Joburg Draft Medium Term Budget and draft tariffs

The City of Johannesburg’s Draft Budget 2020/21

COMMENTS FOR THIS BUDGET PERIOD ARE CLOSED, THANK YOU FOR YOUR PARTICIPATION


Our cities are deteriorating because municipal / metro councils and administrators are not being held accountable when it comes to planning and spending of your money. The process of accountability requires the public to participate and this is where we’ve made it easy for you to participate. 

OUTA is asking you as residents of Johannesburg to have your say on the City of Johannesburg's upcoming budget for 202/21, by clicking on the link below. This platform enables you to comment as you wish, or to extract and utilise some of OUTA’s comments that we have provided below. Please submit your comment before 23 June 2020. 

If we don’t participate, the City will simply say their residents support their budget and the many increases they are planning to implement.

View OUTA's press release here

Property Rates  will increase by 4.9% 

Why you should comment on the City of Johannesburg’s Draft Budget for 2020/21

  • In today's post Covid-19 pandemic world, where many residents and businesses are struggling to make ends meet, we ask one important question: Why is your City increasing any charges to its residents? Why is your City planning to increase its salaries at all, when this is not the reality for the private sector?

  • The City of Johannesburg has not factored in the effect of Covid-19 into its draft budget. This is a “business as usual” budget in a highly unusual time.

  • In the entire 219-page document, the draft budget mentions Covid-19 once – under the health category where the city made available a further R140 million to boost health services.

  • The city is proposing above-CPI increases in property rates and all tariffs. Your bill could rise by as much as 7% per month.

  • Employee costs are to rise by a staggering R843.4-million.

  • Councillors are to receive a 6.4% salary increase.

  • While the salary bill increases yearly the city continues to underspend on repairs and maintenance, with this trend not changing in the near future.

Staff salaries will increase of 6.25% for 2020/21

Quick Draft Budget Facts:

What are the proposed rates and tariff increases?



Service 2020/21 increase 2021/22 increase 2022/23 increase
Property rates 4.90% 4.80% 4.80%
Electricity provision 8.10% 5.22% 10.00%
Water provision 8.60% 8.60% 8.60%
Sanitation services 8.60% 8.60% 8.60%
Refuse collection 5.20% 4.70% 5.00%

        How much is spent on repairs and maintenance?

        For every R10 invested in plant, property and equipment (PPE), the municipality is expected to ringfence an additional 80 cents for repairs and maintenance, or 8% of the value of the asset.

        However, this has not happened since at least 2009 and this has resulted in the City underspending since 2009 to the value of R28.6 billion. The projections on this do not look good either. 

         

        Year
        Repairs and maintenance
        2018/19
        4.7%
        2019/20
        5.9%
        2020/21
        5.8%
        2021/22
        5.8%
        2022/23
        5.8%
        What does this mean?

        The City plans to ringfence only 59 cents for every R10 it has invested in PPE for the year ahead as opposed to the National Treasury recommendation of 80 cents.

        If the municipality built a new road for R1 million, every year they should invest a further R80 000 towards that road’s maintenance. Failure to do so could result in large potholes and general deterioration resulting in the lifespan of the road being significantly reduced. It could also lead to the damage of private property and, in worst-case scenarios, injury, or loss of life.

        How much is spent on salaries? 




        Sanitation (sewerage) will increase by 8.6%  

        Need to know more?

        If you would like to interrogate the budget further, then follow this link.

        The City of Joburg advert notifying residents that the budget is available for public comment can be found here.
          

        What should I look out for?

        Below are some areas of interest in the searchable PDF of the draft budget. Please search the page number (electronic page numbers) supplied for ease of use:

        Pg 12/13 – Revenue analysis: This provides details on how revenue is expected to increase from the current financial year. There is a pie chart showing how much each revenue item contributes to the budget.

        Pg 14 – The table presented shows the average property rates and tariff increases for the upcoming three financial years.

        Pg 15 – Expenditure analysis: This provides details on how expenses are expected to increase from the current financial year. There is a pie chart showing how much each expenditure item accounts for the budget.

        Pg 18 – Key financial indicators: These indicators give a snapshot of the health of the City. One indicator you might find interesting is the spend on repairs and maintenance. For more on understanding the indicators follow this link here.

        Pg 20 – Consolidated Budget Summary Table: This table shows revenue and expenditure for the preceding two financial years and the projection for the upcoming three financial years.

        Pg 47 – Property rates: This section provides details of the cents in the rand value which property owners will be charged depending on their property type (residential, agricultural, business, sectional title etc).

        Pg 121 & 122 –  Tables SA22 and SA23: Councillor and employee costs.