this matter up with their administrations to ensure participation. Local municipalities need all the assistance they can get to improve their audit outcomes, and must take advantage of this opportunity.

STRATEGIC PLANNING SESSION

At the last Council meeting I reported that the Mayoral Committee together with Management held the first phase of a Strategic Planning Session to review the current model of the Municipality and map the way forward. This session took place on 14 and 15 November 2013. Preliminary findings indicated that the business model is still relevant; however a different approach to certain operational aspects is necessary. Among the key recommendations that came to light was that the Cacadu District needs to capitalize more on strategic initiatives and especially renewable energy projects, which are rapidly growing in numbers.

The report on the first session and arrangements for Phase 2 are currently being finalized by Management. Councillors will be advised of the date of the next phase, which will take place in February 2014. This is a matter which must be treated as urgent, because the outcomes of the Strategic Planning exercise must feed into our IDP review for 2014/2015.

PROJECT EXPENDITURE

Councillors, there is a report in our agenda today which deals with spending patterns of our Departments to date. This report paints a very poor picture regarding project expenditure. Not only is our own project expenditure way below the targets set, but it is also hampered by slow responses from local municipalities when it comes to issues relating to projects in their areas. Some LMs have even lost large amounts of funding through late submission or non-submission of rollover applications. Councillors, we all need to put measures in place to improve this situation. This municipality and its locals need to work more closely together. Officials need to develop a sense of urgency when it comes to service delivery to communities. Our strategic planning outcomes must be focused on finding ways to improve the way we work and enable our Departments to function optimally.

ADJUSTMENT BUDGET

1. Introduction

Mr Speaker, Council adopted its 2013/2014 Budget at a meeting held on 29 May, 2013. In terms of the MFMA, the adjustment budget as a result of a Section 72 midyear report will be considered today as more fully detailed in the agenda on pages 109 to 110.

It is now evident, from the December 2013 mid-year assessment report, that revenue targets may not be achieved due to underspending on projects financed from the accumulated surplus account.

It was however decided not to reduce any project budgets as this would have a major impact on the SDBIP as well as the performance plans of Senior Management. At Mayoral Committee meetings it was stressed that departments need to improve their departmental planning as well as project management activities to ensure that targets are met.

It is evident that there are a number of budget adjustments necessary that are affecting the operating and capital budgets.

2. Operating Budget

2.1 Amounts Already Approved (Budgets Adjusted at Previous Council Meetings)

2.1.1 Provincial government –long term medical benefits contribution

The additional amount approved is R4.1 million and relates to the employer's contribution to Pensioners medical scheme in respect of the previous road-works, Primary Health Care, and ambulance employees. The expenditure is funded from Grants received from the Department of Health and Department of Works. The municipality administers the monthly payment process on behalf of the provincial government.

2.1.2 District Development Agency

The District Development Agency has commenced operations and establishment costs are being incurred. It was considered that additional resources are required to fast-track the operations. An amount of R957173 has been allocated and approved by Council.

2.2 Additional Project and Operating Expenditure

The budget adjustments that are affecting the operating and capital include the following:

2.2.1 Intercity Bus Terminal

After enquiries and requests for quotations, it was found that the budget for the Intercity Bus Terminal was insufficient to fund a project of this nature, and thus an additional amount of R2 million is required to be able to commence this project.

2.2.2 Connect with Cacadu

In the past funding for libraries was allocated to the district municipality by the provincial government. As from the previous financial year, library funding was allocated directly to the local municipalities. Expenditure on Connect with Cacadu is also forming part of this operating budget for libraries and thus additional funding amounting to R950 000 is needed to accommodate all costs relating to the data telephone line rental.

2.2.3 Improving Audit Outcomes at Local Municipalities.

The original budget in respect of this project was reduced due to budget constraints. However in view of the success of the project and positive impact on the 2012/2013 audit opinions of local municipalities which participated in the project, and an attempt to include all local municipalities in the project, it is recommended that an additional

R 500000 be allocated to the project.

2.3 Operating Expenditure

Additional operating expenditure required amounted to R1 603 500 as more fully detailed on page 110 of the agenda and includes

Congress and visits R 100 000

Employee related costs R1503 000

3. Reduction of the Project Budget

Due to reasons more fully detailed on page 109 of the agenda it is recommended that the operating project budget be reduced as follows:

PMS support to local municipalities R 100 000

Restoration of fire hydrants 1000 000

Kou Kamma fire station 2500 000

4. Capital Expenditure

No additional capital expenditure was required based on the mid-year assessment. However, during previous Council meetings, an additional amount required for capital expenditure amounted to R959 656 which was to be financed from both the Municipal Systems Infrastructure Grant and the accumulated surplus account. The funds were required to finance the following items:

R

- IT Infrastructure 109 696

- Access Control System 600000

- Boardroom furniture 80 000

- Recording System – Council Chamber 170 000

TOTAL 959 656

5. Unforeseen And Unavoidable Expenditure

There was no unforeseen expenditure approved by the Executive Mayor and incorporated into this adjustment budget since the original approved budget.

6. Changes To Allocations And Grant Adjustments

Changes to allocations and grant adjustments are reflected in the budget supporting documentation. The changes related mainly to grants rolled over from the previous financial year. An additional grant of R456000 was also received from Eastern Cape Development Corporation.

Conclusion

This adjustment budget will result in an increase in the Operating Budget of R1909500 of which R456 000 is funded by a grant from ECDC and R1453500 from accumulated surplus.

The Service Delivery Budget Implementation Plan will be amended accordingly.

STATE OF THE NATION ADDRESS

The President of the Republic of South Africa, Mr Jacob Zuma, will deliver his State of the National Address to Parliament on Thursday, 13 February 2014. The President will take stock of the country's domestic and foreign situation, and provide direction to enhance our efforts to achieve a better life for all.

CACADU MATRIC RESULTS

I am proud to announce that despite the difficult conditions and circumstances in education, four young people from the District were amongst the top achievers in Matric in the province. They are:

Aviwe Menze TEM Mrwetyana Senior School, Grahamstown

Vivienne Dames Victoria Girls High School, Grahamstown

Louise-Mari Zietsman Gill College, Graaff-Reinet

Amandla Makhubalo Aeroville Senior School, Somerset East

Speaker, I would like to present a token of appreciation from this Institution to our four students. We want them to know that we are proud of their achievement, and wish them well in their future careers.

THANK YOU

K E KEKANA
EXECUTIVE MAYOR