Speaker of Council: Madam Nomadlozi Greta Hlongwane, Chief Whip of Council: Cllr. Thembile Nquba, Members of the Mayoral Committee, Councillors, Leaders of various political parties and the civic movement, The Municipal Manager: Mr. Sam Shabalala and members of the Senior Management Team and officials of the municipality, Members of the community, The business fraternity, Distinguished guests, Friends from the media, Ladies and gentlemen.

I stand before you bowing my head in sorrow and sympathy in solidarity with the people of Japan and New Zealand. We extend our condolences to those who perished from the devastating earthquake and tsunami.

We continue to support our national cricket team, the Proteas and wish to congratulate them in their victory against India on Saturday. We further wish them the best against Ireland in their quest for glory today.

The 21st March 2011 Madam Speaker marks the 51st anniversary of the Sharpeville Massacre. We continue to acknowledge those who fell at the hands of the brutal oppressive regime on the 21st March 1960.

Madam Speaker the month of March is a Human Rights Month. It is a confirmation of our constitutional imperatives to ensure the dignity of our people is restored by providing quality services.

Madam Speaker, this Council meeting is special in nature as it takes place at a time when the Kwa-Masiza saga has finally reached an end.

The degrading living conditions of our people will be improved for the better as the Gauteng Provincial Government will be moving in to upgrade the hostel.

This Council sitting is special in nature as we will be tabling both the IDP and Budget for community input. These two tools of governance are the one that determine the developmental trajectory and the future of our communities.

“ A year of job creation”

In his state of the Nation Address, President Jacob Zuma signalled that government is primarily concerned about the continuing high levels of unemployment and poverty in the country and our region has around 54% unemployment.

To address these concerns, 2011 has been declared a year of job creation.

Every sector and every government entity, regardless of size, is urged to focus on job creation. Every contribution counts in this national effort. All government departments will align their programmes with the job creation imperative. The provincial and local government spheres are requested to do the same.

The primary focus of the 2011/12 IDP and Budget should be in line with the theme of job creation as outline by President Jacob Zuma.

We have done more and more still needs to be done

Working together we have done more and more still needs to be done.

For the past five years we pride ourselves with a unique ward based model which was the first in the country. A model that yielded the construction of Evaton, Amatola, Dr. Nkomo, Batswana-Bakoena, Moshoshoe, Bonatla and Adams roads amongst others.

Through our partnership with the Evaton Urban Renewal the establishment of the Mafatsane Thusong Centre, paving of rods and the tarring of roads is a major achievement.

Our partnership with the Gauteng Provincial government for the erection of a taxi rank in Bophelong and the improvement of our transport and road network are a testimony to our cause for a better life.

Our partnership with Randwater has addressed the spillage of effluent into the Vaal River and has contributed immensely to the provision of clean water to communities.

These initiatives are supported by the R800 million Regional Sewer Scheme.

The establishment of the Rapid Response Unit and the effectiveness of our Petitions Committee have instilled confidence in the communities and have led to the speedy resolution of community concerns.

This has led Madam Speaker, a feat I am proud of, together with the Premier’s Hotline, with community members now coming directly to the Mayor’s office instead of calling the Presidential Hotline directly.

Of the 220 queries referred to the Presidential Hotline, we have resolved all issues.

The erection of the Evaton Fire Station, Community Hall in Evaton, the establishment of the Municipal Court in Vanderbiljpark and Vereeniging, the upgrading of the Sebokeng and the Palm Springs libraries are part of the flagship projects.

A lot has been done and more is still to be done.  The establishment of a Maize Triangle in Holfontein and the establishment of food gardens is part of our food security and rural and agricultural development.

We proud ourselves with the speedy provision of houses, provision of electricity and houses as part eradication of informal settlements.

We have cared for the elderly, protected children, provided shelter to the needy and looked after the sick, mentored and trained young people, fought the scourge of HIV and AIDS, fought crime and protected women from violence and abuse.

Madam Speaker I am proud to announce that our endeavours to achieve a clean audit are bearing fruit. We have moved from a disclaimer to a qualified audit.

The process of achieving a clean audit is in line with Operation Clean Audit 2012 and this process is irreversible.

“The ultimate measure of a man is not where he stands in moments of comfort, but where he stands at times of challenges and controversy” so said Martin Luther King Jnr.

I am inspired by the words of the 2nd century AD, poet, Publius Syrus, who once said: “I have always regretted my speech but not my silence.

As true servants our people, we should play direct role in the upliftment of our communities in bringing hope, sharing their pain, their experiences and lead with them without telling no lies and claiming no easy victories.

There are those amongst us who proclaim without nay factual basis or empirical evidence that Council is bankrupt whilst the truth is that, instead of putting peoples’ interests above ours, we retreat to our laagers and at the top our voices spread malicious propaganda.

The truth shall be told be and everything laid bare for everyone to see.

Whilst we admit that we face serious challenges as a result of backlogs and low revenue collection, we have invoked the intervention of Deloitte and Touche’ to salvage Council from the financial doldrums.

We need to be decisive and we are decisive. One of the most constructive steps is to overhaul the entire management component of the revenue department to ensure efficiency and accuracy accompanied by customer care.

Madam Speaker, let the truth be told. The interventions we have put in place entail fixing the billing crisis by ensuring that accounts are accurate and sent on time.

The days of those who steal electricity by way of illegal connections are over. The days of those who collude with revenue officials are over. Let the truth be told, those who do not pay for their services, expect the worst.

We have already started putting enforcements mechanisms in place where if you do not pay we cut.

As the President concluded:

“Our goal is clear. We want to have a country where millions more     South Africans have decent employment opportunities, which has modern infrastructure and a vibrant economy and where the quality of life is high. We all have the responsibility to work hard to make this a reality. Everyone must think of how they can contribute to the job campaign through creating opportunities for themselves and others.”

The draft budget and IDP that will be tabled today provides opportunities to mainstream labour intensive approaches to delivering services.

Vision 2055

• In her State of the Province Address, the Premier of Gauteng, Ms. Nomvula Mokonyane said “Our view has been, and still is today, that our global competitiveness should be based on internal cooperation within Gauteng, between spheres of government, the private sector, as well as civil society. In essence, our leadership role in matters of development is dependent on our ability to plan within along term horizon, accommodative of diverse views and with due consideration of alternative solutions”.

Vision 2055 is a re-affirmation of the Freedom Charter for houses, security and Comfort. Whilst we are proud of our achievements of the last years since the dawn of democracy, a lot has been and a lot needs to be done.

Vision 2055 seeks to address poverty, to provide shelter, food security, better roads in line with the Global Competitive City Region.

Constitutional mandate

The celebration of this 51st milestone of the Sharpeville Massacre re-affirms the supremacy of Constitution for the restoration of the dignity of our people. Sharpeville is a microcosm our national our identity, our unity, our cultural diversity and our heritage. This is where our constitution was born, our human rights entrenched and the journey for a better South Africa started.

Local government is a creature of the statute. The Constitution of the Republic places local government at the coalface of service delivery as a strategic tool to restore the dignity of our people.

This finds its expression in terms of section 155 of the Constitution which establishes local government. Its objectives are provided for by section 151 (1) of the constitution.

Based on a new vision for a developmental local government, the constitution mandates local government to provide democratic and accountable government, which will ensure provision of services to communities in a manner that would stimulate sustainable social and economic development.

The constitution further identifies the national, provincial and local spheres of government, all of which are required to observe the principles of cooperative governance.

Although these spheres of government are distinctive, interdependent and interrelated, they are required to function as a cohesive whole to develop a multi sectoral perspective, harnessing all public resources behind common goals and within a mutually supportive framework.

This system of intergovernmental relations has to provide and facilitate cooperative decision making, to coordinate and align priorities, budgets, policies and activities across interrelated functions and sectors, to ensure smooth flow of information within government, with a view to enhancing the implementation of policy and programmes.

Based on the principles of the RDP both the IDP and budget should reflect the needs and aspirations of the people. The six pillars of the RDP represent the innovation and philosophy of what we envision that is a people driven, integrated and sustainable process and link reconstruction with development.

This constitutes part of our strategic objectives of deepening democracy. Out this Madam Speaker arise an obligation on the part of councillors to ensure organs of peoples’ power are strengthened and our people being at the fore-front of our transformation agenda.

The service delivery protests that besieged us were a sign of our weaknesses in terms of collective leadership and governance as well communication with ward committees.

We need to interact and consult with communities on a constant basis with a view to strengthen relations between communities and government, there is   , as the fist point of contact between communities and government.

This will ingrain accountability and transparency, collective leadership and governance where service delivery protests will be a thing of the past.

Based on the principles of Reconstruction and Development Programme both the Integrated Development Plan and Budget should reflect the needs and aspirations our people.

Legislation requires us to subject the budget and IDP through intense public participation process for community input.

During the past five years since the last local government elections, our people mandated us ensure that we provide quality services.

It is out of this that both the IDP and budget should be reflective of the needs of communities.

We are therefore required to structure and manage our administration and budgeting and planning processes to give priority to the basic needs of the community, and to promote the social and economic development of the community.

Therefore Madam Speaker, our failure to fulfil our obligations as required by legislation is the violation of Human Rights and the Constitution of the Republic Of South Africa.

Integrated Development Plan

Madam Speaker in August 2010 you convened a Council to approve the IDP and budget process plan. The analysis and strategies phases are a premise upon which the IDP is pillared.

This Council is special in nature as we will be tabling both the IDP and budget for community input.

We are required in terms the Local Government: Municipal Systems Act no.32 of 2000 to formulate our Integrated Development Plan. This should be informed by the needs and priorities of a developmental state.

We have aligned our IDP with the local government key strategic objectives and incorporated the performance management system to determine and assess our performance and our ability to achieve our goals and targets. This also constitutes part of Operation Clean Audit.

We have repositioned our strategic path to be inline with the Global Competitive City Region initiative.

The Integrated Development Plan has made provision for capital projects funded in the amount R303 million to address electricity, waste, health, roads and storm-water, public safety, parks and cemeteries.

The challenges and demands of a complex developmental state required innovation and a review of our vision and mission. This warranted a complete overhaul of our core strategies in order to provide services in a sustainable and accountable manner.

The Turnaround Strategy is a vehicle geared towards the establishment of a machinery that has the capacity to change the lives of our people for the better.

Our new vision is that of “A developmental municipality that continuously improves the life of its community.”

Our new mission is that of “providing a responsive, effective, efficient, sustainable municipal services in an accountable manner.”

Our new motto: “The Vaal River City-The Cradle of Human Rights” is a step

towards ensuring that our Integrated Development Plan fits within the Vision 2055 paradigm.

Budget

This draft budget as will be presented to you today has been compiled under extremely tough operating conditions. The low collections rates which impact negatively on our ability to optimally rendered services is attributed to the economic meltdown and the inability of our communities to pay for services.

We have been innovative by embarking on a proactive approach in funding our operations and enhancing revenue and reducing costs through the following interventions:

• Focus on debt collection and intensification of credit control;
• Reduction of water distribution losses;
• Reduction of electricity distribution losses;
• Effective utilization of assets; and
• Better management of human resources.

Effective application of funds will not only result in improved service delivery but increase the revenue base of the municipality

Therefore the following activities have been identified as essential for the 2011/2012 operational budget:

Revenue collection and enhancement

This entails fast-tracking of smart metering, immediate implementation of credit control, establishment of a revenue Management Agency, auditing of bulk consumers through metering and billing and implementation of and access to Extended Public Works Programme grant and other funding.

Cost saving

As part of cost saving measures there will be utilization of alternative energy on public lighting, reallocation of and better management of fleet to fully utilize fleet and minimize its under utilization, increasing the salary threshold by 1% to address and reduce overtime, implement water demand management programme in former black townships and to enter into grant partnerships with the department of Water Affairs, Randwater and other agencies of government.

Cash flow management and financial viability

In ensuring financial viability there will be a reduction of bad debts through a debt collection process, management and restriction of expenditure in line with monthly cash flows, exploring public private partnerships for an independent power producer, independent water purification plan and solid waste renewable energy project.

INCOME AND EXPENDITURE

Revenue

The total revenue projected for the 2011/12 budget year amounts to R3.65 billion. This consists of R2.8 billion (78%) derived from internal resources and R803 million (22%) from grant funding, which includes Equitable Share totalling R539 million.

The proposed tariff increase for all services excluding electricity and water sales is 10%. The tariff water from Randwater is 13.4% whilst the cost to the consumer is approximately 15%.

An increase of 21.28% on electricity tariffs is proposed as approved by Nersa whilst the tariff increase from Eskom is 25.8%.

Expenditure

The projected expenditure for the 2011/12 budget, consist of R3 356 481 in respect of operation expenditure and an allocation of R 303 336 500 towards capital expenditure.

This represents an overall growth in the operational expenditure of R540 million (19.2%) and a decrease in the capital budget of R63 million (17%).

Operational Budget

The significant growth in operational expenditure is dominated by an increase in bulk purchase of Electricity and Water of R 260 million and R 49 million respectively, representing 78% of the total increase.

These increases are a direct result of tariff increase passed on from Eskom (25.8%) and Rand Water (13.4%).

• Contracted services reflects a growth if R 28 million (48%) from the 2010/11 operational budget. The most significant contributor to this increase is the inclusion of sufficient funding for grass cutting services which is a priority issue.
• Employee related cost increased by 9.5%. This increase is a result of:
  • Both Council Remuneration and Employee salaries are in line with the bargaining council agreement and CPI projections.
  • The inclusion of a R10 million provision for the wage curve adjustment.
  • Provision of R26 million in respect of vacancies.
  • 1% of salary cost to cater for overtime and acting allowances.
• Lease payments increased by 45% from the 2010/11 operational budget by R30m. The most significant contributor to this increase is a provision for R12m in respect of the new Municipal Court.
• Depreciation increased by 57% (R47 million) due to revised depreciation calculations and additional capital inclusion in the Asset Register.
• Repairs and maintenance reflects a growth of 16% (R29 million) in order to address critical maintenance on infrastructure, including roads.

Capital Budget

Due to the financial constraints, the capital budget for 2011/12 only includes contributions from the operational budget for counter funding for MIG projects, projected roll over projects and those capital projects directly linked to the increase in Electricity tariffs, as required by NERSA.

Cash flow

As a result of the increase in bulk purchases increases which cannot directly be passed on to the consumer, fixed monthly expenditure has significantly increased.

Taking into account that only 22.99% of the total operational budget is not committed to either a grant, bulk purchase or legal obligation, it is evident that revenue available for daily operations, other than fixed commitments, have significantly decreased.

The current payment level is approximately 74%. This necessitates a provision for bad debts of 26% totalling R544 million. The budgeted provision for bad debts of R290 million is less than the required amount.

The revenue enhancement interventions and cost savings measures should result in sufficient additional revenue and reduce costs to fund the shortfall.

The situation will be reassessed in the adjustments budget after six months.

Tariffs

The following are average proposed tariffs increases:

• Electricity 25.8% Subject to NERSA Approval
• Water 20% Subject to Council approval
• Refuse 10% Subject to Council approval
• Sanitation 10% Subject to Council approval
• Sundry Tariffs 10% Subject to Council approval

Although National Treasury has recommended inflationary increase of 4.8% for the 2011/12 budget, Emfuleni proposes an increase of 10% for sundry tariffs.

It must be noted that employee costs will increase by at least 6.8%, water by 13.4% and electricity tariffs by 25.8%.

Indigent Provision

The current drat budget 2011/12 makes provision of R115 million for free basic services and Indigent support.

Madam Speaker this Council is special in nature as it takes place at a time when we approach the end of the five year term of local government.

As an accountable government already we have submitted our five year end of term report to the provincial government.

The IDP and budget will be subjected to intense community scrutiny and input as part of participatory democracy.

Even under demanding and challenges times, we can put our heads above the water and navigate the through storms towards prosperity.

Our work will come to end until the last day elections. We should remain true servants of communities continue with our national effort to build a better country.

Our people have spoken and we have listened to their cry for quality life. The budget and IDP carry the hopes of millions our people. The 2011/12 budget should be an effective tool towards an attainment of a society that has an ability to build a vibrant regional economy, to create jobs, fight poverty, crime and rid society of the scourge of HIV and AIDS.

Louisa May Alcott, American novelist once said: “We all have our own life to pursue, our own kind of dream to be weaving. And we all have some power to make wishes come true, as long as we keep believing”.

For their dream of a better life to become true, Honourable Councillors, our people believe in us.

Inwoners het hulle vertroue in die leierskap geplaas en ons verantwoorddelikheid lê daarin om ons leierskap in ons arbeid uit te voer en inwoners inspraak daarin te gee.

Madam Speaker I hereby in terms of section 21 of the Municipal Systems Act 32 of 2000, section 127 (5) of the Municipal Finance Management Act, 53 of 2003 and Schedule A of the Municipal Budget and Reporting Regulations table the Budget and IDP 2011/12 and other Mayoral Committee items.

God seën u almal

Cllr. SA Mshudulu
Executive Mayor