annual budget and medium term revenue and expenditure ......annual budget and medium term revenue...

Annual Budget and Medium Term Revenue and Expenditure Framework (2012-2013 / 2014-2015)


The City of Choice Second to None


The City of Choice Second to None 1

ANNUAL DRAFT BUDGET OF MSUNDUZI LOCAL MUNICPALITY

KZN225

2012/13 TO 2014/15MEDIUM TERM REVENUE AND EXPENDITURE FORECASTS

Copies of this document can be viewed:• In the foyers of all municipal buildings• All public libraries within the municipality• At www.msunduzi.gov.za

CITY HALLCHIEF ALBERT LUTHULI AVENUE

3201TEL: 033 392 3000FAX: 033 392 2397

WEBSITE: WWW.MSUNDUZI.GOV.ZA


The City of Choice Second to None2

LIST OF ABBREVIATIONS

DMM Deputy Municipal ManagerCoGTA Cooperative Governance and Tradition AffairsDPLG Department of Provincial and Local GovernmentSBU Strategic Business UnitWSP Workplace Skills PlanLG SETA Local Government Sector Education and Training AuthorityHDI Historically Disadvantaged IndividualUNISA University of South AfricaNQF National Qualifi cation FrameworkMOU Memorandum of UnderstandingIDP Integrated Development PlanMFMA Municipal Finance Management ActAIPF Associated Institution Pension FundSALAPF South African Local Authorities Pension FundMCPF Municipal Councillors Pension FundCLLR CouncillorAIDS Acquired Immuno Defi ciency SyndromeSAPS South African Police ServicesNPA National Prosecuting AuthorityPMB PietermaritzburgSCM Supply Chain ManagementHRM Human Resource ManagementSALGA South African Local Government AssociationVIP Ventilated Improved Pit LatrineSTATSSA Statistics South AfricaSDBIP Service Delivery and Budget Implementation PlanMIG Municipal Infrastructure GrantWSDP Water Services Development PlanSOC Standard Occupational CategoryBBBEE Broad Based Black Economic EmpowermentSMMES Small Medium and Micro EnterprisesCFO Chief Financial Offi cerAG Auditor GeneralMEC Member of Executive CommitteeMPAC Municipal Public Accounts CommitteeEXCO Executive CommitteeICT Information Communication TechnologyPMS Performance ManagementMPRA Municipal Rates ActMM Municipal ManagerKwanaloga KwaZulu-Natal Local Governance AssociationKPMG Klynveld Peat Marwick GoerdelerDBSA Development Bank South AfricaMIDI Msunduzi Innovation Development InstituteSAMWU South African Municipal Workers UnionIMATU Independent Municipal Allied Trade UnionDWAF Department of Water Affairs and ForestryFRP Financial Recovery PlanLTFP Long Term Financial PlanPIT Provincial Intervention TeamMANCO Management CommitteeMTREF Medium Term Revenue and Expenditure Framework



ANNUAL BUDGET 4

1. MAYORAL BUDGET SPEECH 92. EXECUTIVE SUMMARY 243. OPERATING REVENUE FRAMEWORK 264. OPERATING EXPENDITURE FRAMEWORK 365. CAPITAL EXPENDITURE 396. OVERVIEW OF THE ANNUAL BUDGET PROCESS 597. BUDGET PROCESS OVERVIEW 608. IDP AND SERVICE DELIVERY AND BUDGET

IMPLEMENTATION PLAN 619. FINANCIAL MODELLING AND KEY PLANNING DRIVERS 6310. COMMUNITY CONSULTATION 6411. OVERVIEW OF ALIGNMENT OF ANNUAL BUDGET WITH IDP 6512. MEASURABLE PERFORMANCE OBJECTIVES AND INDICATORS 6913. OVERVIEW OF BUDGET ASSUMPTIONS 7214. OVERVIEW OF BUDGET FUNDING 7515. LEGISLATION COMPLIANCE STATUS 7616. SUPPORTING DETAIL TO ‘BUDGETED FINANCIAL PERFORMANCE’ 77

REGISTER OF TARIFFS AND CHARGES 82

BUDGET RELATED POLICIES 149

1. RATES POLICY 1492. BUDGET POLICY 1673. VIREMENT POLICY 1874. CREDIT CONTROL AND DEBT COLLECTION RATES POLICY 1925. INDIGENT POLICY 2126. SUPPLY CHAIN MANAGEMENT POLICY 2177. TARIFF POLICY 252



ANNUAL BUDGETMUNICIPAL FUNCTIONS, POPULATION AND ENVIRONMENTAL OVERVIEW

Msunduzi Municipality provides Water, Sanitation, Electricity, Refuse Removal, & Housing as part of the Basic Services. It also provides Roads, Stormwater & Drainage together with Local Economic Development and the approval of local building plans to local communities. In the 2009/10 fi nancial year service delivery levels dropped due to low levels of payment for services, poor debtor collection, and so forth which inevitably lead to service standards dropping. This then called for the MEC for CoGTA to place Msunduzi Municipality under Administration in terms of Section 139 (b) of the Constitution.

In 2010/11 fi nancial year, with the expertise of the initial Administrator Mr Johann Mettler and the subsequent Mr Sbusiso Sithole, gradual but consistent changes were seen and service delivery standards and levels increased. Better quality services are now being delivered to communities; our streets are much cleaner, refuse began to be collected systematically, roadside verges are being cut, water standards rose to an extent where tests were com-pleted and information forwarded to DWAF to ascertain if Msunduzi Water should receive the blue drop status. Please refer to the Chapter on the Annual Performance Report for further details. Municipal VISION

Whilst we all agreed with our vision as below as it defi nes our current status in the Kingdom of KwaZulu Natal and inspiring us to strive for our City to be the City of Choice, this is an idea that we are aspired for together with community based structures, Non Governmental organizations, business sector, labour movements, traditional leadership, religious sector, youth and women formations, sport and cultural groups, institutions of higher learn-ing, civic organisations and other interest groups. We strive to maintain and model our City Vision in order to be:

Vision 2035

WE ARE A CITY OF CHOICE SECOND TO NONE!

uMbono ka-2035

SIYI DOLOBHA LEKHETHELO JIKELELE

VISION STATEMENT

Since we understand the mammoth tasks, challenges, potentials and capabilities that are existing in the City to enhance and where possible to turn around the architectural designs, planning and socio-economical limitations that were engineered and imposed through the systems of the previous government on the lives of South African society, this vision attempts to acknowledge our existing institutional and natural treasures, cultural diversity as our heritage and poses as a bacon of hope for all peace loving South Africans.

Our vision statement below must also be read alongside with our long term planning vision which is based on our invitation to all citizens of the City to begin to dream big about what will it takes to be a City of Choice and what our contributions thereof. Our invitation to all role players is to begin to Imagining Pietermaritzburg Beyond 2035 Vision whilst our short term realistic vision below represents our quantum leap towards our long term vision statement.



LOCALITY

With 649sq km in size, Msunduzi municipality commonly known as the “City of Choice” is located along the N3 corridor at a junction from Durban and Pietermaritzburg and an agro-industrial corridor stretching from Pieter-maritzburg to Escourt. It is located at the cross section of the N3 and Greytown Road corridor to the north, a tourist route to the Drakensburg and Kokstad Road to the South. It is the second largest city in Kwazulu-Natal, a capital city of the Province, and one of the ninth largest Cities in South Africa that are contributing almost 80% of the country’s GDP, and it is the main economic hub within the Umgungundlovu District. Its location has strong infl uence on regional channels of investment, movement and structuring of the provincial spatial framework for economic development and growth.

2.4. THE POPULATION OF MSUNDUZI: SOURCE STATSSA COMMUNITY SURVEY 2007

Total Population: 616 733

Population by Gender:

298423 318310

616733

Male Female Total

0

100000

200000

300000

400000

500000

600000

700000

Population by Race:

478451

African0

100000

200000

300000

400000

500000

600000

700000

34760

Coloured

68215

Indian or Asian

35307

White

616733

Total



Population by Age:

176853

0-14

0

100000

200000

300000

400000

500000

600000

700000

195905

15-29

125742

30-44

72990

45-59

32501

60-74

12742

75-85+

616733

Total

2.5. HOUSEHOLD & HOUSEHOLD SERVICES

Total Number of HouseholdsCommunity Survey 2007 108227

Water Service level: Community survey 2007

Inside Dwelling 79 813

Inside Yard 33 601

Piped water from access point outside the yard 14 688

Borehole 1 100

Spring 1 126

Dam/pool 265

River/stream 1 555

Water vendor 733

Rain water tank 202

Other 1 308

Toilet Facilities: Community Survey 2007

Flush toilet (with septic tank) 5 875

Dry toilet Facility 13 613

Pit toilet with Ventilation (VIP) 6 307

Pit toilet without Ventilation 22 458

Chemical toilet 2 300

Bucket toilet system 414

None 1 362



Electricity Service Level

Electricity 117 051

Gas 2 088

Paraffi n 10 209

Wood 4 592

Coal 250

Animal dung 69

Solar 59

Other 71

COMMENT ON BACKGROUND DATA:

The data provided herein is data used from the Community Survey 2007 conducted by Statistics South Africa.Msunduzi Municipality strives to ensure the backlogs in the delivery of Basic Services like Water, Electricity and Housing are reduced on an annual basis.



Deputy MayorThobani Zuma

M. ChettyM. InderjithE. MajolaJ. Ngubo

B. Lambert VacantP. Bhengu Vacant

City MayorChris Ndlela

SpeakerB. Baijoo

Chief WhipT. Magubane

MSUNDUZI MUNICIPALITY COUNCILLORS

T.P. Ndlovu

B.B. Ngcobo

L.J. WinterbachP. SitholeN. MsimangV.G.M. MleteM.A. MkhizeM. Maphumulo

S. Majola

M. Tarr P.G. NgidiT.P. NgcoboS.C. NdawondeT. MatiwaneS.I. Madonda

R. AhmedD.F. RyderJ. SinghM. SchalkwykM.B. Mkhize

S. GovenderT.I. DlaminiM.B. ZumaL.N. SikhakhaneJ.M. Ngcobo

N.Z. NdlovuA.L. MbanjwaK.M. NgcoboD.P. ZondiT.V. XuluP.B. Shozi S.C. Gwala A.B. Dlomo N. Atwaru

L.C. Ngcobo D.B. PhungulaF.M. MakhathiniT.S. MagwazaL.L. MadlalaS. Lyne

S.A. MkhizeF.N. MbathaJ.M. LawrenceP.N. DlaminiM.T. ButheleziD. Buthelezi

P.V. JacaC. BradleyR. SoobiahM.S. SokhelaR.B. SinghT.D. Ntombela

N.J. ZunguM.A. NgcoboM.H. MkhizeT.R. ZunguN. AhmedM.B.. Zuma

M.D. Ndlovu G.R. McArthur B.C. Sokhela

MSUNDUZI MUNICIPALITY - EXECUTIVE COMMITTEE



1. MAYORAL BUDGET SPEECH

Honourable Speaker, Cllr Baijoo; Deputy Mayor, Cllr Zuma Colleagues in the Executive Committee Fellow Councillors All Distinguished Guests present; The entire Management led by the Municipal Manager Ladies and Gentleman

It is indeed a great honour for me to stand before all of you to deliver the inaugural budget for this term of offi ce. Colleagues, I stand before you to deliver the 2012/2013 budget as required in terms of the MFMA. As I begin my presentation, I want to borrow a few wise words from the Poet, Richard McWilliam from his poem, What is a Dream?

“What is a dream? What is a dream?A dream is a goal, an inspiration; A dream is where Hopes Live”

Fellow Councillors and all Distinguished guests, if McWilliam is right in saying that a dream is where hopes lives, then what I am about to present here today is our dream because it is where our hopes will live . Not only that, it is where the hopes of the people of Msunduzi live and will for the next twelve months. This is also not only the hope of the citizens of Msunduzi, it is the hope of our Provincial Government, due to the mere fact that we are the Capital City and it is the hope of all those who travel from all corners of the country to our municipality, whether on a daily or regular basis. And if indeed this is their dream as I have no doubt that you will agree with me, we dare not fail them.

Mr. Speaker today’s event marks the end of the beginning and the beginning of the new era. It ends the process that was started by Mr Sithole the last Administrator and the Acting Municipal Manager, Mr Maseko, which culmi-nated in the mid-term budget review. This process was then handed over to the incumbent Municipal Manager, who has assisted me immensely to comply with my legal obligations of tabling the budget, at least 30 days be-fore the start of the new fi nancial year. During the process leading up to today, we met as EXCO, together with Management to look at the draft budget. This was then tabled to the full council for adoption as a draft on the 28th of March 2012. Subsequent to that, this was advertised for more than 21 days for inputs and comments from interested stakeholders.

Simultaneously we held public participation meetings with the civil society, all sector departments, NPO’s and NGO’s as well as the Traditional Leadership. These public participation meetings were not attended to as a matter of compliance, but were done in a manner that would ensure that “I budget yethu iphefumulelwe yibo bonke abantu base Msunduzi”. Before I go any further, I would like to convey my gratitude to all those who participated in this process and want to assure you that all your comments and inputs received our serious consideration, ir-respective of whether they feature in our fi nal budget.



The second phase of the budget preparation saw the Budget preparation committee, led by the Acting CFO, Mr Mtshali, sifting through the inputs and comments on the week beginning the 30th of April 2012. From the 7th to the 9th of May 2012, the EXCO, Chairperson of MPAC, Speaker, Chief Whip, Local Labour Forum together with the Senior Management held a Strategic Planning Workshop at Didima, where inputs, comments and various options were taken into consideration. When we left Didima in the afternoon of the 9th of this month, it was clear to us all that there was still a lot of work to be done. However, without fail, our Management held their Strategic Planning session from the 14th to the 16th of May 2012. Subsequent to this, a one day workshop was held with all Council-lors on the 22nd of May 2012, where presentations were made on the proposed fi nal IDP and Final Budget, as well as the proposed budget-related policies. At that workshop, we resolved that Party Whips should scrutinise the budget as presented and if need be, make further presentations to my offi ce. I want to place on record that no political party came back with further submissions after the workshop of the 22nd of May 2012.

The third phase, which is the fi nal and formal phase of the budget approval process started last week with the consideration of the IDP, Budget and Budget related policies by EXCO at its meeting held on the 24th of May 2012. Again at this meeting, there was consensus across political parties represented in the EXCO when it came to resolving to recommend both the IDP and Budget for approval by Council. It is therefore my sincere hope that the spirit that prevailed at the EXCO last week will permeate in this Council meeting as well. I am stating this, with no intention to supress any dissenting view, but to indicate that we have consulted extensively during the budget preparation process.

It is against this background Mr Speaker that as I stand before all of you today to present this budget, I am indeed presenting the people’s budget.

LEGISLATIVE REQUIREMENTS

Mr Speaker, Section 6(1) of the Municipal Systems Amendment Act states “a municipality’s administration is governed by the democratic values and principles embodied in section 195(1) of the Constitution”. Section 6(2) (a) further requires each municipality “to be responsive to the needs of local community and to facilitate a culture of public service and accountability amongst staff”

Mr Speaker, Section 21 of the MFMA requires the Mayor of a Municipality to: “(a) coordinate the process for preparing the annual budget and for reviewing the municipality’s IDP and budget related policies to en-sure that the tabled budget and any revisions of the IDP and budget-related policies are mutually consis-tent and credible”

Fellow Councillors, I have only mentioned the Constitution, the Systems Amendment Act and the MFMA. It is however a harsh reality that there are more other laws that requires our compliance during the budget prepara-tion process. As I stand here, I want to assure this house that we have done everything possible that we could do during the time available to us to ensure that we comply with all legal requirements.



TARIFF MODELING AND BUDGET PREPERATION ASSUMPTIONS

Mr Speaker, when a team of Senior Managers, led by the Municipal Manager, went to the National Treasury for the Benchmarking Exercise on the fateful day of the 30th of April 2012, the comments from the National Treasury were as follows:

• Our tariffs are not cost refl ective; • Business is subsidized by residential consumption for water; • Our rates exemption of R150 000 offered to all ratepayers is far too generous and does not make sense

compared to other bigger cities .• Also that in comparison to other municipalities, the R150 000 is extremely high since the current value of an

RDP house is approximately R70 000.

With this in mind we then began the process of exploring various options.

Option 1

The fi rst option was to reduce the threshold from R150 000 to R120 000 with a 7% and 8% increase, the additional revenue derived is refl ected in the table below:

Original Budget Projected Revenue Additional Revenue (Option 1)

7% at R150 000 R538 819 908 R22 531 041

8% at R150 000 R543 874 093 R22 741 611

Option 2

Reducing the threshold from R150 000 to R100 000 with a 7% and 8% increase, the additional revenue derived is refl ected in the table below:

Original Budget Projected Revenue Additional Revenue(Option 2)

7% at R150 000 R538 819 908 R37 581 766

8% at R150 000 R543 874 093 R37 932 997

The Council opted for option 2 in this regard. Refuse Tariff modelling

• National Treasury suggested that growth be included within the original budget and indicated that 5% in-crease is below infl ation :

• The Waste Management Section provided input and a 10% growth was suggested.

Original Budget Projected Revenue Additional Revenue

7% + 10% growth R55 973 013 R4 724 020

8% - 10% growth R56 496 125 R4 768 775



Water tariff modelling

Mr Speaker, you will recall that when we started the budgeting process, our proposed tariff was 22%. This was informed by the tariff increase imposed on us by the bulk supplier, Umngeni water and the demand for further capital outlay in areas where there is still no supply of portable water. Many of the inputs that we received were not happy with the proposed increase and we did listen. In addition, the comments from National Treasury in this regard were as follows:

• The proposed 22% hike was too high in comparison to other municipalities; • That the household consumers were subsidizing Business; and that • There was a need to introduce block tariff for business to close the gap between residential and business;

and,• The Municipal Water department was running at a loss.

Informed by the comments as outlined above, we looked at the two options for water tariff modelling, which was:

Option 1

Increase the water tariff by 8% and introduce a basic charge of R 15 for residential and R 25 for others.

Option 2

The second option was to increase the tariff by 15% for residential, 17% for other and introduce a basic charge of R 15 and R 25 for residential and other respectively.

The impact of the two options is illustrated in a table below. Mr. Speaker the EXCO recommended option two and that has informed the preparation of the fi nal budget before you today.

% Increase Basic Charge Projected Revenue

8% R15 residential andR25 other -R8 492 903 additional revenue

R301 718 455

15% - residential17% - Other

R15 residential andR25 other -R8 492 903 additional revenue

R317 M (Block tariff for commercial)

As we move forward, this tariff modeling will allow us to vary the basic charge in a manner that will assist the municipality to absorb a portion of the Spring-Grove dam construction, without effecting a huge tariff increase in terms of percentages.

In addition, Mr Speaker we are proposing to this Council a blocked tariff increase, on a sliding scale for major water consumers. This is a paradigm shift from the previous static R 11.50 per Kilo litre. The proposed blocked tariff is as follows:



Sliding Scale 17%

Block Tariff 0-30kl 13.46

31-60kl 15.00

61-100kl 17.60

>100kl 13.46

Mr Speaker, our position with this proposal is that we are moving away from a one size fi ts all situation whilst at the same time, not killing the goose that lays the golden egg, in the form of the commercial and industrial users of water. This presents a perfect balance for our situation.

BUDGET ASSUMPTIONS

The following assumptions have been used to prepare the proposed fi nal budget,

Headline infl ation forecasts

As part of the process of setting tariff increases and increasing the budget expenditure, National Treasury issued an infl ation forecast through MFMA circular No 58 for 2012/13 of 5.4%. This has been well considered and this resulted in an increase in all tariffs except electricity and water to be increased below 10%.

Revision of rates, tariffs, and other charges

As detailed in paragraph 1 above, when revising tariffs, rates and other charges, infl ation forecasts have been considered to ensure that all proposed increases do not exceed 17%.

Further to the above, the labour and other input costs of services have been taken into account to ensure fi nancial sustainability, local economic conditions and the affordability of services and also taken into consideration the municipality’s indigent policy.

In this regard, the municipality has tried to keep the proposed rates, tariffs and other charges as low as practically possible.

Eskom bulk tariff increases

Due to an announcement of Eskom bulk increases by NERSA, the municipality’s proposed increases on elec-tricity tariffs is 16% as guided by NERSA. The fi nal approved tariffs will be subject to NERSA. These tariffs will increase above the budget circular guideline increase as this is beyond the Municipality’s control as a result of Eskom’s bulk purchases increase.



Funding choices and management matters

Tough decisions on the expenditure side will have to be made by giving priority to ensure that service delivery is improved in all aspects as follows:

• Supporting of meaningful local economic development initiatives that foster micro and small business op-portunities and job creation;

• Supporting of the day to day operations for provision of service delivery; • Expediting spending on capital projects that are funded by conditional grants and MIG; and • Supports meaningful special programs for community groups.

MFMA Circular No.58 and 59 of 2012

The circulars referred to above have provided guidance on budget preparations on many aspects which on these current budget preparations include amongst other things the infl ation forecast for increases as considered. These circulars further provide guidance to municipalities for the preparation of 2012/13 Budgets and Medium Term Revenue and Expenditure Framework. The main guidance provided is on the councils need to ensure that the inputs into 2012/13 budget and MTREF safeguard the fi nancial sustainability of the municipality.

BUDGET RELATED POLICY REVIEW

Mr Speaker, the MFMA requires the municipality to review budget-related policies on an annual basis at the same time that it is preparing its budget. We have also done as such and would like to quickly take you through the policy changes that we have reviewed:

i) Credit Control & Debt Collection Policy: The changes to the Credit Control and Debt Collection policy encompass stricter credit control measures with respect to prepaid meters. Previously, the Credit Control and Debt Collection policy did not make provision for credit control action in respect of prepaid meters. The policy has been amended to ensure that there are no revenue leakages within this ambit.

ii) Rates policy: The changes to the Rates policy are in terms of the Municipal Property Rates Act and accom-modates the introduction of a rebate for developers and child headed households as outlined in the tariff register. These categories of owner are defi ned in the policy.

iii) Tariff Policy: The changes to the tariff policy specify the change in terminology of the indigent tariff. The policy has been amended to apply the indigent tariffs as specifi ed in the tariff register whereas previously this was referred to as a lifeline tariff.

iv) Indigent Policy: The changes to the Indigent Policy are in terms of National Treasury recommendations. The policy has been amended to apply the indigent tariffs as specifi ed in the tariff register whereas previ-ously this was referred to as a lifeline tariff. The concessions have been amended as per National Treasury recommendations.



LONG TERM FINANCIAL PLAN

Mr. Speaker, fellow Councillors, ladies and gentleman, we all know where Msunduzi comes from and I don’t think there is one individual across the political spectrum, who would want to see a repeat of what we experienced during the Provincial Intervention Team (PIT) as well as the Mettler and Sithole era. All of them did their work, for which we are very much appreciative, but we are duty bound, as a collective, to ensure that this municipality never goes through that experience again. A few words from one great Nigerian Poet, and Writer, Ben Okri, which, in my opinion are relevant to our situation, go as follows:

“The most important thing about us is our capacity to create, to overcome, to endure, to transform, to love, and to be greater than our suffering”

To me these words are as if Ben Okri meant them for us. As we emerge from an era that should never come back to revisit us, we are today closing this chapter and gradually but surely, moving towards a city of choice, second to none. We have put in place four pillars, from which our City of Choice will stand from, and these are:

1) Professionalism and Depoliticisation of the administration; 2) Compliance; 3) Revenue enhancement; and 4) Effective and effi cient Service delivery.

Separate from the IDP and Budget preparation process, the Management has been working with the National Treasury to put together the Long Term Financial Plan (LTFP). Fellow Councillors this is the fi rst outlook into the future where we as this Council are beginning to say what kind of Msunduzi are we envisaging 10-20 years from now. I know that the question that comes to many people’s mind is what is the Long Term Financial Plan, what does it incorporate and what does it mean to an ordinary citizen? In my answer, I think it is prudent to fi rst answer the question of why do we exist as an institution, what is our role, legislatively and otherwise? Firstly we have the Vision, the Mission, Organizational goals and Strategic Objec-tives. These are all encapsulated in our IDP and we spent a lot of time reviewing them at Didima. From these documents, the answer is very simple, as Msunduzi, we therefore exist to:-

• Plan, monitor and administer fi nancial and Community assets;• Ensure that resources are used effectively, effi ciently and appropriately to improve the quality of life for all

people within Msunduzi;• Represent our Community by providing leadership and stewardship; and• Ensuring that Municipal services to the Community are provided in a responsible and sustainable manner.

Therefore Mr Speaker From a policy perspective the LTFP is aimed at ensuring that the Municipality has suffi cient and cost-effective funding in order to achieve its long term objectives through the implementation of the medium term operating and capital budgets.

The purpose of this LTFP is therefore to:-

• Ensure that all long term fi nancial planning is based on a structured and consistent methodology in order to ensure the long term fi nancial sustainability of Msunduzi;

• Identify assets (including human resources) investment requirements and associated funding sources to ensure the future sustainability of Msunduzi;

• Identify revenue enhancement and cost saving strategies in order to improve service delivery at affordable rates and tariffs; and

• Identify new revenue sources as funding for future years.



The Msunduzi LTFP takes cognisance of the following additional factors:-

• A collaborative and visionary process. The LTFP does not just forecast the status quo into the future but considers different possible scenarios and involves all stakeholders, elected offi cials, line departments, and the public to help identify fi nancial issues, develop consensus strategies, and ensure a successful imple-mentation.

• A combination of technical analysis and strategising. Long-term forecasts and analysis are used to identify long-term imbalances and fi nancial strategies are developed to counteract these imbalances or inequities.

• An anchor of fi nancial sustainability and policy development. The plan develops big-picture and long-term thinking among elected and appointed Offi cials and also aims to ensure alignment and credibility of the IDP.

• Long term in nature. The plan also covers between fi ve and ten years but some components take a longer view. For example, the plan may include a 20-year forecast of infrastructure needs. In this regard the key is to match this time horizon with the fi nancial strategies of the Municipality.

• Aligned to the Financial Recovery Plan (FRP). The LTFP is not intended to replace the FRP but to rather supplement the FRP and the MTREF Budget of the Municipality.

Without dwelling much on the Long Term Financial Plan, since many of you have not been able to interact with the document, I am appealing to this Council to adopt and mandate the EXCO to monitor its implementation and submit progress reports at least on a quarterly basis. I am also appealing to all of you to familiarise yourself with the document as it has a huge potential not only for fi nancial stability but to ensure that as an institution, we are elevated to another level.

Mr Speaker, when I was addressing the MANCO Strategic Planning Session that took place on the 14th of May 2012, I told the Management that the character of this municipality going forward will be judged by the manner in which we respond to people’s service delivery needs and the quality of our response. In twelve months from now, we want you all to be the judges of whether we have achieved this or not.

WORDS OF GRATITUDE

Mr Speaker, EXCO members and fellow Councillors, let me take this opportunity to convey a few words of grati-tude on your behalf:

1) The Offi ce of The Premier - First we want to convey our words of gratitude to the Offi ce of the Premier for their tireless efforts and contribution in ensuring that Msunduzi reclaim its position as the Capital of the Province in all respects;

2) KZN COGTA - We also want to thank the MEC for COGTA in KZN, Ms Dube for her continued support to Msunduzi, despite the withdrawal of Section 139. As I table this budget, we have in our midst three local government experts, all presenting critical skills to this organisation, at no cost to this municipality. In ad-dition, KZN CoGTA has funded a number of capital projects, which are contributing in the restoration of people’s confi dence in the sphere of local government. We thank COGTA for this;

3) Provincial Treasury - Assisted with many initiatives including operation khokha ngesikhathi, funding for the Pietermaritzburg Airport, development of the risk management register, to name but a few.



3) National Treasury - Mr. Speaker a six member delegation led by the Municipal Manager went to the Na-tional Treasury as part of the bench marking exercise on the 30th of April 2012. The feedback that I received from the Municipal Manager, even before the team left Pretoria was, if I may sum it up “that the National Treasury tore their budget proposal apart and directed that they revisit the whole thing”. Mr Speaker, I have no doubt in my mind that the expressions from the National Treasury were not personal and were not directed at any individual. Instead they were meant to ensure that my presentation today will be able to stand the test. For that I want to convey a word of gratitude to the National Treasury Team under the leadership of Mr Jan Hattingh. In addition, Mr Speaker, a second team has been silently working with our Management preparing the Long Term Financial Plan. This team has been working under the leadership of Mrs Thalitha Cossa. We also want to convey our gratitude to Thalitha and her team;

4) The Msunduzi Exco and Council - We want to convey our gratitude to all Cllrs, particularly EXCO mem-bers, who participated in the budget preparation process. We thank you for your contributions and now request that you to take the very same budget to all corners of our municipality and sell it to the community.

5) Msunduzi Management - Mr. Speaker, section 68 of the MFMA states that the Accounting Offi cer must –

a) Assist the Mayor in performing the budgetary functions assigned to the Mayor in terms of Chapters 4&7 of the MFMA; and

b) Provide the Mayor with the administrative support, resources and information necessary for the performance of those functions.

Mr Speaker, I want to convey my gratitude to the entire Management, led by the Municipal Manager, for go-ing beyond the requirements of section 68 during the budget preparation process. I am aware that some of them have been spending more time in their offi ces than they would normally do. If the commitment, unity and selfl essness shown by all during the budget preparation, continue beyond the budget approval, I have no doubt that we will be able to implement all projects as set out in our budget and SDBIP. To the entire management thank you very much.

6) Other Participants - Last but not least, my gratitude goes to all who have taken time off to look at our IDP, Budget and Policy proposal and submitted inputs and comments. To all of you thank you very much, there was no input too small.

CONCLUSION

Mr Speaker, Chief Albert Luthuli, former President of the ANC, addressed the South African Congress of Demo-crats on the 1st of February 1958. In his speech entitled, Our Vision is a democratic Society stated:

“A man has really one speech to make. He may clothe it in different words, but in essence it is the same speech. Those of us who are in the freedom struggle in this country have really one gospel. We may pos-sibly shade it in different ways, but it is a gospel of democracy and freedom.

Ladies and gentleman, it is my considered view that the words of Chief Luthuli, in 1958, remain relevant in 2012. We all have to preach the same gospel. We may shade it differently depending on where you come from and where you stand in the society. At the end of the day, our gospel remains that of democracy and freedom. This democracy and freedom should be translated into uninterrupted effective and effi cient delivery of sustainable and affordable services to all our citizens.

Sadly, fellow Councillors, Ladies and Gentleman, Chief Albert Luthuli was served with banning orders soon after this speech.



Honourable Speaker, Deputy Mayor, Fellow Councillors and all present here today, as I move towards conclusion, let me once again borrow from the same poem of Richard McWilliam, “What is a dream?”

“That is a dream Get yourself a dreamAnd never, ever let your dream get away”

Mr Speaker, Fellow Councillors and distinguished guests, we have just presented a dream, and it is my hope that none of us will allow this dream to get away. But that instead, we will turn it into real, measurable and achievable service delivery targets that will benefi t the entire Msunduzi populace.

With these Mr Speaker, I so move that the Council:

MOVE FOR THE IDP ADOPTION

That the Executive Committee resolves to recommend to Council:

6.1. That the IDP for 2012/13 – 2016/17 be adopted.6.2. That the Vision 2035, Vision Statement, Mission Statement, Goals and Values as amended in annexure A

be adopted. 6.3. That the Municipal Manager be authorised to submit the revised IDP for assessment by COGTA within ten

days after approval.6.4. That the comments by the MEC for Co-operative Government and Traditional Affairs on the draft IDP

2012/13 – 2016/17 as annexure B be noted

ANNEXURE A

1. THE VISION The City of Choice Second to None

2. The Vision Statement

A safe, Vibrant City in which to Live, Learn, Raise a Family, Work, Play and Do Business

3. MISSION STATEMENT

To ensure that the Municipality functions effectively and in a sustainable manner in order to deliver services of excellence to the community.

4. ORGANISATIONAL GOALS

• A healthy citizenry with access to affordable, quality health care.• A safe city with low crime levels and quality living areas.• An effi ciently managed, fi nancially viable and sustainable, city• A well governed city underpinned by meaningful public participation• A vibrant economic centre, attracting investment, supporting business development and creating jobs• A city where all have access to habitable human settlements – decent houses, clean water and proper sani-

tation• An environmentally sustainable and healthy city• A well planned, spatially integrated city



5. STRATEGIC OBJECTIVES AND A 6 POINT PLAN

5.1. FINANCIAL VIABILITY AND MANAGEMENT

Plan 1: Build a strong institutional, fi nancial and sustainable base

Strategic Objective:

(a) To promote sound fi nancial management and reporting, effective budgeting and revenue en-hancement

5.2 LOCAL ECONOMIC DEVELOPMENT

Plan 4: Create an environment for economic growth and development to enhance the municipal contribution to job creation and sustainable livelihoods through a Local Economic Development Plan


(b) To stimulate economic growth through job creation, promotion of BBBEE, development of SMME’s, co-operatives and agri-industry

(c) To promote sustainable tourism.(d) To promote and stimulate business investment, retention and expansion

5.3. BASIC SERVICE DELIVERY AND INFRASTRUCTURE DEVELOPMENT

Plan 2: Improve quality living environments through basic access to water, sanitation, electricity, waste management, roads and disaster management


(e) To improve access to affordable housing and facilities that promote quality living areas.(f) To improve accessibility and maintenance of habitable human settlements and facilities(g) To provide a responsible facility for the disposal of waste in a manner that is socially and envi-

ronmentally acceptable.

5.4. GOOD GOVERNANCE AND PUBLIC PARTICIPATION

Plan 5: Build a cohesive system of governance that translates deepening democracy into a meaningful since to public participation

Strategic Objectives:

(h) To develop an effi cient, effective and accountable administration(i) To promote full participation of all stakeholders in the planning, implementation and decision

making of the municipality.(j) To improve basic literacy of society with special focus on targeted groups



5.5. INSTITUTIONAL DEVELOPMENT AND TRANSFORMATION

Plan 5: Build a cohesive system of governance that translates deepening democracy into a meaningful sense to public participation


(k) To build a productive, knowledge based organization that will respond adequately to the needs of the community and the city.

(l) To develop the capacity and safety of our workforce.

5.6. ENVIRONMENTAL PLANNING & SOCIAL SERVICES

Plan 3: Provide safe, healthy and secure environment (environmental health and public safety

Plan 6: Ensure integrated, sustainable spatial planning and development (planning, SDF, EMP


(m) To ensure that all communities have access to social Services(n) To contribute towards a health, safe and secure environment with special focus on children,

youth, women and people with disability(o) To promote sports and recreation, and arts and culture(p) To promote a long term development vision and harmony in planning

6. OUR CITY GUIDING PRINCIPLES

To underpin all development activities:

• Ubuntu : Humanity, I am what I am because of who we are• Hard Working : Passionate and committed to one’s work• Competence : Having requisite skills, knowledge, behavior and appropriate attitude in executing one’s

work effectively and effi ciently • Integrity : To maintain and demonstrate good governance and honesty

ANNEXURE B

COMMENTS BY THE MEC LOCAL GOVERNMENT AND TRADITIONAL AFFAIRS (COGTA) ON THE DRAFT IDP 2012/13 – 2016/17

LOCAL ECONOMIC DEVELOPMENT

• Useful data from which strategic goals and detailed strategies have been compiled, notably promoting in-ward investment, business retention, and the promotion of key sectors, co-ordinated tourism and support to informal traders.

• In addition, a number of critical intervention projects have been identifi ed for intervention such as Freedom Square and the Airport. A detailed implementation plan has been compiled and is provided in your IDP guid-ing future economic development and planning in your Municipality. It is noted that the implementation plan is linked to KPA’s, objectives and indicators.



BASIC SERVICE DELIVERY AND INFRASTRUCTURE INVESTMENT

• A hierarchy of applicable sector plans. • Details on backlogs are provided to inform investment decisions but is noted that staff vacancies are high

in your service sub-units. • Planning and prioritization has been done but does not inform future budget compilation.

FINANCIAL VIABILITY AND FINANCIAL MANAGEMENT

• IDP acknowledged the concern of a qualifi ed Auditor General (AG) report and your detailed management response thereto is noted.

• Your municipality is urged to keep reporting in future IDPs on progress in addressing the AG’s concerns and issues.

• With regard to revenue generation it is noted that there is a strategy in place to address debtors. • Noted that that the municipality has been able to secure a number of grants other than the MIG.

GOOD GOVERNANCE AND COMMUNITY PARTICIPATION

• From an IGR perspective, it is noted that due recognition is given by your Municipality to the role of the Traditional Leadership.

• It is further noted that a number of Government Departments have become involved in your IDP processes given the sector department details provided.

SPATIAL DEVELOPMENT FRAMEWORK (SDF)

• It is evident that your SDF is directed by logical spatial strategies, directly integrated within the IDP. I how-ever found the maps contained within your SDF to be illegible. It is evident that the IDP, including the SDF summary, is aimed at the wider Msunduzi community

• The translation of key sections into isiZulu is commended. Furthermore the identifi cation of activity nodes and corridors with direct interventions required are noted.

• The formulation of a clear development framework for the Edendale Corridor as included, is highly com-mended. I further note that your SDF makes specifi c mention of the intention to establish an Area Based Management system within your municipality.

• More detailed planning around key resources should be considered. It is unclear as to what localised reali-ties and structuring elements informed the formulation of the SDF as your summary does not include any maps or analysis information.

• I fi nd that the submitted SDF does not provide clear land use management guidelines.• I recommend that improved linkages between your SDF and the municipality’s Capital Investment Frame-

work be established in order to facilitate the implementation of the SDF. • Furthermore, there is little evidence of planning integration with surrounding municipalities and I recom-

mend that this be more directly addressed in the review of your SDF.

CONSIDERATIONS FOR WESTERN CORRIDOR (N3) DEVELOPMENT

• Please be advised that the Western Corridor Development which is the area from the Ethekwini Metro to Howick (N3) is to be considered in your next IDP.



CONSIDERATIONS FOR COMMUNITY-BASED PLANNING

• It is recommended that your Community Based Plan (CBP) be replicated in other wards of your municipality. We urge your municipality to clearly incorporate your CBP into the IDP. The next step will now be moving towards implementation of the CBP.

Msunduzi IDP Credibility Over 5 Year Horizon

78.57

2007/20080.00

10.00

20.00

30.00

40.00

50.00

60.00

70.00

80.00

90.00

100.00

2008/2009 2009/2010 2010/2011 2011/2012

75.19

92.59

71.4978.57

MOVE FOR THE ADOPTION OF THE BUDGET AND RELATED POLICIES

That the Executive Committee resolves to recommend to Council to approve the following: 1) Final operating and capital budget as refl ected in Summary of Final Operating and Capital Budget Sched-

ules for 2012/2013 of R 3,212,660,000 be approved by the Council.

2) Final operating revenue and expenditure budget as refl ected in Summary of Budget Financial Performance Schedules for 2012/2013 of R 2,987,790,000 and R 2,982,646,000 respectively be approved by the Coun-cil.

3) Final Capital expenditure budget of R 230,014,000 be approved by the Council.

4) The Budget related policies listed below and attached to the fi nal budget that were reviewed and amended after public consultative meetings be approved by the Council:

• Register of Tariffs and Charges• Budget Policy• Virement Policy• Credit Control and Debt Collection Policy• Rates Policy• Indigent Policy• Supply Chain Management Policy• Tariff Policy



5) The proposed property rates and taxes imposed for the budget year 2012/ 2013 be approved by the Council as follows:

a) Residential net rate randage of 0.0111 cents in the rand ; b) Other (business) net rate randage of 0.0196 cents in the rand ;c) Public Service Infrastructure net rate randage of 0.0027 cents in the rand ; d) Farms and Agricultural net rate randage of 0.0027 cents in the rand e) Rural communal properties net rate randage of 0.0174 cents in the rand f) Home business and DSF net rate randage of 0.0141 cents in the rand g) Sectional titles and garages net rate randage of 0.0111 cents in the rand h) Mining net rate randage of 0.0196 cents in the rand

6) That all other proposed service tariffs and charges be approved as listed in the Register of Tariffs and Charges.

I thank you. Ngiyabonga Baie dankie

Presented by Cllr C.J. Ndlela Mayor: Msunduzi Municipality May 30, 2012



2. EXECUTIVE SUMMARY

The application of sound fi nancial management principles for the compilation of the City’s fi nancial plan is essen-tial and critical to ensure that the City remains fi nancially viable and that municipal services are provided sustain-ably, economically and equitably to all communities.

The City’s business and service delivery priorities were reviewed as part of this year’s planning and budget pro-cess. Where appropriate, funds were transferred from low- to high-priority programmes so as to maintain sound fi nancial stewardship. A critical review was also undertaken of expenditures on noncore and ‘nice to have’ items.

The City has embarked on implementing a range of revenue collection strategies to optimize the collection of debt owed by consumers. Furthermore, the City has undertaken various customer care initiatives to ensure the municipality truly involves all citizens in the process of ensuring a people lead government.

National Treasury’s MFMA Circulars No. 51, 54, 55, 58 and 59 were used to guide the compilation of the 2012/13 MTREF.

The main challenges experienced during the compilation of the 2012/13 MTREF can be summarised as follows:

• The ongoing diffi culties in the national and local economy;• Aging and poorly maintained water, roads and electricity infrastructure; • The need to reprioritise projects and expenditure within the existing resource envelope given the cash fl ow

realities and declining cash position of the municipality;• The increased cost of bulk water and electricity (due to tariff increases from Umgeni Water and Eskom),

which is placing upward pressure on service tariffs to residents. Continuous high tariff increases are not sustainable - as there will be point where services will no-longer be affordable;

• Wage increases for municipal staff that continue to exceed consumer infl ation, as well as the need to fi ll critical vacancies;

• Affordability of capital projects – original allocations had to be reduced and the operational expenditure as-sociated with prior year’s capital investments needed to be factored into the budget as part of the 2012/13 MTREF process; and

• Availability of affordable capital/borrowing.

The following budget principles and guidelines directly informed the compilation of the 2012/13 MTREF:

• The 2011/12 Adjustments Budget priorities and targets, as well as the base line allocations contained in that Adjustments Budget were adopted as the upper limits for the new baselines for the 2012/13 annual budget;

• Intermediate service level standards were used to inform the measurable objectives, targets and backlog eradication goals;

• Tariff and property rate increases should be affordable and should generally not exceed infl ation as mea-sured by the CPI, except where there are price increases in the inputs of services that are beyond the con-trol of the municipality, for instance the cost of bulk water and electricity. In addition, tariffs need to remain or move towards being cost refl ective, and should take into account the need to address infrastructure backlogs;

• There will be no budget allocated to national and provincial funded projects unless the necessary grants to the municipality are refl ected in the national and provincial budget and have been gazetted as required by the annual Division of Revenue Act;

In view of the aforementioned, the following table is a consolidated overview of the proposed 2012/13 Medium-term Revenue and Expenditure Framework:



Total operating revenue has grown by 13.29 per cent or R350,55 million for the 2012/13 fi nancial year when compared to the 2011/12 Adjustments Budget. For the two outer years, operational revenue will increase by 25.41 percent (R670,211) and 39.19 per cent (R1,033,592) respectively, equating to a total revenue growth of R1,703,803 over the MTREF when compared to the 2011/12 fi nancial year.

Total operating expenditure for the 2012/13 fi nancial year has been appropriated at R2.99 billion and translates into a budgeted surplus of R5.14 million. When compared to the 2011/12 Adjustments Budget, operational expen-diture has grown by 7.56 per cent in the 2012/13 budget and by 17.45 and 29.78 per cent for each of the respec-tive outer years of the MTREF.

The capital budget of R230 million for 2012/13 is 34.51 per cent less when compared to the 2011/12 Adjustment Budget. The reduction is due to various projects being fi nalised in the previous fi nancial year as well as affordabil-ity constraints in the light of current economic circumstances. The capital programme decreases to R230 million in the 2012/13 fi nancial year, further decreases in 2013/14 to R215 million and in 2014/15 to R180 million. For a substantial increase of the capital budget over the MTREF the municipal council should consider additional bor-rowings in each of the fi nancial years of the MTREF. The repayment of capital and interest (debt services costs) has substantially increased over the past fi ve years as a result of the aggressive capital infrastructure programme implemented over the past three years. Consequently, the capital budget remains relatively fl at over the medium-term.



3. OPERATING REVENUE FRAMEWORK

For Msunduzi Local Municipality to continue improving the quality of services provided to its citizens it needs to generate the required revenue. In these tough economic times strong revenue management is fundamental to the fi nancial sustainability of every municipality. The reality is that we are faced with development backlogs and poverty. The expenditure required to address these challenges will inevitably always exceed available funding; hence diffi cult choices have to be made in relation to tariff increases and balancing expenditures against realisti-cally anticipated revenues.

The municipality’s revenue strategy is built around the following key components:

• National Treasury’s guidelines and macroeconomic policy;• Growth in the City and continued economic development;• Effi cient revenue management, which aims to ensure a 95 per cent annual collection rate for property rates

and other key service charges;• Electricity tariff increases as approved by the National Electricity Regulator of South Africa (NERSA);• Achievement of full cost recovery of specifi c user charges especially in relation to trading services;• Determining the tariff escalation rate by establishing/calculating the revenue requirement of each service;• The municipality’s Property Rates Policy approved in terms of the Municipal Property Rates Act, 2004 (Act

6 of 2004) (MPRA);• Increase ability to extend new services and recover costs;• The municipality’s Indigent Policy and rendering of free basic services; and• Tariff policies of the City.

The following table is a summary of the 2012/13 MTREF (classifi ed by main revenue source):



Tab

le 2

: S

um

mar

y o

f re

ven

ue

clas

sifi

ed b

y m

ain

rev

enu

e so

urc

e

KZ

N22

5 M

sun

du

zi -

Tab

le A

4 B

ud

get

ed F

inan

cial

Per

form

ance

(re

ven

ue

and

exp

end

itu

re)

Des

crip

tio

nR

ef20

08/9

2009

/10

2010

/11

Cu

rren

t Y

ear

2011

/12

2012

/13

Med

ium

Ter

m R

even

ue

& E

xpen

dit

ure

R t

ho

usa

nd

s1

Au

dit

ed

Ou

tco

me

Au

dit

ed

Ou

tco

me

Au

dit

ed

Ou

tco

me

Ori

gin

al

Bu

dg

etA

dju

sted

B

ud

get

Fu

ll Y

ear

Fo

reca

stP

re-a

ud

it

Ou

tco

me

Bu

dg

et

Yea

r 20

12/1

3

Bu

dg

et

Yea

r +

1 20

13/1

4

Bu

dg

et

Yea

r +

2 20

14/1

5

Rev

enu

e B

y S

ou

rce

Pro

pert

y ra

tes

2 3

71,3

63

420

,030

4

48,2

57

488

,358

5

00,0

96

500

,096

5

00,0

96

576

,402

6

21,8

22

665

,349

P

rope

rty

rate

s -

pena

lties

&

col

lect

ion

char

ges

18,

942

20,

285

26,

358

28,

455

28,

455

28,

455

28,

455

33,

812

35,

604

37,

349

Ser

vice

cha

rges

- e

lect

ric-

ity r

even

ue2

584

,115

8

16,2

63

1,0

14,5

89

1,18

5,51

7 1,

227,

850

1,2

27,8

50

1,22

7,85

0 1

,416

,917

1,

586,

948

1,79

3,25

1

Ser

vice

cha

rges

- w

ater

re

venu

e2

199

,654

2

13,6

33

270

,107

3

01,9

06

285

,317

2

85,3

17

285

,317

3

17,3

54

364

,957

4

26,9

99

Ser

vice

cha

rges

- s

anita

-tio

n re

venu

e2

64,

783

76,

207

102

,592

1

13,7

60

107

,432

1

07,4

32

107

,432

1

14,0

00

121

,980

1

31,1

29

Ser

vice

cha

rges

- r

efus

e re

venu

e2

46,

242

53,

287

65,

559

68,

603

69,

853

69,

853

69,

853

78,

752

83,

937

90,

480

Ser

vice

cha

rges

- o

ther

–

–

–

–

–

–

–

–

–

–

Ren

tal o

f fac

ilitie

s an

d eq

uipm

ent

17,

099

15,

571

17,

313

18,

261

18,

261

18,

261

18,

261

19,

534

21,

878

24,

722

Inte

rest

ear

ned

- ex

tern

al

inve

stm

ents

10,

019

5,4

54

12,

823

15,

800

15,

800

15,

800

15,

800

12,

100

Inte

rest

ear

ned

- ou

tsta

nd-

ing

debt

ors

19,

812

1,3

04

47,

437

1,0

19

1,0

19

1,0

19

1,0

19

–

Div

iden

ds r

ecei

ved

–

–

–

–

–

–

–

Fin

es 1

1,52

1 7

,084

5

,354

6

,073

6

,073

6

,073

6

,073

3

,475

3

,700

3

,996

Li

cenc

es a

nd p

erm

its 6

6 7

2 8

9 9

0 9

0 9

0 9

0 7

4 7

8 8

3 A

genc

y se

rvic

es 4

,862

1

,435

5

77

335

3

35

335

3

35

382

4

03

427

T

rans

fers

rec

ogni

sed

- op

erat

iona

l 1

81,0

63

276

,022

3

00,8

42

326

,131

3

26,1

31

326

,131

3

26,1

31

365

,204

4

13,7

25

442

,058

Oth

er r

even

ue2

301

,756

5

99,5

21

590

,343

7

84,8

90

50,

534

50,

534

50,

534

49,

785

52,

423

54,

992

Gai

ns o

n di

spos

al o

f PP

ETo

tal R

even

ue

(exc

lud

-in

g c

apit

al t

ran

sfer

s an

d

con

trib

uti

on

s)

1,83

1,29

8 2

,506

,169

2

,902

,240

3,

339,

196

2,63

7,24

4 2

,637

,244

2,

637,

244

2,9

87,7

90

3,30

7,45

5 3,

670,

836

In li

ne w

ith th

e fo

rmat

s pr

escr

ibed

by

the

Mun

icip

al B

udge

t and

Rep

ortin

g R

egul

atio

ns, c

apita

l tra

nsfe

rs a

nd c

ontr

ibut

ions

are

exc

lude

d fr

om

the

oper

atin

g st

atem

ent,

as in

clus

ion

of th

ese

reve

nue

sour

ces

wou

ld d

isto

rt th

e ca

lcul

atio

n of

the

oper

atin

g su

rplu

s/de

fi cit.



Rev

enue

gen

erat

ed f

rom

rat

es a

nd s

ervi

ces

char

ges

form

s a

sign

ifi ca

nt p

erce

ntag

e of

the

rev

enue

bas

ket

for

the

City

. R

ates

and

ser

vice

ch

arge

rev

enue

s co

mpr

ise

mor

e th

an t

wo

third

s of

the

tot

al r

even

ue m

ix.

In t

he 2

011/

12 fi

nan

cial

yea

r, re

venu

e fr

om r

ates

and

ser

vice

s ch

arge

s to

tale

d R

2.2

billi

on o

r 83

.06

per

cent

. Thi

s in

crea

ses

to R

2.9

billi

on, R

3.3

billi

on a

nd R

3.7

billi

on fo

r 20

12/1

3, 2

013/

14 a

nd 2

014/

15

resp

ectiv

ely.

A n

otab

le tr

end

is th

e in

crea

se in

the

tota

l per

cent

age

reve

nue

gene

rate

d fr

om r

ates

and

ser

vice

s ch

arge

s. T

his

grow

th c

an b

e m

ainl

y at

trib

uted

to th

e in

crea

sed

in th

e sa

le o

f ele

ctric

ity c

ontr

ibut

es to

the

tota

l rev

enue

mix

, whi

ch in

turn

is d

ue to

rap

id in

crea

ses

in th

e E

skom

tar

iffs

for

bulk

ele

ctric

ity.

The

abo

ve t

able

exc

lude

s re

venu

e fo

rego

ne a

risin

g fr

om d

isco

unts

and

reb

ates

ass

ocia

ted

with

the

tar

iff

polic

ies

of th

e M

unic

ipal

ity.

Pro

pert

y ra

tes

is th

e se

cond

larg

est r

even

ue s

ourc

e to

talin

g 19

per

cen

t or

R57

6 m

illio

n an

d in

crea

ses

to R

622

mill

ion

by 2

013/

14. T

he th

ird

larg

est s

ourc

es is

‘oth

er r

even

ue’ w

hich

con

sist

s of

var

ious

item

s su

ch a

s sa

le o

f pro

duce

, tra

inin

g re

cove

ries,

land

ing

fees

, pas

seng

er le

vy,

Hul

let e

xter

nal c

harg

es, r

ates

cer

tifi c

ates

, etc

. Dep

artm

ents

hav

e be

en u

rged

to re

view

the

tarif

fs o

f the

se it

ems

on a

n an

nual

bas

is to

ens

ure

they

are

cos

t refl

ect

ive

and

mar

ket r

elat

ed.

Ope

ratin

g gr

ants

and

tra

nsfe

rs t

otal

s R

365

mill

ion

in t

he 2

012/

13 fi

nan

cial

yea

r an

d st

eadi

ly in

crea

ses

to R

413

mill

ion

by 2

013/

14,

R44

2 m

illio

n by

201

4/20

15. T

he fo

llow

ing

tabl

e gi

ves

a br

eakd

own

of th

e va

rious

ope

ratin

g gr

ants

and

sub

sidi

es a

lloca

ted

to th

e m

unic

ipal

ity o

ver

the

med

ium

term

:

Tab

le 4

: O

per

atin

g T

ran

sfer

s an

d G

ran

t R

ecei

pts

KZ

N22

5 M

sun

du

zi -

Su

pp

ort

ing

Tab

le S

A18

Tra

nsf

ers

and

gra

nt

rece

ipts

Des

crip

tio

nR

ef20

08/9

2009

/10

2010

/11

Cu

rren

t Y

ear

2011

/12

2012

/13

Med

ium

Ter

m R

even

ue

& E

xpen

dit

ure

R t

ho

usa

nd

s1

Au

dit

ed

Ou

tco

me

Au

dit

ed

Ou

tco

me

Au

dit

ed

Ou

tco

me

Ori

gin

al

Bu

dg

etA

dju

sted

B

ud

get

Fu

ll Y

ear

Fo

reca

st

Bu

dg

et

Yea

r 20

12/1

3

Bu

dg

et

Yea

r +

1 20

13/1

4

Bu

dg

et

Yea

r +

2 20

14/1

5R

EC

EIP

TS

:1,

2O

per

atin

g T

ran

sfer

s an

d G

ran

tsN

atio

nal

Go

vern

men

t: 1

79,7

63

203

,378

2

67,3

75

312

,242

3

12,2

42

312

,242

3

42,7

04

366

,152

3

93,9

59

Loca

l Gov

ernm

ent E

quita

ble

Sha

re 1

76,1

17

199

,824

2

67,2

11

304

,835

3

04,8

35

304

,835

3

38,9

03

363

,502

3

91,2

59

Fin

ance

Man

agem

ent

500

7

50

165

1

,441

1

,441

1

,441

1

,500

1

,750

1

,750

M

unic

ipal

Sys

tem

s Im

prov

emen

t 4

00

400

7

90

790

7

90

800

9

00

950

E

PW

P In

cent

ive

1,5

01

2,7

46

2,4

04

Oth

er tr

ansf

ers/

gran

ts 5

,176

5

,176

5

,176

P

rovi

nci

al G

ove

rnm

ent:

2,0

75

10,

548

33,

467

13,

889

13,

889

13,

889

22,

500

47,

573

48,

099

Hea

lth s

ubsi

dy 9

,161

P

rovi

ncia

l Gov

ernm

ent:

20,

979

13,

889

13,

889

13,

889

Hea

lth s

ubsi

dyE

xpan

ded

Pub

lic W

orks

Gra

ntO

pera

ting

Gra

nt -

Pro

pert

y R

ates

2,0

75

1,3

87



KZ

N22

5 M

sun

du

zi -

Su

pp

ort

ing

Tab

le S

A18

Tra

nsf

ers

and

gra

nt

rece

ipts

Des

crip

tio

nR

ef20

08/9

2009

/10

2010

/11

Cu

rren

t Y

ear

2011

/12

2012

/13

Med

ium

Ter

m R

even

ue

& E

xpen

dit

ure

R t

ho

usa

nd

s1

Au

dit

ed

Ou

tco

me

Au

dit

ed

Ou

tco

me

Au

dit

ed

Ou

tco

me

Ori

gin

al

Bu

dg

etA

dju

sted

B

ud

get

Fu

ll Y

ear

Fo

reca

st

Bu

dg

et

Yea

r 20

12/1

3

Bu

dg

et

Yea

r +

1 20

13/1

4

Bu

dg

et

Yea

r +

2 20

14/1

5H

ealth

12,

488

2,5

37

Hum

an S

ettle

men

ts 9

,000

2

6,02

0 2

5,51

8 P

ublic

Wor

ksA

rts

and

Cul

ture

10,

963

21,

553

22,

581

Dis

tric

t M

un

icip

alit

y:-

--

--

--

--

Oth

er g

ran

t p

rovi

der

s:-

--

--

--

--

Tota

l Op

erat

ing

Tra

nsf

ers

and

Gra

nts

5 1

81,8

38

213

,926

3

00,8

42

326

,131

3

26,1

31

326

,131

3

65,2

04

413

,725

4

42,0

58

Tarif

f-se

tting

is a

piv

otal

and

str

ateg

ic p

art

of t

he c

ompi

latio

n of

any

bud

get.

Whe

n ra

tes,

tar

iffs

and

othe

r ch

arge

s w

ere

revi

sed,

loca

l eco

-no

mic

con

ditio

ns, i

nput

cos

ts a

nd th

e af

ford

abili

ty o

f ser

vice

s w

ere

take

n in

to a

ccou

nt to

ens

ure

the

fi nan

cial

sus

tain

abili

ty o

f the

City

.

Nat

iona

l Tre

asur

y co

ntin

ues

to e

ncou

rage

mun

icip

aliti

es to

kee

p in

crea

ses

in r

ates

, tar

iffs

and

othe

r ch

arge

s as

low

as

poss

ible

. Mun

icip

ali-

ties

mus

t jus

tify

in th

eir

budg

et d

ocum

enta

tion

all i

ncre

ases

in e

xces

s of

the

6 pe

r ce

nt u

pper

bou

ndar

y of

the

Sou

th A

fric

an R

eser

ve B

ank’

s in

fl atio

n ta

rget

. Exc

essi

ve in

crea

ses

are

likel

y to

be

coun

terp

rodu

ctiv

e, r

esul

ting

in h

ighe

r le

vels

of n

on-p

aym

ent.

The

per

cent

age

incr

ease

s of

bot

h E

skom

and

Um

geni

Wat

er b

ulk

tarif

fs a

re fa

r be

yond

the

men

tione

d in

fl atio

n ta

rget

. Giv

en th

at th

ese

tarif

f in

crea

ses

are

dete

rmin

ed b

y ex

tern

al a

genc

ies,

the

impa

ct th

ey h

ave

on th

e m

unic

ipal

ity’s

ele

ctric

ity a

nd in

thes

e ta

riffs

are

larg

ely

outs

ide

the

cont

rol o

f the

City

. Dis

coun

ting

the

impa

ct o

f the

se p

rice

incr

ease

s in

low

er c

onsu

mer

tarif

fs w

ill e

rode

the

City

’s fu

ture

fi na

ncia

l pos

ition

an

d vi

abili

ty.

Nat

iona

l Tre

asur

y ra

ised

cer

tain

con

cern

s re

gard

ing

the

2012

/13

Dra

ft B

udge

t:

• Ta

riffs

are

not

cos

t refl

ect

ive

• R

esid

entia

l sub

side

s bu

sine

ss fo

r w

ater

• R

ates

exe

mpt

ion

of R

150

000

offe

red

to a

ll ra

tepa

yers

was

too

gene

rous

• In

com

paris

on t

o ot

her

mun

icip

aliti

es,

the

R15

0 00

0 is

ext

rem

ely

high

sin

ce t

he c

urre

nt v

alue

of

an R

DP

hou

se i

s ap

prox

imat

ely

R70

000

It m

ust a

lso

be a

ppre

ciat

ed th

at th

e co

nsum

er p

rice

inde

x, a

s m

easu

red

by C

PI,

is n

ot a

goo

d m

easu

re o

f the

cos

t inc

reas

es o

f goo

ds a

nd

serv

ices

rel

evan

t to

mun

icip

aliti

es. T

he b

aske

t of g

oods

and

ser

vice

s ut

ilise

d fo

r th

e ca

lcul

atio

n of

the

CP

I con

sist

of i

tem

s su

ch a

s fo

od, p

et-

rol a

nd m

edic

al s

ervi

ces,

whe

reas

the

cost

driv

ers

of a

mun

icip

ality

are

info

rmed

by

item

s su

ch a

s th

e co

st o

f rem

uner

atio

n, b

ulk

purc

hase

s of

ele

ctric

ity a

nd w

ater

, pet

rol,

dies

el, c

hem

ical

s, c

emen

t etc

. The

cur

rent

cha

lleng

e fa

cing

the

City

is m

anag

ing

the

gap

betw

een

cost

driv

ers

and

tarif

fs le

vied

, as

any

sho

rtfa

ll m

ust b

e m

ade

up b

y ei

ther

ope

ratio

nal e

ffi ci

ency

gai

ns o

r se

rvic

e le

vel r

educ

tions

. W

ithin

thi

s fr

amew

ork

the

City

has

und

erta

ken

the

tarif

f set

ting

proc

ess

rela

ting

to s

ervi

ce c

harg

es a

s fo

llow

s.



3.1. Property Rates

Property rates cover the cost of the provision of general services. Determining the effective property rate tariff is therefore an integral part of the municipality’s budgeting process.

National Treasury’s MFMA Circular No. 51 deals, inter alia with the implementation of the Municipal Property Rates Act, with the regulations issued by the Department of Co-operative Governance. The regulations prescrib-ing the rate ratio for the non-residential categories, public service infrastructure and agricultural properties rela-tive to residential properties to be 0,25:1 came into effect on 1 July 2009, whilst the rate ratio for Public Benefi t Organizations came into effect on 1 July 2010. The implementation of these regulations was done in the previous budget process and the Property Rates Policy of the Municipality has been amended accordingly.

Taking into account issues raised by the National Treasury, the Msunduzi Municipality took an initiative to reduce the rates exemption from R150 000 to R100 000.

Reducing the exemption from R150 000 to R100 000 with 7% increase resulted to the additional revenue of R37 581908

Impact of reducing the exemption to Customers

Annual Rates Monthly Rates DifferenceProperty Value 2011/2012 2012/13 2011/12 2012/13 Annual Monthly

R1,500,000 14,040.00 15,540.00 1,170.00 1,295.00 1,500.00 125.00 R850,000 7,280.00 8,325.00 606.67 693.75 1,045.00 87.08 R650,000 5,200.00 6,105.00 433.33 508.75 905.00 75.42 R350,000 2,080.00 2,775.00 173.33 231.25 695.00 57.92 R200,000 520.00 1,110.00 43.33 92.50 590.00 49.17 R150,000 0.00 555.00 0.00 46.25 555.00 46.25

The categories of rateable properties for purposes of levying rates and the proposed rates for the 2012/13 fi nan-cial year based on a 7 per cent increase from 1 July 2012 is contained below:

Table 5: Comparison of proposed rates to levied for the 2012/13 fi nancial year

Rates

VOTE SUB ITEM 2011/12 2012/13060 448 8208

Cents in the R

Cents in the R

1. A GENERAL RATE, assessed in terms of the Local Government: Municipal Property Rates Act 6 of 2004 0.0189 0.0202

(a) Vacant Land - no rebate granted (net) 0.0189 0.0202(b) Unauthorised use plus surcharge 0.0189 0.0243



Rates

VOTE SUB ITEM 2011/12 2012/13060 448 8208

Cents in the R

Cents in the R

2. REBATES:Residential Property

(a A rebate on the valuation of rateable property 0.0085 0.0091Rate Randage – after rebate (net) 0.0104 0.0111

Other Properties(b) A rebate on the valuation of rateable property 0.0006 0.0006

Rate Randage – after rebate (net) 0.0183 0.0196

Agricultural Property(c) A rebate on the valuation of rateable property 0.0163 0.0175


Public Service Infrastructure(d) A rebate on the valuation of rateable property 0.0163 0.0175


Rural Communal Property(e) A rebate on the valuation of rateable property 0.0028 0.0028


Home Business and DSF properties(f) A rebate on the valuation of rateable property 0.0028 0.0061


Sectional Title Garages - Separately Registered(g) A rebate on the valuation of rateable property 0.0085 0.0091


Mining(h) A rebate on the valuation of rateable property 0.0006 0.0006


All additional rebates are included within the Tariff Register for approval.



3.2. Sale of Water and Impact of Tariff Increases

South Africa faces similar challenges with regard to water supply as it did with electricity, since demand growth outstrips supply. Consequently, National Treasury is encouraging all municipalities to carefully review the level and structure of their water tariffs to ensure:

• Council is working towards ensuring that water tariffs are fully cost-refl ective – including the cost of main-tenance and renewal of purifi cation plants, water networks and the cost associated with reticulation expan-sion;

• Water tariffs are structured to protect basic levels of service and ensure the provision of free water to the poorest of the poor (indigent); and

• Water tariffs are designed to encourage effi cient and sustainable consumption.

In addition National Treasury has urged all municipalities to ensure that water tariff structures are cost refl ective by 2014.

Better maintenance of infrastructure, new dam construction and cost-refl ective tariffs will ensure that the supply challenges are managed in future to ensure sustainability. Umgeni Water has increased its bulk tariffs with 17.5 per cent from 1 July 2012, which increase contributes to approximately 48 per cent of the City’s water input cost.

Umgeni Water has undertaken a critical assessment of its capital infrastructure requirements. The assessment indicates that Umgeni Water’s current infrastructure is unlikely to sustain its long-term ability to supply water and they had no other choice but to enter capital markets to raise R1.6 billion for infrastructure upgrades, hence the signifi cant increase in the bulk cost of water.

The National Treasury visit highlighted the exorbitant 22% increase. In comparison to other municipalities, this increase is substantially higher due to the 11% for the construction of Spring Grove Dam plus 4.5% for ageing infrastructure. Residential is subsidizing businesses, in order to close the gap between residential and business a block tariff was introduced.

A tariff increase of 15 per cent for residential, 17% on all the other categories including the commercial with the introduction of an additional commercial block tariff plus a basic charge of R15 for residential and R25 for other categories from 1 July 2012 for water is proposed. This is based on input cost assumptions of 17.5 per cent in-crease in the cost of bulk water (Umgeni Water).

Breakdown of 17.5% percent is as follows:

-6.5% Umgeni tariff increase-11% Construction of Spring Grove Dam

The tariff structure of the 2011/12 fi nancial year has been changed to include a basic charge per category as well as a commercial block tariff. The domestic tariff structure is designed to charge higher levels of consumption a higher rate, steadily increasing to a rate of R21.67 per kilolitre for consumptions in excess of 60kl per reading cycle. However, the commercial block tariff is designed to lessen the burden on commercial consumers where consumptions are in excess of 100kl. This is done to ensure sustainability within the commercial category.



3.3. Sale of Electricity and Impact of Tariff Increases

NERSA has announced the revised bulk electricity pricing structure. A 13.5 per cent increase in the Eskom bulk electricity tariff to municipalities will be effective from 1 July 2012. Considering the Eskom increases, the consumer tariff had to be increased by 11 per cent to offset the additional bulk purchase cost from 1 July 2012. Furthermore, it should be noted that given the magnitude of the tariff in-crease, it is expected to depress growth in electricity consumption, which will have a negative impact on the mu-nicipality’s revenue from electricity.

The inadequate electricity bulk capacity and the impact on service delivery and development remains a challenge for the City. The upgrading of the City’s electricity network has therefore become a strategic priority, especially the substations and transmission lines.

Owing to the high increases in Eskom’s bulk tariffs, it is clearly not possible to fund these necessary upgrades through increases in the municipal electricity tariff – as the resultant tariff increases would be unaffordable for the consumers. It is therefore proposed that the taking up of loans as a strategy for funding of the infrastructure be considered and approved to spread the burden over the life span of the assets. As part of the 2012/13 medium-term capital programme, funding has been allocated to electricity infrastructure but these funding levels will require further investigation as part of the next budget cycle in an attempt to source more funding to ensure this risk is mitigated.

3.4. Sanitation and Impact of Tariff Increases

A tariff increase of 7 per cent for sanitation from 1 July 2012 is proposed. This is based on the input cost assump-tions related to water. It should be noted that electricity costs contributes approximately 20 per cent of waste water treatment input costs, therefore the higher than CPI increase of 7per cent for sanitation tariffs.

The following table compares the current and proposed tariffs:



Table 8: Comparison between current sanitation charges and increases

Sewerage Tariffs

VOTE SUB ITEM 2011/12 2012/13202 469 8439 Excl. Vat Excl. Vat

Based on the relevant Water ScaleSewerage Tariffs

1 Scale 2 – Domestic/House R 102.00 R 109.13

2 Home Business R 115.00 R 123.05

3 Scale 3A – Flats/Simplexes per kl R 5.41 R 5.79

4 Scale 4A – Business/Commercial per kl0 - 400 R 5.53 R 5.92401 - 1000 R 5.16 R 5.52

Greater than 1000 R 4.27 R 4.56Subject to a maximum of R 22,252.32 R 23,809.98

5 Vacant Land R 102.00 R 109.13

6 Scale 6 – Worship Places R 194.58 R 208.20

7 Scale 8M – Municipal Departments per kl R 5.53 R 5.92

8 Indigent Tariff R 51.00 R 54.57

VOTE SUB ITEM202 469 8346

9 Scale 3c, 4c, 7c – Registered Welfare & Charitable Institutions & certain Sporting Bodies which are exempted from payment of rates. Including such organizations & institutions exempted by the City Council.

per kl R 5.53 R 5.92

1.3.5. Waste Removal and Impact of Tariff Increases

National Treasury suggested that growth be included within the original budget and indicated that 5% increase is below infl ation and during the community consultation same view was raised. The Waste Management Section provided input and a 10% growth was suggested.

Original Budget Projected Revenue Additional Revenue7% + 10% growth R55 973 013 R4 724 6208% + 10% growth R56 496 125 R4 768 775

Included in the 2012/13 budget is a 7% plus 10 per cent growth.



The following table compares current and proposed amounts payable from 1 July 2012:

Table 9: Comparison between current waste removal fees and increases

Refuse Tariffs


Standard charges for Domestic and Commercial Refuse Removal Based on rel-evant Electricity Scale

Refuse Removal Tariffs1 Domestic

Single phase up to 80A R 65.97 R 70.58Three phase up to 100A R 65.97 R 70.58

Prepayment Meter R 70.58

2 Home BusinessSingle phase up to 80A R 100.00 R 107.00Three phase up to 100A R 100.00 R 107.00Prepayment Meter R 107.00

3 Small Power Users - Business/CommercialSingle phase up to 80A R 188.99 R 202.22Three phase up to 100A R 188.99 R 202.22

4 Large Power Users – Business/CommercialSupply taken at 400V R 188.99 R 202.22Supply taken at 6.6 or 11kV R 188.99 R 202.22

5 Flats/Simplexes R 55.90 R 59.81




4.

OP

ER

AT

ING

EX

PE

ND

ITU

RE

FR

AM

EW

OR

K

The

City

’s e

xpen

ditu

re fr

amew

ork

for

the

2012

/13

budg

et a

nd M

TR

EF

is in

form

ed b

y th

e fo

llow

ing:

• T

he a

sset

ren

ewal

str

ateg

y an

d th

e re

pairs

and

mai

nten

ance

pla

n;•

Bal

ance

d bu

dget

con

stra

int (

oper

atin

g ex

pend

iture

sho

uld

not e

xcee

d op

erat

ing

reve

nue)

unl

ess

ther

e ar

e ex

istin

g un

com

mitt

ed c

ash-

back

ed r

eser

ves

to fu

nd a

ny d

efi c

it;•

Fun

ding

of t

he b

udge

t ove

r th

e m

ediu

m-t

erm

as

info

rmed

by

Sec

tion

18 a

nd 1

9 of

the

MF

MA

;•

The

cap

ital p

rogr

amm

e is

alig

ned

to th

e as

set r

enew

al s

trat

egy

and

back

log

erad

icat

ion

plan

;•

Ope

ratio

nal g

ains

and

effi

cien

cies

will

be

dire

cted

to fu

ndin

g th

e ca

pita

l bud

get a

nd o

ther

cor

e se

rvic

es; a

nd•

Str

ict a

dher

ence

to th

e pr

inci

ple

of n

o pr

ojec

t pla

n no

bud

get.

If th

ere

is n

o bu

sine

ss p

lan

no fu

ndin

g al

loca

tion

can

be m

ade.

The

follo

win

g ta

ble

is a

hig

h le

vel s

umm

ary

of th

e 20

12/1

3 bu

dget

and

MT

RE

F (

clas

sifi e

d pe

r m

ain

type

of o

pera

ting

expe

nditu

re):

Tab

le 1

0: S

um

mar

y o

f o

per

atin

g e

xpen

dit

ure

by

stan

dar

d c

lass

ifi c

atio

n it

em

KZ

N22

5 M

sun

du

zi -

Tab

le A

4 B

ud

get

ed F

inan

cial

Per

form

ance

(re

ven

ue

and

exp

end

itu

re)

Des

crip

tio

nR

ef20

08/9

2009

/10

2010

/11

Cu

rren

t Y

ear

2011

/12

2012

/13

Med

ium

Ter

m R

even

ue

& E

xpen

dit

ure

R t

ho

usa

nd

s1

Au

dit

ed

Ou

tco

me

Au

dit

ed

Ou

tco

me

Au

dit

ed

Ou

tco

me

Ori

gin

al

Bu

dg

etA

dju

sted

B

ud

get

Fu

ll Y

ear

Fo

reca

stP

re-a

ud

it

Ou

tco

me

Bu

dg

et

Yea

r 20

12/1

3

Bu

dg

et

Yea

r +

1 20

13/1

4

Bu

dg

et

Yea

r +

2 20

14/1

5

Exp

end

itu

re B

y Ty

pe

Em

ploy

ee r

elat

ed c

osts

2 5

21,2

75

660

,087

6

34,1

06

657

,096

6

60,2

05

660

,205

6

60,2

05

713

,415

7

70,4

89

839

,833

R

emun

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3



The budgeted allocation for employee related costs for the 2012/13 fi nancial year totals R713 million, which equals 23.92 per cent of the total operating expenditure. Salary increases have been factored into this budget at a percentage increase of 7 per cent for the 2012/13 fi nancial year. An annual increase of 8 and 9 per cent has been included in the two outer years of the MTREF respectively. In addition expenditure against overtime was signifi cantly reduced, with provisions of R39 million against this budget item only being provided for emergency services and other critical functions.

The cost associated with the remuneration of councillors is determined by the Minister of Co-operative Gover-nance and Traditional Affairs in accordance with the Remuneration of Public Offi ce Bearers Act, 1998 (Act 20 of 1998). A 7.0 per cent increase has been factored in councilors remuneration.

The provision of debt impairment was determined based on an annual collection rate of 90 per cent and the Debt Write-off Policy of the City. For the 2012/13 fi nancial year this amount equates to R250 million and for the two outer years it decreases because of new strategies will be put in place to increase the collection levels. While this expenditure is considered to be a non-cash fl ow item, it informed the total cost associated with rendering the services of the municipality, as well as the municipality’s realistically anticipated revenues.

Provision for depreciation and asset impairment has been informed by the Municipality’s Asset Management Policy. Depreciation is widely considered a proxy for the measurement of the rate asset consumption. Budget ap-propriations in this regard total R158 million for the 2012/13 fi nancial and equates to 5.3 per cent of the total oper-ating expenditure. Note that the implementation of GRAP 17 accounting standard has meant bringing a range of assets previously not included in the assets register onto the register. This has resulted in a signifi cant increase in depreciation relative to previous years.

Finance charges consist primarily of the repayment of interest on long-term borrowing (cost of capital). Finance charges make up 2.6 per cent (R78 million) of operating expenditure

Bulk purchases are directly informed by the purchase of electricity from Eskom and water from Umgeni Water. The annual price increases have been factored into the budget appropriations and directly inform the revenue provisions. The expenditures include distribution losses.

Other materials comprise materials for maintenance of roads, water, sewerage, landfi ll site.line with the City’s repairs and maintenance plan this group of expenditure has been prioritised to ensure sustainability of the City’s infrastructure.

Contracted services had been identifi ed as a cost saving area for the City. As part of the compilation of the 2011/12 MTREF this group of expenditure was critically evaluated and operational effi ciencies were enforced. In the 2012/13 fi nancial year, this group of expenditure totals R57 million and previously this cost was refl ected under “other expenditure”. For the two outer years growth has been limited to 5.3 and 4.9 per cent.

Other expenditure comprises of various line items relating to the daily operations of the municipality. This group of expenditure has also been identifi ed as an area in which cost savings and effi ciencies can be achieved.

The following table gives a breakdown of the main expenditure categories for the 2012/13 fi nancial year.



Expenditure

Finance charges3%

Depreciation & asset impairment

5%

Bulk purchases51%

Contracted services1%

Transfers and Grants0%

Other expenditure3%

Employee related costs23%

Remuneration of councillors

1%

Debt impairment13%

Figure 1 Main operational expenditure categories for the 2012/13 fi nancial year

4.1. Priority given to repairs and maintenance

Aligned to the priority being given to preserving and maintaining the City’s current infrastructure, the 2012/13 budget and MTREF provide for extensive growth in the area of asset maintenance, as informed by the asset renewal strategy and repairs and maintenance plan of the City. In terms of the Municipal Budget and Reporting Regulations, operational repairs and maintenance is not considered a direct expenditure driver but an outcome of certain other expenditures, such as remuneration, purchases of materials, contracted services and Free Basic Services: Basic Social Services Package

The social package assists households that are poor or face other circumstances that limit their ability to pay for services. To receive these free services the households are required to register in terms of the City’s Indigent Policy. The cost of the social package of the registered indigent households is largely fi nanced by national gov-ernment through the local government equitable share received in terms of the annual Division of Revenue Act.



5.

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A list of some of the capital projects for 2012-13, 2013-14 and 2014-15

Ward IDP No Project Description2012 / 2013

Amount2013/2014 2014/2015 MATRIX

ROADS, STORMWATER & TRANSPORTATION15 / 19 RNMP262 Horse Shoe Access Rd and passages

in Imbali Stage 1 & 21,700,000 2,000,000 1,500,000 FS & BP - Yes

Design - N/ACommitted - No

12 RNMP266 Upgrade Moscow Roads 4,000,000 1,500,000 2,000,000 FS & BP - YesDesign - U/WayCommitted - No

23 RNMP278 Rehabilitation of Roads in Ashdown 2,500,000 3,000,000 30,000,000 FS & BP - YesDesign - YesCommitted - Yes

21 RNMP271 Upgrading of Machibisa / Dambuza Roads

2,000,000 3,000,000 3,000,000 FS & BP - YesDesign - U/WayCommitted - No

5 RNMP253 Upgrade D1128 Road* 3,000,000 10,000,000 10,000,000 FS & BP - YesDesign - YesCommitted - Yes

11 RNMP264 Upgrade Station Road Bridge - EIA & Design Update

100,000 5,000,000 6,000,000 FS & BP - YesDesign - YesCommitted - Yes

29 RNMP280 Upgrade of Haniville Internal Roads 1,500,000 2,000,000 1,200,000 FS & BP - YesDesign - N/ACommitted - No

1 RNMP252 Upgrading of Mbucwana Rd 1,800,000 500,000 0 FS & BP - YesDesign - N/ACommitted - No

22 RNMP278 Upgrade of Gravel Roads Edendale - Ward 22: Mthethomusha Rd, Natshi Rd, Mfeka Rd, Diphini Rd, Dennisfi eld Rd, Garries Ext Rd, Thula Rd, Motha Rd, Thusi Rd, Thabizo Rd, Nyala Rd, Laycentre Rd, Hadebe Rd, Eight Rd, Bhula Rd, Mofokeng Rd, Mbali Funeral Rd, Maqinase Rd 1, Maqinase Rd 2 & Ekujabuleni Home Rd

2,300,000 2,000,000 2,000,000 FS & BP - YesDesign - N/ACommitted - No

12 RNMP255 Upgrade of Gravel Roads - Edendale: Hlubi Rd, Nkosi Rd, Ntombela Rd, D. Shezi Rd, Ntshingila Rd, Mpungose Rd, Gama Rd & Thandeka Rd

400,000 3,000,000 3,000,000 FS & BP - YesDesign - in 12/13+J42Committed - No

16 RNMP270 Upgrading of Gravel Roads - Edendale - Ward 16 - 8.0 km: Senti Rd, Sbhomora Rd, Khawula Rd & Thulani Rd


13 RNMP284 Upgrading of Gravel Roads - Edendale: KwaNyamazane Roads

500,000 2,000,000 2,000,000 FS & BP - YesDesign - in 12/13Committed - No

11 RNMP237 Upgrading of Gravel/Grav-seal Road - Edendale: Tafuleni Road - 1.2 km

3,500,000 500,000 0 FS & BP - YesDesign - N/ACommitted - No



Ward IDP No Project Description2012 / 2013

Amount2013/2014 2014/2015 MATRIX

14 RNMP268 Upgrading of Gravel Roads - Wil-lowfountain: Willowfountain Main Rd, Phupha Rd & Khuzwayo Rd

6,500,000 4,000,000 3,000,000 FS & BP - YesDesign - U/WayCommitted - No

17 RNMP274 Upgrading of Gravel Road - Greater Edendale - Imbali BB - Phase 2: New road next to Zondi store, Kancane Rd, Sibukosezizwe Rd


20 RNMP276 Upgrading of Gravel Roads - Greater Edendael - 2.0 km: Upgrading of Mban-jwa Rd - Siyamu

3,500,000 600,000 0 FS & BP - YesDesign - YesCommitted - No

35 RNMP293 New footpaths, kerbing and channelling - Sobantu

200,000 200,000 200,000 FS & BP - YesDesign - N/ACommitted - No

12 Upgrading of Gravel Roads - Greater Edendale: Shembe Rd, Joe Ngidi Rd, Ndwendwe Rd, Mavimbela Rd, Stebhisi Link, Shandu Rd & Ntombela Rd

664,590 1,500,000 500,000 FS & BP - YesDesign - N/ACommitted - No

SUB TOTAL 36,864,590 43,700,000 67,300,000* D Roads to be removed in outer years and referred to KZN DoTPUBLIC INFRASTRUCTURE/SOCIAL INSTITUTIONS35 Hollingwood cemetery 13,500,000 11,500,000 2,000,000 FS & BP - Yes

Design - YesCommitted - Yes

35 Mountain Rise Crematorium 2,800,000 3,000,000 1,000,000 FS & BP - YesDesign - N/ACommitted - No

Var Public Ablution Facilities 1,500,000 1,500,000 1,500,000 FS & BP - YesDesign - N/ACommitted - No

15 Unit 18 Community Hall 2,500,000 1,500,000 300,000 FS & BP - YesDesign - YesCommitted - No

20 Caluza Sports Facility 5,500,000 1,500,000 0 FS & BP - YesDesign - YesCommitted - No

27 Informal Trade Structures 500,000 300,000 0 FS & BP - YesDesign - YesCommitted - No

OTHER PROJECTS - SUPPORTING ECONOMIC DEVELOPMENT33 New England Road (Phase 2) - COG-

TA/CNL3,000,000 0 0 FS & BP - Yes

Design - YesCommitted - Yes

32 N3 / Chota Motala Road Interchange - COGTA/CNL

17,000,000 0 0 FS & BP - YesDesign - YesCommitted - Yes

Var (12, 21, 22, 23, 27, 32 etc)

IRPTN - DoT 85,000,000 0 0 FS & BP - YesDesign - YesCommitted - Yes



Bu

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crip

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t Y

ear

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m R

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6. OVERVIEW OF THE ANNUAL BUDGET PROCESS

Section 53 of the MFMA requires the Mayor of the municipality to provide general political guidance in the budget process and the setting of priorities that must guide the preparation of the budget. In addition Chapter 2 of the Municipal Budget and Reporting Regulations states that the Mayor of the municipality must establish a Budget Steering Committee to provide technical assistance to the Mayor in discharging the responsibilities set out in sec-tion 53 of the Act.

The Budget Steering Committee consists of the Municipal Manager and senior offi cials of the municipality meet-ing under the chairpersonship of the MMC for Finance.

The primary aim of the Budget Steering Committee is to ensure:

• that the process followed to compile the budget complies with legislation and good budget practices;• that there is proper alignment between the policy and service delivery priorities set out in the City’s IDP and

the budget, taking into account the need to protect the fi nancial sustainability of municipality; • that the municipality’s revenue and tariff setting strategies ensure that the cash resources needed to deliver

services are available; and• that the various spending priorities of the different municipal departments are properly evaluated and priori-

tised in the allocation of resources.



7. BUDGET PROCESS OVERVIEW

In terms of section 21 of the MFMA the Mayor is required to table in Council ten months before the start of the new fi nancial year (i.e. in August 2010) a time schedule that sets out the process to revise the IDP and prepare the budget.

The Mayor tabled in Council the required IDP and budget time schedule on 31 August 2011. Key dates applicable to the process were:

• August - 1st October 2011 - Conduct a Socio-economic survey or a Backlog Study, to determine the socio-economic data, municipal fi nancial environment, levels of service;

• September 2011 - Budget offi ce develop MTREF and determine revenue projections and proposed rates and service charges and draft initial allocations to functions and dept’s for the next fi nancial year;

• October 2011 - Conduct a Joint Strategic Planning Workshop for the Management Team and Political Leadership. Making strategic choices on agreed Key Development Priorities to underpin revision of various sector plans;

• November 2011 - Briefi ng on the Analysis and determine strategic objectives and priorities for service de-livery;

• January 2012 - Multi-year budget proposals are submitted to the Mayoral Committee for endorsement;• 25 January 2012 - Council considers the 2012/13 Mid-year Review and Adjustments Budget;• February 2012 - Recommendations of the Mayoral Committee are communicated to the Budget Steering

Committee, and on to the respective departments. The draft 2012/13 MTREF is revised accordingly;• 30 March 2012 - Tabling in Council of the draft 2012/13 IDP and 2012/13 MTREF for public consultation;• April 2012 - Public consultation;• 26 April 2012 - Closing date for written comments;• 2 to 21 May 2012 - fi nalisation of the 2012/13 IDP and 2012/13 MTREF, taking into consideration comments

received from the public, comments from National Treasury, and updated information from the most recent Division of Revenue Bill and fi nancial framework; and

• 23 May 2011 - Tabling of the 2011/12 MTREF before Council for consideration and approval.



8. IDP AND SERVICE DELIVERY AND BUDGET IMPLEMENTATION PLAN

This is the third generation or new IDP of the 2012/13 to 2016/17 fi nancial years based on two IDP generations (2001 to 2005 and 2006 to 2011) which would be adopted by Full Council on 30 May 2012. The IDP review pro-cess started in July 2011 after the tabling of an integrated IDP and PMS Process Plans and the Budget Time Schedule for the 2012/13 MTREF in August 2011.

The City’s IDP is a principal strategic planning tool, which directly guides and informs its planning, budget, man-agement and development actions. This plan is rolled out into objectives, key performance indicators and targets for implementation which directly inform the Service Delivery and Budget Implementation Plan. This Process Plan signifi ed the end of the second IDP generation into what is referred as third generation IDP, and the applicability included the following key IDP processes and deliverables:

• Registration of community needs;• Compilation of departmental business plans including key performance indicators and targets;• Financial planning and budgeting process;• Public participation process;• Compilation of the SDBIP,• 5 year organizational scorecard and• The review of the performance management and monitoring processes.

The third generation IDP in terms of its compilation and deliverables has emphasis on credible and simplifi ed IDP perched on a business and fi nancial planning process that would lead up to the 2012/13 to 2016/17 MTREFs, based on the approved 2012/13 MTREF, Mid-year Review and adjustments budget. The business planning pro-cess has subsequently been refi ned in the light of current economic circumstances and the resulting revenue projections.

With the compilation of the 2012/13 MTREF, each department/function had to review the business planning process, including the setting of priorities and targets after reviewing the mid-year and third quarter performance against the 2011/12 Departmental Service Delivery and Budget Implementation Plan. Business planning links back to priority needs and master planning, and essentially informed the detail operating budget appropriations and three-year capital programme.

In terms of the baseline as well as backlogs data regarding the basic services, the Stats SA Census report which will be available probably towards the end of this year, will support the municipality a great deal in setting realist service delivery performance targets, reducing the backlogs and meeting the Millennium Development Goals as well as aligning our service delivery agenda with the PGDS and Msunduzi and uMgungundlovu District SDFs.

During the public participation engagements prior to the draft IDP and Budget, the very biggest three monsters as identifi ed by the National Development Plan, i.e. eradication of poverty, unemployment and service delivery, the following graphical representation guides the municipal development priorities and budget allocation:



Refuse Collection

Electricity

Street Lighting

Creches

Bridges

Water

Toilets/Sanitation

Taxi Ranks

Roads

Halls/Community Centres

Economic Development

Good Governance

Sportsfi eld

Clinics

Repair & Maintenance

Housing

6%

6%2%

2%2%

3%

3%3% 3%

4%

8%

1%1%

21%

28.69%

6.31%

Ho

us

ing

Re

pa

ir &

Ma

inte

na

nc

e

Cli

nic

s

Sp

ort

sfi

eld

Go

od

Go

ve

r-n

an

ce

Ec

on

om

ic

De

ve

lop

me

nt

Ha

lls

/Co

mm

u-

nit

y C

en

tre

s

Ro

ad

s

Ta

xi

Ra

nk

s

To

ile

ts/S

an

i-ta

tio

n

Wa

ter

Bri

dg

es

Cre

ch

es

Str

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t L

igh

tin

g

Ele

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icit

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Re

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e C

ol-

lec

tio

n

% of Need 6% 21% 2% 3% 28.69% 6.31% 6% 8% 1% 4$ 3% 1% 2% 3% 3% 2%

MSUNDUZI WARDS 1 -37 NEEDS ANALYSIS 2012:1589 REQUESTS

The above analysis does not represent the entirely population of 616 730 of the City of Pietermaritzburg as per the Stats SA 2007 survey. This serves as a refl ection of developmental priorities emanating from a survey conducted among 1589 respondents that were interviewed or able to articulate issues during public participation meetings or izimbizo prior the approval of the draft IDP and Budget and after the budget road-shows and these are critical issues affecting communities in various wards. This input supports the prioritization process.



9. FINANCIAL MODELLING AND KEY PLANNING DRIVERS

As part of the compilation of the 2012/13 MTREF, extensive fi nancial modelling was undertaken to ensure afford-ability and long-term fi nancial sustainability. The following key factors and planning strategies have informed the compilation of the 2012/13 MTREF:

• City growth• Policy priorities and strategic objectives • Asset maintenance • Economic climate and trends (i.e. infl ation, Eskom increases, household debt, migration patterns)• Performance trends• The approved 2011/12 adjustments budget and performance against the SDBIP• Cash Flow Management Strategy• Debtor payment levels• Loan and investment possibilities• The need for tariff increases versus the ability of the community to pay for services;• Improved and sustainable service delivery

In addition to the above, the strategic guidance given in National Treasury’s MFMA Circulars 51 and 54 has been taken into consideration in the planning and prioritisation process.



10. COMMUNITY CONSULTATION

The draft 2012/13 MTREF as tabled before Council on 30 March 2012 for community consultation was published on the municipality’s website, and hard copies were made available at customer care offi ces, municipal notice boards and various libraries.

All documents in the appropriate format (electronic and printed) were provided to National Treasury, and other national and provincial departments in accordance with section 23 of the MFMA, to provide an opportunity for them to make inputs.

Ward Committees were utilised to facilitate the community consultation process from 13 to 29 April 2012. The applicable dates and venues were published in all the local newspapers and on average attendance of 200 was recorded per meeting. This is up on the previous year’s process. This can be attributed to the additional initiatives that were launched during the consultation process, including the specifi c targeting of ratepayer associations. In-dividual sessions were scheduled with organised business and imbizo’s were held to further ensure transparency and interaction. Other stakeholders involved in the consultation included churches, non-governmental institutions and community-based organisations.

Submissions received during the community consultation process and additional information regarding revenue and expenditure and individual capital projects were addressed, and where relevant considered as part of the fi -nalisation of the 2012/13 MTREF. Feedback and responses to the submissions received are available on request. The following are some of the issues and concerns raised as well as comments received during the consultation process:

• Electricity revenue collected from the monthly Ampere Charge (MCB charge) IN 2012/13 be retained in a ring fenced account and used specifi cally for electricity infrastructure maintenance and renewal;

• Several complaints were received regarding poor service delivery, especially waste removal backlogs and the state of road infrastructure;

• Poor performance of contractors relating to infrastructure development and maintenance especially in the areas of road construction and maintenance were raised;

• The affordability of tariff increases, especially electricity, was raised on numerous occasions. This concern was also raised by organized business as an obstacle to economic growth;

• Pensioners cannot afford the tariff increases due to low annual pension increases; • Concerned about the amount owed to the municipality by debtors

Signifi cant changes effected in the fi nal 2012/13 MTREF compared to the draft 2012/13 MTREF that was tabled for community consultation, include:

• from 1 July 2012, was factored into the The fi nal Eskom bulk tariff increase, applicable to municipalities proposed consumer tariffs, applicable from 1 July 2012. This resulted in an increase of 16 per cent;

• The 2012 Division of Revenue Act (DORA) grant allocations were fi nalized and aligned to the gazetted al-locations; and



11. OVERVIEW OF ALIGNMENT OF ANNUAL BUDGET WITH IDP

The Constitution mandates local government with the responsibility to exercise local developmental and coopera-tive governance. The eradication of imbalances in South African society can only be realized through a credible integrated developmental planning process.

Municipalities in South Africa need to utilise integrated development planning as a method to plan future develop-ment in their areas and so fi nd the best solutions to achieve sound long-term development goals. A municipal IDP provides a fi ve year strategic programme of action aimed at setting short, medium and long term strategic and budget priorities to create a development platform, which correlates with the term of offi ce of the political incum-bents. The plan aligns the resources and the capacity of a municipality to its overall development aims and guides the municipal budget. An IDP is therefore a key instrument which municipalities use to provide vision, leadership and direction to all those that have a role to play in the development of a municipal area. The IDP enables munici-palities to make the best use of scarce resources and speed up service delivery.

Integrated developmental planning in the South African context is amongst others, an approach to planning aimed at involving the municipality and the community to jointly fi nd the best solutions towards sustainable development. Furthermore, integrated development planning provides a strategic environment for managing and guiding all planning, development and decision making in the municipality.

It is important that the IDP developed by municipalities correlate with National and Provincial intent. It must aim to co-ordinate the work of local and other spheres of government in a coherent plan to improve the quality of life for all the people living in that area. Applied to the City, issues of national and provincial importance should be refl ected in the IDP of the municipality. A clear understanding of such intent is therefore imperative to ensure that the City strategically complies with the key national and provincial priorities.

The aim of this revision cycle was to develop and coordinate a coherent plan to improve the quality of life for all the people living in the area, also refl ecting issues of national and provincial importance. One of the key objectives is therefore to ensure that there exists alignment between national and provincial priorities, policies and strategies and the City’s response to these requirements.

The national and provincial priorities, policies and strategies of importance include amongst others:

• Green Paper on National Strategic Planning of 2009;• Government Programme of Action;• Development Facilitation Act of 1995;• Provincial Growth and Development Strategy (GGDS);• National and Provincial spatial development perspectives;• Relevant sector plans Table 21 IDP Strategic Objectives



2011/12 Financial Year 2012/13 MTREF1. The provision of quality basic

services and infrastructure1. Provision of quality basic services and infrastructure

2. Acceleration of higher and shared economic growth and development

2. Economic such as transportation, legislation and policy;National Key Performance Indicators (NKPIs);Accelerated and Shared Growth Initiative (ASGISA);National 2014 Vision; National Spatial Development Perspective (NSDP) andThe National Priority Outcomes.

The Constitution requires local government to relate its management, budgeting and planning functions to its objectives. This gives a clear indication of the intended purposes of municipal integrated develop-ment planning. Legislation stipulates clearly that a municipality must not only give effect to its IDP, but must also conduct its affairs in a manner which is consistent with its IDP. The following table highlights the IDP’s fi ve strategic objectives for the 2012/13 MTREF and further planning refi nements that have directly informed the compilation of the budget:

growth and development that leads to sustainable job creation3. Fighting of poverty, building

clean, healthy, safe and sus-tainable communities

3.1 Fight poverty and build clean, healthy, safe and sustainable communi-ties

3.2 Integrated Social Services for empowered and sustainable communi-ties

4. Fostering participatory de-mocracy and adherence to Batho Pele principles through a caring, accessible and ac-countable service

4. Foster participatory democracy and Batho Pele principles through a caring, accessible and accountable service

5. Good governance, Financial viability and institutional gov-ernance

5.1 Promote sound governance5.2 Ensure fi nancial sustainability5.3 Optimal institutional transformation to ensure capacity to achieve set

objectives

In order to ensure integrated and focused service delivery between all spheres of government it was important for the City to align its budget priorities with that of national and provincial government. All spheres of government place a high priority on infrastructure development, economic development and job creation, effi cient service de-livery, poverty alleviation and building sound institutional arrangements.

Local priorities were identifi ed as part of the IDP review process which is directly aligned to that of the national and provincial priorities. The key performance areas can be summarised as follows against the fi ve strategic ob-jectives:



1. Provision of quality basic services and infrastructure which includes, amongst others:

• Provide electricity;• Provide water;• Provide sanitation;• Provide waste removal;• Provide housing;• Provide roads and storm water;• Provide public transport;• Provide city planning services; and• Maintaining the infrastructure of the City.

2. Economic growth and development that leads to sustainable job creation by:

• Ensuring there is a clear structural plan for the City;• Ensuring planning processes function in accordance with set timeframes;• Facilitating the use of labour intensive approaches in the delivery of services and the building of infra-

structure.

3.1. Fight poverty and build clean, healthy, safe and sustainable communities:

• Effective implementation of the Indigent Policy;• Working with the provincial department of health to provide primary health care services;• Extending waste removal services and ensuring effective city cleansing;• Ensuring all waste water treatment works are operating optimally;• Working with strategic partners such as SAPS to address crime;• Ensuring safe working environments by effective enforcement of building and health regulations;• Promote viable, sustainable communities through proper zoning; and• Promote environmental sustainability by protecting wetlands and key open spaces.

3.2. Integrated Social Services for empowered and sustainable communities

• Work with provincial departments to ensure the development of community infrastructure such as schools and clinics is properly co-ordinated with the informal settlements upgrade programme

4. Foster participatory democracy and Batho Pele principles through a caring, accessible and accountable service by:

• Optimising effective community participation in the ward committee system; and• Implementing Batho Pele in the revenue management strategy.

5.1. Promote sound governance through:

• Publishing the outcomes of all tender processes on the municipal website

5.2. Ensure fi nancial sustainability through:

• Reviewing the use of contracted services• Continuing to implement the infrastructure renewal strategy and the repairs and maintenance plan



5.3. Optimal institutional transformation to ensure capacity to achieve set objectives

• Review of the organizational structure to optimize the use of personnel;

In line with the MSA, the IDP constitutes a single, inclusive strategic plan for the City. The fi ve-year programme responds to the development challenges and opportunities faced by the City by identifying the key performance areas to achieve the fi ve strategic objectives mentioned above.

In addition to the fi ve-year IDP, the City undertakes an extensive planning and developmental strategy which primarily focuses on a longer-term horizon; 15 to 20 years. This process is aimed at infl uencing the development path by proposing a substantial programme of public-led investment to restructure current patterns of settlement, activity and access to resources in the City so as to promote greater equity and enhanced opportunity. The strat-egy specifi cally targets future developmental opportunities in traditional dormitory settlements. It provides direc-tion to the City’s IDP, associated sectoral plans and strategies, and the allocation of resources of the City and other service delivery partners.

This development strategy introduces important policy shifts which have further been translated into seven stra-tegic focus areas/objectives as outlined below:

• Developing dormant areas;• Enforcing hard development lines – so as to direct private investment;• Maintaining existing urban areas;• Strengthening key economic clusters;• Building social cohesion;• Strong developmental initiatives in relation to the municipal institution as a whole; and• Sound fi nancial fundamentals.

Lessons learned with previous IDP revision and planning cycles as well as changing environments were taken into consideration in the compilation of the fourth revised IDP, including:

• Strengthening the analysis and strategic planning processes of the City;• Initiating zonal planning processes that involve the communities in the analysis and planning processes.

More emphasis was placed on area based interventions, within the overall holistic framework;• Ensuring better coordination through a programmatic approach and attempting to focus the budgeting pro-

cess through planning interventions; and• Strengthening performance management and monitoring systems in ensuring the objectives and deliver-

ables are achieved.

The 2012/13 MTREF has therefore been directly informed by the IDP revision process and the following tables provide a reconciliation between the IDP strategic objectives and operating revenue, operating expenditure and capital expenditure.



12. MEASURABLE PERFORMANCE OBJECTIVES AND INDICATORS

Performance Management is a system intended to manage and monitor service delivery progress against the identifi ed strategic objectives and priorities. In accordance with legislative requirements and good business prac-tices as informed by the National Framework for Managing Programme Performance Information, the City has developed and implemented a performance management system of which system is constantly refi ned as the integrated planning process unfolds. The Municipality targets, monitor, assess and review organisational perfor-mance which in turn is directly linked to individual employee’s performance.

At any given time within government, information from multiple years is being considered; plans and budgets for next year; implementation for the current year; and reporting on last year’s performance. Although performance information is reported publicly during the last stage, the performance information process begins when poli-cies are being developed, and continues through each of the planning, budgeting, implementation and reporting stages. The planning, budgeting and reporting cycle can be graphically illustrated as follows:

Oversightby parliament, provincial legislature or municipal council

InstitutionNational departmentprovincial department

municipalitypublic entity

municipal entity

Strategic planning

Policy development

End-year reporting

Operational planning and

budgeting

Implementation and in-year reporting

Assess and adjustSpecify performance

indicators

Identify deired impacts

Monitor and take corrective action

Set targets and allocate resources

Figure 2: Planning, budgeting and reporting cycle



The performance of the City relates directly to the extent to which it has achieved success in realising its goals and objectives, complied with legislative requirements and meeting stakeholder expectations. The City therefore has adopted one integrated performance management system which encompasses:

• Planning (setting goals, objectives, targets and benchmarks);• Monitoring (regular monitoring and checking on the progress against plan);• Measurement (indicators of success); • Review (identifying areas requiring change and improvement); • Reporting (what information, to whom, from whom, how often and for what purpose); and• Improvement (making changes where necessary).

The following table sets out the municipalities main performance objectives and benchmarks for the 2012/13 MTREF.

13.1. Free Basic Services: basic social services package for indigent households

The social package assists residents that have diffi culty paying for services and are registered as indigent house-holds in terms of the Indigent Policy of the City. With the exception of water, only registered indigents qualify for the free basic services.

For the 2011/12 fi nancial year 90 000 registered indigents have been provided for in the budget with this fi gured increasing to 105 000 by 2013/14. In terms of the Municipality’s indigent policy registered households are entitled to 6kl free water, 50 kwh of electricity, 6 kl sanitation and free waste removal equivalent to 85l once a week, as well as a discount on their property rates. Further detail relating to the number of households receiving free basic services, the cost of free basic services, highest level of free basic services as well as the revenue cost associated with the free basic services is contained in Table 27 MBRR A10 (Basic Service Delivery Measurement) on page 38.

Note that the number of households in informal areas that receive free services and the cost of these services (e.g. the provision of water through stand pipes, water tankers, etc) are not taken into account in the table noted above.

13.2. Providing clean water and managing waste water

The Msunduzi Municipality is the gazetted Water Services Authority for the entire municipality in terms of the Water Services Act and Umgeni Water is the water services provider. The City’s bulk water needs are provided directly by Umgeni Water in the form of purifi ed potable water that conforms to the drinking water requirements of SANS 241. The Department of Water Affairs conducts an annual performance rating of the Umgeni Water owned DV Har-ris/Midmar water treatment works Darvill Waste Water Treatment Works, presenting a Blue Drop or Green Drop award respectively to potable water treatment works and waste water treatment works that meet certain criteria of excellence.

Msunduzi Municipality City was awarded Blue Drop status in 2010/11 and 2011/2012, indicating that the City’s drinking water is of exceptional quality. Whilst the Green Drop certifi cation process will only be scored in 2013, the City has further made several interventions to ensure that this excellence award is received for Sanitation.



However, the following is briefl y the main challenges facing the City in this regard:

• The capacity at Darvill waste water treatment works has reached in hydraulic and organic threshold and therefore the need to seriously consider Waste Water Treatment alternatives, which forms part of the IDP Submission.

• Shortage of skilled personnel makes proper operations and maintenance diffi cult; • Electrical power supply to some of the plants is often interrupted which hampers the purifi cation processes;

and • There is a lack of proper regional catchment management, resulting in storm water entering the sewerage

system and hence the inclusion in the IDP submission.

The following are some of the steps that have been taken to address these challenges:

• Infrastructure shortcomings are being addressed through the capital budget in terms of a 5-year upgrade plan;

• The fi lling of vacancies has commenced. The initiation of the Waste Water Treatment plan to proactively ad-dress capacity requirements. The Electricity Division is to install dedicated power supply lines to the plants; and

• The Division is working in consultation with the Department of Water Affairs to address catchment manage-ment.

• Intensive Asset renewal programs are scheduled to start in the next 3 years• A intensive 5 year Non-Revenue Water program has commenced in order to reduce losses and increase

revenue.



13. OVERVIEW OF BUDGET ASSUMPTIONS

13.1. External factors

Owing to the economic slowdown, fi nancial resources are limited due to reduced payment levels by consumers. This has resulted in declining cash infl ows, which has necessitated restrained expenditure to ensure that cash outfl ows remain within the affordability parameters of the City’s fi nances.

13.2. Review of Credit Control and Debt Collection Policy

The review of the Credit Control and Debt Collection policy approved by Council for the 2011/12 fi nancial year has taken into consideration the current debt position. As a result, the revised policy for the 2012/13 year focuses on stricter credit control measures being included.

The policy includes provision for the prepaid meter aspect to facilitate payment apportionment against arrear debt from the purchases of electricity. Further to this, where accounts remained outstanding, the policy now allows for the removal or disconnection of the prepaid meter service.

The 2012/13 Credit Control and Debt Collection policy is also focused on providing more suitable options to assist consumers with settling their arrears on a more affordable basis.

13.3. General infl ation outlook and its impact on the municipal activities

There are fi ve key factors that have been taken into consideration in the compilation of the 2012/13 MTREF:

• National Government macro economic targets;• The general infl ationary outlook and the impact on City’s residents and businesses;• The impact of municipal cost drivers;• The increase in prices for bulk electricity and water; and• The increase in the cost of remuneration. Employee related costs comprise 23.92 per cent of total operating

expenditure in the 2012/13 MTREF and therefore this increase above infl ation places a disproportionate upward pressure on the expenditure budget. The wage agreement SALGBC is not concluded with the mu-nicipal workers unions yet. C redit rating outlook

Table 27: Credit rating outlook

Global Rating

03 04 04 05 05 06

Ratings on:

LONG TERM DEBT BBB+ A - A

SHORT TERM DEBT A2 A2 A1 -



Year Date Security Class

Rating Scale

Currency Rating

June 2002 06/2003 Short Term National Rand A2

Long Term National Rand BBB+

June 2003 06/2004 Short Term National Rand A2 Long Term National Rand BBB+

June 2004 06/2005 Short Term National Rand A2 Long Term National Rand A -

June 2005 05/2006 Short Term National Rand A1- Long Term National Rand A





June 2010 04/2010 Short Term National Rand A3 Long Term National Rand BBB

June 2011 06/2011 Short Term National Rand A3 Long Term National Rand BBB

13.4. Interest rates for borrowing and investment of funds

The MFMA specifi es that borrowing can only be utilised to fund capital or refi nancing of borrowing in certain condi-tions. The City has no intention for borrowing in the 2012/13 fi nancial year.

13.5. Collection rate for revenue services

The base assumption is that tariff and rating increases will increase at a rate slightly higher that CPI over the long term. It is also assumed that current economic conditions, and relatively controlled infl ationary conditions, will continue for the forecasted term.

The rate of revenue collection is currently expressed as a percentage (90 per cent) of annual billings. Cash fl ow is assumed to be 90 per cent of billings, plus an increased collection of arrear debt from the revised collection and credit control policy. The performance of arrear collections will however only be considered a source of additional cash in-fl ow once the performance has been carefully monitored.



13.6. Growth or decline in tax base of the municipality

Debtors revenue is assumed to increase at a rate that is infl uenced by the consumer debtors collection rate, tariff/rate pricing, real growth rate of the City, household formation growth rate and the poor household change rate.

Household formation is the key factor in measuring municipal revenue and expenditure growth, as servicing ‘households’ is a greater municipal service factor than servicing individuals. Household formation rates are as-sumed to convert to household dwellings. In addition the change in the number of poor households infl uences the net revenue benefi t derived from household formation growth, as it assumes that the same costs incurred for servicing the household exist, but that no consumer revenue is derived as the ‘poor household’ limits consumption to the level of free basic services.

13.7. Impact of national, provincial and local policies

Integration of service delivery between national, provincial and local government is critical to ensure focussed service delivery and in this regard various measures were implemented to align IDPs, provincial and national strategies around priority spatial interventions. In this regard, the following national priorities form the basis of all integration initiatives:

• Creating jobs;• Enhancing education and skill development;• Improving Health services;• Rural development and agriculture; and• Fighting crime and corruption.

To achieve these priorities integration mechanisms are in place to ensure integrated planning and execution of various development programs. The focus will be to strengthen the link between policy priorities and expenditure thereby ensuring the achievement of the national, provincial and local objectives.

13.8 Ability of the municipality to spend and deliver on the programmes

It is estimated that a spending rate of at least 99 per cent is achieved on operating expenditure and 100 per cent on the capital programme for the 2012/13 MTREF of which performance has been factored into the cash fl ow budget.



14. OVERVIEW OF BUDGET FUNDING

Tariff setting plays a major role in ensuring desired levels of revenue. Getting tariffs right assists in the compilation of a credible and funded budget. The City derives most of its operational revenue from the provision of goods and services such as water, electricity, sanitation and solid waste removal. Property rates, operating and capital grants from organs of state and other minor charges (such as building plan fees, licenses and permits etc).

The revenue strategy is a function of key components such as:

• Growth in the city and economic development;• Revenue management and enhancement;• Achievement of a 95 per cent annual collection rate for consumer revenue;• National Treasury guidelines;• Electricity tariff increases within the National Electricity Regulator of South Africa (NERSA) approval;• Achievement of full cost recovery of specifi c user charges;• Determining tariff escalation rate by establishing/calculating revenue requirements;• The Property Rates Policy in terms of the Municipal Property Rates Act, 2004 (Act 6 of 2004) (MPRA), and • And the ability to extend new services and obtain cost recovery levels.

The above principles guide the annual increase in the tariffs charged to the consumers and the ratepayers aligned to the economic forecasts.



15. LEGISLATION COMPLIANCE STATUS

Compliance with the MFMA implementation requirements have been substantially adhered to through the follow-ing activities:

1. In year reporting Reporting to National Treasury in electronic format was fully complied with on a monthly basis. Section 71

reporting to the Executive Mayor (within 10 working days) has progressively improved and includes monthly published fi nancial performance on the City’s website.

2. Internship programme The Msunduzi Municipality commits itself to making a valuable contribution towards improving skills among

unemployed community members by prioritizing internships to previously disadvantaged groups in the Msunduzi area of jurisdiction. Internships are awarded annually and are funded by the Human Resourc-es Development unit of the Msunduzi Municipality. The Municipality is committed to facilitate these pro-grammes to give students the opportunity to obtain skills and professional experience, thus developing a sense of professional identity. The 2012 internship needs for the Msunduzi Municipality were determined in consultation with the Deputy Municipal Managers, Process Managers and Level 4 Managers of the relevant Business Units.

3. Budget and Treasury Offi ce The Budget and Treasury Offi ce has been established in accordance with the MFMA and a restructuring

process will take place soon to ensure that it functioning effectively and effeciently.

4. Audit Committee An Audit Committee has been established and is fully functional.

5. Service Delivery and Implementation Plan The detail SDBIP document is at a draft stage and will be fi nalised after approval of the 2012/13 MTREF in

May 2010 directly aligned and informed by the 2011/12 MTREF.

6. Annual Report Annual report is compiled in terms of the MFMA and National Treasury requirements.

7. MFMA Training The MFMA training module in electronic format is presented at the City’s internal centre and training is on-

going.

8. Policies An amendment of the Municipal Property Rates Regulations as published in Government Notice 363 of 27

March 2009, was announced in Government Gazette 33016 on 12 March 2010. The ratios as prescribed in the Regulations have been complied with.



16

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REGISTER OF TARIFFS AND CHARGESFINANCIAL MANAGEMENT

RatesVOTE SUB ITEM 2011/12 2012/13060 448 8208

Cents in the R

Cents in the R

1. A GENERAL RATE, assessed in terms of the Local Government: Municipal Property Rates Act 6 of 2004 0.019 0.0202

(a) Vacant Land - no rebate granted (net) 0.019 0.0202(b) Unauthorised use plus surcharge 0.019 0.0243

2. REBATES:

Residential Property(a) A rebate on the valuation of rateable property 0.009 0.0091


Other Properties(b) A rebate on the valuation of rateable property 0.001 0.0016


Agricultural Property(c) A rebate on the valuation of rateable property 0.016 0.0175


Public Service Infrastructure(d) A rebate on the valuation of rateable property 0.016 0.0175


Rural Communal Property(e) A rebate on the valuation of rateable property 0.003 0.0028


Home Business and DSF properties(f) A rebate on the valuation of rateable property 0.003 0.0061


Sectional Title Garages - Separately Registered(g) A rebate on the valuation of rateable property 0.009 0.0091


Mining(h) A rebate on the valuation of rateable property 0.001 0.0006


Public Benefi t Organisations(i) A rebate on the valuation of rateable property 0.0001

Statutory Rebate 0.0027Additional Rebate 100%



2011/12 2012/13

Cents in the R

Cents in the R

Impermissable and Free Value based rebates(j) No rates shall be levied on the market value of the fi rst R15,000 of residential property,

home business and DSF propertiesA rebate of 100% will be granted on all residential property and home business property from a value of R15,001 to a value of R100,000.

Aged Persons and Disability Grantees Rebate(k) Aged Persons Occupier Owner Applicants:

Female – 60 years and overMale – 63 years and overTotal monthly income of all occupants and owners from all sourcesUnder age 75 R 2,896 R 3,000Age 75 and over R 3,040%’tage Rebate – 331/3% 33 1/3%orTotal monthly income of all occupants and owners from all sourcesUnder age 75 R 2,280 R 2,400Age 75 and over R 2,440%’tage Rebate – 40% max 40% max

Child Headed Households(l) Maximum monthly income of all occupants and owners from all sources R 2,400

%’tage Rebate – 40% max

Listed Buildings(m) Rates Rebate after primary rebate on Listed Buildings 40% Max 40% Max

Developers Rebate(n) Rates Rebate on VL only subject to Council Conditions 100%

Year 1 66%Year 2 33%Year 3

4. General Note 1 No rebates on Listed Buildings and Developers properties will be granted to ratepayers

where any arrears is outstanding on the property for rates & services. Rebate will only be granted to aged persons and child headed households where arrangements are made for arrears and where all arrangments are being maintained.

2 Existing Newly Incorporated Properties have been phased in over three years and no fur-ther rebates will be granted in terms of the Municipal Property Rates Act.

3 Rural Communal Properties will be phased in over four years and a rebate of 25% will be granted in this fi nancial year.

4 No rates will be levied on property owned and occupied by the Msunduzi Municipality.



5 Properties that were not previously rated in terms of the Local Authorities Ordinance, that do not qualify in terms of the MPRA or other Council criteria as a place of worship or public benefi t organisation, will be rated in terms of their current use category and continue to be phased in according to the MPRA. A phase in rebate of 25% will apply for the current fi nancial year.


Miscellaneous Charges

1 Revenue Clearance Certifi cate Application Fee R 220 R 230

FINANCIAL MANAGEMENTFINANCIAL CONTROL AND CASH MANAGEMENT

Municipal Market


Hiring, Storage and Ripening1 Use of Handling Equipment

Hiring of light trolley (small) per day or part thereof 2.074 1.322Hiring of heavy trolley (large) per day or part thereof 4.530 3.950


Cold Storage of Fresh Produce or Other Articles2.a. Storage tariffs of fresh produce or other articles (excluding bananas) in cold storage

rooms per day or part thereof are indicated hereunder provided that the tariff shallnot be less than 4.313 4.572per pallet per day

2.b. Packed into containers (other than large bags or pockets), the size of which shall be cal-culated per cubic centimeter and such calculation shall be based on the outer dimensions of the container.

i) Per container not exceeding 10 000 cm³ (2 kg grape tray, S/L box) 0.023 0.024

ii) Per container exceeding 10 000 cm³ but not exceeding 20 000 cm³ 0.045 0.048(½ bushel, WB box, double layer, tomato box, lemon box, etc)




iii) Per container exceeding 20 000 cm³ but not exceeding 30 000 cm³ 0.067 0.071(jumble pack, multi-layer, pear box, and economy pack)

iv) Per container exceeding 30 000 cm³ but not exceeding 40 000 cm³ 0.090 0.095(economy pack)

v) Per container exceeding 40 000 cm³ but not exceeding 50 000 cm³ 0.113 0.120(apple carton [counts], thrift pack, banana box)

vi) Per container exceeding 50 000 cm³ but not exceeding 60 000 cm³ 0.134 0.142(large cardboard box, timber crate – lettuce)

vii) Per container exceeding 60 000 cm³ but not exceeding 70 000 cm³ 0.156 0.165

viii) Tariff for containers exceeding 70 000 cm³, per 10 000 cm³ 0.023 0.024

2.c. Packed into bags or pockets or similar containers:Per bag with net mass not exceeding 7 kg (½ pocket) 0.038 0.040

Per bag with net mass exceeding 7 kg but not exceeding 15 kg 0.075 0.080( Orange, Potato Pocket)

Per bag with net mass exceeding 15 kg but not exceeding 35 kg 0.187 0.198(Sugar pocket)

2.d. Unpacked bunched fresh produce or other articles:Per fi ve bunches 0.045 0.048

2.e. Unpacked loose units of fresh produce or other articles:Per watermelon or pumpkin 0.045 0.048Per unit of any other fresh produce or other articles. 0.045 0.048

2.f. Double the tariffs fi xed in 2(b), (c), (d) and (e) shall be payable in respect of cold storage of fresh produce or other articles not purchased on the market or sold through the market.




3 Tariffs for Bananas3.a. Ripening

Per standard 20 kg banana boxper week 1.636 1.734per day 0.232 0.246

Per 10 kg banana boxper week 0.815 0.864per day 0.118 0.125


3.b. StoragePer banana box per day 0.113 0.120

4 Tariff for StorageFresh produce sold and not removed from the market hall by 1 p.m on the day of pur-chase, shall be subjected to a fee of R0.785 cents per unit per day or part thereof.

0.741 0.785


5 Salesmen’s Permits Salesmen’s Permits monthly fee R 25.780 R 4.390


6 a. Loading Bays – per annum R 311 R 330b. Reserved Open Parking Bays for Agents – per annum R 311 R 330


7 Cage Hire – per month R 163 R 173

8 Digital Prints – Condemned Produce (Cost to Agent) – per print R 7 R 8

9 Transaction Charge 0.227 0.240



FINANCIAL MANAGEMENTSUPPLY CHAIN MANAGEMENT

Tender Documents Deposits


The tender documentation deposit is charged on pick up of a tender document by a tenderer.

Non-refundable deposit for projectsContract Values between

R 30 000.00 to R 200 000.00 R 100 R 105

R 200 001.00 to R1 000 000.00 R 120 R 126

R1 000 001.00 to R5 000 000.00 R 300 R 316

R5 000 001.00 and over R 500 R 527

INFRASTRUCTURE DEVELOPMENT, SERVICE DELIVERY AND MAINTENANCE MANAGEMENTELECTRICITY DISTRIBUTION MANAGEMENT

City Electrical Engineers

DESCRIPTION VOTE SUB ITEMDomestic – Basic

Charge704 412 8401

Domestic – Amp Charge

704 412 8154

Domestic – Energy Charge

704 412 8157

Scale A: Domestic 1 A.I Single-Phase up to 80A –

Basic Charge per month R 16.20 R 17.50Net Ampere Charge per amp per phase p.m. R 5.994 R 6.953Energy Charge per kWh (cents) 51.728 60.005

DESCRIPTION VOTE SUB ITEMDomestic – Basic

Charge704 412 8401

Domestic – Amp Charge

704 412 8154

Domestic – Energy Charge

704 412 8157

2 Scale A.3 Three Phase up to 100A Basic Charge per month R 27.00 R 29.16Net Ampere Charge per amp per phase p.m. R 4.610 R 5.348Energy Charge per kWh (cents) 51.728 60.005



DESCRIPTION VOTE SUB ITEM 2011/12 2012/13Small Power Users

Basic Charge704 412 8402 Excl. Vat Excl. Vat

Small Power Users Ampere charge

704 412 8376

Small Power Users Energy Charge

704 412 8289

Scale B: Small Power users (Maximum Load 65 kVA)

3 Scale B.1 Single-Phase up to 80ABasic Charge per month R 43.20 R 46.66Net Ampere Charge per amp per phase p.m. R 13.140 R 15.242Energy Charge per kWh (cents) 53.019 61.502

4 Scale B.3 Three-Phase up to 100ABasic Charge per month R 75.60 R 81.65Net Ampere Charge per amp per phase p.m. R 10.950 R 12.702Energy Charge per kWh (cents) 53.019 61.502Minimum Charge per amp per phase p.m. R 10.950 R 12.702

DESCRIPTION VOTE SUB ITEMLarge Power Users

Bulk Basic704 412 8403

Large Power Users Bulk kVa

704 412 8049

Large Power Users Bulk kWh

704 412 8052

Scale C: Large Power users (Load greater than 65 kVA)

5 Scale C.1 Supply taken at 400VBasic Charge per month R 324.00 R 349.92Demand charge per kVA per month R 119.378 R 138.479Energy charge per kWh (cents) 51.141 59.324

* The minimum charge per month payable by the consumer under Scale C shall be an amount calculated as aforesaid on the basis of 70% of the highest maximum demand in kVA notifi ed to the City Electrical Engineer by the consumer or 70% of the previous twelve months highest maximum in kVA, whichever is the higher.


Scale D.1: Block Tariff This scale may be applied to any consumer at his election as an alternative to any other scale.

6 Energy Charge per kWh R 2.450 R 2.842* The minimum monthly charge payable by the consumer under this scale shall be an amount calculated as aforesaid based on 50% of the highest monthly meter reading in the last twelve months.




Indigent Benefi t - Domestic supply onlyProperties valued at R100,000 and below with a 20amp circuit breaker will automatically receive the fi rst 50kWh of electricity free

Domestic households with a total household income within the limit set out in Rates, Section 3. (j), may apply for this benefi t, subject to additional qualifying criteria

7 Energy Charge only (cents) 70.855 82.192

Scale S: Prepayment Meter Tariff8 Energy Charge only (cents)

87.364 101.342

DESCRIPTION VOTE SUB ITEMTime of Use:

Basic704 412 8404

Time of Use: Demand kVa

704 412 8405

Time of Use: Access kVa

704 412 8406

Time of Use: kWh

704 412 8407

Scale T: Time Of Use Tariff

9 Scale T.1 Supply taken at 6.6 or 11 kVBasic Charge per month R 1,620.00 R 1,749.60Demand charge per kVA per month R 55.790 R 64.716Access charge per kVA per month. R 18.240 R 21.158Based on highest of notifi ed or previous 12 months highest demand.

Energy charge c/kWh (Periods as per Eskom Megafl ex)High Demand: (June, July, August)

Peak 194.378 225.478Standard 63.572 73.744Off Peak 42.195 48.946

Low Demand: (Other Months)Peak 66.989 77.708Standard 47.862 55.520Off Peak 38.778 44.983

Reactive energy charge. A charge for all reactive energy which exceed 30% of the real energy (kWh) per half hour period in the peak and standard periods only (c/kvarh)

4.864 5.642



Time periods

Day Peak Standard Off-Peak

Week Day 00:00 - 06:00

06:00 - 07:00

07:00 - 10:00 10:00 - 18:00

18:00 - 20:00 20:00 - 22:00 22:00 - 24:00

Saturday 00:00 - 07:00

07:00 - 12:00 12:00 - 18:00

18:00 - 20:00 20:00 - 24:00

Sunday 00:00 - 24:00

The table below indicates the treatment of public holidays for the Time of Use tariff

Date Day Actual day of the week Day treated as

9 August 2012 NATIONAL WOMEN’S DAY THURSDAY SATURDAY

24 September 2012 HERITAGE DAY MONDAY SUNDAY

16 December 2012 DAY OF RECONCILIATION SUNDAY SATURDAY

17 December 2012 PUBLIC HOLIDAY MONDAY SATURDAY

25 December 2012 CHRISTMAS DAY TUESDAY SUNDAY

26 December 2012 DAY OF GOODWILL WEDNESDAY SUNDAY

1 January 2013 NEW YEARS DAY TUESDAY SUNDAY

21 March 2013 HUMAN RIGHTS DAY THURSDAY SATURDAY

29 March 2013 GOOD FRIDAY FRIDAY SUNDAY

1 April 2013 FAMILY DAY MONDAY SUNDAY

27 April 2013 FREEDOM DAY SATURDAY SATURDAY

1 May 2013 WORKERS DAY WEDNESDAY SATURDAY

16 June 2013 YOUTH DAY SUNDAY SUNDAY

17 June 2013 PUBLIC HOLIDAY MONDAY SATURDAY


CHARGES FOR PUBLIC LIGHTING SERVICES TO NON-MUNICIPAL CUSTOMERSCHARGES FOR PUBLIC LIGHTING SERVICES TO MUNICIPAL APPLICATIONS

L1 Lights: Whole Night (incl Maintenance)Fixed-R /light/month R 23.97 R 25.89Energy charge per 100 Watt per month if not measured R 16.665 R 19.331Energy charge if measured (cents) per kWh 45.621 52.920

L2 Lights: 24 hour (incl Maintenance)Fixed-R /light/month R 23.97 R 25.89Energy charge per 100 Watt per month if not measured R 59.927 R 69.515Energy charge if measured(cents) per kWh

49.320 57.211



2011/12 2012/13Excl. Vat Excl. Vat

L3 Lights: Whole Night High Mast (incl. Maintenance)Fixed-R /light/month R 479.45 R 517.81Energy charge per 100 Watt per month if not measured R 48.920 R 56.747Energy charge if measured (cents) per kWh 45.621 52.920

L4 Lights: 24 Hrs Traffi c (Excl. Maintenance)Maintenance charged at actual cost Actual

CostActual

CostEnergy charge per 100 Watt per month if not measured R 59.927 R 69.515Energy charge if measured (cents) per kWh 49.320 57.211


New Connection1 Bylaw 27(12)(a)(a) Normal domestic business premises:

(single phase service connection with a maximum capacity of 80A with a credit meter):

R 2,647 R 2,859

Plus the cost of labour and material

(single phase service connection with a maximum capacity of 80A with a prepayment meter):

R 3,242 R 3,501

Plus the cost of labour and material

Plus the cost of providing and laying or mounting the under-ground cable or overhead wiring, as the case may be, within the consumer’s property boundary

Plus the cost of providing and laying or mounting the under-ground cable or overhead wiring,as the case may be, within the consumer’s property boundary

(b) Surcharge raised for the reinstatement of single phase domestic services that have been removed for tampering (including illegal reconnection of disconnected service):

First offence R 10,800 R 11,664Second offence R 16,200 R 17,496Third or subsequent offence R 27,000 R 29,160

(c) Surcharge raised for the reinstatement of single phase domestic services that have been removed for tampering (including illegal reconnection of disconnected service):


(d) Tampering with Electricity Meters or Metering Installations: Domestic & Business Disconnection Fee R 625 R 675Back dated consumption (calculated based on estimated tampering period)




(e) Additional Charges: Illegal Connection and Reconnection

(i) Copper Theft Theft of Material Immediate

ArrestImmediate

ArrestBuying of stolen material Immediate

ArrestImmediate

Arrest

(ii) Illegal service connection - Connector Immediate Arrest

Immediate Arrest

(iii) Interference with other consumer’s equipment R 1,000 R 1,080(iv) Failure to comply with any issued notice R 200 R 216(v) Improper use of Electricity R 500 R 540(vi) Property access to inspect equipment is denied R 300 R 324(vii) Refusing to provide information R 200 R 216(viii) Rendering false information R 200 R 216(ix) Refusal of admittance R 200 R 216(x) Restricted access to meter room R 200 R 216(xi) Resale of electricity without a license or approval R 200 R 216(xii) Selling or supplying electricity without authority R 500 R 540(xiii) Standby Equipment connected to network without authority R 500 R 540

(f) Tampering with installed anti-tampering seals R 2,000 R 2,160

(g) Use of Electricity supply without a signed consumer agreement with the Municipality R 500 R 540

(h) Unkept substation equipment accommodation room R 500 R 540

(i) Unkept meter rooms R 500 R 540

(j) Unlocked meter rooms R 500 R 540




2 Bylaw 27 (12)(b)In all other cases, the connection charges shall be calculated on the basis of maximum demand required in accordance with the following:

Maximum Demand Basic Charge (Rands)

Basic Charge if no substation provided (Rands)

(kVA) 2011/12 2012/13 2011/12 2012/130 – 25 3,408 3,681 0 0

26 – 50 6,390 6,901 0 051 – 65 8,128 8,778 0 066 – 100 12,235 13,214 0 0101 – 130 15,725 16,983 0 0131 – 200 23,993 25,913 0 0201 – 315 60,469 65,307 19,470 21,028316 – 500 71,414 77,127 42,451 45,847501 – 800 88,495 95,575 77,580 83,786

801 – 1 000 104,747 113,126 104,747 113,126More than 1000 kva 101*kva +1620

Added to these charges will be the cost of providing and installing all cables and Council-owned equipment on the consumer’s premises.

3 Bylaw 27 (13)(a)Electrifi cation projects (Low Cost Housing)Fee for the installation and connection, for domestic or small power users, of service cable or line, electricity dispenser and, where necessary, power distribution unit:(a) For a single phase service up 20A R 183 R 197(b) For a single phase service up to 60A R 1,217 R 1,315


1 Fee for attendance at or disconnection of consumer’s Installation per meter:

(a) where due to non-payment of charges or fees or due to failure to make any required deposit or furnish any required security by the consumer in terms of the bylaws or to the breach by the consumer of any of the bylaws or any condition of his agreement

business R 625 R 675domestic R 625 R 300

Note: This charge is also applicable to water disconnections/restrictions ito 1(a) (b) on the consumer’s request for a temporary disconnection (11kV supply) R 832 R 898

(c) on the consumer’s request for a temporary disconnection (low voltage supply) R 517 R 558 (d) where a consumer’s supply is disconnected at the supply mains R 1,010 R 1,091

2 Fee for attendance in connection with a failure of supply R 129 R 139




3 Fee for testing(a) fee for testing and inspection of an installation

(other than bona fi de shock or fault of a serious nature) (i) Single dwelling unit

First visit inspection R 621 R 671Subsequent visits/inspections R 309 R 334

(ii) Any other installation Actual Cost Actual Cost

(b) fee for inspection of meter box upon certifi cation by electrical contractor that a meter box is ready for inspection

(i) First inspection No Charge No Charge

(ii) Any subsequent inspection R 218 R 236

4 Fee for testing accuracy of meter(a) Single-phase R 380 R 410

(b) Three-phase R 566 R 611

(c) Maximum demand Actual Cost Actual Cost

5 Fee for testing accuracy of tariff mcb(a) Single-phase service R 334 R 361

(b) Three-phase service R 475 R 513


6 Fee for change of tariff mcb(a) Single-phase service No Charge No Charge

(b) Three-phase R 19 R 21

7 Fee for checking meter reading R 105 R 113

VOTE SUB ITEM 704 415 8010

8 Accounting Charge R 123 R 133



INFRASTRUCTURE DEVELOPMENT, SERVICE DELIVERY AND MAINTENANCE MANAGEMENTWATER DISTRIBUTION AND SANITATION MANAGEMENT

Water Tariffs


Water Supply Tariffs

1 Scale 2 (1) – Domestic Basic Charge R 15.000kl to 6kl R 32.52 R 37.40

2 (2) – Domestic7kl to 30kl per kl R 10.94 R 12.58

2 (3) – Domestic 31kl to 60kl per kl R 16.15 R 18.57

2 (4) _Domestic 61kl and over per kl R 18.85 R 21.67

2 (5) _Domestic Flat rate (unmetered households) R 60.00

2 Scale 3A – Flats, SimplexesBasic Charge R 15.00Unit R 10.31 R 11.86

3 Scale 3B – Flats (Non-Rateable)Basic Charge R 15.00Unit R 14.19 R 16.32

4 Scale 4A (1) – CommercialBasic Charge R 25.000 - 30 kl per kl R 13.46

4A (2) – Commercial31kl to 60kl per kl R 15.00

4A (3) – Commercial61kl to 100kl per kl R 17.60

4A (4) – Commercial101kl and over per kl R 13.46

5 Scale 4B – Commercial (Non-Rateable)Basic Charge R 25.00Unit R 14.19 R 16.60




6 Scale 5 – Builders, Construction SitesBasic Charge R 25.00Unit R 14.19 R 16.60

7 Scale 6 – Religious OrganisationsBasic Charge R 25.00Unit R 11.25 R 13.17

8 Scale 7 – Registered Welfare & Charitable Institutions & certain Sporting Bodies which are exempted from payment of rates. Including such organizations & institutions ex-empted by the City Council.

Basic Charge R 25.00Unit R 11.25 R 13.17

10 Scale 8 – Municipal DepartmentsUnit R 10.75 R 12.57

Indigent Benefi t - Domestic Water supply onlyProperties valued at R100,000 and below will automatically receive the fi rst 6kl of water freeThe applicable tariff will be billed from the 7th kl upwards

Domestic households with a total household income within the limit set out in Rates, Section 3. (j), may apply for this benefi t, subject to additional qualifying criteria


Sewerage Tariffs


Based on the relevant Water ScaleSewerage Tariffs

1 Scale 2 – Domestic/House R 102.00 R 109.13

2 Home Business R 115.00 R 123.05

3 Scale 3A – Flats/Simplexes per kl R 5.41 R 5.79

4 Scale 4A – Business/Commercial per kl0 - 400 R 5.53 R 5.92

401 - 1000 R 5.16 R 5.52

Greater than 1000 R 4.27 R 4.56

Subject to a maximum of R 22,252.32 R 23,809.98




5 Vacant Land R 102.00 R 109.13

6 Scale 6 – Worship Places R 194.58 R 208.20

7 Scale 8M – Municipal Departments per kl R 5.53 R 5.92



9 Scale 3c, 4c, 7c – Registered Welfare & Charitable Institutions & certain Sporting Bodies which are exempted from payment of rates. Including such organizations & institutions exempted by the City Council.

per kl R 5.53 R 5.92

Note: Home BusinessRefers to a property previously rated as residential where an owner or lessee runs a small business from the premises and which is still primarily used as a place of resi-dence by that owner or lessee and where special consent has been obtained in terms of the Town Planning scheme to run this business on the premises.


Water Services Bylaw Tariffs


Sewer Connections

In all cases the connection into the Corporate Sewer shall be undertaken by the Executive Manager at the expense of the owner of the premises to be connected or his authorised agent.The Executive Manager shall decide the type and diameter of the pipe to be used for the con-nection.

Except where otherwise authorised, the work shall be charged at the following tariffs:1 Connection fees payable in terms of bylaw 23(3)b:(a) 100mm pipes R 2,447 R 2,643

(b) 150mm pipes minimum charge [cost plus 10%] R 4,479 R 4,837

(c) 200mm pipes minimum charge [cost plus 10%] R 5,168 R 5,581




The tariffs payable ito. this item are subject to the provision that – (i) where it is necessary to include such items as manholes, or other means of access to

the connection, special pipes or any other works which may be peculiar to the connec-tion, such additional work shall be to the expense of the owner of the premises to be connected or to his authorized agent, and such additional work shall be charged at full cost plus 10% administration charges, and

Cost Plus 10%

Admin. Charge

Cost Plus 10%

Admin. Charge

(ii) where a connection is required for a property within the central area other than a single residential dwelling, such connection shall be charged at full cost plus 10% administration charges with a minimum charge equal to the relevant tariff set out in this item.

Cost Plus 10%

Admin. Charge

Cost Plus 10%

Admin. Charge

2 Miscellaneous FeesThe following miscellaneous fees shall be payable to the Council in accordance with the provisions of these bylaws:

(a) Clearing of internal drain and sewer blockages during normal working hours. R 665 R 719 (b) Clearing of internal drain and sewer blockages during hours other than normal working

hoursR 1,259 R 1,360

(c) (i) Clearing of septic tanks within the Council’s area of jurisdiction R 1,354 R 1,463(ii) Clearing of septic tanks outside Council’s area of jurisdiction Cost plus

10%Cost plus

10%(Minimum deposit R1000.00)

(d) Clearing of conservancy tanks during normal working hours for non-residential prop-

erty (per load)R 428 R 462

(e) Clearing of conservancy tanks during normal working hours for residential property

(per load)R 214 R 231

(f) Clearing of pit latrines R 214 R 231

(g) Clearing of pit latrines monthly tariff R 33 R 36


3 The charge to be levied by the Council iro. conveyance and treatment of trade effl uent discharged into its sewers from manufacturing premises shall be assessed in accor-dance with the following formula:

(i) Cost [c/kl] = 0,637 [Ave COD – 350] 0.590 0.637

(ii) The volume of effl uent discharged being a fi xed percentage of their monthly water consumption, such percentage being mutually agreed upon by the industry concerned and Umgeni Water.

(iii) The average COD value used shall be determined from the average of previous six

months COD results taken by Umgeni Water.




(iv) Where an industry’s monthly effl uent sample is found to exceed the limits set out in the Water Services By-Laws, a charge will be levied for a re-inspection of the premises and re-sampling of the effl uent within a two week prescribed period.

R 838 R 905


1 When an owner or a consumer desires the services of the Council for the closing down or turning on of the water from a Council Control valve to a fi re supply consequent upon alterations, repairs or otherwise to the system, application shall be made for such service to the Council and the applicant shall pay in advance to the Council a fee of R421 for both the closing down and turning on of water by the Council. Fees payable ito Bylaw 30.

R 386 R 421

NOTEWhen it is necessary icw the repairs of any consumer’s pipes or fi ttings that the water should be turned off at the mains, the consumer’s plumber shall inform the Engineer who will give him notice of the day and hour that the water will be turned off, and upon the water being turned off, the plumber shall carry out the necessary repairs forthwith and complete same as expeditiously as possible.

2 The Council is empowered summarily to cut off the water supply of any consumer whose account for water is overdue or who has contravened any of these Bylaws, without prejudice to any penalties which may be recoverable under the Bylaws, and the Council may recover the fee provided in Subsection (b) of this Bylaw and any fur-ther sum or sums due by the consumer.

(a) When the water supply to any consumer has been cut off under this Bylaw, or is turned off at the owner’s or consumer’s request for the purposes other than repairs by an authorized plumber, a disconnection fee of R719 will be charged when the property is situated inside the Council’s area and a disconnecting fee of R719 will be charged when the property is situated outside the area of the Council, which fees will be pay-able by the owner or consumer, as the case may be, upon demand. Fees payable ito Bylaw 32.

R 660 R 719

(b) When the water supply to any consumer has been cut off under this Bylaw, the Council may, at its discretion, on payment in full of the overdue account and the disconnecting fee and a further fee for reconnection of R719 the property is situated within the area of Council or R719 if the property is situated outside the area of the Council, reconnect the supply to such premises.Fees payable ito Bylaw 32 R 660 R 719

(c) Water Restriction Washer

Installation R 228 R 249Removal R 243 R 265

(d) Surcharge raised for the reinstatement of domestic services that have been removed

for tampering (including where a meter has been removed and/or bypassed by an oc-cupier/owner):





(e) Surcharge raised for the reinstatement of Business services that have been removed

for tampering (including where a meter has been removed and/or bypassed by an oc-cupier/owner):


(f) Tampering with Water Meters or Metering Installations: Domestic & Business

Disconnection Fee R 660 R 719.40Back dated consumption (calculated based on estimated tampering period)


3 (a) Except where other competent arrangements have been agreed upon, the tariff for

connection to the water main shall be as follows[fees payable ito Bylaw96]:

(i) In Council’s area of jurisdiction – Diameter of supply pipe15mm – 200l per day limited supply R 885 R 96515mm R 1,931 R 2,10420mm R 4,419 R 4,81725mm R 5,679 R 6,190

50mm R 8,708 R 9,49280mm R 15,771 R 17,190100mm R 22,216 R 24,215150mm R 25,245 R 27,517

(ii) Outside Council’s area of jurisdiction – In all cases – cost of labour and materials plus

10% supervision on total costCost plus

10%Cost plus

10% (iii) Where an application is made for more than one connection for the same property a

discount of 25% be given on the smaller connections, subject to the following –(a) the application be made at the same time.(b) the positions of the connections be adjacent to one another. (c) the applicant be ready for the connections to be done at the same time. Discount

25%Discount

25%

(iv) Removal of ConnectionsMoving of connection from one position to another shall be charged at actual cost.Where a meter has been temporarily removed at the request of the owner, the cost of replacing the meter at a later date will be

R 700 R 763

(v) Removal or By-passing metersWhere a meter has been removed and/or bypassed by an occupier/owner, a fee shall be charged for the replacement of the meter.

R 1,210 R 1,319




(vi) Fee for attendance at the applicant’s site at time notifi ed by applicant where it is not possible to make the connection due to the applicants pipe-work not being ready for connection.

R 386 R 421

The following shall be the charges for the testing of meters and testing and stamping of taps and fi ttings in accordance with these Bylaws:

4 (b) Testing Meters(i) for testing meters up to 20mm supplied by the Council, R434 provided that where

the meter shows an error of more than 3% fast a refund of R434 will be made to the consumer concerned.

R 398 R 434

(ii) for testing meters from 25mm up to and including 50mm supplied by the Council

R550, provided that where the meter shows an error of more than 3% fast a refund of R550 will be made to the consumer concerned.

R 505 R 550

(iii) for testing meters in excess of 50mm up to and including 150mm supplied by the Council R1004, provided that where the meter shows an error of more than 3% fast a refund of R1004 will be made to the consumer concerned.

R 921 R 1,004

(iv) for testing meters from 15mm up to and including 50mm, supplied not by the Council R175. No refund will be applicable.

R 160 R 175

(v) for testing meters in excess of 50mm up to and including 150mm, supplied not by Council R240. No refund will be applicable.

R 220 R 240

(c) Hydrant/Flow Pressure TestsThe charge for a fl ow pressure test on a hydrant shall be R434 for a test and a further R434 for each and every subsequent test requested.

R 398 R 434

INFRASTRUCTURE DEVELOPMENT, SERVICE DELIVERY AND MAINTENANCE MANAGEMENTWASTE MANAGEMENT

Refuse Tariffs


Standard charges for Domestic and Commercial Refuse RemovalBased on relevant Electricity Scale

Refuse Removal Tariffs

1 DomesticSingle phase up to 80A R 65.97 R 70.58

Three phase up to 100A R 65.97 R 70.58

Prepayment Meter R 65.97 R 70.58




2 Home BusinessSingle phase up to 80A R 100.00 R 107.00


Prepayment Meter R 100.00 R 107.00

3 Small Power Users - Business/CommercialSingle phase up to 80A R 188.99 R 202.22


4 Large Power Users – Business/CommercialSupply taken at 400V R 188.99 R 202.22

Supply taken at 6.6 or 11kV R 188.99 R 202.22

5 Flats/Simplexes R 55.90 R 59.81


7 Central Business District R 251.33 R 268.92Main cbd bordered by East(Massukwane), Winston/Victoria, Bulwer, Boschoff, Alan Paton, Prince Alfred, Railway, Pine.Greytown Rd form East To Trichy, Balhambra Way from Greytown Road to Newholme Way, Khan Roadfrom Greytown Road to Deccan Road, Mysore Road from Greytown Road to Bangalore Road, Alan Paton up till King Edward Ave.

Note: Home BusinessRefers to a property previously rated as residential where an owner or lessee runs a small business from the premises and which is still primarily used as a place of resi-dence by that owner or lessee and where special consent has been obtained in terms of the Town Planning scheme to run this business on the premises.

INFRASTRUCTURE DEVELOPMENT, SERVICE DELIVERY AND MAINTENANCE MANAGEMENTWASTE MANAGEMENTRefuse Removal Tariffs

1 Standard charges for Domestic and CommercialRefuse Removal.

Fees payable for the additional removal and clearance of refuse by arrangement from premises other than those applicable in item 1.





2. (a) Removal of additional domestic refuse: Excluding Central Business DistrictNormal days per collection – (i) 3 x 85l bins or part thereof R 21 R 22(ii) 240l wheeled bin or part thereof R 21 R 22

(b) Other than normal removal days, per collection –(i) 3 x 85l bins or part thereof R 127 R 135

(c) Where Council refuse containers are used on high density residential developments (simplexes, duplexes, cluster homes etc). The charge for a 1,75m³ container for ap-prox. 10 units, one clearance per week, subject to agreement with the Waste Manage-ment Division.

R 207 R 221

3. (a) Removal of additional domestic refuse: Central Business District

Normal days per collection – (i) 3 x 85l bins or part thereof R 21 R 22(ii) 240l wheeled bin or part thereof R 21 R 22

(b) Other than normal removal days, per collection –(i) 3 x 85l bins or part thereof R 129 R 138

(c) Where Council refuse containers are used on high density residential developments (simplexes, duplexes, cluster homes etc).The charge for a 1,75m³ container for ap-prox. 10 units, one clearance per week, subject to agreement with the Waste Manage-ment Division.

R 211 R 225

4. (a) Removal of trade refuse [Industrial/Commercial]:Normal days, per collection –(i) 3 x 85l bins or part thereof R 55 R 58(ii) 210l drum or part thereof R 55 R 58(iii) 240l bin or part thereof R 55 R 58(iv) Removal of additional refuse as per 3(a)(i)-(iii) R 55 R 58

(b) Other than normal removal days, per collection –

(i) 3 x 85l bins or part thereof R 121 R 130(ii) 210l drum or part thereof R 121 R 130(iii) 240l bin or part thereof R 121 R 130


5 Removal of industrial refuse [Industrial/Commercial]: (a) (i) per load or part thereof loaded by the Executive Manager

[maximum 15 m³] removed as a once off clearance. R 2,079 R 2,224

(ii) bulk refuse containers [15 m³] hire thereof, including a once off clearance.

R 1,565 R 1,674

(iii) bulk refuse containers [maximum 15 m³] hire thereof, includ-ing one clearance per week.

R 1,515 R 1,621

(iv) second clearance R 1,049 R 1,122(v) each additional clearance R 941 R 1,007




(b) small mobile refuse containers [approx. 0,24m³] available in Otto Bin serviced areas only:(i) hire thereof, including one clearance per week. R 58 R 62(ii) second clearance R 44 R 47(iii) each additional clearance R 40 R 43

(c) small mobile refuse containers [approx. 1 m³] available in Otto Bin services areas only:(i) hire thereof, including one clearance per week. R 232 R 248(ii) second clearance R 171 R 183(iii) each additional clearance R 150 R 160

(d) small mobile refuse containers [approx. 2 m³]:(i) hire thereof as a once off clearance R 378 R 404(ii) hire per week, including one clearance R 343 R 367(iii) second clearance R 178 R 191(iv) each additional clearance R 156 R 167

(e) 7 m³ refuse skips available in south-west area only:(i) hire thereof, including one clearance per week. R 758 R 811(ii) second clearance R 531 R 568(iii) each additional clearance R 452 R 484

6 The tariff for the removal of refuse from properties owned by the State & Municipal Departments:

240l(i) hire thereof, including one clearance per week. R 58 R 62(ii) second clearance R 44 R 47(iii) each additional clearance R 40 R 431 100l(i) hire thereof, including one clearance per week. R 222 R 238(ii) second clearance R 164 R 175(iii) each additional clearance R 139 R 149

1,75m³(i) hire thereof, including once off clearance R 361 R 387(ii) hire per week, including one clearance per week R 328 R 351(iii) second clearance R 170 R 182(iv) each additional clearance R 149 R 160

7m³(i) hire thereof, including one clearance per week R 725 R 776(ii) Second clearance R 513 R 549(iii) Each additional clearance R 433 R 463




15m³(i) per load or part thereof loaded by the Executive Manager.

Removed as a once off clearanceR 2,079 R 2,224

(ii) hire thereof, including a once off clearance R 1,565 R 1,674(iii) hire thereof, including once clearance per week R 1,515 R 1,621(iv) second clearance R 1,063 R 1,137(v) each additional clearance R 941 R 1,007

20m³(i) per load or part thereof loaded by the Executive Manager.


(ii) hire thereof, including a once off clearance R 2,086 R 2,232(iii) hire thereof, including once clearance per week R 2,020 R 2,162(iv) second clearance R 1,417 R 1,516(v) each additional clearance R 1,255 R 1,343

25m³ (i) per load or part thereof loaded by the Executive Manager.


(ii) hire thereof, including a once off clearance R 2,608 R 2,790(iii) hire thereof, including once clearance per week R 2,525 R 2,702(iv) second clearance R 1,771 R 1,895(v) each additional clearance R 1,569 R 1,679

DESCRIPTION VOTE SUB ITEMDomestic – Outside

Refuse Removal Area182 469 8439

Commercial – Outside Refuse Removal Area

183 469 8046

7 Removal and clearances from properties outside the refuse removal area: Applicable Tariff

plus 20%

Applicable Tariff

plus 20%

Services provided by the Executive Manager8 Dead animals [per carcass] during working hours – (a) (i) dog or cat R 356 R 381

(ii) sheep, goat, calf or pig R 535 R 572(iii) ox, cow, bull, horse, mule or donkey R 1,152 R 1,233

(b) outside working hours –(i) dog or cat R 398 R 426(ii) sheep, goat, calf or pig R 1,010 R 1,080(iii) ox, cow, bull, horse, mule or donkey R 2,020 R 2,161

The fees specifi ed in this item shall be payable upon demand or otherwise may be arranged with the Council.9 Euthanased animals [per carcass]:




(a) Removal of dog and cat carcasses from the premises owned or occupied by registered veterinary practitioners –(i) during normal working hours R 119 R 127(ii) after normal working hours R 428 R 458

(b) removal of carcasses other than dogs and cats shall be charged at the fees prescribed in items 4 and 5 as the case may be.

INFRASTRUCTURE DEVELOPMENT, SERVICE DELIVERY AND MAINTENANCE MANAGEMENTWASTE MANAGEMENT

Landfi ll Site Tariffs


1 The tariff for the disposal of refuse at the New EnglandRoad Landfi ll Site –

(a) general domestic refuse, inert trade refuse, per 250kg or part thereof R 34 R 35.64

(b) mixed refuse (garden, domestic, trade refuse, including builder’s rubble) per 250kg or part thereof

R 34 R 35.64

(c) industrial sludges, subject to agreement and approval by the Landfi ll Manager per 250kg or part thereof

R 145 R 153.66

(d) builder’s rubble and excavated material per 250kg or part thereof R 11 R 11.63

(e) bulk food waste and condemned food per 250kg or part thereof R 76 R 80.64

(f) garden refuse, per 250kg or part thereof R 11 R 11.63

(g) fi nely divided excavated material with the maximum stone content of 10% and maxi-mum stone size of 100mm per 250kg or part thereof

R 5 R 5.35

(h) Sawdust and woodwaste, per 250kg or part thereof R 51 R 54.29

Provided that no charge shall be payable for the disposal of –(i) garden refuse by bona fi de householders where such refuse is conveyed in motor

cars, trailers with a nominal capacity not greater than 0,5 tonne and light delivery vehicles with a nominal capacity not greater than 1 tonne and deposited in the garden refuse containers.

Existingconcession

Existingconcession

(ii) builder’s rubble by bona fi de householders and casual builders where such rubble is conveyed in vehicles with a nominal capacity not greater than 1 tonne and deposited in the demarcated area on the Landfi ll site.

1 Tonne – limit

1 Tonne – limit

(iii) garden refuse by bona fi de householders where such refuse is conveyed in vehicles with a nominal capacity not greater than 1 tonne and deposited in the demarcated area on the Landfi ll Site

1 Tonne –limit

1 Tonne –limit




(iv) soil, ash and sand which the Landfi ll Site Manager has agreed in advance is suitable

cover material, delivered in trucks of minimum 5 tonne capacity.No change

to existing

concession

No change to

existing concession

2 Tariff for the voluntary weighing of vehicles (per vehicle) R 28 R 29.43

3 That parking of a vehicle, trailer or container be not more than 8 hours at the New England Road Site, or on the road reserve adjacent to the site For each 8 hour period (per unit)

R 307 R 325.92

4 Building Rubble: deposit payable when submitting a building plan for approval and refundable upon proof of disposal on the landfi ll site.

R 1,034 R 1,095.83

5 Illegal Dumping: a collection and disposal fee per 1,75m³ container load for refuse or rubble dumped on a road verge in front of or next to a property.

R 1,020 R 1,081.72

6 Florescent Tubes – complete tubes to be deposited in specialized containers located in the recycling area. Per 250 kgs or part thereof

R 67 R 70.54

ECONOMIC DEVELOPMENT SERVICESTOWN PLANNING

Town Planning Applications


1. Town Planning General

(a) Burning Town Planning Scheme to CD R 175(b) Copy of Town Planning Scheme R 350(c) Copy of clauses, per page R 5(d) Zoning Certifi cate R 50(e) Home activity (metered Tax) R 200(f) Home activity (crèche for 12 and below) R 850(g) Objection Fee R 250

2. Fees payable in terms of the Planning and Development Act, (Act No. 6 of 2008) within or outside the scheme (a) Application for relaxation of building lines in terms of the scheme R 960.36(b) Add new area to scheme R 1,700(c) Under 0.5 hectare R 1,176 R 2,100(d) 0.5 ha and over, but less than 1 ha R 1,176 R 2,100

Plus R277 per 1000 m² or part thereof in excess of 0.5 ha R 238 R 277(e) 1 hectare and over but less than 5 hectares R 2,495 R 4,000(f) 5 hectares and over but less than 10 hectares R 3,185 R 6,000(g) 10 hectares and over R 3,185 R 8,000

Plus R554 for every ha or part thereof, in excess of 10 ha R 475 R 554




3. Fees payable in terms of Council Consent(a) Tuck Shop R 850(b) Social halls, institutions, dwellings, houses, places of public worship, places of instru-

tion, agricultural buildings, taverns, bed and breakfast (B&B), Boarding House, Home Business or any other building or use not specifi ed in paragraph 3. (c)

R 1,500

(c) Places of public entertainment, residential buildings, parking garages, taxi business, public garages, petrol fi lling stations, light industrial, industrial and noxious industrial buildings, shops, business premises, professional offi ces and special buildings not covered by paragraph 3. (b)

R 1,900

(d) Crèche (per number of children)12 - 20 R 1,50021 - 30 R 2,00031 and more R 3,000

(e) Medium density housing (Basic) R 1,500Plus R500 per every fourth unit and above in PMB Scheme and also for every sixth and above in Ashburton Scheme

R 500

4. Development outside a scheme area as per the Planning and Development Act, (Act No. 6 of 2008) (a) Tuckshop R 850(b) Social halls, institutions, dwellings, houses, places of public worship, places of instruc-

tion, agricultural buildings, taverns, home business or any other building or use not specifi ed in paragraph 4. (c)

R 1,500

(c) Places of public entertainment, residential buildings, parking garages, taxi business, public garages, petrol fi lling stations, light industrial, industrial and noxious industrial buildings, shops, business premises, professional offi ces and special buildings not covered by paragraph 4. (b)

R 1,900

(d) Medium density housing (Basic) R 1,500Plus R500 per unit R 500

(e) Crèche (per number of children)12 - 20 R 1,50021 - 30 R 2,00031 and more R 3,000

(f) Title DeedsAlterations, suspension and Removal of restrictive Title Conditions R 2,100

5. Closure of Roads/Open Spaces in terms of the Planning and Development Act, (Act No. 6 of 2008)(a) Closure of Roads/Open Space R 2,100(b) Amend phasing or cancellation of layout

Phasing of approved layouts R 2,100Cancellation or phasing of layouts R 2,100

(c) Application for a subdivision (Rem = A Subdivision)Basic fee R 2,100Additional fee for each subdivision As per land

survey tariff

Amendment of existing subdivision As per land survey

tariff




Consolidation As per land survey

tariff(d) Fines/Penalties

Section 89 civil penalties ito PDA As per court order

Fines as per Section 78 & 89 of the PDA As per court order

Additional penalties in accordance with Section 76 As per court order

Appeal fee in term of Sec 62 of the Systems Act - per appeal lodge

R 9,063

Note:The approved tariffs in respect of Geographic Information Systems are also applicable to Town Planning.

INFRASTRUCTURE DEVELOPMENT, SERVICE DELIVERY AND MAINTENANCE MANAGEMENTHOUSING AND HUMAN SETTLEMENT DEVELOPMENT MANAGEMENT

Copies and Subdivision of Land Tariffs


1 (i) Search Fee (Excluding Locality Sketches & Site Plans) R 16 R 16.84

(ii) Copies of documents (per copy) (aa) A4 R 2 R 2.63(bb) A3 R 2 R 3.07(cc) A1 R 48 R 50.39(dd) A0 R 69 R 72.85

(iii) Dyeline prints, ordinary paper only(ee) A2 R 40 R 42.41(ff) A1 R 48 R 50.39(gg) A0 R 81 R 85.33

2 Subdivisions and Consolidation of Land: Application and Approval in terms of the KZN Planning and Development Act No. 6 of 2008

a Up to 10 pieces of land:Basic fee R 426 R 447.82Plus, per subdivision + Remainder R 199 R 209.31

b Over 10 pieces of land:Basic fee R 1,185 R 1,243.91Plus, per subdivision + Remainder R 100 R 104.66




Provided that in respect of subdivisions for Government-subsidised Townships for low-income Housing Projects

Basic fee R 187 R 196.09Plus, per subdivision + Remainder R 19 R 19.90

c Additional trips to site to inspect compliance with conditions imposed, over and above initial trips, based on radial distance from City Hall:

Radius up to 5km R 107 R 112.64Radius up to 10km R 173 R 181.50Radius up to 15km R 233 R 245.11Radius up to 20km R 280 R 294.14Radius up to 25km R 380 R 398.79Radius over 25km R 433 R 454.43

d ConsolidationsBasic fee R 216 R 226.80Plus, per component R 54 R 56.70

3 Certifi cation of Copies of Documents Basic Fee R 73 R 76.84

4 Processing of D F A Applications Basic Fee R 3,240 R 3,402.00

5 Preparation of Service Agreements Basic Fee R 3,240 R 3,402.00

6 Applications for relaxation of municipal omnibus servitudes Basic Fee R 216 R 226.80

7 Applications for Removal of Title Deed Restrictions Basic Fee R 648 R 680.40

Note:a. The approved tariffs in respect of Geographic Information Systems are as refl ected in

item 2. (ii) – Supply of Digital Data, and are similarly applicable.b. Advertisement of Applications for road closures and PDA applications where

necessaryAdvertisement costs shall be borne by the applicant. Upon confi rmation of the ap-plication being complete and the 14 day acknowledgement period having lapsed, the Development Services Unit shall, within a period of fourteen (14) working days, sup-ply the applicant with a text of the notice to be advertised in the two offi cial languages of the region, which the applicant shall place in the Local Newspaper at their cost, and serve copies thereof on affected property owners as directed by the Manager: Development Services.




Valuations

Miscellaneous Charges 2011/12 2012/13VOTE SUB ITEM Excl. Vat Excl. Vat242 460 8586

1 Valuation CD R 500 R 550


2 Valuation Certifi cate R 28 R 30

3 Deed search fee R 28 R 30


4 Request Section 53 of the Municipal Properties Rates Act for reasons for the decision of the Municipal Valuer in respect of objections

R 63 R 70

INFRASTRUCTURE DEVELOPMENT, SERVICE DELIVERY AND MAINTENANCE MANAGEMENTHOUSING ADMINISTRATION BUSINESS UNIT

Market Rents at Housing Schemes

Vote Numbers per Scheme

DESCRIPTION VOTE SUB ITEMEastwood No.1 (Econo) 568 454 8253Eastwood No. 1 (Sub-E) 571 454 8253

Glenwood 586 454 8253The Grange No. 1 589 454 8253Northdale No. 8 (Sub-E) 607 454 8253Northdale No. 10 (Sub-E) 610 454 8253

Northdale 7 (Econo) 625 454 8253Northdale 9 (Econo) 628 454 8253Northdale 12 631 454 8253Riverbend No. 1 634 454 8253Woodlands No. 3 670 454 8253Woodlands No. 4 673 454 8253Woodlands No. 8 682 454 8253Sobantu - Housing 695 454 8253Properties Outside Schemes

246 454 8094

Properties Outside Schemes

246 454 8097

Rents for the above areas will be calculated at the prevailing market rental for a similar prop-erty in the relevant area at the time the property is allocated.



INFRASTRUCTURE DEVELOPMENT, SERVICE DELIVERY AND MAINTENANCE MANAGEMENTHOUSING ADMINISTRATION BUSINESS UNIT

Market Rents at Council Flats

Market Related Rentals for Council and State Funded HousesThe rental for tenants of State-funded and Council-funded housing escalates at a rate of 15% per annum as per Council Resolution, until “break even” market rentals are reached, in terms of National Housing Legislation.

DESCRIPTION VOTE SUB ITEM 2011/12 2012/13Willow Gardens Flats 649 454 8253 Excl. Vat Excl. VatWillow Gardens Flats 652 454 8253Willow Gardens Flats 655 454 8253Willow Gardens Flats 658 454 8253

Willow GardensBatchelor Flat rental R 1,041 R 1,0411 Bedroom Flat rental R 1,304 R 1,3042 Bedroom Flat rental R 1,551 R 1,5513 Bedroom Flat rental R 1,725 R 1,725

DESCRIPTION VOTE SUB ITEMRudling Rd. Flats 637 454 8253

Erica and Nerina Flats2 Bedroom Flat rental R 2,203 R 2,2033 Bedroom Flat rental R 2,570 R 2,570

Gross minimum income to afford accommodation at market related rentals are as fol-lows:-

not more than 20% of income

Willow Gardens – per monthBatchelor Flat R 5,204 R 5,2041 Bedroom Flat R 6,520 R 6,5202 Bedroom Flat R 7,757 R 7,7573 Bedroom Flat R 8,626 R 8,626

Erica and Nerina Flats – per month2 Bedroom Flat R 11,013 R 11,0133 Bedroom Flat R 12,848 R 12,848

Notes:1 Offers of accommodation are made to applicants only where the required rental does

not constitute more than 20% of the applicant’s gross income in terms of Council Resolution and based on national legislation.

2 The gross minimum income to qualify to be registered on Council’s waiting list is R3500.00 which is in accordance with the Housing Act of 1997.




Building Survey Tariffs

The following amended tariffs are for the Msunduzi Municipality excluding Less Formal Townships and any other area declared by the Msunduzi Municipality


1. Building plans submission fees(a) Preliminary building plans submitted for scrutiny and comment, 25% of the normal

plan approval fee as detailed below.

(b) Plans for new buildings or additions to buildings submittedi) For the fi rst 20m2 R 320 R 337ii) Each additional 10m2 exceeding 20 m2 up to and including 5000 m2 R 80 R 84iii) For each additional 10m2 over 5000 m2 up to and including 15000 m2 R 33 R 35iv) For each additional 10m2 over 15 000 m2 R 23 R 24v) Minimum charge R 320 R 337

(c) Minor Building Work R 166 R 175

(d) Approval-in-Principle 25% of Building

25% of Building

(non-refundable) Plan Fee Plan Fee

(e) Alterations½% of estimated cost (0,005 x estimated cost) - minimum charge R 320 R 337

(f) Swimming Pools - minimum charge R 166 R 175 (g) Drainage - minimum charge only R 320 R 337 (h) Petrol, Diesel & Gas Installations - minimum charge only R 320 R 337 (i) Temporary Buildings & Structures

For every 50m2 (or part thereof) R 134 R 141

(j) Pre-Cast Concrete Boundary FencesPrecast concrete boundary walls not adjacent to a road boundary and not exceed-ing 1,8 metres in height shall be exempt from the need for the submission of sketch plans or the payment of a fee

Exempt Exempt

Precast concrete boundary walls not adjacent to a road boundary but exceeding 1,8 metres in height shall require the submission of an application with sketch plan and the payment of fee of

R 166 R 175

Precast concrete boundary walls adjacent to a road and not exceeding 1,5 metres in height shall be exempt from the need for the submission of plans or the payment of a fee

Exempt Exempt




Precast concrete boundary walls adjacent to a road and which exceed 1,5 metres in height shall be subject to the submission of application forms, building plans and pay-ment of a fee calculated at half a percent of the value of the fence with a minimum fee of

R 87 R 92

(k) Application fee for processing of Demolition applications R 146 R 154

(l) Application fee for the substitution of a plan during the approval process R 134 R 141


2 Hoarding Deposit - Per frontage of 10m (or part thereof) R 3,095 R 3,262Rental - Per frontage of 10m (or part thereof) per week R 146 R 154


3. Tariff for the purposes of Bylaw 209 (encroachments)(a) Balconiesi) For any balcony which is not used for living or business purposes, the charge shall

be R95 per 10m2 or part thereof per yearR 90 R 95

ii) For any balcony which is not more than 75% enclosed and attached to business premises but not used for business purposes, the charge shall be R176 per 10m2 or part thereof per year.

R 167 R 176

iii) For any balcony used for the purpose of a licensed business the charge shall be R455 per 10m2 or part thereof per year

R 432 R 455

(b) Verandahsi) For any verandah per year R 90 R 95ii) Where any structure is both a verandah and a balcony within the meaning of these

bylaws the owner shall in respect of such structure pay the charges in terms of these bylaws for a verandah and a balcony.

(c) Other Projectionsi) Posts or columns at street level R 90 R 95ii) Bay windows per 0,1m2 of such projection on plan R 90 R 95iii) Pavement lights or openings per 0,5m2 or part thereof R 90 R 95iv) Showcases per 0,1m2 on plan R 90 R 95v) Sunblinds each R 90 R 95vi) Cellars under pavements per 0,5m2 R 90 R 95vii) Any other projection R 90 R 95


4 Building plans (a) Search fees R 17 R 18

(b) Copies of documents (per copy)




i) A4 R 3 R 3ii) A3 R 3 R 3

(c) Copies of building plans (per copy)i) A4 R 11 R 12ii A3 R 21 R 22iii) A2 R 40 R 42iv A1 R 48 R 51v) AO R 69 R 73vi) Copied to fl oppy disk R 21 R 22vii) Copied to CD R 40 R 42viii) To search for and prepare a record for disclosure, for each hour or part thereof ex-

cluding the fi rst half hour.R 24 R 25

PLAN SUBMISSION FEES FOR LESS FORMAL TOWNSHIPS AND ANY OTHER AREA DECLARED BY THE MSUNDUZI MUNICIPALITY


1 Building Plans(a) Preliminary plans submitted for scrutiny and comment R 67 R 71

(b) 20 m² - 30 m² R 67 R 71

(c) 30 m² - 40 m² R 87 R 92

(d) 40 m² - 50 m² R 102 R 108

(e) 50 m² - 60 m² R 120 R 126

(f) 60 m² - 70 m² R 166 R 175

(g) 70 m² - 80 m² R 226 R 238

(h) for the alteration of any building which does not increase the fl oor area thereof R 67 R 71

(i) application fee for the erection of a minor building work as defi ned in the National Building Regulations

R 67 R 71

(j) permission for the erection of temporary buildings may be granted upon payment of a charge of R71 for each 50 m² or part thereof. Such permission shall be valid for twelve months, but may be renewed for further periods of twelve months upon pay-ment of charges at the same rate.

R 67 R 71

2 Precast concrete boundary walls(a) precast concrete boundary walls not adjacent to a road boundary but exceeding 1,8

metres in height shall require the submission of an application with sketch plan but exempt from the payment of a fee

Exempt Exempt




(b) precast concrete boundary walls adjacent to a road boundary and not exceeding 1,5 metres in height shall be exempt from the need for the sub-mission of sketch plans or the payment of a fee.

Exempt Exempt

(c) precast concrete boundary walls adjacent to a road and which exceed 1,5 metres in height shall be subject to the submission of application forms, building plans and pay-ment of a fee calculated at half a per cent of the value of the fence with a minimum fee of

R 67 R 71

3 Building plan search fee R 17 R 18


Advertising Signage Tariffs


A. Application Fees and Deposits for a License/Permit for Outdoor Advertising

Every person who applies to Council for its approval or permission shall on making applica-tion pay to the Council the charge determined therefore and no application shall be consid-ered until such charge has been paid;The charges are set out below:

1 A non-refundable application fee must be tendered with each application.Application fees per sign shall be levied for sign types A (Billboards), B (Ground Signs), C (Wall Signs), D (Roof Signs), and E (Verandah, Balcony, Canopy and Under-Awning Signs) as follows:NB! Application fees for billboards and ground signs will be per sign face.

Area of SignNon IlluminatedApplication fee per sign for sign area up to 2m² R 89 R 94Application fee per sign for sign area over 2m² up to 4m² R 114 R 120Application fee per sign for sign area over 4m² up to 6m² R 160 R 169Application fee per sign for sign area over 6m² up to 12m² R 226 R 238Application fee per sign for sign area over 12m² up to 36m² R 719 R 758Application fee per sign for sign area over 36m² R 1,398 R 1,473

Area of SignIlluminatedApplication fee per sign for sign area up to 2m² R 100 R 105Application fee per sign for sign area over 2m² up to 4m² R 126 R 133Application fee per sign for sign area over 4m² up to 6m² R 188 R 198Application fee per sign for sign area over 6m² up to 12m² R 312 R 329Application fee per sign for sign area over 12m² up to 36m² R 866 R 913Application fee per sign for sign area over 36m² R 1,676 R 1,767




2 Any minor amendment to an application, considered by the duly authorized offi cial of Council to be a minor amendment, may be submitted at a reduced application fee of R94 each

R 89 R 94

3 An application fee must be tendered with each application for advertisements for sign types F (Posters, Banners and Flags excluding Election Advertisements) as follows:

3.1 Per 25 posters or part thereof R 360 R 3793.2 Per 50 posters or part thereof R 573 R 6043.3 Per 100 posters or part thereof for events taking place within the Msunduzi Municipal

areaR 1,132 R 1,193

3.4 Per 100 posters or part thereof for events not taking place within the Msunduzi Mu-nicipal area

R 2,795 R 2,946

Upon removal of all these posters (point 3 above) by the applicant to the satisfaction of the Council, 50% of the application fee will be refunded.

4 Banners – R 199 per week or part thereof per banner plus any costs incurred by the Council in the erection thereof.(Charitable and non-profi t organizations will be exempt from the above tariff, but must still tender an application.)

4.1 Advertising on Comrades Gantry (per week)

R 933 R 983

5 A non-refundable application fee or part thereof must be tendered with the annual application for Estate Agents Boards.

Per annum5.1 1 to 5 Agents R 866 R 9135.2 6 to 10 Agents R 1,676 R 1,7675.3 11 to 20 Agents R 3,394 R 3,5775.4 21 to 30 Agents R 5,059 R 5,3325.5 31 to 50 Agents R 6,655 R 7,0155.6 51 Plus Agents R 8,519 R 8,979

6 A non-refundable application fee must be tendered with the annual application for Portable Boards or any other collapsible structure – per annum

R 453 R 477

7 A non-refundable application fee must be tendered with each application for Aerial

Advertisements; adequate public liability insurance for the duration of display will also need to be furnished to Council’s satisfaction – per annum

R 453 R 477

8 Transit Advertising: A non-refundable application fee Including a weekly rental as fol-

lows; must be tendered with each application for transit vehicles. A certifi ed copy of the current vehicle registration certifi cate must accompany each application:

8.1 Annual Application Fee – per annum R 719 R 7588.2 Per Trailer per Site – per week R 133 R 140

9 An encroachment fee per m² per annum or part thereof to be paid for each sign type that encroaches over Council property.




10 Headline Poster: A non-refundable application fee or part thereof based on the total circulation must be tendered with the annual application fee:

0 to 10 000 Copies R 2,798 R 2,94910 000 to 20 000 Copies R 5,591 R 5,89320 000 to 30 000 Copies R 8,386 R 8,839Over 30 000 Copies R 11,180 R 11,784Annual deposit required with each application R 1,331 R 1,402

Note: The duration of the approval for all advertising signs shall be at Council’s discretion.

B. Rentals for Individual Outdoor Advertising Signs on Council PropertyRental shall be charged in respect of all individual outdoor advertising signage on Council property in terms of the current Policy and Bylaws on Outdoor Advertising Signs, excluding any bulk signage erected as part of an approved project for a particular type of signage at various locations in the City.The minimum being as follows:

Monthly Rental

Monthly Rental

1 Size per Face per Faceup to 3 m² R 134 R 141over 3 m² and up to 6 m² R 266 R 280over 6 m² and up to 10 m² R 532 R 561over 10 m² and up to 16 m² R 666 R 702over 16 m² R 1,331 R 1,402

2 The Local Authority reserves the right to adopt a tariff higher than the above in the terms of a negotiated rental with an applicant.

Billboard, Building Wrap Sign, Electronic Advertising 1 A non refundable application fee must tendered with each application for a billboard,

building wrap sign or electronic sign irrespective of whether the sign is erected on private or council property.

R 1,037 R 1,093

2 A rental rate per m² or part thereof be charged monthly for a billboard/wrap sign R 119 R 125 3 A rental rate per m²/month for electronic advertising signs irrespective of whether

the sign is erected on private or council propertyR 440 R 463

4 All Billboards and electronic advertising signs are subject to a fi ve year lease period

with an option of a further extended renewal period of fi ve years.

5 Building Wrap Signs are subject to a one year lease period with an option of a fur-ther extended renewal period of one year.



SUSTAINABLE COMMUNITY SERVICE DELIVERY PROVISION MANAGEMENTCOMMUNITY SAFETY AND SECURITY

Licensing


1 Bails & Fines(Admission of Guilt)

(a) Dogs:Failure to license R 112 R 118Failure to control R 112 R 118


2 Fees(a) Dog Licenses

First two dogs - each R 10 R 11Any dog in excess of two R 54 R 57


(b) Trade Licenses Application FeeBusiness conducted from fi xed premises R 373 R 373Item 1 & 2 License

Informal Trade License Application Fee R 34 R 34Item 3 License

Informal Trade(i) Telephone Operator R 71 R 75(ii) Hair Dressers R 30 R 31(iii) General Traders R 18 R 19Duplicate License Fee R 23 R 24

Impoundment of Goods R 59 R 63

Release of goods fee R 30 R 31


3 Tariff of Charges:(a) General By-Laws

Dog ControlSeizure of Dog R 38 R 40

Conveyance to Pound R 76 R 80




4 Bandstand R 76 R 80

SUSTAINABLE COMMUNITY SERVICE DELIVERY PROVISION MANAGEMENTREGIONAL COMMUNITY SERVICES PROVISION

Pietermaritzburg Airport


1 Passenger levy feedeparting passengers on all scheduled fl ights R 50 R 60departing passengers on all non-schedule/charter fl ights R 30 R 36departing passengers on general aviation fl ights R 20 R 24check-in passenger levy on all schedule fl ights R 3 R 4


2 Domestic Landings: Fixed Wing AircraftMaximum certifi ed mass in kg of aircraft up to and including

0 - 500 R 33 R 40501 - 1000 R 49 R 591001 - 1500 R 63 R 751501 - 2000 R 83 R 1002001 - 2500 R 89 R 1072501 - 3000 R 103 R 1233001 - 4000 R 144 R 1724001 - 5000 R 183 R 2205001 - 6000 R 223 R 2686001 - 7000 R 265 R 3187001 - 8000 R 303 R 3648001 - 9000 R 343 R 4119001 - 10000 R 391 R 46910001 - 12000 R 443 R 53112001 - 14000 R 501 R 601

14001 - 16000 R 559 R 671 16001 - 18000 R 617 R 741

18001 - 20000 R 675 R 81020001 - 22000 R 734 R 880

3 Parking Fee: Fixed Wing AircraftMaximum certifi ed mass in kg of aircraft up to and including

0 - 2000 R 21 R 262001 - 3000 R 44 R 523001 - 4000 R 62 R 744001 - 5000 R 85 R 102




5001 - 10000 R 125 R 15010001 - 15000 R 165 R 19815001 - 20000 R 208 R 24920001 - 25000 R 248 R 298

4 Domestic Landings: HelicoptersMaximum certifi ed mass in kg of aircraft up to and including

0 - 500 R 7 R 8501 - 1000 R 10 R 121001 - 1500 R 13 R 151501 - 2000 R 15 R 182001 - 2500 R 18 R 22

2501 - 3000 R 21 R 253001 - 4000 R 29 R 344001 - 5000 R 37 R 445001 - 6000 R 45 R 546001 - 7000 R 53 R 647001 - 8000 R 61 R 73

8001 - 9000 R 69 R 829001 - 10000 R 77 R 92

10001 - 12000 R 89 R 10612001 - 14000 R 100 R 12014001 - 16000 R 112 R 134

16001 - 18000 R 123 R 14818001 - 20000 R 135 R 162

5 Parking Fee: HelicopterMaximum certifi ed mass in kg of aircraft up to and including

0 - 2000 R 4 R 52001 - 3000 R 9 R 113001 - 4000 R 12 R 154001 - 5000 R 17 R 215001 - 10000 R 25 R 3010001 - 15000 R 33 R 40

15001 - 20000 R 42 R 5020001 - 25000 R 50 R 60

6 Landing Fee: Experimental AircraftAircraft certifi ed mass unlimited

0 - Unlimited R 50 R 60



MISCELLANEOUS CHARGESVOTE SUB ITEM 2011/12 2012/13508 415 8395 Excl. Vat Excl. Vat

7 Access Control PermitsPersonal permanent access permit R 50 R 54

Penalty for 1st lost/stolen permit R 50 R 54Penalty for 2nd lost/stolen permit R 100 R 107

Adhoc personal access permit R 25 R 27 Penalty for 1st lost/stolen permit R 25 R 27

Penalty for 2nd lost/stolen permit R 50 R 54Permanent vehicle access permit R 30 R 32

Penalty for 1st lost/stolen permit R 30 R 32Penalty for 2nd lost/stolen permit R 60 R 64

Adhoc vehicle permit R 10 R 11Penalty for 1st lost/stolen permit R 10 R 11Penalty for 2nd lost/stolen permit R 20 R 21


Municipal Halls

Scale ADESCRIPTION VOTE SUB ITEM

Ashdown Hall 243 454 8417Unit “S” Hall 243 454 8422Imbali 243 454 8425Unit “J” 243 454 8420Unit “N” 243 454 8426Plessislaer 243 454 8419Georgetown 243 454 8423

1. PRIVATE FUNCTIONS1.1 Profi t-making functions, banquets, theatre and the like,

Charge per 12 hours R 1,200 R 1,200Additional time per hour R 250 R 250Deposit R 2,000 R 2,000Overtime charges per hour on weekends & public holidays R 140 R 140

1.2 Fund-raising functions by sporting, religious, social & cultural institutions recognized by the Council.

Charge per 12 hours R 800 R 800Additonal time per hour R 150 R 150Deposit R 2,000 R 2,000Overtime charges per hour on weekends & public holidays R 140 R 140

1.3 Weddings, receptions, parties, choir performances and the like, Charge per 12 hours R 1,100 R 1,100Additional time per hour R 250 R 250Deposit R 2,000 R 2,000Overtime charges per hour on weekends & public holidays R 140 R 140




2. COMMUNITY ACTIVITIES2.1.1 Institutional activities of political, educational, cultural or sporting bodies recognized

by the Council. Charge per hour: Monday to Thursday R 200 R 200

Deposit R 1,000 R 1,000

2.1.2 Religious Activities(Church Services): Charge per hour Monday to Thursday R 200 R 200Deposit R 1,000 R 1,000Sundays - minimum 3hrs Hire

2.2 Activities of the Community Awareness Project and of groups, clubs etc., affi liated with the Project or sponsored by it.

Per uninterrupted period not exceeding 3 hours: Monday to Thursday

R 300 R 300

Deposit R 1,000 R 1,000

2.3 Rehearsals:Rehearsals per hour: Monday to Thursday R 180 R 180Deposit R 1,000 R 1,000

2.4 Pre-SchoolsPer uninterrupted period not exceeding 6 hours R 400 R 100Deposit R 1,000 R 1,000

2.5 Overtime charges per hour on weekends & public holidays R 140 R 140

Scale B


TruroMain Hall




Charge per 12 hours R 2,300 R 2,300Additonal time per hour R 200 R 200Deposit R 2,000 R 2,000Overtime charges per hour on weekends & public holidays R 140 R 140




1.3 Weddings, receptions, parties, choir performances and the like, Charge per 12 hours (Hall+Sec 1) R 2,800 R 2,800Additional time per hour R 250 R 250Deposit R 2,000 R 2,000Overtime charges per hour on weekends & public holidays R 140 R 140



Deposit R 1,000 R 1,000

2.1.2 Religious Activities(Church Services): Charge per hourMonday to Thursday R 300 R 300Deposit R 1,000 R 1,000Sundays - minimum 3hrs Hire



R 300 R 300

Deposit R 1,000 R 1,000



Scale C

DESCRIPTION VOTE SUB ITEMBombay Road Hall Plus Annex. 1 & 2

243 454 8352

AF Wood Hall & Annex.

243 454 8031

Grange Hall plus Annex.

243 454 8610

Bombay Road Hall plus Annexure l or Annexure IIAF Wood Hall and AnnexeGrange Hall plus Annexe


Charge per 12 hours (Hall+Annex1) R 2,200 R 2,200Additional time per hour R 250 R 250Deposit R 2,000 R 2,000Overtime charges per hour on weekends & public holidays R 140 R 140





Charge per 12 hours (Hall+Annex1) R 1,800 R 1,800Additonal time per hour R 150 R 150Deposit R 2,000 R 2,000Overtime charges per hour on weekends & public holidays R 140 R 140

1.3 Weddings, receptions, parties, choir performances and the like, Charge per 12 hours (Hall+Annex1) R 2,000 R 2,000Additional time per hour R 250 R 250Deposit R 2,000 R 2,000Overtime charges per hour on weekends & public holidays R 140 R 140



Deposit R 1,000 R 1,000

2.1.2 Religious Activities(Church Services): Charge per hourMonday to Thursday R 200 R 200Deposit R 1,000 R 1,000Sundays - minimum 3hrs Hire



R 300 R 300

Deposit R 1,000 R 1,000






Scale D

DESCRIPTION VOTE SUB ITEM 2011/12 2012/13Truro Center – Secondary Hall ll

243 454 8574 Excl. Vat Excl. Vat

Bombay Road Hall 243 454 8352Eastwood Theater 243 454 8163Eastwood Hall 243 454 8163AF Wood Hall 243 454 8031Woodlands Hall 243 454 8613Grange Hall 243 454 8610Sobantu 243 454 8415








Deposit R 1,000 R 1,000

2.1.2 Religious Activities(Church Services): Charge per hourMonday to Thursday R 200 R 200Deposit R 1,000 R 1,000



R 300 R 300

Deposit R 1,000 R 1,000Sundays - minimum 3hrs Hire







Scale E

DESCRIPTION VOTE SUB ITEMTruro Center – Secondary Hall l

243 454 8574

Truro Social Center l 243 454 8574Truro Social Center ll 243 454 8574 Bombay Rd - Annexe l or ll

243 454 8352

Eastwood Social Center

243 454 8163

AF Wood Annexe 243 454 8031Grange Annexe 243 454 8610Glenwood Hall 243 454 8163




Charge per 12 hours R 900 R 900Additional time per hour R 150 R 150Deposit R 1,800 R 1,800Overtime charges per hour on weekends & public holidays R 140 R 140




Deposit R 1,000 R 1,000




2.1.2 Religious Activities(Church Services): Charge per hourMonday to Thursday R 200 R 200Deposit R 1,000 R 1,000



R 300 R 300

Deposit R 1,000 R 1,000Sundays - minimum 3hrs Hire





Winston Churchill Theatre


Full TheatrePer day R 2,500 R 2,500Rehearsals (per hour): Monday to Thursday R 300 R 300

Lascelles Room – Per Performance R 1,500 R 1,500Lascelles Room – Rehearsal (per hour): Monday to Thursday R 200 R 200Deposit R 2,500 R 2,500

Deposits for Live Shows at the Winston Churchill Theatre R 3,300 R 3,300Overtime labour charges per hour on weekends & public holidays R 140 R 140

** Confi rmation of Hire subject to obtaining a permit from the Environmental Health Division of the Msunduzi Municipality.

MISCELLANEOUS CHARGES

1 Excessive cleaning after functions (per hour) R 300 R 3002 Cooking facilities (Including gas, pot, spoons) R 350 R 3503 Extra time after midnight Double

hourly rateDouble

hourly rate4 SAMRO Performing Rights – per function R 25 R 50




GENERAL COMMENTS

For tariff rates on Community based activities/functions on weekends and public holidays, refer to section 1.2 on the tariff schedule.

Daily pre-school hire is restricted to Annexe and Secondary Halls.


Cemetery


Mountain Rise CemeteryCemetery and Crematoria Tariffs

A. Cemetery Tariffs for Residents

1 Private GravesReserved Site (including maintenance levy) R 3,500 R 3,600Unreserved Site – Adult (including maintenance levy) R 3,000 R 3,000Child under 12 years of age (including maintenance levy) R 1,580 R 1,580Child under 1 year or stillborn (including maintenance levy) R 1,010 R 1,010

Ashes R 131 R 140

Second Internment – Adult R 523 R 550Child R 238 R 250

2 Public GraveAdult R 743 R 750Child under 12 years of age R 315 R 350

Child under 1 year or stillborn R 154 R 160

The charge for the burial of newly born child and mother in the same coffi n shall be the same as for a single adult.

3 MiscellaneousExhumation of body R 1,500 R 1,580

Permit to erect memorial per grave site R 297 R 300

Permit to erect kerbs only – (No inscription) per grave site R 143 R 150




Permit to add inscription R 143 R 150

Transfer of Grave Site R 143 R 150

Rental of Storage Material Bins (payable annually in ad-vance) per annum

R 113 R 115

Overtime labour charge additional to normal burial fees for funeral commenced or concluded after 16H00 per funeral, per hour or part thereof

R 154 R 160

Lengthening or widening of Graves R 416 R 440

Overtime labour charge in addition to the normal burial fee, for burials On Saturday R 211 R 220On Sundays an public holidays per burial R 280 R 300

Late arrival of body for burial (for each quarter of an hour or part thereof)

R 137 R 150


Crematoria

B. Crematorium Tariffs for Residents


1 Cremation Fees:Person over 12 years of age R 1,200 R 1,200

Child 12 years of age and under R 267 R 300

Person certifi ed as indigent R 267 R 280

Overtime labour charge additional to normal Cremation fees for cremations on Saturdays R 211 R 220Cremation fees for cremations on Sundays and public holidays per cremation

R 280 R 295




2 Space for Tablet at Memorial WallNote:Space for tablet may not be purchased except for immediate use, and shall be al-located in sequence upon application to the Registrar. The tablets shall be of white marble 30mm thick and of such a length and breadth as to fi t into a recess 22.5 mm wide by 175 mm high.The fi nished face of the tablet shall be recessed 6mm from the face of the brick sur-round.

Space for inscribed tablet R 327 R 345Each subsequent inscription thereon R 131 R 140


3 Niche is columbarium and deposit therein of ashesNote:Niches may not be purchased except for the immediate deposit of ashes and shall be allocated in sequence upon application to the Registrar.The niche must be sealed by a white marble tablet 25 mm thick and of such a length and breadth as to fi t an opening 260 mm wide by 195 mm high.The fi nished face of the tablet shall be recessed 6 mm from the face of the brick surround.

Purchase of Niche R 915 R 950Each subsequent deposit of ashes in the same niche R 244 R 250

4 Safekeeping of ashes for a period exceeding 14 days from day of cremation, per week or part thereof

R 95 R 100

Note:If the ashes are removed or scattered in the Garden of Remembrance by a repre-sentative of the deceased within 14 days of the cremation, this charge will not be made.

5 Purchase of grave 60 cm x 38 cm and interment of urn or casket containing ashes R 166 R 175Each subsequent deposit of ashes in the same grave R 108 R 115Note:Graves may not be purchased except for immediate use and shall be allocated in sequence upon application to the Registrar.

6 Late arrival of body at Crematorium (For each quarter or part thereof) R 125 R 130

7 Permit to erect memorial R 101 R 105

8 Use of Chapel R 0.00 R 0.00

C. Tariffs for Non-Residents

The scale of charges for non-residents shall be double the scale of residents, except in respect of charges for additional or overtime labour.




Azalea Cemetery Fee

1 Grave Sites – ResidentsFamily Grave R 125 R 130Single Grave R 95 R 100Child’s Grave (12yrs and younger) R 89 R 95Grave for stillborn Child R 77 R 80Exhumation R 1,069 R 1,125Reburial R 108 R 115Enlargement of Grave R 89 R 100Sundays and Public Holidays R 280 R 300

2 Grave Sites – Non-ResidentsFamily Grave R 250 R 260Single Grave R 190 R 200Child’s Grave (12yrs and younger) R 178 R 187Grave for stillborn Child R 154 R 160Exhumation R 1,069 R 1,125Reburial R 216 R 230Enlargement of Grave R 560 R 590

Once the Azalea Cemetery is closed, the Mountain Rise Cemetery will be effective as a one tariff structure for cemeteries.

SUSTAINABLE COMMUNITY SERVICE DELIVERY PROVISION MANAGEMENTCOMMUNITY SERVICE DELIVERY: PROVISION AND MANAGEMENT

Production and Display


1 Loan and Hire of Plants and other Decorative FeaturesNon profi t organizations will be afforded the loan of palms for the decoration of functions that are to the benefi t of the community and the upliftment of the City.

Profi t making organizations – Hire of Palms per unit per function

R 71 R 75

For functions that are to the benefi t of the community and the upliftment of the City.

Damages incurred to plants and decorative features while on loan/hire are for the account of the organization.

2 City Hall – Main HallWings of Stage R 630 R 665Full Stage R 6,332 R 6,675Reception Point R 630 R 660Organ Steps R 1,259 R 1,325




Base of Stage R 1,580 R 1,665Foliage Division R 1,580 R 1,665Palms around the Hall R 1,111 R 1,170

3 City Hall – Other DecorationsWater Feature (5m diam) R 5,702 R 6,000Fountain (1-1.5m diam) R 790 R 830Two meter diameter Decoration R 630 R 665

4 Sale of Plants

4.1 Trees, Shrubs and Ground coverNursery Bag Size 1 (3l)

Wholesale R 11 R 15Retail R 16 R 20

Nursery Bag (5l)Wholesale R 32 R 35Retail R 49 R 50

Nursery Bag Size 4 (8l)Wholesale R 43 R 50Retail R 71 R 75

Nursery Bag Size 6 (20l)Wholesale R 65 R 70Retail R 125 R 130



4.2 SeedlingsPer Seedling


4.3 CuttingsDepending on size and species, contract grown in trays of 80 or loose:





5 Hire of Park FacilitiesAlexandra Park , Camps Drift and Percy Mayor Rockery

Functions: Weddings, Wedding receptions, end of the year parties – Hirers have exclusive use of an area of the park for a set duration (per day or part thereof)

R 1,580 R 1,665

Use per 15 amp Plug Point R 59 R 60

6 Hire of Demo Gardens (Alexandra Park)Functions: Weddings, Wedding receptions, end of the year parties etc. (per day or part thereof)

R 1,580 R 1,665

Use for photo sessions (per day or part thereof) R 71 R 75

The Executive Manager and Manager: Parks, Sport and Recreation be granted delegated authority to waive charges in respect of item 1,5 and 6 for institutional activities of political, educational, cultural or sporting bodies recognized by the Council.


Swimming Pool Tariffs

Summer

DESCRIPTION VOTE SUB ITEMBuchanan St. Pool 437 442 8400Berg St. Pool 434 442 8400Pilditch Pool 435 442 8400Olympic Pool 436 442 8400Alexandra Pool 432 442 8400Eastwood Pool 438 442 8400Sobantu Pool 443 442 8400

Winter

DESCRIPTION VOTE SUB ITEMBuchanan St. Pool 437 442 8400

1 DailyAdults

Summer R 8 R 8Winter R 11 R 11

Junior (U-16 and Scholars)Summer R 5 R 5Winter R 8 R 8

Scholars accompanied by teacher in offi cial groupsSummer R 2 R 2Winter R 4 R 4




Minimum ChargeSummer R 15 R 15Winter R 22 R 22

2 MonthlyAdults


Junior (U-16 and Scholars)Summer R 49 R 49Winter R 59 R 59

Season TicketsAdults


JuniorsSummer R 140 R 140Winter R 157 R 157

3 The Executive Manager and Manager: Parks, Sports & Recreation be granted del-egated authority to waive the above charges in special circumstances for schools or organized groups such as street children, orphanages, municipal development programs etc. that make use of the facilities.

4 Social Welfare Pensioners will be admitted free of charge. No Charge No Charge

5 Use of the pool by professional swimming coach:To instruct competitive swimmers:Per hour or part thereof R 130 R 130

6 Hire of Pool for summer Galasper morning or afternoon session R 335 R 335per evening session R 459 R 459

7 Hire of pool for bona fi de swimming Club NightsSummerMondays to Fridays only Per half hour or part thereof R 54 R 54

Hire of Buchanan pool (Winter)Per half hour or part thereof R 59 R 59

(Provided that in respect of the tariffs under item 6, there shall be a minimum charge pay-able at the rate prescribed for hire for a half hour, or part thereof, for every night a pool is hired, irrespective of whether any use is made of such pool by the hirer that night. In respect of items 5 & 7 the use of pools must be after public bathing times.)




8 Use of electronic timing system at Alexandra Pool:Per morning or afternoon session R 216 R 216Per evening session R 313 R 313

9 Admission tickets other than monthly and season tickets shall be valid only in re-spect of the particular pool at which they were bought.


10 Super tube per hour (exclusive use) R 275 R 275

Casual Rides per half hour (exclusively used by groups) R 140 R 140

Casual Rides per half hour (per person) R 16 R 16

11 The DMM Community Services and Manager Sports and Recreation reserves the right to allow free use of swimming pools by the public on specifi ed days or hours of the day.


Sport and Recreation Facilities


Sport and Recreation Facilities1 Fleamarkets: Per day or part thereof

Maritzburg Oval Arts and Crafts Market Site (Alexandra Park)

R 1,485 R 1,565

Upmarket Site (Next to Kershaw Park Tennis Courts) R 1,247 R 1,252Public Open spaces or sport facility sites R 416 R 438Electricity per 15 amp plug per day R 59 R 64

2 Fee for the hire of grounds excluding fl oodlight, material and special preparation and cleaning:

Oval per day or part thereof R 772 R 814Training session – three hours R 71 R 76

Fee for the hire of Harry Gwala StadiumExcluding fl oodlights, material, marking and special preparation and cleaning

Per day or part thereof R 5,400 R 5,405Refundable Deposit R 5,400 R 5,405

Use of functions roomPer day or part thereof R 2,160 R 2,165




Use of fi eld for training purposesPer hour R 270 R 275

Northdale/Imbali Stadium/sBetween 07:00-12:00 R 356 R 361Between 18:00-24:00 R 321 R 326

All other soccer/rugby/grass hockey/polocrosse and cricket fi elds

Between 07:00-12:00 R 83 R 88Between 12:00-18:00 R 83 R 88Between 18:00-24:00 R 83 R 88Full Day R 143 R 150Seasonal Lease by associations, clubs, federations per season

R 653 R 1,000

Astro Hockey FieldBetween 07:00-12:00 R 270 R 275Between 12:00-17:00 R 270 R 275Between 17:00-24:00 R 270 R 275

Wadley StadiumBetween 07:00-12:00 R 275Between 12:00-17:00 R 275

Tennis/netball/volleyball/combi court with lights per hour R 27 R 32without lights per hour R 22 R 27

Squash Courts per hour R 22 R 27

3 All Sport HallsFor use by schools or sport associations per hour R 49 R 54Non sport associations per six hours or part thereof R 333 R 338Deposit (Refundable) R 315 R 325

4 Floodlight fees per hourOval – Level 1 R 356 R 361 - Level 2 R 564 R 569 - Level 3 R 832 R 837

Harry Gwala R 1,350 R 1,355Northdale Stadium R 326 R 331Protea Center – Ground Number 1 R 95 R 100Protea Center – Ground Number 2 R 71 R 76Dales Park Soccer R 71 R 76Dales Park Rugby R 71 R 76Dare Osborne R 71 R 76




Qokololo R 83 R 76Ashdown R 71 R 76Sobantu R 71 R 76Wadley Stadium R 71 R 76

AB Jackson Hockey Field R 432 R 437

All other fi elds with Lights R 71 R 76

5 Three phase power – all facilities R 1,620 R 1,625

6 Equipment Hire ChargeRefundable Deposit R 324 R 500Daily Hire Charge R 71 R 76


7 Hire of Bisley Valley and Ferncliffe Nature ReservesResource Centres

Per Day or part thereof R 397 R 419Refundable Deposit R 267 R 282

8 The DMM Community Services and Manager Sports and Recreation be granted delegated authority to waive the above charges in special circumstances for schools or organized groups such as street children, orphanages etc. that makes use of the facilities


Municipal Libraries

DESCRIPTION VOTE SUB ITEMThe Msunduzi

Municipal Library513 415 8506

1 Over due materials

(a) Fines for overdue books, audio-visual material and other media (Excluding videos and DVD’s)

Adults10 days graceper book or item per week for 8 weeks R 2.00 R 1.00maximum fi ne per book or item R 16.00 R 5.00maximum fi ne per adult member R 50.00 R 50.00

Children & Young Adults10 days graceper book or item per week for 5 weeks R 1.00 R 1.00maximum fi ne per book or item R 5.00 R 5.00maximum fi ne per juvenile or young adult member R 30.00 R 50.00




(b) Fines for overdue videos and DVD’sAdults, children and young adultsNo grace periodper item per day for 8 days R 2.00 R 1.00maximum fi ne per item R 16.00 R 5.00

2 Damaged BooksTorn pages – per page R 4.00 R 4.00Torn or lost book barcode – per barcode R 12.00 R 12.00Torn book pockets R 6.00 R 6.00Damage to book spine R 8.00 R 8.00Damage to book – to be assessed on return to librarian

3 Lost BooksOriginal purchase price

4 Membership FeesMembership R 0.00 R 0.00Replacement barcode R 15.00 R 10.00Replacement pockets - each R 12.00 R 3.00

5 Photocopy ChargesFor every photocopy of an A4 size page or part thereof R 0.50 R 0.50For every photocopy of an A3 size page or part thereof R 1.00 R 1.00

Note: These photocopy charges apply to the Library only. The photocopy charges refl ected elsewhere in this document apply to the business units specifi ed.

6 Laser PrintingColour R 10.00 R 10.00Black & White R 2.00 R 2.00

7 Hire Charges (bookings only within library hours) Non-Government Organisations (NGO’s) R 0.00 R 0.00per hour or part thereofAuditorium R 90.00 R 100.00Boardroom R 90.00 R 100.00




Fire and Rescue Services

VOTE SUB ITEM 2011/12 2012/13302 415 8506 Incl. Vat Incl. Vat

Except as is specifi cally otherwise provided, these tariffs determine the fees payable by a Controlling Authority, Governing Body or any other person in terms of Section 10 (1) of the Fire Brigade Services Act 99 of 1987 on whose behalf the Fire and Rescue Services of the Msunduzi Council is applied outside or inside the area of jurisdiction of the Council:

(a) For the attendance of services(b) For the use of the services and any equipment, or(c) For any material consumed

Any person who feels aggrieved by an assessment of the charges raised may within 14 days after receipt of that assessment object in writing against that assessment as such, or the amount thereof, to the Municipal Manager of the Msunduzi Council, whereby the Coun-cil may confi rm, alter or revoke the assessment.

Tariff of Charges for Services Rendered at Fire and Special Service Incidents1 For Services Rendered at Incidents Classifi ed as Fire and Rescue:

per hour or part thereof

1.1 Structural R 1,358 R 1,4311.2 Transport R 1,018 R 1,1401.3 Fire – Vegetation, Grass, Bush, Rubbish or Plantation R 883 R 9301.4 Fire – Hazmat R 1,358 R 1,4311.5 Fire – Other R 845 R 8901.6 Special Service – Transport R 677 R 7141.7 Special Service – Structural R 677 R 7141.8 Special Service – Hazmat R 1,358 R 1,4311.9 Special Service – Water R 677 R 7141.10 Special Service – Other R 677 R 7141.11 Out of Area

Applicable rate as per incident plus 50% of applicable category plus charge1.12 For consumables used at any incident

Cost of consumables used plus 15%

2 Tariff of Charges in respect of the attendance & employment of Special Appliances and Plant to Fire & Rescue incidents

For the attendance and employment (per hour or part thereof) of a:2.1 High Rise Fire fi ghting Appliance R 677 R 7142.2 Water Foam Carrier R 677 R 7142.3 Foam Tanker and / or Foam Service Vehicle R 677 R 7142.4 Mobile Lighting Unit R 677 R 714

3 Tariff of Charges in respect of the employment of Outside Agencies at any incident

For costs incurred as a result of the employment of an outside agency in:



2011/12 2012/13Incl. Vat Incl. Vat

3.1 the mitigation of any incidentCost incurred plus 15% of applicable charge

4 Tariff of Charges in respect of Fire Prevention Services

4.1 For the attendance of staff at stage/theatre performances standby duty and the like, per staff memeber

First Hour R 135 R 143Per Hour thereafter R 72 R 76

4.2 For scheduled inspections, consultations, inspections of safety exits & appliances in public buildings

First Hour R 135 R 143Per Hour thereafter R 67 R 70

4.3 For the monitoring of direct alarm links – per alarm p.m. R 102 R 1084.4 For a certifi ed copy of a fi re report - per copy R 135 R 1434.5 For issuing a certifi cate of Registration - per certifi cate R 32 R 344.6 For issuing a certifi cate of Competence – per certifi cate R 339 R 3574.7 For a copy of a Fire Investigation Report - per copy R 504 R 5314.8 For the monitoring of non-emergency telephone lines (after hours complaints etc)

– per line per annum R 21,189 R 22,333

5 Tariff of Charges in respect of Professional Fire Fighting and Rescue Training Course

(Per Candidate excluding course materials, accommodation etc.)5.1 Fire Fighter One R 7,197 R 7,5865.2 Fire Fighter Two R 2,394 R 2,5235.3 Hazmat 1st Responder (Awareness) R 1,116 R 1,1765.4 Hazmat 2nd Responder (Operations) R 3,198 R 3,3715.5 Fire Offi cer One R 2,989 R 3,1505.6 Handling of Chlorine Emergencies R 475 R 5015.7 Elementary Breathing Apparatus R 475 R 5015.8 Aerial Appliance (HPP) R 959 R 1,0105.9 Vehicle Rescue & Extrication R 1,599 R 1,6855.10 Elementary Fire fi ghting, Fire prevention

(Disaster Management) R 157 R 1655.11 Pump Operator/Driver – Basic Course R 959 R 1,0125.12 Pump Operator/Driver – IFSAC Course R 1,920 R 2,0235.13 Re-Issue of Certifi cates - per certifi cate R 78 R 83

6 Tariff of Charges for the Certifi cation for Fire Fighting 1 & 2 (Challenging) at 10% of Course Fee (Per Candidate)

6.1 Fire Fighter One R 718 R 7566.2 Fire Fighter Two R 238 R 2506.3 Hazmat (Awareness) R 110 R 1166.4 Hazmat (Operations) R 318 R 3366.5 Fire Offi cer One R 318 R 3366.6 Instructor One R 318 R 336



2011/12 2012/13Incl. Vat Incl. Vat

7 Tariff of Charges for the Use of Training Staff and Facilities7.1 For the use of Lecture rooms and facilities for the purposes of seminars and sym-

posia per lecture room per dayR 504 R 531

7.2 For the attendance of training personnel on training courses out of the area of jurisdiction.

per lecture per day R 339 R 3577.3 For the attendance of training personnel at accreditation for emergency service

courses/challenges held in terms of regulations framed under IFSAC – (Interna-tional Fire Services Accreditation Committee)

per module per candidate R 168 R 1777.4 Re-Issue of Certifi cates

Cost plus 15% of applicable IFSAC tariff

8 Tariff of Charges in respect of Hose Charges 8.1 Testing, scrubbing and drying of hose per length R 132 R 1398.2 Testing, scrubbing and drying of Hazmat contaminated hose - per length R 265 R 279

plus cost of any consumables used in decontaminationplus 15% of cost of consumables

8.3 Seizing of Couplings to hose – per coupling R 132 R 1398.4 Repairing of Hose – per length R 132 R 139

plus materials at cost plus 15%

9 Tariff of Charges in respect of the attendance & employment of Special Appliances and Plant to standby at sports & special eventsFor attendance and employment (per hour or part thereof)

9.1 High Rise fi re fi ghting appliance R 350 R 3699.2 Water Carrier R 175 R 1849.3 Mobile lighting unit R 175 R 1849.4 Major pumper R 350 R 3699.5 Light pumper R 175 R 184

10 Tariff of Charges in respect of Various Miscellaneous Services and Hire Chargesper hour or part thereof in respect of 10.1 – 10.4

10.1 Hire of Portable Pump and related equipment R 252 R 26510.2 Hire of Extension Ladder R 252 R 26510.3 Gaining Access/Lock-Outs R 252 R 26510.4 Miscellaneous Service – per service R 252 R 26510.5 In addition to the above applicable charge, mileages for out of area call- outs are

as follows - per kmHeavy duty vehicles R 6 R 7Light duty vehicles R 4 R 4

All tariffs refl ected above are inclusive of VAT

11 General Comments:11.1 Any Fire, Rescue or other emergency incident involving property or activities of the

Msunduzi Municipality shall not attract charges.11.2 Any incident of a humanitarian nature or request for assistance of a humanitarian

nature shall not attract charges.



11.3 Services performed in the assistance of Community projects or departmental pub-lic relations exercises and displays shall not attract charges.

11.4 The applicable attendance rate charge shall be calculated from the time that the fi rst arriving appliance is in attendance at an incident until the last departing ap-pliance leaves the scene at the conclusion of the incident, due allowances being made for breakdown or mishap or time occupied by relief personnel.

11.5 When the time used to calculate the applicable attendance rate charge is less than 30 minutes no charge shall be raised.

11.6 Explanation of Terminology:i) Hazmat stands for Hazardous Material and refers to incidents that involve ma-

terials and chemicals that require an extraordinary response and the use of specialist equipment in order to resolve the incident.

ii) Out of Area means a response to any physical location that is outside of the recognised area of jurisdiction of the Msunduzi Municipality.

iii) Structural means any building regardless of construction type or occupancy.iv) Transport means mechanical transportation of any means.11.7 Whenever the Chief Fire Offi cer deems it necessary in the interests of public safe-

ty and in order to preserve life and property and as often as he thinks fi t, arrange-ments shall be made for an inspection and/or attendance service to be provided in respect of premises used as public buildings or sports and recreational events.

11.8 The following persons shall be jointly and severally liable to the Council for the charges payable in terms of this section:11.8.1 The owner/s of all property damaged or destroyed or

under threat of damage or destruction by fi re, accident or other mishap in respect of which the service is rendered or the materials are supplied.

11.8.2 The person or owner or the owner’s spouse, child, employee or agent whose wrongful act or omission was the direct cause of the circumstances which make the rendering of the service necessary in the opinion of the Chief Fire Offi cer or any other offi cer acting with his authority.

11.8.3 The person responsible or whose alarm system was re-sponsible for the summoning of the service where, in the opinion of the Chief Fire Offi cer, such summoning was unwarranted, or was no reasonable justifi cation thereof.


Traffi c and Security


1 The Removal of Light Motor Vehicles from Public Roads and Public Spaces Contracted Out

Contracted Out


2 Release of Impounded Vehicles R 500 R 550

3 Impounding Fees per day R 50 R 60




4 Escort Fee (per offi cer per hour) R 300 R 320

5 Traffi c Offi cer for By-Law 23A No Charge No Charge(Council Resolution)

6 Service of Summons:Personal R 40 R 40

Non-Personal R 30 R 30

7 Events (per offi cer per hour) R 130 R 140


8 Taxi Stand Permits R 190 R 200

9 Permit Application R 60 R 65

10 Late Applications for the Renewal of Taxi Stand Permits R 60 R 65


11 Junior Traffi c Centre R 200 R 250

SUSTAINABLE COMMUNITY SERVICE DELIVERY PROVISION MANAGEMENTHEALTH AND SOCIAL SERVICES

Health


1 Food InspectionFor Voluntary surrender of foodstuffs for destruction R 81 R 85


2 Animal & Bee keeping permits (per permit) R 37 R 39


3 Fines For contravention of health legislation Refer to the Master fi le at

Room 336 of the Health Department



Tariffs relating to Dairymen and Milk Dealers


4 Fees payable in respect of certifi cates of registration:(a) application for a certifi cate of registration R 354 R 373

(b) annual renewal thereof R 173 R 182


5 Fees payable for the testing of milk samples:(a) during consideration of an application for a certifi cate of

registrationR 77 R 300

(b) upon request R 77 R 300

( c) fee payable for water sampling R 200


6 Clearing of Vacant Land Cost of clearing

plus any applic. fee

Cost of clearing plus any

applic. fee

CORPORATE SERVICES AND PLANNINGINFORMATION MANAGEMENT

Geographical Information Systems


1 Plotting of Digital Data: Market Aver-age

Market Average

Paper Size Line/Vector Line/Vector A4 R 25 R 26 A3 R 30 R 32 A2 R 40 R 42 A1 R 50 R 53 A0 R 65 R 69

Paper Size Vector Fill/Raster

Vector Fill/Raster

A4 R 30 R 32 A3 R 40 R 42 A2 R 65 R 69 A1 R 120 R 126 A0 R 230 R 242




2 Supply of Digital Data:(i) Digital Orthphotos

per 1:10 000 Cut into 8 blocks of the original R 25 R 26per 1:5 000 sheets R 100 R 105per 1:10 000 R 200 R 211

(ii) Other digital data (zipped fi le)Minimum Search fee R 52 R 55Per half hour thereafter R 26 R 28Complete data set R 1,050 R 1,107

(iii) Cost of Digital Medium (CD) R 5 R 5

CORPORATE SERVICES AND PLANNINGCity Hall


City Hall and Musical Instruments

1 Main HallHire of Main Hall (inclusive of fi re protection) R 2,700 R 2,846After Midnight per hour or part thereof R 432 R 456Per hour of Preparations/Rehearsals R 183 R 193

Deposit Refundable - damage/breakage etc. and overtime for caretakers and cleaners

R 2,535 R 4,135

2 Hire of Musical InstrumentsGrand Piano (August Forster) Per performance R 367 R 387Per hour of Rehearsals R 56 R 60

Grand Piano (Steinway) Per Performance

R 611 R 644

Per Hour of Rehearsals R 56 R 60

Organ per Performance R 611 R 644Per Hour of Rehearsals R 56 R 60



MISCELLANEOUS CHARGESALL DEPARTMENTS


1 Duplicate Statement FeeFirst two statements per request No Charge No ChargeMore than two statements per request per statement R 1.50 R 1.50

2 For every photocopy of an A4 size page or part thereof R 2.00 R 2.00For every photocopy of an A3 size page or part thereof R 3.00 R 3.00

3 Laminations - A4 size page or part thereof R 2.00 R 2.00 PLUS prevailing Cost of the Lamination Sheet/sLaminations - A3 size page or part thereof R 3.00 R 3.00 PLUS prevailing Cost of the Lamination Sheet/s

4 Fax Charges – A4 size page or part thereof R 2.00 R 2.00 PLUS costs relating to the transmission of the facsimile

5 To search for and prepare a record for disclosure, for each hour, or part of an hour, excluding the fi rst half hour, reasonably required for such search and prepa-ration.

R 70 R 74

PLUS Administration Fee R 20 R 21(Excluding applications made in terms of the Promotion of Access to Information Act, No. 2 of 2000)

6 Consumer’s Dishonored Cheques - Penalty Charged at the prevailing

bank fee

Charged at the prevailing

bank feePLUS Administration Fee R 18.00 R 19

7 Commission Charged in respect of Easy Pay cheque payments which have dis-honored, will be payable by the consumer plus R19 administration fee.

Commission Charged plus

R18 Admin. Fee

Commission Charged plus

R19 Admin. Fee

PROMOTION OF ACCESS TO INFORMATION ACT

Applications made in terms of the Promotion of Access to Information Act, No. 2 of 2000 Schedule of ChargesPublic and private bodies registered under the Value-Added Tax Act, No. 89 of 1994, as vendors may add value-added tax to all fees prescribed in this section.

Fees in Respect of Guide1 The fee for a copy of the guide as contemplated in regulation 2(3)(b) and 3(4)9c)

for every photocopy of an A4-size page or part thereof is R 0.60 R 0.60

Fees in Respect of Public Bodies1. The fee for a copy of the manual as contemplated in regulation 5(c) for every

photocopy of an A4-size page or part thereof isR 0.60 R 0.60




2. The fees for reproduction referred to in regulation 7(1) are as follows:(a) For every photocopy of an A4-size page or part thereof R 0.60 R 0.60

(b) For every printed copy of an A4-size page or part thereof held on a computer or in electronic or machine-readable form

R 0.40 R 0.40

(c) For a copy in a computer-readable form on-(i) stiffy disc R 5 R 5(ii) compact disc R 40 R 40

(d) (i) For a transcription of visual images, for an A4-size page or part thereof R 22 R 22 (ii) For a copy of visual images R 60 R 60

(e) (i) For a transcription of an audio record, for an A4-sizepage or part thereof R 12 R 12 (ii) For a copy of an audio record R 17 R 17

3. The request fee payable by every requester, other than a personal requester, referred to in regulation 7(2)is

R 35 R 35

4. The access fees payable by a requester referred to in regulation 7(3) are as fol-lows:

(1) (a) For every photocopy of an A4-size page or part thereof R 0.60 R 0.60

(b) For every printed copy of an A4-sizepage or part thereof held on a computer or Electronic or machine –readable form

R 0.40 R 0.40

(c) For a copy in a computer-readable form on- (i) stiffy disc R 5 R 5 (ii) compact disc R 40 R 40

(d) (i) For a transcription of visual images, for an A4-size page or part thereof R 22 R 22 (ii) For a copy of visual images R 60 R 60

(e) (i) For a transcription of an audio record, for an A4-size page or part thereof R 12 R 12 (ii) For a copy of an audio record R 17 R 17

(f) To search for and prepare the record for disclosure, for each hour or part of an hour, excluding the fi rst hour, reasonably required for such search and prepara-tion

R 15 R 15

(2) For purposes of section 22(2) of the Act, the following applies:(a) Six hours as the hours to be exceeded before a deposit is payable; and

(b) one third of the access fee is payable as a deposit by the requester.

(3) The actual postage is payable when a copy of a record must be posted to a requester.

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Budget Related PoliciesRates Policy

DEFINITIONS:

1. Inthisdocumentandinadditiontothedefinitionsintheact,andunlessthecontextindicatesotherwise-

“agriculturalproperty”meanspropertyusedforagriculturalpurposesieproductionofcrops,livestockorgenerallyrecognizedagriculturalactivitieswiththosebuildingswhicharegenerallyconsiderednecessaryforagriculturalactivities,asdefinedintheAct;

“category”–(a) inrelationtoproperty,meansacategoryofpropertiesdeterminedintermsofsection8oftheAct;and(b) inrelationtoownersofproperties,meansacategoryofownersdeterminedintermsofsection15(2)

oftheAct;

“childheadedhousehold”–meansahouseholdwherebothparentsaredeceasedandwherealloccupantsofthepropertyarechildrenofthedeceasedandareallunderthelegalagetocontractforservicesandareconsideredasminorsinlawbythestate;

“developer”meansanownerwhopurchasesrawlandandinstallsthenecessaryinfrastructurefordevelopmentofthelandforresidential,industrialorcommercialpurposes.

“dwelling,shops,flats”(DSF)–meansanypropertywhereacommercialcomponentexiststogetherwithablockofresidentialunitsprovidedthattwothirdsormoreofthefloorareaisusedforresidentialpurposes

“effectivedate”-(a) inrelationtoavaluationroll,meansthedateonwhichthevaluationrolltakeseffectintermsofsection

32(1)oftheAct;or(b) inrelationtoasupplementaryvaluationroll,meansthedateonwhichasupplementaryvaluationroll

takeseffectintermsofsection78(2)(b)oftheAct;

“financialyear”meanstheperiodstartingfrom1Julyinayearto30Junethenextyear;

“home business” –means a property previous rated as residentialwhere an owner or lessee runs a smallbusinessfromthepremisesandwhichisstillprimarilyusedasaplaceofresidencebythatownerorlesseeandwherespecialconsenthasbeenobtained in termsof theTownPlanningscheme to run thisbusinesson thepremises.

“landreformbeneficiary”,inrelationtoaproperty,meansapersonwho-

(a) acquiredthepropertythrough-(i) theProvisionofLandandAssistanceAct,1993(ActNO.126of1993);or(ii) theRestitutionofLandRightsAct,1994(ActNo.22of1994)

(b) holdsthepropertysubjecttotheCommunalPropertyAssociationsAct,1996(Act•No.28of1996);or(c) holdsoracquiresthepropertyintermsofsuchotherlandtenurereformlegislationasmaypursuant

tosection25(6)and(7)oftheConstitutionbeenactedafterthisActhastakeneffect;

“marketvalue”,inrelationtoaproperty,meansthevalueofthepropertydeterminedinaccordancewithsection46oftheAct;

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“Mining”,meanspropertyusedforminingpurposesorpurposesincidentaltominingoperations.

“Minister”meanstheCabinetmemberresponsibleforlocalgovernment;

“Multiplepurposes”meansapropertyusedformorethanonepurpose.

municipalproperty”meanspropertyofwhichtheMunicipalityistheownerbutexcludesregisteredleasesandforthepurposesofratingthosepropertiesoccupiedbypersonsotherthanthemunicipality;

“newlyrateableproperty”meansanyrateablepropertyonwhichpropertyrateswerenotleviedbeforetheendofthefinancialyearprecedingthedateonwhichthisActtookeffect,excluding-

(a) apropertywhichwasincorrectlyomittedfromavaluationrollandforthatreasonwasnotratedbeforethatdate;and

(b) aproperty identifiedby theMinisterbynotice in theGazettewhere thephasing-inofa rate isnotjustified;

“occupier”meansanypersonwhooccupiesanypropertyorpartthereof,withoutregardtothetitleunderwhichhe/sheoccupiestheproperty.

“otherproperty”,meansallpropertiesthatarenotincludedintheratespropertycategoriesinrespectofsection16atogoftheMsunduzimunicipalityratespolicy “owner”-

(a) inrelationtoapropertyreferredtoinparagraph(a)ofthedefinitionof“property”,meansapersoninwhosenameownershipofthepropertyisregistered;

(b) inrelationtoarightreferredtoinparagraph(b)ofthedefinitionof“property”,meansapersoninwhosenametherightisregistered;

(c) inrelationtoalandtenurerightreferredtoinparagraph(c)ofthedefinitionof“property”,meansapersoninwhosenametherightisregisteredortowhomitwasgrantedintermsoflegislation;or

(d) inrelationtopublicserviceinfrastructurereferredtoinparagraph(d)ofthedefinitionof“property”,meanstheorganofstatewhichownsorcontrolsthatpublicserviceinfrastructureasenvisagedinthedefinitionof“publiclycontrolled”,providedthatapersonmentionedbelowmayforthepurposesofthisActberegardedbyamunicipalityastheownerofapropertyinthefollowingcases:(i) Atrustee,inthecaseofapropertyinatrustexcludingstatetrustland;(ii) anexecutororadministrator,inthecaseofapropertyinadeceasedestate;(iii) atrusteeorliquidator,inthecaseofapropertyinaninsolventestateorinliquidation;(iv) ajudicialmanager,inthecaseofapropertyintheestateofapersonunderjudicialmanage-

ment;(v) acurator,inthecaseofapropertyintheestateofapersonundercuratorship;(vi) apersoninwhosenameausufructorotherpersonalservitudeisregistered,inthecaseofa

propertythatissubjecttoausufructorotherpersonalservitude;(vii) alessee,inthecaseofapropertythatisregisteredinthenameofamunicipalityandis

leasedbyit;or(viii) abuyer,inthecaseofapropertythatwassoldbyamunicipalityandofwhichpossessionwas

giventothebuyerpendingregistrationofownershipinthenameofthebuyer;

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“permitteduse”,inrelationtoaproperty,meansthelimitedpurposesforwhichthepropertymaybeusedintermsof–

(a) anyrestrictionsimposedby-(i) aconditionoftitle;(ii) aprovisionofatownplanningorlandusescheme;or(iii) anylegislationapplicabletoanyspecificpropertyorproperties;or

(b) anyalleviationofanysuchrestrictions;“person”includesanorganofstate;

“placesofworship”,meansapropertyregisteredinthenameofandusedprimarilyasaplaceofpublicworshipbyareligiouscommunity,includinganofficialresidenceregisteredinthenameofthatcommunitywhichisoccupiedbyanofficebearerofthatcommunitywhoofficiatesatservicesatthatplaceofworship,

“property”means-

(a) immovable property registered in the nameof a person, including, in the caseof a sectional titlescheme,asectionaltitleunitregisteredinthenameofaperson;

(b) arightregisteredagainstimmovablepropertyinthenameofaperson,excludingamortgagebondregisteredagainsttheproperty;

(c) alandtenurerightregisteredinthenameofapersonorgrantedtoapersonintermsoflegislation;or(d) publicserviceinfrastructure;

“protectedarea”–meansanareathatisorhastobelistedintheregisterreferredtoinsection10oftheNationalEnvironmentalManagement;ProtectedAreasAct,2003.

“publicbenefitorganizationproperty”meansanypropertyownedbya.publicbenefitorganizationandusedforanyspecifiedpublicbenefitactivitylistedinpart1oftheninthScheduletotheIncomeTaxActexcludingItem3and5beinglandandhousing,placesofworshipalreadywhererebates,reductionsandexemptionshavealreadybeenconsideredunderimpermissiblerates.Ratiospublishedbytheministerforitems1,2and4oftheschedulemustnotexceedthosepublishedbytheministerfromtimetotime.

“publicserviceinfrastructure”meanspubliclycontrolledinfrastructureofthefollowingkinds:

(a) national,provincialorotherpublicroadsonwhichgoods,servicesorlabourmoveacrossamunicipalboundary;

(b) waterorsewerpipes,ductsorotherconduits,dams,watersupplyreservoirs,watertreatmentplantsorwaterpumpsformingpartofawaterorsewerschemeservingthepublic;

(c) powerstations,powersubstationsorpower lines formingpartofanelectricityschemeserving thepublic;

(d) gasorliquidfuelplantsorrefineriesorpipelinesforgasorliquidfuels,formingpartofaschemefortransportingsuchfuels;

(e) railwaylinesformingpartofanationalrailwaysystem;(f) communicationtowers,masts,exchangesorlinesformingpartofacommunicationssystemserving

thepublic;(g) runwaysorapronsatnationalorprovincialairports;(h) anyotherpubliclycontrolledinfrastructureasmaybeprescribed;or(i) arightregisteredagainstimmovablepropertyinconnectionwithinfrastructurementionedinparagraphs

(a)to(h);

“residentialproperty”meansapropertyincludedinthevaluationrollasresidential

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“rural communal property”means agricultural or township propertywhere there is a single cadastral holdingdevelopedpredominantlyforresidentialpurposesand/ortraditionalruralhomesteads,andwhichmayalsohaveavarietyofnon-residentialstructureswhichcollectivelyconstitutetheminorityintermsofmeasuredbuildingarea,includingpropertybelongingtotheIngonyamaTrustBoardandpropertybelongingtoalandreformbeneficiary,wherethedominantuseisresidentialratherthancommercialagricultural;

“SMME”meansSmall,MediumandMicroEnterprises

“theAct”meanstheLocalGovernment:MunicipalPropertyRatesAct,2004(ActNo.6of2004).

“unauthorizeduse”–meansanypropertyusedforanypurposeotherthanitspermittedzoneduseorthathasnotbeengrantedspecialconsentbythemunicipalityintermsofitsTownPlanningScheme;andthathasanyunauthorizedstructuresonthepropertythatarenotpartoftheapprovedplan;thatcannotthereforebeplacedintoanyoftheexistingcurrentpermittedusecategoriesapprovedbyCouncilintheRatesPolicy.

“vacantland”meansanyundevelopedpropertyaslistedinthevaluationroll

ADOPTION AND CONTENTS OF RATES POLICY

2. TheMunicipalityshalladoptaratespolicyintermsofwhichallrateablepropertieswithinitsareaofjurisdictionarerated.

3. TheratespolicyshalltakeeffectontheeffectivedateofthefirstvaluationrollpreparedbytheMunicipalityundertheAct,andshallaccompanytheMunicipality’sbudgetforthefinancialyearconcernedwhenthebudgetistabledintermsofsection16(2)oftheLocalGovernment:MunicipalFinanceManagementAct,2003(ActNo.56of2003).

COMMUNITY PARTICIPATION

4. BeforetheMunicipalityadoptsoramendsitsratespolicyitshallfollowaprocessofcommunityparticipationinaccordancewithChapter4oftheLocalGovernment:MunicipalSystemsAct,2000(Act32of2000)andsection4and5oftheAct.”

LEVYING OF RATES

5. TheMunicipalityshalllevyratesonallrateablepropertywithinitsarea,providedthatitmay,byresolution,grantexemptions from, rebatesonor reductions in, rates levied in termsof thispolicyor in termsofanationalframeworkprescribedundertheAct.

6. InlevyingratesonpropertytheMunicipalityisnotobligedtolevyratesonpropertiesofwhichitistheowner,orpublicserviceinfrastructure,oronpropertiesinrespectofwhichitisimpossibleorunreasonablydifficulttoestablishamarketvaluebecauseof legally insecuretenureresultingfrompastraciallydiscriminatorylawsorpractices.

DIFFERENTIAL RATES

7. TheMunicipalitymay,byresolution,and in termsofcriteriasetout in thispolicy, levydifferent rates fordifferentcategoriesofrateableproperty,whichmayincludecategoriesdeterminedaccordingtotheuseoftheproperty,thepermitteduseofthepropertyorthegeographicalareainwhichthepropertyissituated.

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IMPERMISSIBLE DIFFERENTIATION 8. TheMunicipalitymaynotlevy-

(a) Differentratesonresidentialproperties,exceptasprovidedforinsections11(2)[uniformfixedamountforrates],21[phasinginofrates]and89[useofexistingvaluationroll/supplementaryroll]oftheAct;

(b) a rate on a category of non-residential properties that exceeds a prescribed ratio• to the rate onresidentialpropertiesdeterminedintermsofsection11(1)(a)[onthemarketvalueoftheproperty]oftheAct:Providedthatdifferentratiosmaybesetinrespectofdifferentcategoriesofnon-residentialproperties.

(c) rateswhichunreasonablydiscriminatebetweencategoriesofnon-residentialproperties;(d) additionalratesexceptasprovidedforinsection22[specialratingareas]oftheAct.

PROPERTIES USED FOR MULTIPLE PURPOSES 9. Apropertyusedformultiplepurposesandwhere there isnotaseparateratingcategoryshall, for rates

purposes,beassignedtoacategorydeterminedbytheMunicipalityfortheprimaryuseoftheproperty.

LEVYING OF PROPERTY RATES ON SECTIONAL TITLE SCHEMES

10(1)Arateonpropertywhichissubjecttoasectionaltitleschemeshallbeleviedontheindividualsectionaltitleunitsintheschemeandnotonthepropertyasawhole.

(2) ThiswillbeapplicableonlyafterthefirstvaluationrolloftheMunicipalityhasbeenpreparedintermsoftheAct.Intheinterim,thebodycorporateremainsliableforpaymentofratesonsectionaltitleschemes.Oncethevaluationrollhasbeenprepared,thebodycorporatewillonlybeliableforpaymentofratesinthosecaseswhereitistheownerofanyspecificsectionaltitleunit.

AMOUNT DUE FOR RATES

11(1)TherateleviedbytheMunicipalityshallbeanamountintheRandonthemarketvalueoftheproperty.

(2) Furthermore,intheinterestofacceleratingtheprovisionofbasicservicestocommunities,andenhancingthe internationalcompetitivenessof theSouthAfricaneconomyandmobilizationof foreign investmentsand jobcreation, theMunicipalitymayconsiderexempting from ratingall componentsofpublicserviceinfrastructureasdefinedintheAct.

(3) TheMunicipalityacknowledgesthattheMinistermayfromtimetotimeincreasethemonetarythresholdreferredtoinsection21,toreflectinflation.

PERIOD FOR WHICH RATES MAY BE LEVIED

12(1) TheMunicipalityshalllevyratesforonefinancialyearatatime.Attheendofeachfinancialyeartherateleviedforthatfinancialyearshalllapse.

(2)TheMunicipalityshall,annually,atthetimeofitsbudget,settheamountintheRandforrates. (3) ThelevyingofratesshallformpartoftheMunicipality’sannualbudgetprocessassetoutinChapter4of

theLocalGovernment:MunicipalFinanceManagementAct,2003(ActNo.56of2003).

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COMMENCEMENT OF RATES

13. RatesleviedbytheMunicipalityshallbecomedueandpayableasfromthestartofthefinancialyear.

PROMULGATION OF RESOLUTIONS LEVYING RATES

14(1)ArateleviedbytheMunicipalityshallbeadoptedbyresolutionsupportedbyamajorityofthemembersoftheCouncil.

(2)TheMunicipalityshallpublishtheresolutionintheProvincialGazette.

(3) TheMunicipalManagershall,withoutdelay,conspicuouslydisplaytheresolutionforaperiodofat least30daysattheMunicipality’sheadofficeandsatelliteofficesandlibrariesand,ifapplicable,onawebsiteavailabletoit.

(4) In addition, theMunicipal Manager shall, without delay, advertise in themedia a notice stating that aresolutionlevyingarateonpropertyhasbeenpassedbytheCouncilandthattheresolutionisavailableforinspectionattheMunicipality’sheadofficeandsatelliteofficesandlibrariesduringofficehoursandontheMunicipality’swebsite,ifapplicable.

EXEMPTIONS. REDUCTIONS AND REBATES

15(1)TheMunicipalityshallnotgrantreliefinrespectofthepaymentofratesotherthanbywayofexemption,rebateorreduction,norshallitgrantsuchrelieftotheownerofapropertyonanindividualbasis.

(2) TheMunicipalManagershallannuallytableintheCounciloftheMunicipalityalistofallexemptions,rebatesand reductionsgrantedby theMunicipalityduring thepreviousfinancial year togetherwithastatementreflectingtheincomeforegonebytheMunicipalitybywayofexemptions,rebates,reductions,exclusionsandthephasing-indiscountgrantedintermsofsection21oftheAct.

(3) TheCouncilshallidentify,andprovidereasonsfor,exemptions,rebatesandreductionswhentheannualbudgetistabledintermsofsection16(2)oftheLocalGovernment:MunicipalFinanceManagementAct,2003.

CATEGORIES OF PROPERTIES

16. TheCouncilmay,byresolution,grantexemptions,reductionsandrebatesonthefollowingcategoriesofproperties-

(a) residentialproperty;(b) homebusiness;(c) vacantland;(d) agriculturalproperty;(e) publicserviceinfrastructure;(f) ruralcommunalproperty;(g) impermissibleratesproperty;(h) mining;(i) sectionaltitlegarages(separatelyregistered)(j) unauthorizeduseproperty;(k) DSFproperties(l) publicbenefitorganisationproperty;(m) otherproperty

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CONSTITUTIONALLY IMPERMISSIBLE RATES

17. TheMunicipalityacknowledgesthatitmaynotlevyratesonpropertyinawaythatwouldmateriallyandunreasonablyprejudicenationaleconomicpolicies,economicactivitiesacrossitsboundaryorthenationalmobilityofgoods,services,capitalorlabourasprovidedforinsection229(2)(a)oftheConstitution.

OTHER IMPERMISSIBLE RATES

18(1)TheMunicipalityshallnot levyarateonthosepartsofaspecialnaturereserve,nationalparkornaturereservewithinthemeaningoftheNationalEnvironmentalManagement:ProtectedAreasAct,orofanationalbotanicalgardenwithinthemeaningoftheNationalEnvironmentalManagement:BiodiversityAct,2004,whicharenotdevelopedorusedforcommercial,business,agriculturalorresidentialpurposes.

(2) In respect of subsection (1), the exclusion from rates shall lapse if the declaration of that property asaspecialnature reserve,nationalpark,nature reserveornationalbotanicalgarden,oraspartof suchreserve,park,orbotanicalgarden,iswithdrawnintermsoftheapplicableAct.

(3) TheMunicipalitymaylevyarateonthoseportionsofaprotectedareaand/ornationalbotanicalgardenthataredevelopedorusedforbusiness,commercial,agriculturalorresidentialpurposes.

(4) Inorder todeterminewhether theexclusion fromrates lapses inrespectof thepropertiesmentioned insubsection(1),theMunicipalityshallrefertotheregistertobeprovidedbytheDepartmentofEnvironmentalAffairsentitled“RegisterofProtectedArea”,containingalistofallprotectedareas,thenameoftheMunicipalitywheretheprotectedareaislocated,cadastralboundaries,thekindofprotectedareaineachcase,thedateofdeclarationandwithdrawal.TheregisterwillbeupdatedannuallyandforwardedtoMunicipalities.

19(1)TheMunicipalityshallnotlevyarateonapropertyregisteredinthenameofandusedprimarilyasaplaceofpublicworshipbyareligiousorganisation,includinganofficialresidenceregisteredinthenameofthatorganisationwhich isoccupiedbyanoffice-bearerof thatorganisationwhoofficiatesatservicesat thatplaceofpublicworship.

(2) In respectof theexclusion fromratesonaproperty registered in thenameof,andusedprimarilyasaplaceofpublicworshipby,areligiousorganisation,theMunicipalityregardsthereligiousorganisationasanon-profitmakingentityregardingtheuseoftheproperty.Therefore,anydeviationfromthisprincipleshallautomaticallydisqualifythereligiousorganisationfromenjoyingthebenefitsconferredbytheAct.

(3) Theprinciplestatedinsubsection(2)shallalsoapplywhereapropertyintheownershipofonereligiousorganisationisusedbyanotherreligiousorganisation.Inthatcase,ifanymoneychangeshandsbetweenthetworeligiousorganisations,suchmoneyshouldbelimitedtosettlementsofmunicipalfinancialobligationssuchaspaymentsforuserservicecharges,e.g.,onwater,electricity,refuseremovalandthelike.

(4) Inthecaseofapropertyownedbyanon-religiousentityororganisation,butmadeavailabletoareligiousorganisationforuseasaplaceofpublicworship,suchnon-religiousentityororganisationshallbeliableforpaymentofratesonsuchproperty.

(5) WhereareligiousorganisationenjoysthebenefitaffordedbytheActandthepropertyisdisposedofbythereligiousorganisationowningit,thebenefitshalllapseandratesonsuchpropertyshallbecomepayable.

(6) Similarly,wherethepropertyisnolongerusedprimarilyasaplaceofpublicworshipor,inthecaseofanofficialresidenceregisteredinthenameofthatorganisation,wheresuchresidenceisnolongerusedasaresidencebytheoffice-bearerwhoofficiatesatservicesatthatplaceofworship,theexclusionfromratesinrespectofthosepropertiesshalllapse.

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20. TheMunicipalityshallnotlevyarateonmineralrightswithinthemeaningofparagraph(b)ofthedefinitionof“property”insection1.

21. TheMunicipalityshallnotlevyarateonapropertybelongingtoalandreformbeneficiaryorhisorheirs,provided that this exclusion shall lapse ten years from the date on which such beneficiary’s title wasregisteredintheofficeoftheRegistrarofDeeds.

22. In respect of properties assigned in the valuation roll to a category determined by themunicipality forresidentialpurposes,theratesleviedshallbecalculatedonthemarketvalueofthepropertylessanamountofR15000.

23. TheMunicipalityshallnotlevyarateonthefirst30%ofthemarketvalueofpublicserviceinfrastructure.

PRIMARY REBATES PER CATEGORY OF PROPERTY

24(1). TheMunicipalitymayby resolution grant a rebate on the rate payable on the following categories ofrateableproperties-

(a) residentialproperty;(b) homebusinesses;(c) agriculturalproperty;(d) publicserviceinfrastructure;(e) ruralcommunalproperty;(f) DSFproperty(g) mining;(h) sectionaltitlegarages(separatelyregistered)(i) publicbenefitorganizationproperty;(j) otherproperty

(2) TheMunicipalityshallineachfinancialyeardeterminetheamountoftherebatetobegrantedtoeachofthecategoriesspecifiedinsubsection(1).

OTHER REBATES PER CATEGORY OF OWNER

25. TheMunicipalitymaygrantarebateonapropertyownedandoccupiedbytheMsunduziMunicipality.

26. TheMunicipalitymaygrantarebateonapropertywhoseowner isarecipientofanoldagepensionordisabilitygrant,providedthattheownerofsuchpropertyappliesannually,ontheprescribedformwhichmustbereceivedbyclosingdateandsatisfiesthecriteriaforsuchrebateasmaybedeterminedbytheMunicipality.

27. TheMunicipalitymaygrantarebatetoaminor(s)whoownspropertyorarethesoleheirsofpropertythatis;childheadedhouseholds,providedthattheseowner(s)ofsuchpropertyapplyannually,ontheprescribedformwhichmustbereceivedbyclosingdateandsatisfiesthecriteriaforsuchrebateasmaybedeterminedbytheMunicipality.

28 TheMunicipalitymaygrantarebateonarateablepropertywhichhasbeenlistedundertheMunicipality’sTownPlanningScheme:Providedthattheownerofsuchpropertyappliesannually,ontheprescribedformwhichmustbereceivedbyclosingdate,andsatisfiesthecriteria,forsuchrebate,asdeterminedbytheMunicipality.

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29 TheMunicipalitymaygrantarebatetodeveloperswhoownandareintheprocessofdevelopingproperty,providedthattheownerofsuchpropertymakesapplicationintheprescribedformatandsatisfiesthecriteriaforsuchrebateasmaybedeterminedbytheMunicipality.

30. Arebategrantedontheratepayableonanypropertyreferredtoinsections26to29,inclusive,isconditionalupontherebeingnooutstandingratesorservicechargesowingandpayableonsuchpropertyexcepttoanownerwhoisinreceiptofanoldagepension,disabilitygrantorchildheadedhousehold,providedthatanarrangementintermsofthecreditcontrolpolicyforanyarrearsisinplaceandisbeingmaintained.

31. NorebatewillbegrantedtoanydeveloperasenvisagedinSection29above,whohaspreviouslyreceivedabusinessconcessionordevelopmentincentivefromCouncilforthedevelopment.

COMPULSORY PHASING-IN OF CERTAIN RATES

30(1)Arateonnewlyrateablepropertyshallbephasedinoveraperiodofthreefinancialyears.

(2) Arateonpropertyreferredtoinsection20shallbephasedinoveraperiodofthreeyearsaftertheexclusionperiodreferredtointhatsection.

(3) A rate leviedonnewly rateableproperty ownedandusedbyorganisations conducting specifiedpublicbenefitactivitiesandregisteredintermsoftheIncomeTaxActforthoseactivitiesshallbephasedinoveraperiodoffourfinancialyears.

(4) Inrespectoftheratesreferredtoinsubsections(1)and(2),thephasingindiscountshallbeappliedas

follows: (a) Firstyear:atleast75%oftherateforthatyearotherwiseapplicabletothatproperty;(b) Secondyear:atleast50%oftherateforthatyearotherwiseapplicabletothatproperty;(c) Thirdyear:atleast25%oftherateforthatyearotherwiseapplicabletothatproperty.

(5) Inrespectofpropertiesreferredtoinsubsection(3),theMunicipalityshallnotlevyarateonsuchpropertiesduringthefirstyear.Thereafter,thephasing-indiscountshallbeappliedasfollows:

(a) Secondyear:atleast75%oftherateforthatyearotherwiseapplicabletotheproperty;(b) Thirdyear:atleast50%oftherateforthatyearotherwiseapplicabletothatproperty;(c) Fourthyear:atleast25%oftherateforthatyearotherwiseapplicabletothatproperty.

(6) Arateleviedonpropertiesreferredtoinsubsections(1)to(3)shallnotbehigherthantherateleviedonsimilarpropertyorcategoryofpropertiesintheMunicipality.

(7) TheMunicipalitymayapplytotheMinistertoextendthephasing-inperiodreferredtoinsubsections(1)to(3),butsuchextendedperiod,togetherwiththeinitialperiod,shallnotexceedsixfinancialyears.

ADDITIONAL RATES FOR SPECIAL RATING AREAS

31(1)TheMunicipalCouncilmaybyresolutiondefineanareawithin theMunicipalityasaspecial ratingareaandinsodoingmaylevyanadditionalrateonthepropertysodefinedforthepurposesofraisingfundsforimprovingorupgradingthatarea.

(2) Beforeactingintermsof(1)above,theMunicipalityshallconsulttheaffectedcommunityontheproposedboundariesofthearea,theproposedimprovementorupgradingoftheareaandobtaintheconsentoftheaffectedcommunitywhowillbeliableforpayingtheadditionalrate.

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(3) Uponresolvingtoestablishaspecialratingarea,theMunicipalCouncilshallindicatetheboundariesoftheareaandindicatehowsuchareaistobeimprovedorupgraded.

(4) Furthermore, the Municipality shall establish separate accounting and other record- keeping systemsregardingtherevenuegeneratedbytheadditionalrateandtheimprovementandupgradingofthearea.

(5) Where the Municipal Council has established ward committees, it may establish a sub- committee ofthewardcommitteeof theaffectedareaconsistingofpersons representing thecommunity toactasaconsultativeandadvisoryforumfortheMunicipality.

LIABILITY FOR RATES

PROPERTY RATES PAYABLE BY OWNERS

32(1)Arateleviedonapropertyshallbepaidbytheownerofthatproperty.

(2) Whereapropertyisownedjointlytheownersshallbejointlyandseverallyliableforthepaymentoftheratesonsuchproperty.

(3) Inrespectofagriculturalpropertythat isownedbymorethanoneowner inundividedshareswheretheholdingofsuchundividedshareswasallowedbeforethecommencementoftheSubdivisionofAgriculturalLandAct,1970(ActNo.70of1970),theMunicipalityshallholdownersjointlyandseverallyliableforallratesleviedinrespectofthepropertyconcerned

(4) (a) Councilbuildingsandlandlettoindividualtenants,involvingseparatelyregisteredsubdivisions,shallbeshownseparatelyinthevaluationrollandshallbevaluedatmarketvalue.

(b) InrespectofaCouncilbuildingwheremultipletenanciesoccur,theentirebuildingshallbevaluedatmarketvalue,basedonaprorataportionofthemarketvalue,calculatedbylettablearea.

PAYMENT OF RATES ON PROPERTY IN SECTIONAL TITLE SCHEMES

33(1).ArateleviedbytheMunicipalityonasectionaltitleunitispayablebytheowneroftheunitandnotbythebodycorporatecontrollingthesectionaltitlescheme;providedthatthiswillbeapplicableonlyafterthefirstvaluationrolloftheMunicipalityhasbeenpreparedintermsoftheAct.

(2) Whereasectionaltitleschemeisinthecourseofdevelopment,theundevelopedportionofthepropertyshallbevaluedandseparatelyratedandtheratesonsuchundevelopedportionshallbepaidbythebodycorporate.

(3)Thecommonpropertyinasectionaltitleschemeshallnotbevaluedorrated.

METHOD AND TIME OF PAYMENT

34(1)TheMunicipalityshallrecoverratesonamonthlybasis.

(2) RatesshallbepaidineachmonthonorbeforeadatedeterminedbytheMunicipality.

(3) (a) Thefinaldateforthepaymentofrates,asdeterminedbytheMunicipalityintermsofsubsection(2)above,shallnotbeaffectedbyreasonofanyobjectionintermsofsection52,oranappealintermsofsection55,oftheAct.

(b) Iftheresultofanyobjectionorappealisthatthevaluationis-

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(i) unchanged,theMunicipalitymaycollectanypenaltythatmayhaveaccruedtoitintermsofsection37(1);

(ii) adjusteddownwards,theMunicipalityshallonlycollectsuchpenaltyontheratesdueonsuchreducedvaluationandanyover-paymentthatmayhavebeenmadeshallberefunded;

(iii) adjustedupwards,theMunicipalityshall,inadditiontocollectingsuchpenaltyontheratesdueonthevaluationbeforetheobjectionorappeal,alsocollectsuchpenaltychargesontheaddi-tionalamountofratesdueinconsequenceofsuchupwardadjustment,whichremainsunpaidafterthedatespecifiedforpaymentthereofinanoticeservedbytheMunicipalManager,orhisauthorizedrepresentative,onthepersonliableforthepaymentoftherates.

ACCOUNTS TO BE FURNISHED

35(1) TheMunicipalityshallfurnisheachpersonliableforpaymentofaratewithawrittenaccountwhichshallcontainthefollowinginformation–

(a) theamountdueforratespayable;(b) thedateonorbeforewhichtheamountispayable;(c) howtheamountwascalculated;(d) themarketvalueoftheproperty;(e) ifthepropertyissubjecttoanycompulsoryphasing-indiscountintermsofsection21oftheAct,the

amountofthediscount;(f) ifthepropertyissubjecttoanyadditionalrateintermsofsection22oftheAct,theamountduefor

additionalrates.

(2) AnypersonliableforthepaymentofarateinrespectofrateablepropertyshallnotifythemunicipalityofanyaddresswithintheRepublictowhichnoticesinrespectofsuchpropertyshallbesent.

(3) Anynoticewhichthemunicipalityisrequiredtogiveintermsofsection35(1)shallbedeemedtohavebeenproperlygiven-

(a)ifithasbeensentbypre-paidpost-(i) toanaddressnotifiedintermsofsubsection(2);(ii) ifsubparagraph(i)doesnotapplyandthepropertyisnotvacantland,totheaddressofthe

propertyshowninthevaluationroll;or(iii) toanaddresswhichappearstobetheresidentialorbusinessaddressofthepersonliablefor

thepaymentoftherate,accordingtotherecordsofthemunicipality,whichmethodofpostingshallbeutilizedifsubparagraphs(i)and(ii)donotapplyorifanynoticepostedintermsofthesaidsubparagraphshasbeenreturnedasundelivered;

(b) ifithasinfactcometothenoticeofthepersontowhomitisrequiredtobegiven;(c) ifparagraphs(a)and(b)donotapply,byaffixingonthenoticeboardofthemunicipalityforaperiodof

atleastthirtydays,aschedulecontainingthenameofthepersonwhoisliableforthepaymentoftherateasshowninthevaluationrollandtheparticularsrequiredbysection28(1)oftheAct;

(4) Whereapropertyinrespectofwhicharateispayable,isownedbymorethanonepersonandeitherorboth

ofwhomareliableforthepaymentofarateonsuchproperty,thenoticesrequiredtobegivenintermsofthissectionshallbedeemedtohavebeenproperlygivenifpostedordeliveredtotheaddressofoneofsuchpersons;providedthatsuchpersonsmayagreeamongstthemselvestowhichaddresssuchnoticesshallbepostedordeliveredandmaynotifythemunicipalityaccordingly,inthemannerprovidedforinsubsection(3).

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(5) (a) Anypersonwho is liable forpaymentofa ratebutwhohasnot receivedanaccountshallnotbeabsolvedfrompayingtheamountowingbyduedateandanyamountoutstandingaftersuchdateshallattractpenaltychargesasprovidedforinsection37(1);

(b) Ifanypersonwhoisliableforpaymentofaratedoesnotreceiveanaccount,suchpersonshallobtainacopyofsuchaccountfromtheofficesoftheMunicipality,beforetheduedateforpaymentoftheaccount.

(c) ifanypersonwho is liable for thepaymentofa rateshallnotify theMunicipalityofanychangeofaddressincludinganye-mailaddressorothercontactdetails;

(d) Achangeofaddressreferredtoin(c)aboveshalltakeeffectonreceiptthereofbytheMunicipality;(c) Ifanypersonwhoisliableforthepaymentofaratedoesnotreceiveanaccountasaresultofsuch

person’sfailuretonotifythemunicipalityofachangeofaddress,suchpersonshallneverthelesspaytheamountowingbytheduedate.

RECOVERY OF OVERDUE RATES

36(1)TheMunicipalityshalltakeappropriatestepsagainsttheownerofapropertywheretheratespayableonsuchpropertyareinarrearsandshallhavethepowertosueforandrecoverallrateswhicharedueandpayabletotheMunicipality

(2) Wheretheratespayableonapropertyareoverdue,anoticestatingthatsuchratesareoverdueshallbeaddressedtotheownerofthepropertyinthemannerprovidedforin35(3)callingupontheownertopaysuchoutstandingratesandthepenaltiesaccruedoraccruingthereon.

(3) Whereapropertyinrespectofwhichtheratesareoverdueorinarrears,andthepropertyisownedbymorethanoneperson,thenoticeprovidedforinsubsection(2),shallbeservedinthemannerprovidedforinsection35(4).

(4) Shouldtheoutstandingratesandanypenaltiesonapropertynotbepaid,orshouldasatisfactoryarrangementnotbemadewiththeMunicipalitybytheownerforthepaymentofsuchoutstandingratesandpenalties,andintheeventthatthereisnoresponsefromtheowner,servicestothepropertyshallbeterminated.

(5) Atanytimeafterthelastworkingdayofthesecondmonthsucceedingthemonthinwhichtherefallsthefinaldateforthepaymentofrates,theMunicipalitymaycausetobepublishedinoneormorenewspaperscirculatingintheareaofjurisdictionoftheMunicipality,anoticestatingthat,ifthearrearsofratesinrespectofthefinancialyearspecifiedinthenoticetogetherwithallpenaltiesinrespectthereofuptothedateofpayment,arenotpaidwithinsixmonthsofthedateofthepublicationofthenotice,applicationwillbemadetoacourtofcompetentjurisdictionforanorderforthesalebypublicauctionofthepropertiesinrespectofwhichsuchratesandpenaltiesareinarrearandforthepaymentoutoftheproceedsthereofofallarrearratestogetherwithpenaltiesandcostsinrespectthereof.

(6) If,afterthepublicationofanoticeintermsofsubsection(5),suchratesandpenaltiesarenotpaidwithintheperiodstatedtherein,theMunicipalityshallmakeapplicationtoacourtofcompetentjurisdictionshowingtheamountofratesandpenaltiestheninarrearandthatallnoticeshavebeengivenandrequestingthecourttoorderanysuchrateablepropertyorsomuchthereofasmaybesufficienttosatisfytheamountsoutstandingintermsofratesandpenalties,tobesoldbypublicauctionandtheproceedsthereoftobepaidintocourt,andtodirectpaymenttotheMunicipalityofallratesandpenaltiesaccruedinrespectofthedateofsuchsaletogetherwiththecostsofobtainingthesaidorderandallexpensesofsuchsale.

(7) Anyamountsdueformunicipalservicefees,propertyratesandothermunicipaltaxes,leviesanddutiesrecoveredasaresultofthesaleofapropertybypublicauctionintermsofanordergrantedbyacourtofcompetentjurisdiction,areachargeuponthepropertysosoldandenjoyapreferenceoveranymortgagebondregisteredagainstsuchproperty.

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(8) Ifbeforethesaleofanyrateablepropertyintermsofanordermadeundersubsection(6)thereisproducedtotheDeputySherifforotherpersonchargedwiththesalethereof,acertificatebytheMunicipalitythatallamountsowingintermsofoutstandingandarrearratesandpenaltychargeshavebeenpaid,thesaidpropertyshallbewithdrawnfromthesale.

(9) Notwithstandingthatalloutstandingandarrearratespenaltychargesmayhavebeenpaidbeforethesaidsale,theMunicipalityshallnotbeliabletoanypersonforanylossordamagesufferedbysuchpersonbyreasonofthesaleofanysuchpropertyinrespectofwhichnosuchcertificatehasbeenproducedtothesaidDeputySherifforotherperson.

PENALTIES AND COLLECTION CHARGES

37(1)Inrespectofanyratesremainingunpaidafterthefinaldatefortheirpaymentthereshallbeaddedforeachmonthduringwhichthedefaultcontinues,interestataratetobedeterminedbytheMinisterwhichrateshallbepublishedintheMunicipality’stariffofcharges.

(2) Inadditiontoanyratesandpenaltiesinrespectofanyproperty,collectionchargesshallaccrueasfollows:

(a) Asfromthelastworkingdayreferredtoinsection36(5),anamountrepresentingtenpercent(10%)ofthecapitalamountoftheratestheninarrear;

(b) Onthegrantofacourtorder intermsofsection36(6),afurtheramountrepresentingtenpercent(10%)ofthecapitalamountoftheratestheninarrear.

(3) ThesaidchargesshallbepayabletotheMunicipalityandthesaidamountsorsuchofthemasmaybeapplicablemayberecoveredbyitinanyproceedingsfortherecoveryofrates.

(3) NothinghereincontainedshallpreventtheMunicipalityfromtakingproceedingsfortherecoveryofanyrates,penaltiesorchargesbywayofactionorothercompetentprocedureinanycourtofcompetentjurisdiction.

RESTRAINT ON THE TRANSFER OF PROPERTY AND REVENUE CLEARANCE CERTIFICATES

38(1)Section118oftheLocalGovernment:MunicipalSystemsAct,2000(ActNo.32of2000)(“theSystemsAct”)providesasfollows:

“118(1)Aregistrarofdeedsmaynotregisterthetransferofpropertyexceptonproductionofaprescribedcertificate–

(a) issuedbythemunicipalityormunicipalitiesinwhichthatpropertyissituated;and(b) whichcertifiesthatallamountsthatbecamedueinconnectionwiththatpropertyformunicipalservice

fees,surchargesonfees,propertyratesandothermunicipaltaxes,leviesanddutiesduringthetwoyearsprecedingthedateofapplicationforthecertificatehavebeenfullypaid.

Aprescribedcertificateissuedbyamunicipalityintermsofsubsection(1)isvalidforaperiodof120daysfromthedateithasbeenissued.

(2) Inthecaseofthetransferofpropertybyatrusteeofaninsolventestate,theprovisionsofthissectionaresubjecttosection89oftheInsolvencyAct,1936(ActNo.24of1936).

(3) Anamountdueformunicipalservices,surchargesonfees,propertyratesandothermunicipaltaxes,leviesanddutiesisachargeuponthepropertyinconnectionwithwhichtheamountisowingandenjoyspreferenceoveranymortgagebondregisteredagainsttheproperty.

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(4) Subsection(1)doesnotapplyto–

(a) a transfer fromthenationalgovernment,aprovincialgovernmentoramunicipalityofa residentialproperty which was financed with funds or loans made available by the national government, aprovincialgovernmentoramunicipality;and

(b) thevestingofownershipasaresultofaconversionoflandtenurerightsintoownershipintermsofChapter1oftheUpgradingofLandTenureRightsAct,1991(ActNo.112of1991);

Providedthatnothinginthissubsectionprecludesthesubsequentcollectionbyamunicipalityofanyamountsowedtoitinrespectofsuchapropertyatthetimeofsuchtransferorconversion.

(5) Subsection(3)doesnotapplytoanyamountreferredtointhatsubsectionthatbecameduebeforeatransferofaresidentialpropertyoraconversionoflandtenurerightsintoownershipcontemplatedinsubsection(4)tookplace.”

(6) Theprovisionsofsection118oftheSystemsActshallbestrictlyadheredtoatalltimes.

(7) Onlyapplicationscompletedinfullontheprescribedform,receivedfromabonafideconveyancer,StateDepartment orMunicipal Department and accompanied by the prescribed fee as recorded in the tariffregisterwillbeprocessed.

(8) Inaccordancewithsection118(i)oftheSystemsAct,wheretheamountdueonapropertyexceedstwoyearsandaclearancecertificateisissued,theconveyancershallnotifythepurchaserofthepropertyinwritingthathe/shewillbeliablefortheoutstandingaccount(s)ontransfer.Acopyofthenotificationmustbesenttothemunicipalityontransfer.

(9) Section118(i)shallnotapplywheretheownerofthepropertyhassignedawaiverofthissectionforthepurposesofpaymentsarrangements in termsof theMsunduziCreditControlPolicyandthefullarrearsrelatingtothepropertyshallbepaid.

(10) Wherethemonthlyconsumptionofservicestoapropertyhasbeenaveragedforaperiodofmorethan60days,theowner,inconsultationwiththeMunicipality,shallmakearrangementsforthereadingofthemeterin respectof therelevantservices inorder that therequirementsofsection118of theSystemsActarecompliedwith.

(11) Where a conveyancer is able to demonstrate that exceptional circumstances exist, theChief FinancialOfficermayacceptaletterofundertaking,oraguarantee,forthepaymentoftheamountsrequiredundersubsection (4), provided that the full amounts contemplated in that subsection are paid on the date ofregistrationoftransferoftheproperty.

DATE OF VALUATION

39(1)Forthepurposesofageneralvaluation,theMunicipalityshall,byresolution,determineadatethatmaynotbemorethan12monthsbeforethestartofthefinancialyearinwhichthevaluationroll istobefirstimplemented.

(2) Thegeneralvaluationrollshallreflectthemarketvalueofpropertiesdeterminedinaccordancewithmarket

conditions,whichappliedasatthedateofvaluation.

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APPENDIX 1INCOME TAX ACT. NO. 58 OF 1962 NINTH SCHEDULEPUBLIC BENEFIT ACTIVITIES

PART 1 WELFARE AND HUMANITARIAN

(1) (a) Thecareorcounsellingof,ortheprovisionofeducationprogrammesrelatingto,abandoned,abused,neglected,orphanedorhomelesschildren.

(b) Thecareorcounselingofpoorandneedypersonswheremorethan90%ofthosepersonstowhomthecareorcounselingareprovidedareovertheageof60.

(c) Thecareorcounselingof,ortheprovisionofeducationprogrammesrelatingtophysicallyormentallyabusedandtraumatizedpersons.

(d) Theprovisionofdisasterrelief.(e) Therescueordareofpersonsindistress.(f) Theprovisionofpovertyrelief.(g) Rehabilitativecareorcounselingoreducationofprisoners,formerprisonersandconvictedoffenders

andpersonsawaitingtrial,(h) The rehabilitation, careor counselingof personsaddicted to a dependence-forming substanceor

theprovisionofpreventativeandeducationprogrammesregardingaddictiontodependence-formingsubstances.

(i) Conflictresolution,thepromotionofreconciliation,mutualrespectandtolerancebetweenthevariouspeoplesofSouthAfrica.

(j) Thepromotionoradvocacyofhumanrightsanddemocracy.(k) Theprotectionofthesafetyofthegeneralpublic.(l) Thepromotionorprotectionoffamilystability.(m) Theprovisionoflegalservicesforpoorandneedypersons.(n) Theprovisionoffacilitiesfortheprotectionandcareofchildrenunderschool-goingageofpoorand

needyparents.(o) Thepromotionorprotectionoftherightsandinterestsof,andthecareof,asylumseekersandrefugees.(p) Communitydevelopmentforpoorandneedypersonsandanti-povertyinitiatives,including-

(i) thepromotionofcommunity-basedprojectsrelatingtoself-help,empowermentcapacitybuild-ing,skillsdevelopmentoranti-poverty;

(ii) theprovisionoftraining,supportorassistancetocommunity-basedprojectscontemplatedinitem(i);or

(iii) theprovisionoftraining,supportorassistancetoemergingmicroenterprisestoimprovecapacitytostartandmanagebusinesses,whichmayincludethegrantingofloansonsuchconditionsasmaybeprescribedbytheMinisterbywayofregulation.

HEALTH CARE

(2) (a) Theprovisionofhealthcareservicestopoorandneedypersons.(b) Thecareorcounselingofterminallyillpersonsorpersonswithaseverephysicalormentaldisability,

andthecounselingoftheirfamiliesinthisregard.(c) ThepreventionofHIVinfection,theprovisionofpreventativeandeducationprogrammesrelatingto

HIV/AIDS.(d) Thecare,counselingortreatmentofpersonsafflictedwithHIVIAIDS,includingthecareorcounseling

oftheirfamiliesanddependantsinthisregard.(e) Theprovisionofbloodtransfusion,organdonororsimilarservices.(f) Theprovisionofprimaryhealthcareeducation,sexeducationorfamilyplanning.

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LAND AND HOUSING

(3) (a) Thedevelopment,construction,upgrading,conversionorprocurementofhousingunitsforthebenefitofpoorandneedypersons.

(b) Thedevelopment,servicing,upgradingorprocurementofstands,ortheprovisionofbuildingmaterials,forpurposesoftheactivitiescontemplatedinsubparagraph(a).

(c) Theprovisionofresidentialcareforretiredpersons,wheremorethan90%ofthepersonstowhomtheresidentialcareisprovidedareovertheageof60andregularmealsandnursingservicesareprovidedbytheorganisationcarryingonsuchactivity.

(d) Buildingandequippingofcommunitycentres,clinics,sportfacilitiesorcrèchesorotherfacilitiesofasimilarnatureforthebenefitofthepoorandneedy.

(e) Thepromotion,facilitationandsupportofaccesstolandanduseofland,housingandinfrastructuraldevelopmentforpromotingofficiallandreformprogrammes.

(f) Granting of loans for purposes of subparagraph (a) or (b) subject to such conditions asmay beprescribedbytheMinisterbywayofregulation.

(g) Theprotection,enforcementorimprovementoftherightsofpoorandneedytenants,labourtenantsoroccupiers,touseoroccupylandorhousing.

EDUCATION AND DEVELOPMENT

(4) (a) Theprovisionofeducationbya“school”asdefinedintheSouthAfricanSchoolsAct,1996(ActNo.84of1996).

(b) Theprovisionof“highereducation”bya“highereducationinstitution”asdefinedintheHigherEducationAct,1997(ActNo.101of1997).

(c) “Adultbasiceducationandtraining”asdefinedintheAdultBasicEducationandTrainingAct,2000(ActNo.52of2000),includingliteracyandnumeracyeducation.

(d) “Furthereducationand training”providedbya “public furthereducationand training institution”asdefinedintheFurtherEducationandTrainingAct,1998(ActNo.98of1998).

(e) Trainingforunemployedpersonswiththepurposeofenablingthemtoobtainemployment.(f) Thetrainingoreducationofpersonswithaseverephysicalormentaldisability.(g) Theprovisionofbridgingcoursestoenableeducationallydisadvantagedpersonstoenterahigher

educationinstitutionasenvisagedbysubparagraph(b).(h) Theprovisionofeducareorearlychildhooddevelopmentservicesforpre-schoolchildren.(i) Trainingofpersonsemployedinthenational,provincialandlocalspheresofgovernment,forpurposes

ofcapacitybuildinginthosespheresofgovernment.(j) Theprovisionofschoolbuildingsorequipmentforpublicschoolsandeducationalinstitutionsengaged

inpublicbenefitactivitiescontemplatedinsubparagraphs(a)to(h).(k) Careerguidanceandcounselingservicesprovidedtopersonsforpurposesofattendinganyschoolor

highereducationinstitutionasenvisagedinsubparagraphs(a)to(b).(I) Theprovisionofhostelaccommodationtostudentsofapublicbenefitorganizationcontemplatedin

section30oraninstitution,boardorbodycontemplatedinsection10(1)(cA)(i),carryingonactivitiesenvisageinsubparagraphs(a)to(h).

(m) Programmesaddressingneedsineducationprovision,learning,teaching,training,curriculumsupport,governance,wholeschooldevelopment,safetyandsecurityatschools,pre-schoolsoreducationalinstitutionsasenvisagedinsubparagraphs(a)to(h).

(n) Educationalenrichment,academicsupport,supplementary tuitionoroutreachprogrammes for thepoorandneedy.

(o) The provision of scholarships, bursaries and awards for study, research and teaching on suchconditionsasmaybeprescribedbytheMinisterbywayofregulationintheGazette.

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RELIGION, BELIEF OR PHILOSOPHY

(5) (a) The promotion or practice of religionwhich encompasses acts of worship, witness, teaching andcommunityservicebasedonabeliefinadeity.

(b) Thepromotionand/orpracticeofabelief.(c) Thepromotionof,orengagingin,philosophicalactivities.

CULTURAL

(6) (a) theadvancement,promotionorpreservationofthearts,cultureorcustoms.(b) thepromotion,establishment,protection,preservationormaintenanceofareas,collectionsorbuildings

ofhistoricalorculturalinterest,nationalmonuments,nationalheritagesites,museums,includingartgalleries,archivesandlibraries.

(c) Theprovisionofyouthleadershipordevelopmentprogrammes.

CONSERVATION, ENVIRONMENT AND ANIMAL WELFARE

(7) (a) Engagingintheconservation,rehabilitationorprotectionofthenaturalenvironment,includingflora,faunaorthebiosphere.

(b) Thecareofanimals,includingtherehabilitation,orpreventionoftheilltreatmentofanimals.(c) The promotion of, and education and training programmes relating to, environmental awareness,

greening,clean-uporsustainabledevelopmentprojects.(d) TheestablishmentandmanagementofaTranfrontierarea,involvingtwoormorecountries,which–

(i) isorwillfallunderaunifiedorcoordinatedsystemofmanagementwithoutcompromisingna-tionalsovereignty;and

(ii) hasbeenestablishedwiththeexplicitpurposeofsupportingtheconservationofbiologicaldiversity,jobcreation,freemovementofanimalsandtouristsacrosstheinternationalboundar-ieswithinthepeacepark,andthebuildingofpeaceandunderstandingbetweenthenationsconcerned.

RESEARCH AND CONSUMER RIGHTS

(8) (a) Researchincludingagricultural,economic,educational,industrial,medical,political,social,scientificandtechnologicalresearch.

(b) Theprotectionandpromotionofconsumerrightsandtheimprovementandcontrolandqualitywithregardtoproductsorservices.

SPORT

(9) Theadministration,development,coordinationorpromotionofsportorrecreationinwhichtheparticipantstakepartonanon-professionalbasisasapastime.

PROVIDING OF FUNDS, ASSETS OR OTHER RESOURCES

(10) Theprovisionof-

(a) funds,assets,servicesorotherresourcesbywayofdonation;(b) assetsor other resourcesbywayof sale for a considerationnot exceeding thedirect cost to the

organisationprovidingtheassetsorresources;(c) fundsbywayofloanatnocharge;or

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(d) assetsbywayofleaseforanannualconsiderationnotexceedingthedirectcosttotheorganisationprovidingtheassetdividedbythetotalusefullifeoftheasset,toany-(i) anypublicbenefitorganisationwhichhasbeenapprovedintermsofsection30;(ii) anyinstitution,boardorbodycontemplatedinsection10(1)(cA)(i),whichconductsoneor

morepublicbenefitactivitiesinthispart(otherthanthisparagraph);(iii) anyassociationofpersonscarryingononeormorepublicbenefitactivitycontemplatedinthis

part(otherthanthisparagraph),intheRepublic;or(iv) anydepartmentofstateoradministrationinthenationalorprovincialorlocalsphereofgov-

ernmentoftheRepublic,contemplatedinsection10((1)(a)or(b).

GENERAL

11. (a) Theprovisionofsupportservicesto,orpromotionofthecommoninterestsofpublicbenefitorganisationscontemplated in section30or institutions, boardsorbodies contemplated in section10(1)( cA)(i),whichconductoneormorepublicbenefitactivitiescontemplatedinthispart.

(b) Thehostingofany internationaleventapprovedby theMinister forpurposesof theseregulations,havingregardto-(j) theforeignparticipationinthatevent;and(ii) theeconomicimpactthateventmayhaveonthecountryasawhole.

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Budget Policy

1.INTRODUCTIONIntermsoftheMunicipalFinanceManagementAct,No.56of2003,Chapter4onMunicipalBudgets,Subsection(16)(1),statesthatthecouncilofamunicipalitymustforeachfinancialyearapproveanannualbudgetforthemunicipalitybeforethestartofthatfinancialyear.Accordingtosubsection(2)oftheActconcerned,inordertocomplywithsubsection(1),themayorofthemunicipalitymusttabletheannualbudgetatacouncilmeetingatleast90daysbefore thestartof thebudgetyear.Thispolicymustbe read,analysed,explained, interpreted,implemented and understood against this legislative background.The budget plays a critical role in attemptto realize diverse community needs. Central to this, the formulation of amunicipality budgetmust take intoaccountthegovernment’smacro-economicandfiscalpolicyfundamentals.Inbrief,theconceptualizationandtheoperationalisationofthebudgetmustbelocatedwithinthenationalgovernment’spolicyframework.

2. OBJECTIVETheobjectiveofthebudgetpolicyistosetout:

-Theprincipleswhichthemunicipalitywillfollowinpreparingeachmediumtermrevenueandexpenditureframeworkbudget,-The responsibilities of the mayor, the accounting officer, the chief financial officer and other seniormanagersincompilingthebudget-ToestablishandmaintainprocedurestoensureadherencetoMsunduziMunicipality’sIDPreviewandbudgetprocesses.

-Toensureeffectivebudgetmonitoring. -ToensurecompliancewiththeMFMABudgetandReportingRegulations.

3. LEGISLATIVE FRAMEWORkThepolicyshouldcomplywithbudgetguidelines,MunicipalFinanceManagementAct,2003andotherapplicablelegislationissuedbyNationalTreasury.

4. BUDGETING PRINCIPLES4.1 Themunicipality shall not budget for adeficit and shouldalsoensure that revenueprojections in the

budgetarerealistictakingintoaccountactualcollectionlevels.4.2 Expensesmayonlybeincurredintermsoftheapprovedannualbudget(oradjustmentbudget)andwithin

thelimitsoftheamountsappropriatedforeachvoteintheapprovedbudget.4.3 MsunduziMunicipalityshallpreparethree-yearbudget(mediumtermrevenueandexpenditureframework

(MTREF)andthatbereviewedannuallyandapprovedbyCouncil.4.4 TheMTREFbudgetmustatalltimesbewithintheframeworkoftheMunicipalIntegratedDevelopment

Plan.4.5 Exceptinsofarascapitalprojectsrepresentacontractualcommitmenttothemunicipalityextendingover

morethanonefinancialyear,theannualcapitalbudgetshallbepreparedfromazerobase.4.6 Thecapitalbudgetcomponentoftheannualoradjustmentsbudgetshallonlybeapprovedbythecouncil

ifithasbeenproperlybalanced,thatis,ifthesourcesoffinancewhicharerealisticallyenvisagedtofundthebudgetequaltheproposedcapitalexpenses.

4.7 Beforeapprovingthecapitalbudgetcomponentoftheannualoradjustmentsbudget,thecouncilshallconsidertheimpactonthepresentandfutureoperatingbudgetsofthemunicipalityinrelationtofinancechargestobeincurredonexternalloans,depreciationoffixedassets,maintenanceoffixedassets,andanyotherordinaryoperationalexpensesassociatedwithanyitemonsuchcapitalbudget.Inaddition,thecouncilshallconsiderthelikelyimpactofsuchoperationexpenses–netofanyrevenuesexpectedtobegeneratedbysuchitem–onfuturepropertyratesandservicetariffs.

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4.8 ThecouncilshallestablishanCapitalReplacementReserveforthepurposeoffinancingcapitalprojectsandtheacquisitionofcapitalassetsandorthereplacementofassets.Suchreserveshallbeestablishedfromthefollowingsourcesofrevenue:• unappropriatedcash-backedsurplusestotheextentthatsuchsurplusesarenotrequiredforoperational

purposes;• furtheramountsappropriatedascontributionsineachannualoradjustmentsbudget.

4.9 Eachannualandadjustmentsbudgetshallreflectarealisticexcess,ofcurrentrevenuesoverexpenses.4.10 Anyun-appropriatedsurplusfrompreviousfinancialyears,eveniffullycash-backed,shallnotbeused

tobalanceanyannualoradjustmentsbudget,butshallbeappropriated,as faras it isnotrequiredtofinancethepaymentofoperatingcreditorsorforotheroperationalpurposes,tothemunicipality’sCapitalReplacementReserve.

4.11 Animpendingoperatingdeficitshallbemadegoodinanadjustmentsbudget,butifanoperatingdeficitarisesattheendofafinancialyear,notwithstandingtheprecautionarymeasuresadoptedbythecouncil,suchdeficitshallimmediatelybemadegoodintheannualoradjustmentsbudgetfortheensuingfinancialyear,andshallnotbeoffsetagainstanyun-appropriatedsurpluscarriedforwardfromprecedingfinancialyears.

4.12 Themunicipalityshallestablishandmaintainaprovisionforaccruedleaveentitlementsequalto100%oftheaccruedleaveentitlementofofficialsasat30Juneofeachfinancialyear,andshallbudgetappropriatelyforcontributionstosuchprovisionineachannualandadjustmentsbudget.

4.13 Themunicipalityshallestablishandmaintainaprovisionforbaddebtsinaccordancewithitsratesandtariffs policies, and shall budget appropriately for contributions to such provision in each annual andadjustmentsbudget.

4.14 Allexpenses,excludingdepreciationexpenses,shallbecash-funded.Allredemptionsofexternalloansshallbepaidfromthemunicipalitybankaccountandmusthavesufficientprovisionbeinthecalculationoftariffstorecoversuchexpenses.

4.15Financechargespayablebythemunicipalityshallbeapportionedbetweendepartmentsorvotesonthebasisoftheproportionatthelastbalancesheetdateofthecarryingvalueofthefixedassetsbelongingtosuchdepartmentorvotetotheaggregatecarryingvalueofallfixedassetsinthemunicipality.However,whereit isthecouncil’spolicytoraiseexternal loansonlyforthefinancingoffixedassets inspecifiedcouncilservices,financechargesshallbechargedtoorapportionedonlybetweenthedepartmentsorvotesrelatingtosuchservices.WhenexternalfundsareraisedforCapitalAssetsthentheprincipalsintermsofGRAP5-Borrowingcostmustbeadheredto.

4.16Depreciationandfinancechargestogethershallnotexceed20%oftheaggregateexpensesbudgetedforintheoperatingbudgetcomponentofeachannualoradjustmentsbudget.

4.17 Theallocationofinterestearnedonthemunicipality’sinvestmentsshallbebudgetedforintermsofthebankingandinvestmentpolicy.

4.18 Themunicipalityshalladequatelyprovideineachannualandadjustmentsbudgetforthemaintenanceof itsfixedassets inaccordancewith itsfixedassetmanagementandaccountingpolicy. At least7%oftheoperatingbudgetcomponentofeachannualandadjustmentsbudgetshallbesetasideforsuchmaintenance.

4.19 Inthepreparationofthedraftoperatingbudgetcomponentoftheannualbudget,theallowablebudgetaryincrementshallrelatetothetotalamountprovidedforeachbudgetvote,andtheheadofthedepartment,serviceorfunctionconcernedshallhavetherighttoallocatethetotalbudgetedamounttotheline-itemswithinsuchvote,except inso faras the line-itemprovisionsrelate tomattersdeterminedby thechieffinancialofficerintermsofthemunicipality’sapprovedpoliciesandcontractualandstatutorycommitments(forexample,depreciationcharges,financecharges,insurancecosts).

4.20Notwithstandingtheprecedingprinciple,thebudgetforsalaries,allowancesandsalaries-relatedbenefitsshallbeseparatelyprepared,andshallnotexceed35%oftheaggregateoperatingbudgetcomponentoftheannualoradjustmentsbudget.Forpurposesofapplyingthisprinciple,theremunerationofpoliticalofficebearersandothercouncillorsshallbeexcludedfromthislimit.

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4.21 Theheadofthedepartment,serviceorfunctiontowhicheachbudgetvoterelatesshalljustifytheallocationoftheaggregatebudgetforsuchvotetothevariousline-itemswithinthevotetotheportfoliocommitteeresponsibleforthedepartment,serviceorfunctionconcerned.Inmotivatingtheallocationsmadetoandwithinthevote,theheadofdepartment,serviceorfunctionconcernedshallprovidetherelevantportfoliocommitteewithappropriatequarterlyperformanceindicatorsandservicedeliverytargetspertainingtothebudget.Suchindicatorsandtargetsshallbepreparedwiththeapprovalofthemunicipalmanagerandthemayor.

4.22 Inpreparing its revenuebudget, themunicipalityshallstrive tomaintain theaggregate revenues frompropertyratesatnotlessthan2%theaggregaterevenuesbudgetedfor.

4.23 Whenconsidering thedraftannualbudget, thecouncil shall consider the impact,which theproposedincreasesinratesandservicetariffswillhaveonthemonthlymunicipalaccountsofhouseholdsinthemunicipalarea.Theimpactofsuchincreasesshallbeassessedonthebasisofafairsampleofrandomlyselectedaccounts. Becausehouseholdshavenomechanism forpassingonsuch increases tootherparties,butmustfullyabsorbtheincreasesconcerned,thecouncilshallensurethattheaverageadditionalimpactofsuchincreasesisnotmorethantherelevantincreaseintheconsumerpriceindex.

5. BUDGET MANAGEMENT AND OVERSIGHTSection71oftheMunicipalFinanceManagementActreads,interalia,asfollows:“Theaccountingofficerofamunicipalitymustbynolaterthan10workingdaysaftertheendofeachmonthsubmittothemayorofthemunicipality,therelevantprovincialandnationaltreasuryastatementintheprescribedformatonthestateofthemunicipality’sbudgetreflectingthefollowingparticularsforthatmonthandforthefinancialyearuptotheendofthatmonth:(a) Actual revenue, per revenue source;(b) Actual borrowings;(c) Actual expenditure, per vote;(d) Actual capital expenditure, per vote;(e) The amount of any allocations received;(f) Actual expenditure on those allocations, excluding expenditure on i. its share of the local government equitable share; and ii allocations exempted by the annual Division of Revenue Act from compliance with this

paragraph; and(g) When necessary, an explanation of

i. any material variances from the municipality’s projected revenue by source, and from the municipality’s expenditure projections per vote; any material variances from the service delivery and budget implementation plan; and

ii. any remedial or corrective steps taken or to be taken to ensure that projected revenue and expenditure remain within the municipality’s approved budget.”

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TheFinanceServicesDepartmentwillfacilitatethesection71in-yearreportingprocessasfollows:

1. Financialmonthendreportswillbeavailableonthe10thworkingdayofthemonth2. ReportsdetailingthefollowinginformationwillbecirculatedtotheSeniorManagementTeamandHeadsofDepartments:

-ActualOperatingRevenue/Expenditureforthemonthcomparedtothebudgetforthemonthpercategory-ActualOperatingRevenue/Expenditurefortheyeartodatecomparedtothebudgetfortheyearto date-ActualOperatingRevenue/Expenditurefortheyeartodatecomparedtothebudgetforthefullyear-CapitalBudgetExpenditureforthemonthcomparedtothebudgetforthemonth-CapitalBudgetExpenditurefortheyeartodatecomparedtothebudgetfortheyeartodate-CapitalBudgetExpenditurefortheyeartodatecomparedtothebudgetforthefullyear-Grantallocationsreceivedaswellasexpenditureagainstthosegrantsfortheyeartodate-Detailsofunspentgrantfunding-Otherrelevantstatistics

6.BUDGET PREPARATION PROCESS

6.1Formulation of the budget(a)Themayorofamunicipalitymustco-ordinatetheprocessesforpreparingtheannualbudgetand

forreviewingthemunicipality’sintegrateddevelopmentplanandbudget-relatedpoliciestoensurethatthetabledbudgetandanyrevisionsoftheintegrateddevelopmentplanandbudget-relatedpoliciesaremutuallyconsistentandcredible.

(b)TheAccountingOfficerwith theassistanceof theChiefFinancialOfficerand the IDP teamshalldrafttheIDPprocessplanaswellasthebudgettimetableforthemunicipalityincludingmunicipalentitiesforensuingfinancialyear.

(c)ThemayorshalltabletheIDPprocessplanaswellasthebudgettimetabletoCouncilby31Augusteachyearforapproval(10monthsbeforethestartofthebudgetyear).

(d)IDPprocessplanaswellasthebudgettimetableshallindicatethekeydeadlinesforthereviewoftheIDPaswellaspreparationofthemediumtermrevenueandexpenditureframeworkbudgetandtherevisionoftheannualbudget.SuchtargetdatesshallfollowtheprescriptionsoftheMunicipalFinanceManagementActaswellastheguidelinessetbyNationalTreasury.

(e)ThemayorshallconveneastrategicworkshopinSeptember/OctoberwiththeFinanceCommitteeandseniormanagersinordertodeterminetheIDPprioritieswhichwillformthebasisforthepreparationoftheMTREFbudgettakingintoaccountthefinancialandpoliticalpressuresfacingthemunicipality.ThemayorshalltabletheIDPprioritieswiththedraftbudgettoCouncil.

(f)ThemayorshalltablethedraftIDPandMTREFbudgettocouncilby31March(90daysbeforethestartofthebudgetyear)togetherwiththedraftresolutionsandbudgetrelatedpolicies(policiesontariffsetting,creditcontrol,debtcollectionandindigentsetc).

(g)TheChiefFinancialOfficer,seniormanagersandotherstakeholdersundertakethetechnicalpreparationofthebudget.

(h)Thebudgetmustbeintheprescribedformat,andmustbedividedintocapitalandoperatingbudgetinaccordancewithinternationalbestpractice,asmaybeprescribed.

(i) The budget must reflect the realistically anticipated revenue for the budget year from each revenuesource.

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(j)Thebudgetmustalsocontaintheinformationrelatedtothetwofinancialyearsfollowingthefinancialyeartowhich thebudget relates,aswellas theactual revenuesandexpenses for theprior year,and theestimatedrevenuesandexpensesforthecurrentyear.

(k)Theexpensesreflectedinthebudgetmustbedividedintoitems. 6.2Public participation processImmediatelyafterthedraftannualbudgethasbeentabled,themunicipalitymustconvenehearingsonthedraftbudgetinAprilandinvitethepublic,stakeholderorganizations,tomakerepresentationatthecouncilhearingsandsubmitcommentsinresponsetothedraftbudget.Afterconsideringtheseviews,thecouncilmustgivethemayortheopportunitytorespondonthesubmissionsreceivedandifnecessary,revisethebudgetandtableamendmentsforconsiderationbythecouncil.The accounting officermust immediately submit the tabled budget in both printed and electronic formats toNationalTreasuryandProvincialTreasury.

6.3Approval of annual budget(a)Councilmustatleast30days(31May)beforethestartofthebudgetyearconsiderapprovaloftheannual

budget.(b)Thecouncilresolution,mustcontainbudgetpoliciesandperformancemeasuresbeadopted.(c )An annual budget tabled toCouncilmust be approved togetherwith adoption of resolutions asmay be

necessary:(i) imposinganymunicipaltaxforthebudgetyear;(ii) settinganymunicipaltariffsforthebudgetyear;(iii) approvingmeasurableperformanceobjectivesforrevenuefromeachsourceandforeachvoteinthe

budget;(iv) approvinganychangestothemunicipality’sintegrateddevelopmentplan;and(v) approvinganychangestothemunicipality’sbudget-relatedpolicies.(vi) thecosttothemunicipalityofthesalaries,allowancesandotherbenefitsofitspoliticalofficebearers

andothercouncilors,theaccountingofficer,thechieffinancialofficer,andotherseniormanagers;(vii) particularsofanyproposedallocationsorgrants toothermunicipalities,municipalentities,external

mechanismsassistingthemunicipalityinservicedelivery,otherorgansofstate,andorganizationssuchasNon-GovernmentalOrganisations,welfareinstitutions

(d)TheaccountingofficerofamunicipalitymustsubmittheapprovedannualbudgettotheNationalTreasuryandtherelevantprovincialtreasury.

6.4Publication of the budget(a)Within 5 days after the draft annual budget has been tabled, theDeputyMunicipalManager: Corporate

Servicemustpostthebudgetandotherbudget-relateddocumentationontothemunicipalwebsitesothatitisaccessibletothepublicaswellassendhardcopiestoNationalandProvincialTreasury.

(b)TheChiefFinancialOfficermustwithin5dayssubmit theapprovedbudget inbothprintedandelectronicformatstotheNational,theProvincialTreasuryaswellaspostitonthemunicipalwebsite.

6.5Service Delivery and Budget Implementation Plan (SDBIP)TheSDBIPwhichgiveseffecttotheIntegratedDevelopmentPlan(IDP)andthemunicipality’sbudgetasonealignedprocessinconjunctionwiththeperformanceagreementsofseniormanagers.TheSDBIPservesasa‘contract’betweentheadministration,councilandcommunityexpressingthegoalsandobjectivessetbycouncilasquantifiableoutcomesthatcanbeimplementedbytheadministrationoverthenexttwelvemonths.Thisprovidesthebasisformeasuringperformanceinservicedeliveryagainstend-of-yeartargetsandimplementingthebudget.TheSDBIPcanbesummarizedvisuallyasfollows:

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What is an SDBIP?Council Administration

SDBIP

Service delivery targets (by top manager + by wards)

Performance Indicators

Revenue + Expenditure by vote

IDP BUDGET

Monthly Reports

Mid-year Performance Assessment

Annual Report

Employee contracts + annual

performance agreements for the municipal

manager + senior managers

(a)ThemayormustapprovetheServicesDeliveryandBudgetImplementationPlannotlaterthan28daysaftertheapprovalofthebudgetbyCouncil.

(b)TheSDBIPshallincludethefollowingcomponents:i.Monthlyprojectionsofrevenuetobecollectedforeachsourceii.Monthlyprojectionsofexpenditure(operatingandcapital)andrevenueforeachvoteiii.Quarterlyprojectionsofservicedeliverytargetsandperformanceindicatorsforeachvoteiv.Wardinformationforexpenditureandservicedeliveryv.Detailedcapitalworksplanbrokendownbywardoverthreeyears.

7.CAPITAL BUDGET Thechieffinancialofficershallmakerecommendationsonthefinancingofthedraftcapitalbudgetforensuingandfuturefinancialyears,indicatingtheimpactofviablealternativefinancingscenariosonfutureexpenses,andspecificallycommentingonrelativefinancialmeritsofinternalandexternalfinancingoptions.(a)Expenditureofaprojectshallbeincludedinthecapitalbudgetsifitmeetstheassetdefinitioni.eifitresultsin

assetbeingacquiredorcreatedandhasausefullifeinexcessofoneyear.(b)Amunicipalitymayspendmoneyonacapitalprojectonlyifthefundsfortheprojecthasbeenappropriatedin

thecapitalbudget.(c)TheenvisagedsourcesoffundingforthecapitalbudgetmustbeproperlyconsideredandtheCouncilmustbe

satisfiedthatthisfundingisavailableandhasnotbeencommittedforotherpurposes.(d)Beforeapprovingacapitalproject,theCouncilmustconsider:

i.theprojectedcostoftheprojectoverallensuringfinancialyearsuntiltheprojectbecomesoperational,ii.futureoperationalcostsandanyrevenues,whichmayariseinrespectofsuchproject,includingthelikely

futureimpactonoperatingbudget(i.e.onpropertyratesandservicetariffs).

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(e)Beforeapprovingthecapital,thecouncilshallconsider:i.theimpactonthepresentandfutureoperatingbudgetsofthemunicipalityinrelationtofinancechargestobeincurredonexternalloans,ii.depreciationoffixedassets,andiii.maintenanceoffixedassets,andiv.anyotherordinaryoperationalexpensesassociatedwithanyitemonsuchcapitalbudget.

(f)Councilshallapprovetheannualoradjustmentcapitalbudgetonlyifithasbeenproperlybalancedandfullyfunded.

(g)Thecapitalexpenditureshallbefundedfromthefollowingsources:

External Loans-Externalloanscanberaisedonlyifitislinkedtothefinancingofanasset;-Acapitalprojecttobefinancedfromanexternalloancanonlybeincludedinthebudgetiftheloanhasbeensecuredorifcanbereasonablyassumedasbeingsecured;-Theloanredemptionperiodshouldnotexceedtheestimatedlifeexpectancyoftheasset.Ifthishappenstheinterestpayableontheexcessredemptionperiodshallbedeclaredasfruitlessexpenditure;-Financechargesrelatingtosuchloansshallbechargedtoorapportionedonlybetweenthedepartmentsorvotestowhichtheprojectsrelate.

Grant Funding -Noncapitalexpenditurefundedfromgrants .mustbebudgetedforaspartoftherevenuebudget; .expendituremustbereimbursedfromthefundingcreditorandtransferredtothe Operatingandmustbebudgetedforassuch.-Capitalexpendituremustbebudgetedforinthecapitalbudget;-InterestearnedoninvestmentsofConditionalGrantFundingshallbecapitalizediftheconditionsstatethatinterestshouldaccumulateinthefund.Ifthereisnoconditionstatedtheinterestcanbeallocateddirectlytotherevenueaccounts.-Grantfundingdoesnotneedtobecashbackedbutcashshouldbesecuredbeforespendingcantakeplace.

8. OPERATING BUDGET(a)Themunicipalityshallbudgetineachannualandadjustmentsbudgetforthecontributionto:

i. provisionforbaddebtsinaccordancewithitsratesandtariffspoliciesii. lossofobsolescenceanddeteriorationofstockinaccordancewithitsstoresmanagementpolicywillbe

carriedintheoperatingbudgetinyearthatlossesoccurediii. depreciationandfinancechargesshallbechargedtoorapportionedonlybetweenthedepartmentsor

votestowhichtheprojectsrelate.iv. Atleast7%oftheoperatingbudgetcomponentofeachannualandadjustmentsbudgetshallbesetaside

formaintenance.(b)Whenconsideringthedraftannualbudget,councilshallconsidertheimpact,whichtheproposedincreasesin

ratesandservicetariffswillhaveonthemonthlymunicipalaccountsofhouseholds.(c)Theimpactofsuchincreasesshallbeassessedonthebasisofafairsampleofrandomlyselectedaccounts.(d)Theoperatingbudgetshallreflecttheimpactofthecapitalcomponenton:

• depreciationcharges• repairsandmaintenanceexpenses• interestpayableonexternalborrowings• otheroperatingexpenses

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(e) Thechieffinancialofficershallensurethatthecostofindigencyreliefisseparatelyreflectedintheappropriatevotes.

(f) Thebudgetforsalaries,allowancesandsalaries-relatedbenefitsshallbeseparatelyprepared,andshallnotexceed35%oftheaggregateoperatingbudget.

(g) Theremunerationofpoliticalofficebearersandothercouncillorsshallbeexcludedfromthislimit. 9. FUNDING OF CAPITAL AND OPERATING BUDGET(a)Thebudgetmaybefinancedonlyfrom:

i. realisticallyexpectedrevenues,basedoncurrentandpreviouscollectionlevelsandii. borrowedfundsinrespectofthecapitalbudgetonly.

10. UNSPENT FUNDS / ROLL OVER OF BUDGET(a) Theappropriationoffundsinanannualoradjustmentsbudgetwilllapsetotheextentthattheyareunspent

bytheendoftherelevantbudgetyear.(b) Onlyunspentgrant(iftheconditionsforsuchgrantfundingallowsthat)orloanfundedcapitalbudgetmaybe

rolledovertothenextbudgetyear(c) Conditionsofthegrantfundshallbetakenintoaccountinapplyingforsuchroll-overoffunds(d) Applicationforroll-overoffundsshallbeforwardedtothebudgetofficebythe15thofAprileachyeartobe

includedinnextyear’sbudgetforadoptionbyCouncilinMay.(e) Adjustmentstotherolledoverbudgetshallbedoneduringthe1stbudgetadjustmentinthenewfinancialyear

aftertakingintoaccountexpenditureuptotheendofthepreviousfinancialyear.(f) Nounspentoperatingbudgetshallberolledovertothenextbudgetyear(g) ConditionalGovernmentGrantsunspentcannotberolledoveruntilsuchtimeithasapprovedbyNational

Treasuryinwriting.

11. ADJUSTMENT BUDGET Eachadjustmentsbudgetshallreflectrealisticexcess,howevernominal,ofcurrentrevenuesoverexpenses.(a)TheDeputyMunicipalManager:FinancialServicesshallensurethattheadjustmentsbudgetscomplywiththe

requirementsoftheNationalTreasuryreflectthebudgetprioritiesdeterminedbythemayor,arealignedwiththeIDP,andcomplywithallbudget-relatedpolicies,andshallmakerecommendationstothemayorontherevisionoftheIDPandthebudget-relatedpolicieswheretheseareindicated.

(b) Councilmay revise its annual budget bymeans of an adjustments budget once a year before the 28th Februaryofeachyear.

(c)TheAccountingOfficermustpromptlyadjustitsbudgetedrevenuesandexpensesifamaterialunder-collectionofrevenuesarisesorisapparent.

(d)TheAccountingOfficershallappropriateadditionalrevenues,whichhavebecomeavailablebutonlytoreviseoracceleratespendingprogrammesalreadybudgetedfororanyareasofcritical importance identifiedbyCouncil.

(e)TheCouncilshallinsuchadjustmentsbudget,andwithintheprescribedframework,confirmunforeseenandunavoidableexpensesontherecommendationoftheMayor.

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(f)OnlytheMayorshalltableanadjustmentsbudget.Theadjustmentsbudgetcanbedoneforthefollowing-i. toadjustfundingrolledoverfromthepreviousfinancialyearaswellastoincludeadditionalfundingthat

hasbecomeavailablefromexternalsources,ii. totakeintoaccountrecommendationsfromthemid-yearbudgetandperformancereporttabledtoCouncil

inJanuarythataffecttheannualbudget(g)Anadjustmentsbudgetmustcontainallofthefollowing:

i. anexplanationofhowtheadjustmentsaffecttheapprovedannualbudget;ii. appropriatemotivationsformaterialadjustments;andiii. anexplanationoftheimpactofanyincreasedspendingonthecurrentandfutureannualbudgets.

(h) Municipal taxesand tariffsmaynot be increasedduringa financial year except if required in termsof afinancialrecoveryplan.

(i) Unauthorisedexpensesmaybeauthorisedinanadjustmentbudget.

12. BUDGET IMPLEMENTATION12.1 Monitoring

(a)TheaccountingofficerwiththeassistanceoftheDeputyMunicipalManager:FinancialServicesandotherseniormanagers is responsible for the implementationof thebudget,andmust take reasonablesteps toensurethat:• fundsarespentinaccordancewiththebudget;• expensesarereducedifexpectedrevenuesarelessthanprojected;and• revenuesandexpensesareproperlymonitored.

(b)TheAccountingofficerwiththeassistanceoftheDeputyMunicipalManager:FinancialServicesmustprepareanyadjustmentsbudgetwhensuchbudgetisnecessaryandsubmitittotheMayorforconsiderationandtablingtoCouncil.

(c) TheAccountingofficermustreportinwritingtotheCouncilanyimpendingshortfallsintheannualrevenuebudget,aswellasany impendingoverspending, togetherwith thesteps taken topreventor rectify theseproblems.

12.2 ReportingThechieffinancialofficershallcompilemonthlybudgetreports,withrecommendations,comparingactualresultswithbudgetedprojections,andthebusinessunitsshallfurnishthechieffinancialofficerwithallexplanationsrequiredfordeviationsfromthebudget.Thechieffinancialofficershallsubmitthesemonthlyreportstogetherwithahighlevelreportfromthefinancebusinesstothemayor,financecommitteeandexecutivecommitteeinaccordancewiththeprescriptionsoftheMunicipalFinanceManagementAct.

12.2.1 Monthly budget statements(a) Theaccountingofficerwiththeassistanceofthechieffinancialofficermust,notlaterthantenworkingdays

aftertheendofeachcalendarmonth,submittothemayorandNationalTreasuryareportintheprescribedformatonthestateofthemunicipality’sbudgetforsuchcalendarmonth,aswellasonthestateofthebudgetcumulativelyforthefinancialyeartodate.

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(b) Thisreportmustreflectthefollowing:i. actualrevenuespersource,comparedwithbudgetedrevenues;ii. actualexpensespervote,comparedwithbudgetedexpenses;iii. actualcapitalexpenditurepervote,comparedwithbudgetedexpenses;iv. actualborrowings,comparedwiththeborrowingsenvisagedtofundthecapitalbudget;v. theamountofallocationsreceived,comparedwiththebudgetedamount;vi. actualexpensesagainstallocations,butexcludingexpensesinrespectoftheequitableshare;vii. explanationsofanymaterialvariancesbetweentheactualrevenuesandexpensesasindicatedabove

andtheprojectedrevenuesbysourceandexpensesbyvoteassetoutintheservicedeliveryandbudgetimplementationplan;

viii.the remedialorcorrectivesteps tobe taken toensure that the relevantprojections remainwithin theapprovedorrevisedbudget;and

ix. projections of the revenues and expenses for the remainder of the financial year, together with anindicationofhowandwheretheoriginalprojectionshavebeenrevised.

(c) ThereporttotheNationalTreasurymustbebothinelectronicformatandinasignedwrittendocument.

12.2.2Quarterly Reports(a) TheMayormustsubmittoCouncilwithinthirtydaysoftheendofeachquarterareportontheimplementation

ofthebudgetandthefinancialstateofaffairsofthemunicipality.

12.2.3Mid-year budget and performance assessment (a) TheAccountingofficermustassess thebudgetaryperformanceof themunicipality for thefirsthalfof the

financialyear,takingintoaccountallthemonthlybudgetreportsforthefirstsixmonths,theservicedeliveryperformanceof themunicipalityasagainst theservicedelivery targetsandperformance indicatorswhichweresetintheservicedeliveryandbudgetimplementationplan.

(b) TheAccountingofficermustthensubmitareportonsuchassessmenttotheMayorby25JanuaryeachyearandtoCouncilandNationalTreasuryby31Januaryeachyear.

(c) TheAccountingofficermay insuchreportmakerecommendationsafterconsidering therecommendationof theDeputyMunicipalManger: FinancialServices for adjusting theannual budget and for revising theprojectionsofrevenuesandexpensessetoutintheservicedeliveryandbudgetimplementationplan.

13. Unforeseeable and unavoidable expenditure is incurred and approved by the MayorThe MFMA Budget and Reporting Regulations prescribes the process to be followed for the approval ofunforeseeableandunavoidableexpenditure.Unforeseenandunavoidableexpenditureareexpenditurethat-Couldnothavebeenforeseenatthetimetheannualbudgetofthemunicipalitywaspassed-Thedelaythatwillbecausedbyapendingadjustmentsbudgetmay:

1.Resultinsignificantfinanciallossforthemunicipality2.Causeadisruptionorsuspensionorseriousthreattothecontinuationofservices3.Leadtolossoflifeorseriousinjuryorsignificantdamagetoproperty4.Obstructthemunicipalityfrominstitutingordefendinglegalproceedingsonanurgent

basis.

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AnydepartmentbecomingawareoftheneedtoincurunforeseenorunavoidableexpendituremustimmediatelyapproachtheChiefFinancialOfficerwiththefulldetailsontheunforeseenexpenditure,providinginformationontheconsequencesofnotincurringtheexpenditureaswellasanindicationoftheexpectedcost(bothforthecurrentyearaswellasanyrecurringcostresultingfromtheevent).

TheChiefFinancialOfficerwilldeterminewhether thecostcannotbedealtwiththroughaprocessofshiftingof fundswithin the relevant votes. If sufficient funds are available for shiftingwithin the vote, the shifting offundsprocesswillbefollowed.Ifnot,thematterwillbereportedtotheMunicipalManagerforconsiderationasunforeseenandunavoidableexpenditure.OncetheMunicipalManagerhasgrantedapproval,therelevantHeadofDepartmentwillbeauthorisedtosubmitareporttotheMayorrequestingapproval.Ifapprovalisgranted,thePROMISfinancialsystemwillbeadjustedtoallowthedepartmenttoprocessthefinancialtransaction.

Theabovementionedprocesswillbedealtwithashighestpriority toensurethatadministrativedelaysdonotexacerbatethesituation.AnadjustmentsbudgetwillbesubmittedtothenextCouncilmeeting.Thepreferredprocesswouldbetoshiftfundsbetweenvotestoavoidanynegativeimpactonthetotalcashpositionofcouncil.

14. Approval of un-authorised expenditure when the Mayor tables the annual reportTheMFMAdefinesUnauthorised,irregularorfruitlessandwastefulexpenditureasfollows:“Unauthorised expenditure”, in relation to a municipality, means any expenditure incurred by a municipalityotherwisethaninaccordancewithsection15or11(3),andincludes-(a)Overspendingofthetotalamountappropriatedinthemunicipality’sapprovedbudget;(b)Overspendingofthetotalamountappropriatedforavoteintheapprovedbudget;(c)Expenditurefromavoteunrelatedtothedepartmentorfunctionalareacoveredbythevote;(d)Expenditureofmoneyappropriatedforaspecificpurpose,otherwisethanforthatspecificpurpose;(e)Spendingofanallocationreferredtoinparagraph(b),(c)or(d)ofthedefinitionof“allocation”otherwisethan

inaccordancewithanyconditionsoftheallocation;or(f)agrantbythemunicipalityotherwisethaninaccordancewiththisAct;Anyunauthorisedexpenditureasdefinedabove,mustbedisclosedintheAnnualFinancialStatementsbytheChiefFinancialOfficer.

TheFinanceCommitteemustconsidertheunauthorisedexpenditureasdisclosedimmediatelyaftertheAnnualReporthasbeentabledinCouncil.Aspartoftheirinvestigation,thefollowingrequirementsforrecoveringofcostmustbeconsidered:

Section 32 of the MFMA:32. (1) Without limiting liability in terms of the common law or other legislation-(a) apoliticaloffice-bearerofamunicipalityisliableforunauthorisedexpenditureifthatoffice-bearerknowingly

orafterhavingbeenadvisedbytheaccountingofficerofthemunicipalitythat Theexpenditureislikelytoresultinunauthorisedexpenditure,instructedanofficialofthemunicipalitytoincur

the expenditure;

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(b) the accounting officer is liable for unauthorised expenditure deliberately or negligently incurred by theaccountingofficer,subjecttosubsection(3);

(c) any political office-bearer or official of amunicipalitywhodeliberately or negligently committed,madeorauthorised an irregular expenditure, is liable for that expenditure; or

(d)anypoliticaloffice-bearerorofficialofamunicipalitywhodeliberatelyornegligentlymadeorauthorisedafruitless and wasteful expenditure is liable for that expenditure.

(2) A municipality must recover unauthorised, irregular or fruitless and wasteful expenditure from the person liable for that expenditure unless the expenditure-

(a ) in the case of unauthorised expenditure, is-(i) authorised in an adjustments budget; or(ii)certifiedbythemunicipalcouncil,afterinvestigationbyacouncilcommitrecoverableandwrittenoffbythe

council; and in the case of irregular or fruitless and wasteful expenditure, is, after investigation by a council committee,certifiedbythecouncilasirrecoverableandwrittenoffbythecouncil.

( 3) If the accounting officer becomes aware that the council, theMayor or the executive committee of themunicipality, as the case may be, has taken a decision which, if implemented, is likely to result in unauthorised, irregularorfruitlessandwastefulexpenditure,theaccountingofficerisnotliableforanyensuingunauthorised,irregularorfruitlessandwastefulexpenditureprovidedthattheaccountingofficerhasinformedthecouncil,the mayor or the executive committee, in writing, that the expenditure is likely to be unauthorised, irregular or fruitless and wasteful expenditure.

15. RESPONSIBILITIES OF THE CHIEF FINANCIAL OFFICER (ASSUMING REQUIRED DELEGATIONS BY ACCOUNITNG OFFICER IN PLACE)15.1Withoutderogatinginanywayfromthelegalresponsibilitiesofthemunicipalmanagerasaccountingofficer,

thechieffinancialofficershallberesponsibleforpreparingthedraftannualcapitalandoperatingbudgets(includingthebudgetcomponentsrequiredfortheensuingfinancialyears),anyrequiredadjustmentsbudgets,theprojectionsofrevenuesandexpensesfortheservicedeliveryandbudgetimplementationplan(includingthealignmentofsuchprojectionswiththecashmanagementprogrammepreparedintermsofthebankingandinvestmentspolicy),andshallbeaccountabletothemunicipalmanagerinregardtotheperformanceofthesefunctions.

15.2Themunicipalmanagershallensurethatallheadsofdepartmentsprovidetheinputsrequiredbythechieffinancialofficerintothesebudgetprocesses.

15.3Thechief financial officer shall draft thebudget timetable for theensuing financial year for themayor’sapproval, andshall indicate in such timetable the targetdates for thedraft revisionof theannualbudgetandthepreparationoftheannualbudgetfortheensuingfinancialyear,whichtargetdatesshallfollowtheprescriptionsoftheMunicipalFinanceManagementAct,andtargetdatesforthesubmissionofallthebudget-relateddocumentationtothemayor,financecommittee,executivecommitteeandcouncil.

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15.4Exceptwherethechieffinancialofficer,withtheconsentofthemayorandmunicipalmanager,decidesotherwise,thesequenceinwhicheachannualbudgetandadjustmentsbudgetshallbeprepared,shallbe:first,thecapitalcomponent,andsecond,theoperatingcomponent.Theoperatingcomponentshalldulyreflecttheimpactofthecapitalcomponenton:

• depreciationcharges• repairsandmaintenanceexpenses• interestpayableonexternalborrowings• otheroperatingexpenses.15.5Inpreparingtheoperatingbudget,thechieffinancialofficershalldeterminethenumberandtypeofvotesto

beusedandtheline-itemstobeshownundereachvote,providedthatinsodoingthechieffinancialofficershallproperlyandadequatelyreflecttheorganisationalstructureofthemunicipality,andfurtherinsodoingshallcomply–insofarastheorganisationalstructurepermits–alsowiththeprescribedbudgetformatofNationalTreasury.

15.6 The chief financial officer shall determine the depreciation expenses to be charged to each vote, theapportionmentofinterestpayabletotheappropriatevotes,theestimatesofwithdrawalsfrom(claims)andcontributionstoinsurance(premiums),andthecontributionstotheprovisionsforbaddebtsandobsolescenceofstocks.

15.7Thechieffinancialofficershallfurther,withtheapprovalofthemayorandthemunicipalmanager,determinethe recommended contribution to the asset financing reserve and any special contributions to the self-insurancereserve.

15.8Thechieffinancialofficershall,withtheapprovalofthemayorandthemunicipalmanager,andhavingregardtothemunicipality’scurrentfinancialperformancedeterminetherecommendedaggregategrowthfactor(s)accordingtowhichthebudgetsforthevariousvotesshallbedrafted.

15.9Thechieffinancialofficershallcompilemonthlybudgetreports,withrecommendations,comparingactualresultswithbudgetedprojections,andtheheadsofdepartmentsshalltimeouslyandadequatelyfurnishthechieffinancialofficerwithallexplanationsrequiredfordeviationsfromthebudget.Thechieffinancialofficershallsubmitthesemonthlyreportstothemayor,financecommitteeandexecutivecommittee,andallotherprescribedparties,inaccordancewiththeprescriptionsoftheMunicipalFinanceManagementAct.

15.10Thechieffinancialofficershallprovidetechnicalandadministrativesupporttothemayorinthepreparationandapprovaloftheannualandadjustmentbudgets,aswellasintheconsultativeprocesses,whichmustprecedetheapprovalofsuchbudgets.

15.11ThechieffinancialofficershallensurethattheannualandadjustmentsbudgetscomplywiththerequirementsoftheNationalTreasury,reflectthebudgetprioritiesdeterminedbythemayor,arealignedwiththeIDP,andcomplywithallbudget-relatedpolicies,andshallmakerecommendationstothemayorontherevisionoftheIDPandthebudget-relatedpolicieswheretheseareindicated.

15.12Thechieffinancialofficershallmakerecommendationsonthefinancingofthedraftcapitalbudgetfortheensuingandfuturefinancialyears,indicatingtheimpactofviablealternativefinancingscenariosonfutureexpenses,andspecificallycommentingon the relativefinancialmeritsof internalandexternalfinancingoptions.

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15.13Thechieffinancialofficershalldeterminethebasisforallocatingoverheadexpensesnotdirectlychargeabletovotes.Theexpensesassociatedwiththedemocraticprocessshallbeallocatedtoaseparatevote,andshallnotbechargedoutasanoverhead.

15.14Thechieffinancialofficershallensurethatthecostofindigencyreliefisseparatelyreflectedintheappropriatevotes.

15.15Thechieffinancialofficershallensurethattheallocationsfromotherorgansofstateareproperlyreflectedintheannualandadjustmentsbudget,andthattheestimatedexpensesagainstsuchallocations(otherthantheequitableshare)areappropriatelyrecorded.

ANNEXURE A: LEGAL REQUIREMENTSSection 15 of Municipal Finance Management Act: Appropriation of funds for expenditureExpensesmayonlybeincurredintermsoftheapprovedannualbudget(oradjustmentsbudget)andwithinthelimitsoftheamountsappropriatedforeachbudgetvote.

Section 16 Annual budgetsTheCouncilofthemunicipalitymustapprovetheannualbudgetbeforethestartofthefinancialyeartowhichitrelates.TheMayormusttabletheannualbudgetatleastninetydaysbeforethestartofsuchfinancialyear.Thecapitalbudgetmayextendoverthreeyears,providedthatitisseparatedintoannualappropriationsforthatperiod.

Section 17 Contents of annual budgets and supporting documentsThebudgetmustbeintheprescribedformat,andmustbedividedintoacapitalandanoperatingbudget.Thebudgetmustreflecttherealisticallyexpectedrevenuesbymajorsourceforthebudgetyearconcerned.Theexpensesreflectedinthebudgetmustbedividedintovotes.Thebudgetmustalsocontaintheforegoinginformationforthetwofinancialyearsfollowingthefinancialyeartowhichthebudgetrelates,aswellastheactualrevenuesandexpensesfortheyearbeforethecurrentyear,andtheestimatedrevenuesandexpensesforthecurrentyear.

Thebudgetmustbeaccompaniedbyallthefollowingdocuments:draftresolutionsapprovingthebudgetandlevyingpropertyrates,othertaxesandtariffsfor thefinancialyearconcerned;draftresolutions(whereapplicable)amendingtheIDPandthebudget-relatedpolicies;measurableperformanceobjectivesforeachbudgetvote,takingintoaccountthemunicipality’sIDP;theprojectedcashflowsforthefinancialyearbyrevenuesourcesandexpenditurevotes;anyproposedamendmentstotheIDP;anyproposedamendmentstothebudget-relatedpolicies;thecosttothemunicipalityofthesalaries,allowancesandotherbenefitsofitspoliticalofficebearersandothercouncillors,themunicipalmanager,thechieffinancialofficer,andotherseniormanagers;particularsofanyproposedallocationsorgrantstoothermunicipalities,municipalentities,externalmechanismsassisting themunicipality inservicedelivery,otherorgansofstate,andorganisationssuchasNGOs,welfareinstitutionsandsoon;particularsofthemunicipality’sinvestments;andvariousinformationinregardtomunicipalentitiesunderthesharedorsolecontrolofthemunicipality.

Section 18 Funding of expendituresThebudgetmaybefinancedonlyfrom:realisticallyexpectedrevenues,basedoncurrentandpreviouscollectionlevels;cash-backedfundsavailablefromprevioussurpluseswheresuchfundsarenotrequiredforotherpurposes;andborrowedfundsinrespectofthecapitalbudgetonly.

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Section 19 Capital projectsAmunicipalitymayspendmoneyonacapitalprojectonlyifthemoneyfortheproject(includingthecostofanyrequiredfeasibilitystudies)hasbeenappropriatedinthecapitalbudget.ThetotalcostoftheprojectmustalsobeapprovedbytheCouncil.Theenvisagedsourcesoffundingforthecapitalbudgetmustbeproperlyconsidered,andtheCouncilmustbesatisfiedthatthisfundingisavailableandhasnotbeencommittedforotherpurposes.Beforeapprovingacapitalproject,theCouncilmustconsidertheprojectedcostoftheprojectoveralltheensuingfinancialyearsuntiltheprojectbecomesoperational,aswellasthefutureoperationalcostsandanyrevenueswhichmayariseinrespectofsuchproject,includingthelikelyfutureimpactonpropertyratesandservicetariffs.

Section 20 Matters to be prescribedTheMinisterofFinancemustprescribetheformoftheannualbudget,andmayfurtherprescribeavarietyofothermatters,includingtheinflationprojectionswhichthemunicipalitymustuseincompilingitsbudget.TheMinistermayalsoprescribeuniformnormsandstandardsinregardtothesettingoftariffswhereamunicipalityentityorotherexternalmechanismsisusedtoperformamunicipalservice;andmayalsotakeappropriatestepstoensure that amunicipality doesnot, inexceeding its fiscal powers,materially andunreasonablyprejudicenationaleconomicpolicies(particularlyoninflation,administeredpricingandequity),economicactivitiesacrossmunicipalboundaries,andthenationalmobilityofgoods,services,capitalorlabour.

Section 21 Budget preparation processTheMayorofthemunicipalitymust:Co-ordinatetheprocessesforpreparingtheannualbudget,andforreviewingthemunicipality’sIDPandbudget-relatedpoliciestoensurethatthebudget,theIDP,andthepoliciesaremutuallyconsistentandcredible.Atleasttenmonthsbeforethestartoftheensuingfinancialyear,tableintheCouncilthetimeschedulewithkeydeadlinesforthepreparation,tablingandapprovalofthefollowingyear’sannualbudget,thereviewoftheIDPandbudget-relatedpolicies,andtheconsultativeprocessesrequiredintheapprovalofthebudget.When preparing the annual budget, take into account themunicipality’s IDP, the national budget, provincialbudget,theNationalGovernment’sfiscalandmacro-economicpolicies,andtheannualDivisionofRevenueAct.TakeallreasonablestepstoensurethatthemunicipalityrevisesitsIDPinlinewithrealisticrevenueandexpenditureprojectionsforfutureyears.Consultthedistrictmunicipality(ifitisalocalmunicipality)andallotherlocalmunicipalitiesinthedistrict,andallotherlocalmunicipalitiesinthedistrictifitisadistrictmunicipality.ConsulttheNationalTreasurywhenrequested,theProvincialTreasury,andsuchotherprovincialandnationalorgansofstateasmaybeprescribed.Provide,onrequest,anybudget-relatedinformationtotheNationalTreasury,othernationalandprovincialorgansofstate,andanyothermunicipalityaffectedbythebudget.

Section 22 Publication of annual budgetsImmediatelyaftertheannualbudgethasbeentabled,theMunicipalManagermustmakethisbudgetandotherbudget-relateddocumentationpublic,andmustinvitethelocalcommunitytosubmitrepresentationsinregardtosuchbudget.TheMunicipalManagermustalsoimmediatelysubmitthetabledbudgetinbothprintedandelectronicformatstotheNationalTreasury,theProvincialTreasury,andineitherformattoprescribednationalandprovincialorgansofstateandothermunicipalitiesaffectedbythebudget.

Section 23 Consultations on tabled budgetsAfterthebudgethasbeentabled,theCouncilofthemunicipalitymustconsidertheviewsofthelocalcommunity,theNationalTreasury, theProvincialTreasury,andanyprovincialornationalorgansofstateormunicipalitieswhichhavemadesubmissionsonthebudget.Afterconsideringtheseviews,theCouncilmustgivetheMayortheopportunitytorespondtothesubmissionsreceived,and– ifnecessary–revisethebudgetandtabletherelevantamendmentsforconsiderationbytheCouncil.

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TheNationalTreasurymayissueguidelinesonthemannerinwhichtheCouncilmustprocesstheannualbudget,includingguidelinesontheformationofacommitteeoftheCounciltoconsiderthebudgetandholdpublichearings.SuchguidelinesshallbebindingonlyiftheyareadoptedbytheCouncil.

Section 24 Approval of annual budgetsTheCouncilmustconsiderapprovalofthebudgetatleastthirtydaysbeforethestartofthefinancialyeartowhichsuchbudgetrelates.The budgetmust be approved before the start of such financial year, and the resolutions and performanceobjectivesreferredtoinSection17mustsimultaneouslybeadopted.

Section 25 Failure to approve budget before start of budget yearThisSectionsetsouttheprocesswhichmustbefollowedifthebudgetisnotapprovedinthenormalcourseofevents.BrieflytheCouncilmustreconsiderandvoteonthebudget,oranamendedversionofthebudget,everysevendaysuntilabudgetisapproved.TheMayormustimmediatelyinformtheMECforLocalGovernmentifthebudgetisnotadoptedbythestartofthebudgetyear,andmayrequestaprovincialintervention.

Section 26 Consequences of failure to approve budget before start of budget yearTheprovincialexecutivemustinterveneinanymunicipalitywhichhasnotapproveditsannualbudgetbythestartoftherelevantfinancialyear.Suchinterventionmustentailthetakingofanyappropriatestepstoensureabudgetisapproved,includingdissolvingtheCouncilandappointinganadministratoruntilanewCouncilcanbeelected,andapprovingatemporarybudgetuntilsuchnewCouncilcanadoptapermanentbudgetforthemunicipality.TheSectionalsoimposesrestrictionsonwhatmaybespentintermsofsuchtemporarybudget.

Section 27 Non-compliance with provisions of this chapter ThisSectionsetsoutthedutiesoftheMayortoreportanyimpendingnon-complianceandthegeneralconsequencesofnon-compliancewiththerequirementsofthevariousforegoingprescriptions.

Section 28 Municipal adjustments budgetsAmunicipalitymayreviseitsannualbudgetbymeansofanadjustmentsbudget.However,amunicipalitymustpromptlyadjustitsbudgetedrevenuesandexpensesifamaterialunder-collectionofrevenuesarisesorisapparent.Amunicipalitymayappropriateadditionalrevenueswhichhavebecomeavailablebutonlytoreviseoracceleratespendingprogrammesalreadybudgetedfor.Amunicipalitymayinsuchadjustmentsbudget,andwithintheprescribedframework,authoriseunforeseenandunavoidableexpensesontherecommendationoftheMayor.Amunicipalitymayauthorisetheutilisationofprojectedsavingsonanyvotetowardsspendingunderanothervote.Municipalitiesmayalsoauthorisethespendingoffundsunspentattheendofthepreviousfinancialyear,wheresuchunder-spendingcouldnotreasonablyhavebeenforeseenatthetimetheannualbudgetwasapprovedbytheCouncil.Only theMayorof themunicipalitymay tableanadjustmentsbudget. Suchbudgetmaybe tabledwhenevernecessary,butlimitationsonthetimingandfrequencyofsuchtablingmaybeprescribed.Anadjustmentsbudgetmustcontainallofthefollowing:

• anexplanationofhowtheadjustmentsaffecttheapprovedannualbudget;• appropriatemotivationsformaterialadjustments;andanexplanationoftheimpactofanyincreased

spendingonthecurrentandfutureannualbudgets.

Municipaltaxesandtariffsmaynotbeincreasedduringafinancialyearexceptifrequiredintermsofafinancialrecoveryplan.

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Section 29 Unforeseen and unavoidable expenditureInregardtounforeseenandunavoidableexpenses,thefollowingapply:

• theMayormayauthorisesuchexpensesinanemergencyorotherexceptionalcircumstances;• themunicipalitymaynotexceedaprescribedpercentageoftheapprovedannualbudgetinrespect

ofsuchunforeseenandunavoidableexpenses;• theseexpensesmustbereportedbytheMayortothenextCouncilmeeting;• theexpensesmustbeappropriatedinanadjustmentsbudget;and• theadjustmentsbudgetmustbepassedwithinsixtydaysaftertheexpenseswereincurred.

Section 30 Unspent fundsTheappropriationoffundsinanannualoradjustmentsbudgetwilllapsetotheextentthattheyareunspentbytheendoftherelevantbudgetyear,butexceptfortheexpensesreferredtoaboveinSection16.

Section 31 Shifting of funds between multi-year appropriationsIfthefundsforacapitalprojecthavebeenappropriatedformorethanonefinancialyear(seeSection16)theseexpensesmayexceedtheappropriationforanyonefinancialyear,provided:

• theincreaseisnotmorethan20%ofthatfinancialyear’sallocation;• theincreaseisfundedinthenextfinancialyear’sappropriations;• theMunicipalManagercertifiesthatactualrevenuesareexpectedtoexceedbudgetedrevenues,

andthatenoughfundswillbeavailabletofinancesuchincreasedappropriationwithoutincurringfurtherborrowingbeyondtheannualbudgetlimit;

• theMayorgivespriorwrittenapprovalforsuchincreasedappropriation;and• alltheabovedocumentationisprovidedtotheAuditor-General.

Section 32 Unauthorised, irregular or fruitless and wasteful expenditureUnauthorisedexpensesmaybeauthorisedinanadjustmentsbudget.

Section 33 Contracts having future budgetary implicationsContractsextendingbeyondonefinancialyearmaybeenteredintobyamunicipality,butifsuchcontractextendsbeyondthethreeyearscoveredintheannualbudget,themunicipalitymayenterintosuchcontractonlyif:TheMunicipalManager,atleastsixtydaysbeforetheCouncilmeetingatwhichthecontractistobeapproved,hasmade the contract public,with an information statement summarising themunicipality’s obligations, andinvitingthelocalcommunityandotherinterestedpartiestosubmitcommentsormakerepresentations.TheMunicipalManagersolicitstheviewsandrecommendationsoftheNationalTreasuryandProvincialTreasuryinrespecttosuchcontract,aswellasthoseoftheNationalDepartmentofProvincialandLocalGovernment,andanynationaldepartmentconcernedwithwater,sanitationorelectricity,ifthecontractrelatestoanyoftheseservices.TheCouncilhastakenintoaccounttheprojectedfinancialobligationsinregardtosuchcontract,theimpactontariffs,andtheviewsandcommentsreceivedfromalltheforegoingparties.TheCounciladoptsaresolutiondeterminingthatthemunicipalitywillsecureasignificantcapitalinvestmentorderiveasignificantfinancialoreconomicbenefitfromthecontract,andapprovestheentirecontractexactlyasitistobeexecuted.AcontractforpurposesofthisSectionshallexcludeanycontractrelatingtotheincurringoflong-termdebtbythemunicipality,employmentcontracts,contractsforcategoriesofgoodsasmaybeprescribed,orcontractswherethevalueofthecontractislessthanaprescribedvalueoraprescribedpercentageoftheannualbudget.

Section 42 Price increases of bulk resources for provision of municipal servicesNationalandprovincialorgansofstatewhichsupplywater,electricityoranyotherbulkresourcestomunicipalitiesormunicipalentitiesfortheprovisionofmunicipalservicesmayincreasethepriceofsuchresourcesonlyafterdoingallthefollowing:Theproposedincreasemustbesubmittedtotheorgan’sexecutiveauthorityand(wherelegislationsorequires)toanyregulatoryagencyforapproval.

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AtleastfortydayspriortotheabovesubmissiontheNationalTreasuryandorganisedlocalgovernmentmustbeinvitedtosubmitwrittencommentsontheproposedincrease.The executive authority, after taking into account the comments received, must table the price increase inParliamentortheprovinciallegislature,asthecasemaybe,withafullmotivationandcertainotherprescribedexplanatorydocumentation.UnlesstheMinisterofFinanceotherwisedirects,apriceincreasemustbetabledonorbefore15Marchtotakeeffectfrom1Julyofthesameyear.Ifitistabledafter15Marchitmayonlytakeeffectfrom1Julyofthefollowingyear.

Section 43 Applicability of tax and tariff capping on municipalitiesIfanationalorprovincialorganofstateislegislativelyempoweredtodeterminetheupperlimitsofanymunicipaltaxortariff,suchdeterminationtakeseffectonthedatespecifiedinthedetermination,butprovidedthat,unlesstheMinisterofFinanceotherwisedirects:Adeterminationpromulgatedonorbefore15Marchshallnottakeeffectbefore1Julyofthesameyear.Adeterminationpromulgatedafter15Marchshallnottakeeffectbefore1Julyofthefollowingyear.Adeterminationshallnotbeallowedtoimpairamunicipality’sabilitytomeetanyannualorperiodicescalationsinthepaymentsitmustmakeinrespectofanycontractlegallyenteredintobyamunicipality.

Section 53 Budget processes and related mattersTheMayorofthemunicipalitymust:Providegeneralpoliticalguidanceovertheannualbudgetprocessandtheprioritiesthatguidethepreparationofeachbudget.Co-ordinatetheannualrevisionoftheIDP,aswellasthepreparationoftheannualbudget,anddeterminehowtheIDPistobetakenintoaccountoristoberevisedforpurposesofsuchbudget.TakeallreasonablestepstoensurethattheCouncilapprovestheannualbudgetbeforethestartofthefinancialyeartowhichitrelates,andthatthemunicipality’sservicedeliveryandbudgetimplementationplanisapprovedwithintwenty-eightdaysaftertheapprovalofthebudget.Ensure that theannual performanceagreements for theMunicipalManagerand the seniormanagersof themunicipalityarelinkedtomeasurableperformanceobjectiveswhichareapprovedwiththebudgetandtheservicedeliveryandbudgetimplementationplan.TheMayormustpromptly report to theCouncil and theMEC forLocalGovernmentanydelay in tabling theannualbudget,approvingtheservicedeliveryandbudgetimplementationplanorsigningtheannualperformanceagreements.TheMayormustfurtherensurethattheservicedeliverytargetsandquarterlyperformanceindicators,andthemonthlyprojectionsofrevenuesandexpensesintheservicedeliveryandbudgetimplementationplan,aremadepublicnotlaterthanfourteendaysafterthesemattershavebeenapproved;andthattheperformanceagreementsoftheMunicipalManagerandotherseniorofficialsaresimilarlymadepublicnotlaterthanfourteendaysaftertheirapproval.

Section 68 Budget preparationTheMunicipalManagermustassisttheMayorinperformingtheassignedbudgetaryfunctionsandmustprovidetheMayorwithadministrativesupport,operational resourcesand the informationnecessary toperform thesefunctions.

Section 69 Budget implementationTheMunicipalManagerisresponsibleforimplementingthebudget,andmusttakereasonablestepstoensurethat:fundsarespentinaccordancewiththebudget;expensesarereducedifexpectedrevenuesarelessthanprojected;andrevenuesandexpensesareproperlymonitored.TheMunicipalManagermustprepareanyadjustmentsbudgetwhensuchbudgetisnecessaryandsubmitittotheMayorforconsiderationandtablinginCouncil.

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TheMunicipal Manager must submit a draft service delivery and budget implementation plan to theMayorfourteendaysaftertheannualbudgethasbeenapproved,andmustalsowithinthesameperiodsubmitdraftsoftheannualperformanceagreementstotheMayor.

Section 70 Impending shortfalls, overspending and overdraftsTheMunicipalManagermust report inwriting to theCouncil any impendingshortfalls in theannual revenuebudget,aswellasanyimpendingoverspending,togetherwiththestepstakentopreventorrectifytheseproblems.

Section 71 Monthly budget statementsTheMunicipalManagermust,notlaterthantenworkingdaysaftertheendofeachcalendarmonth,submittotheMayorandProvincialTreasuryareportintheprescribedformatonthestateofthemunicipality’sbudgetforsuchcalendarmonth,aswellasonthestateofthebudgetcumulativelyforthefinancialyeartodate.

Thisreportmustreflectthefollowing:actualrevenuespersource,comparedwithbudgetedrevenues;actualexpensespervote,comparedwithbudgetedexpenses;actualcapitalexpenditurepervote,comparedwithbudgetedexpenses;actualborrowings,comparedwiththeborrowingsenvisagedtofundthecapitalbudget;theamountofallocationsreceived,comparedwiththebudgetedamount;actualexpensesagainstallocations,butexcludingexpensesinrespectoftheequitableshare;explanationsofanymaterialvariancesbetweentheactualrevenuesandexpensesasindicatedaboveandtheprojectedrevenuesbysourceandexpensesbyvoteassetoutintheservicedeliveryandbudgetimplementationplan;theremedialorcorrectivestepstobetakentoensurethattherelevantprojectionsremainwithintheapprovedorrevisedbudget;andprojectionsoftherevenuesandexpensesfortheremainderofthefinancialyear,togetherwithanindicationofhowandwheretheoriginalprojectionshavebeenrevised.ThereporttotheNationalTreasurymustbebothinelectronicformatandinasignedwrittendocument.

Section 54 Budgetary control and early identification of financial problemsOnreceiptofthereportfromtheMunicipalManager,theMayormust:considerthereport;checkwhetherthebudgethasbeenimplementedinaccordancewiththeservicedeliveryandbudgetimplementationplan;issueappropriateinstructionstotheMunicipalManagertoensurethatthebudgetisimplementedinaccordancewith thisplan,and that thespendingof fundsand thecollectionof revenuesproceed inaccordancewith theapprovedbudget;identifyanyfinancialproblemsfacingthemunicipality,aswellasanyemergingorimpendingfinancialproblems;andsubmittotheCouncilwithinthirtydaysoftheendofeachquarterareportontheimplementationofthebudgetandthefinancialstateofaffairsofthemunicipality.Ifthemunicipalityfacesanyseriousfinancialproblems,theMayormust:promptlyrespondtoandinitiatetheremedialorcorrectivestepsproposedbytheMunicipalManager,andalerttheMECforLocalGovernmentandtheCouncilofthemunicipalitytotheproblemsconcerned.TheMayormayrevisethedetailsoftheservicedeliveryandbudgetimplementationplan,butanyrevisionstotheservicedeliverytargetsandquarterlyperformanceindicatorsmustbeapprovedbytheCouncil,andbesupportedbyanadjustmentsbudget.Anychangesmadetotheprojectionsofrevenuesandexpensesassetoutintheplanmustpromptlybemadepublic.Section55ReporttoprovincialexecutiveifconditionsforprovincialinterventionexistIftheCouncilhasnotapproveditsannualbudgetbythefirstdayofthefinancialyeartowhichitrelates,orifthemunicipalityencountersseriousfinancialproblems,theMayormustimmediatelyreportthismattertotheMECforLocalGovernmentandmayrecommendaprovincialintervention.

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Section 72 Mid-year budget and performance assessment TheMunicipalManagermustassessthebudgetaryperformanceofthemunicipalityforthefirsthalfofthefinancialyear,takingintoaccountallthemonthlybudgetreportsforthefirstsixmonths,theservicedeliveryperformanceofthemunicipalityasagainsttheservicedeliverytargetsandperformanceindicatorswhichweresetintheservicedeliveryandbudgetimplementationplan,andthepastfinancialyear’sannualreportandtheprogressmadeinresolvingproblemsidentifiedinsuchreport.TheMunicipalManagermustthensubmitareportonsuchassessmenttotheMayor,theNationalTreasuryandtheProvincialTreasury.TheMunicipalManagermay in such reportmake recommendations for adjusting the annual budget and forrevisingtheprojectionsofrevenuesandexpensessetoutintheservicedeliveryandbudgetimplementationplan.IntermsofSection54(1)(f)theMayormustpromptlysubmitthisassessmentreporttotheCouncilofthemunicipality.

Section 73 Reports on failure to adopt or implement budget-related and other policiesTheMunicipalManagermustinformtheProvincialTreasury,inwriting,ofanyfailurebytheCounciltoadoptorimplementanybudget-relatedpolicyorasupplychainmanagementpolicy,andofanynon-compliancebyanofficebearerorpoliticalstructurewithsuchpolicy.

Section 75 Information to be placed on websites of municipalitiesTheMunicipalManagermustplaceonthemunicipality’sofficialwebsite(interalia)thefollowing:

theannualandadjustmentsbudgetsandallbudget-relateddocuments;allbudget-relatedpolicies;theannualreport;allperformanceagreements;allservicedeliveryagreements;alllong-termborrowingcontracts;allquarterlyreportssubmittedtotheCouncilontheimplementationofthebudgetandthefinancialstateofaffairsofthemunicipality.

Section 80 Establishment (of municipal budget and treasury office)Everymunicipalitymusthaveabudgetand treasuryofficecomprisingaChiefFinancialOfficersupportedbyappointedofficialsandcontractedstaff.

Section 81 Role of chief financial officerTheChiefFinancialOfficerisadministrativelyinchargeofthebudgetandtreasuryofficeandmust,interalia,assisttheMunicipalManagerinpreparingandimplementingthebudget;performsuchbudgeting,financialreportingandfinancialmanagementandreviewdutiesasaredelegatedbytheMunicipalManager;accounttotheMunicipalManagerfortheperformanceofalltheforegoingresponsibilities.

Section 83 Competency levels of professional financial officialsThe Municipal Manager, senior managers, the Chief Financial Officer and the other financial officials in amunicipalitymustallmeetprescribedfinancialmanagementcompetencylevels.

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ViRement Policy

1. BACkGROUND AND PURPOSE

1.1 Virementistheprocessoftransferringfundsfromonelineitemofabudgettoanother.ThetermisderivedfromaFrenchwordmeaningacommercialtransfer.

1.2 TheMFMAandtheMunicipalBudgetandReportingRegulationsseektomovethemunicipalityawayfromthetraditionalapproachofappropriating/approvingbudgetsbylineitem.Theaimistogivetheheadsofmunicipaldepartmentsandprogrammesgreaterflexibilityinmanagingtheirbudgets.Tofurtherfacilitatethis,themunicipalitymustputinplaceavirementpolicy,whichshouldprovideclearguidancetomanagersofwhentheymayshiftfundsbetweenitems,projects,programmesandvotes.

1.3 Eachyear,theMunicipalityproducesanannualbudgetwhichmustbeapprovedbyCouncil.Inpractice,astheyearprogresses,circumstancesmaychangesothatcertainestimatesareunder-budgetedandothersover-budgetedduetounforeseenexpenditure(forexample,duetotheoccurrenceofdisasters),savingsandreducedrevenueprojected.Asaresult,itbecomesnecessarytotransferfundsbetweenvotesandlineitems.ItisnotpracticaltoreferalltransfersbetweenlineitemswithinaspecificvotetotheCouncil,andastheLocalGovernment:MunicipalFinanceManagementAct(“MFMA”)islargelysilentastosuchtransfers,itisnecessarytoestablishapolicywhichgovernstheadministrativetransferbetweenlineitems.

1.4 Thepurposeofthispolicyisthereforetoprovideaframeworkwherebytransfersbetweenlineitemswithinvotesoftheoperatingbudgetmaybeperformedwiththeapprovalofcertainofficials.

2. APPLICATION OF POLICY2.1 ThispolicyappliesonlytotransfersbetweenlineitemswithinvotesoftheMunicipality’soperating

budget.

2.2 Section28(2)(d)readtogetherwithsection69oftheMFMAprovidesthat“Anadjustmentsbudget…mayauthorisetheutilisationofprojectedsavingsinonevotetowardsspendinginanothervote.”TransfersbetweenvotesmaythereforebeauthorisedonlybytheCounciloftheMunicipality.

2.3Section1oftheMFMAdefinesa“vote”as: (a)One of the main segments into which a budget of a municipality is divided for the appropriation

of money for the different departments or functional areas of the municipality; and (b)whichspecifiesthetotalamountthatisappropriatedforthepurposesofthedepartmentor

functional area concerned

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2.4 Theterm“vote”isusedtodividethebudgetintosegmentsandthecouncilthenapprovesthebudgetaccordingtothesevotesviaresolution.Thedefinitionrequiresvotestobeatthedepartmentalorfunctionallevel.Thereasonforthisisthatmunicipalitiesareorganizedarounddepartments,whichinmostinstancestendtobelinkedtospecificfunctions.Seniormanagersoftenheadsuchdepartments/functions,whichmakesiteasierforthe“vote”ofadepartmenttobeusedtofacilitategreateraccountabilityforservicedeliveryandbudgetimplementationovertheperformanceofseniormanagers,inaccordancewiththeirannualperformanceagreements.

2.5 Foreffectiveaccountability,seniormanagersformpartoftopmanagementandreportdirectlytothemunicipalmanager(section77oftheMFMA).Anyexpenditureincurredthatisnotinaccordancewithavote(orexceedstheamountforavote)isclassifiedasunauthorisedexpenditure,whichsetsoffcorrectiveanddisciplinarymechanismsagainsttheaccountingofficer.Anymovementoffundsbetween“votes”oralterationofservicedeliverytargetsorperformanceindicatorsthereforerequiresanadjustmentbudgetandafurthercouncil resolution.That is,acouncil resolution isrequiredtodeviatefromtheoriginalcouncilresolutionthatapprovedthebudget.Keepingthe“vote”atahighlevelallowsseniormanagerstomoveexpenditureandrevenueasnecessarywithina“vote”withoutanadjustmentsbudgetprovidedtheoverallrevenue,expenditureandperformanceobjectivesforthat“vote”arenotnegativelyaffected.AsperMFMACircular12,issued31January2005.

2.6 Theshiftingoffundsbetweenvoteswillbeallowedwithinthedelegatedparametersofofficials:

Anyrequesttoshiftfundswithinvotes(beitforcapitaloroperatingexpenditure),mustbedoneusing theprescribed form.The followingprocessof informationverificationmustbecompletedbeforetherequestissubmittedforapproval:

1.Verificationthattherequestwillnotleadtotheshiftingoffundsthatarenotwithinthelimitsofthedelegatedpowersasindicatedabove.

2.Provisionofbackgroundinformationastowhytheshiftingoffundsarerequired.3.Provisionofspecificinformationinrespectoftheshiftingoffunds.

Thefollowinginformationmustbeprovided:SpecificQuestionstobeansweredforallbudgetre-allocations

1.Wasthebudgetwhichisnowbeingreducedoverbudgetedfor?2.Ifnot,howisitnowpossibletoreducethebudget?3.Ifyes,why?4.Howwillthisre-allocationimpactonthebudgetforthenextfinancialyear?

SpecificQuestionstobeansweredforcapitalbudgetre-allocations1.Willtheprojectwherefundsaretransferredfromstillbeimplemented?2.Ifnot,whynot?3.Ifyes,whenandhowwillitbefunded?4.Wasthewardcouncillorinformedofthebudgetadjustment?

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3. The Approval ProcessIftheshiftingoffundsisauthorised,theapprovalprocesslistedbelowshouldtakeplace

3.1. BudgettransferswithinthesamevoteshallberecommendedbytheDeputyMunicipalManagerandapprovedbytheDeputyMunicipalManager:FinancialServicesorsuchotherseniordelegatedofficialintheBudgetandTreasuryDepartmentprovidedthattherequestwillnothaveanegativeimpactontheSDBIPoutcomes.

3.2. TheMunicipalManagershallprescribeaformonwhichallproposalsfortransfersoffundsunderthispolicyshallbemade,whichformshallinclude,butnotbelimitedto,provisionsforthefollowing:3.2.1 thenameofthedepartmentconcerned;3.2.2 descriptionsofthelineitemsfromandtowhichthetransferistobemade;3.2.3 theamountoftheproposedtransfer;3.2.4 thecauseofthesavinginthelineitemfromwhichthetransferistobemade;3.2.5 thejustificationforthetransfer;3.2.6 andescriptionofanyconsequencesthatsuchtransfermyhavefortheIntegrated

DevelopmentPlanortheServiceDeliveryandBudgetImplementationPlan.

3.3. NobudgetorvirementshallbemadetoorfromsalariesexceptwiththepriorapprovaloftheDeputyMunicipalManger:FinancialServicesinconsultationwiththeDeputyMunicipalManager:CorporateServices.

3.4. IncasesofemergencysituationsvirementsshallbesubmittedbytheaccountingofficertotheMayorforauthorizationandbereportedbytheMayortoCouncilatitsnextmeeting.

3.5. Savingsonallocationsearmarkedforspecificoperatingandcapitalprojectsmaynotbeusedforotherpurposesexceptwiththeapprovalofcouncil.

3.6. DeputyMunicipalManagersmayutilizeasavingintheamountappropriatedunderamainexpenditurecategory(e.g.Salaries,GeneralExpenses,Repairs&Maintenance,etc.)withinavotewhichisundertheircontroltowardsthedefraymentofexcessexpenditureunderanothermainexpenditurecategorywithinthesamevote,withtheapprovaloftheDeputyMunicipalManager:FinancialServicesorsuchseniordelegatedofficialintheBudget&TreasuryDepartment.

3.7. The request will be forwarded to the Executive Manager, Municipal Manager and FinanceCommittee(asapplicable)forco-approvalintermsofthedelegatedpowers.

3.8. Approvedrequestswillbeprocessedonthefinancialsystem.3.9. Onlyoncefundshavebeenshifted,willdepartmentsbeabletoprocessfinancialtransactions.

Savings is an amount appropriated for capital expenditure may not be used to defray operationalexpenditure.Virementsbetweenvotesshallbeincludedintheadjustmentbudget.Thispolicyshallnotapplytotransfersbetweenorfromcapitalprojectsoritemsandnosuchtransfersmaybeperformedunderthispolicy.Anydeviationfromoradjustmenttoanannualbudgetortransferwithinabudgetwhichisnotspecificallypermittedunderthispolicyoranyotherpolicymaynotbeperformedunlessapprovedbythecouncilthroughanadjustmentsbudget.

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4. AUTHORISATION OF VIREMENTSAtransferoffundsfromonelineitemtoanotherunderthispolicymay,subjecttotheprovisionsofthispolicy,beauthorisedasfollows:

4.1IftheamountdoesnotexceedR100,000thetransfermaybeauthorisedbytheChiefFinancialOfficeroftheMunicipalityortheMunicipalManageroftheMunicipalityafterconsultationwiththeChiefFinancialOfficer;

4.2IftheamountexceedsR100,000butdoesnotexceedR199,000thetransfermaybeauthorisedbytheMunicipalManagerafterconsultationwiththeChiefFinancialOfficer;

4.3IftheamountexceedsR199,000butdoesnotexceedR200,000thetransfermaybeauthorisedbytheMayoroftheMunicipalityontherecommendationoftheMunicipalManager.

4.4Notwithstandingtheprovisionsof4.1,atransferoffundsbetweencostorfunctionalcentreswithinaparticularvotemaynotbeauthorisedbytheChiefFinancialOfficerbutmayonlybeauthorisedby:

4.4.1theMunicipalManager,iftheamountdoesnotexceedtheamountofR200,000 4.4.2theMayor,ifthecostexceedstheamountofR200,000butdoesnotexceedR200,000

5. LIMITATIONS ON AMOUNT OF VIREMENT5.1 Notwithstandingtheprovisionsofsection3:

5.1.1Thetotalamounttransferredfromandtolineitemswithinaparticularvoteinanyfinancialyearmaynotexceeding10%(theamountavailableafteractualandcommittedexpenditureisaccountedfor)oftheamountallocatedtothatvote;

5.1.2Thetotalamounttransferredfromandtolineitemsintheentirebudgetinanyfinancialyearmaynotexceed20%(amount)ofthetotaloperatingbudgetforthatyear;

5.1.3TheamountofanyonetransferoffundsbetweenlineitemsmaynotexceedthesumofR200,000

5.2 Atransferwhichexceeds,orwhichwouldresultintheexceedingof,anyofthelimitsreferredtoin4.1abovemay,however,beperformediftheCouncilbyresolutionapprovesthereof.

6. VIREMENT PERMITTED ONLY IF SAVINGS ARE PROJECTED

Atransferoffundsfromonelineitemtoanothermaytakeplaceonlyifsavingswithinthefirst-mentionedlineitemareprojected,andsuchtransfermay,subjectinanyeventtotheprovisionsofthispolicy,notexceedtheamountofsuchprojectedsavings.

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7. FURTHER RESTRICTIONS ON VIREMENT

7.1 Atransferoffundsbetweenlineitemsshallnotbepermittedunderthispolicyiftheeffectthereofwouldbeto:7.1.1contraveneanypolicyoftheMunicipality;or7.1.2altertheapprovedoutcomesoroutputsofanIntegratedDevelopmentPlan;or7.1.3resultinanyadjustmenttotheServiceDeliveryandBudgetImplementationPlan.

7.2 NotransferoffundsshallbepermittedifsameweretoresultinanychangetothestaffestablishmentoftheMunicipality,exceptiftheMunicipalManagerapprovesofsuchchange.

7.3 Ifanylineitemhasbeenspecificallyring-fenced,notransferoffundsmaybemadeunderthispolicytoorfromsuchlineitem.

7.4 Transfersoffundsmaynotbemadeunderthispolicybetweenorfromcapitalitemsorprojects.

7.5 Totheextentthatitispracticaltodoso,transferswithinthefirstthreemonthsandthelastmonthofthefinancialyearshouldbeavoided.

7.6 Bydefinition,transfersmaynotbemadeunderthispolicyfromalineitemadministeredbyonedepartmenttoalineitemadministeredbyanother.

7.7 InaccordancewithSection30oftheMFMA,notransferoffundsmaybemadefromalineitemofabudgetforaparticularyeartoalineitemofabudgetforasubsequentyear.

7.8 Thetransferoffundsinanyyearinaccordancewiththispolicyshallnotgiverisetoanyexpectationsofasimilartransferoccurringinasubsequentyear.

7.9 Notransferoffundsshallbemadeifsuchtransferwouldconstituteatransgressionorcontraventionofanystatute,regulationorotherlaw,anypolicy,directiveorguidelinebindingupontheMunicipality,ortheavoidancebytheMunicipalityofanyobligationimposeduponitbycontractoranyothercause.

7.10Theapprovalofanytransfershallnotperseconstituteexpenditureauthority,andallexpenditureresultingfromapprovedtransfersmust,totheextentthatsameisapplicable,becarriedoutinaccordancewiththeMunicipality’sSupplyChainManagementPolicy.

8. GENERAL

8.1 TheMunicipalManagershallberesponsiblefortheimplementationandadministrationofthisPolicy.

8.2 ThisPolicyshallcomeintoeffecton1July2012.

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cRedit contRol & deBt collection Policy

INDEXSection Details

Preamble1 Definitions2 Introduction3 Objectives4 Underlying Principles of this Policy5 Roles and Responsibilities of the Municipal Manager6 Roles and Responsibilities of the Council7 Duties and Functions of Councillors8 Duties and Functions of Communities, Ratepayers and Residents9 Area of Application

10 Application for Services and Service Agreements11 Deposits and Guarantees12 Access to Property to read Meters13 Accounts, Billing and Payment14 Property Rates15 Interest on Arrears and other Penalty Charges16 Agreement and Arrangements for Payment of Arrear Accounts17 Allocation of Payments and Part Payments18 Dishonoured and other Unacceptable Cheques 19 Queries in Respect of Accounts20 Disconnection/ Restriction of Services21 Reconnection/ Reinstatement of Terminated/ Restricted Services22 Period for Reconnection or Reinstatement23 Procedure for Debt Collection and Write Off24 Recovery of Overdue Rates25 Illegal Tampering and/ or Theft of Services26 Property Services Audit27 Water Leaks28 Unoccupied Premises29 Municipal Staff and Councillors30 Reporting and Performance Management31 Communication of Policy to Account Holders32 By-Laws to be Adopted33 Enforcement of other Legislation

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PREAMBLE

WHEREASSection152(1)(b)oftheConstitutionoftheRepublicofSouthAfricaAct108of1996(‘theConstitution’)providesthatoneoftheobjectsoflocalgovernmentistoensurethattheprovisionofservicestocommunitiesoccursinasustainablemanner;

ANDWHEREASSection153(a)oftheConstitutionprovidesthatamunicipalitymuststructureitsadministration,budgetingandplanningprocessestogiveprioritytothebasicneedsofthecommunity,andtopromotethesocialandeconomicdevelopmentofthecommunity;

• ANDWHEREASSection195(1)oftheConstitutionprovidesthatthepublicadministrationmustbegovernedbythedemocraticvaluesandprinciplesenshrinedintheConstitution,including-

• Thepromotionoftheefficient,economicandeffectiveuseofresources;• Theprovisionofservicesimpartially,fairly,equitablyandwithoutbias;and• Thefactthatpeople’sneedsmustberespondedto.

ANDWHEREASSection4(1)(c)oftheLocalGovernment:MunicipalSystemsAct33of2000(‘the Systems Act’) providesthattheCouncilofamunicipalityhastherighttofinancetheaffairsofthemunicipalitybychargingfeesforservices,imposingsurchargesonfees,ratesonpropertyand,totheextentauthorisedbynationallegislation,othertaxes,leviesandduties;

ANDWHEREASSection5(1)(g),readwithsubsection(2)(b),oftheSystemsActprovidesthatmembersofthelocalcommunityhavetherighttohaveaccesstomunicipalserviceswhichthemunicipalityprovidesprovidedthat,whereapplicableandsubjecttothepolicyforindigentdebtors,paypromptlyforservicesfees,surchargesonfees,othertaxes,leviesanddutiesimposedbythemunicipality;

ANDWHEREASSection6(2)(c),(e)and(f)oftheSystemsActprovidesthattheadministrationofamunicipalitymusttakemeasurestopreventcorruption;givemembersofalocalcommunityfullandaccurateinformationaboutthe levelandstandardofmunicipalservices that theyareentitled toreceive;and informthe localcommunityabouthowthemunicipalityismanaged,ofthecostsinvolvedandthepersonsincharge;

ANDWHEREASChapter9,Sections95,96,97,98,99and100,oftheSystemsActprovidesforCustomerCareManagement,DebtCollectionresponsibilityoftheMunicipality,contentsofthepolicy,by-lawsthatgiveeffecttothepolicy,SupervisoryauthorityandImplementingauthority.

DEFINITIONS

1.1 Inthispolicy,unlessthecontextindicatesotherwise,thewordorexpressionhasthefollowingmeaning:

1.2 “Accounting Officer”TheMunicipalManagerappointedintermsofSection82(1)(a)or(b)oftheMunicipalStructuresAct,1998(ActNo.117of1998);

1.3 “Account Holder” includesa customer/consumer and refers to anyoccupier of anypremises towhichCouncilhasagreedtosupplyorisactuallysupplyingservices,orifthereisnooccupier,thentheownerofthepremisesandincludesanydebtorofthemunicipality;

1.4 “Actual consumption” meansthemeasuredconsumptionofaconsumerofamunicipalserviceduringaspecifiedperiod;

1.5 “Arrangements” meansaformalagreemententeredintobetweentheCouncilandadebtorwherespecificrepaymentparametersareagreedto.

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1.6. “Arrears” meansanyamountdue,owingandpayablebyacustomerinrespectofamunicipalaccountnotpaidontheduedate;

1.7. “Average consumption” meansthedeemedconsumptionofacustomerofamunicipalserviceduringaspecificperiod,whichconsumptioniscalculatedbyaddingtherecordedmonthlyaverageconsumptionandthecurrentactualconsumptionanddividingthetotalby2;

1.8. “Bank guarantee” refers toanundertakingbyaregisteredfinancial institutionwhereby itguaranteesaspecifiedmaximumamounttobepaidiftheprincipaldebtor(“theconsumer”)failstopay;

1.9. “Calculated amounts” refers to the amounts calculated by theChief FinancialOfficer, in consultationwiththerelevanttechnicaldepartments,tobeduetotheCouncilbyaconsumerinrespectofthesupplyoftheapplicablemunicipalservicesforanyperiodduringwhichtheexactquantityofthesupplycannotbedeterminedaccuratelyforreasonsbeyondthecontroloftheChiefFinancialOfficer.Thisshallnormallybebasedontheaverageconsumptionfigures,ifavailable,fortheservicerenderedtothecustomeror,failingtheavailabilityofsuchdata,ontheaverageconsumptionfiguresapplicabletooneormorepropertiesofsimilarsizeandnatureintheareainwhichthecustomerresidesorcarriesonbusiness;

1.10.“Chief Financial Officer” referstothepersonsodesignatedintermsofSection75(2)(a)oftheMunicipalFinanceManagementAct,2003(ActNo.56of2003)oranypersondulyauthorisedtoactonbehalfofsuchpersonandshallhavethesamemeaningasStrategicExecutiveManager:Finance;

1.11. “Consolidated account” refers toonecombinedaccount forallmunicipal services,housing rentsandinstallments,ratesandbasicchargespayable,and“consolidatedbill”hasacorrespondingmeaning;

1.12“C.D.U.”shallmeanacentraldistributionunitthatdistributeselectricityfromacentralpointtohouseholds;

1.13. “Consumption”meanstheordinaryuseofmunicipalservices,includingwater,sanitation,refuseremoval,andelectricityservicesforallcategoriesofconsumers;

1.14.“Conventional electricity and water meters”meanselectricityand/orwatermeters,asthecasemaybe,whichareusedtodeterminethesupplyofelectricityandwaterandwhicharenormallyreadonamonthlyorotherfixedintervalbasis;

1.15 “Council”referstoTheMsunduziMunicipalityanditssuccessorsinlawandincludestheCouncilofthatmunicipalityoritsExecutiveCommitteeoranyotherbodyactingbyvirtueofanypowerdelegatedtoitintermsoflegislation,aswellasanyofficialtowhomtheExecutiveCommitteehasdelegatedanypowersanddutieswithregardtothispolicy;

1.16 “Councillor”referstoanymemberofamunicipalcouncil;

1.17“Credit Control” referstoallfunctionsrelatingtothecollectionofmoniesowedbycustomersandusersofmunicipalservices.

1.18 “Defaulter” referstoanycustomerwhoowestheCouncilarrearmoniesinrespectofratesand/orservicecharges;

1.19 “Deposit”referstoaminimumsumofmoneyspecifiedbytheChiefFinancialOfficerandpayablebytheconsumertotheMunicipalitypriortooccupationofthepropertyorpriortothedateonwhichservicestothepropertyarerequired;

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1.20 “Final date” in theabsenceofanyexpressagreement in relation theretobetween theCounciland thecustomer,referstothedatestipulatedontheaccountanddeterminedfromtimetotimeasthelastdateonwhichtheaccountmustbepaid;

1.21“Final Demand” meansanoticesenttoanaccountholdercallingforsettlementofanymunicipaldebtthathasnotbeenpaidbyduedateandwherelegalactionmaybetakenaftergivingdueconsiderationtothenoticeperiodspecifiedinthenotice.

1.22 “Equipment” refers to any building or other structure, pipe, pump, wire, cable, meter, engine or anyaccessories;

1.23 “Estimated consumption” ariseswhennoactualreadingcanbetakenandisequivalenttotheexistingaverageconsumption;

1.24 “Existing customers”referstothecustomerswhohavealreadyenteredintoanagreementforthesupplyofmunicipalservices;

1.25 “Financial year”referstotheperiodstartingfrom1Julyinayearto30Junethenextyear;

1.26 “Implementing Authority” meanstheMunicipalManagerorhisnominee,actingintermsofSection100oftheLocalGovernmentMunicipalSystemsAct,2000(ActNo.32of2000);

1.27“Interest” isachargeleviedandcalculatedataratedeterminedbylawfromtimetotimeonall arrearamountsowing;

1.28“Market value”,inrelationtoaproperty,meansthevalueofthepropertydeterminedinaccordancewithsection46oftheAct;

1.29”MCB” meansMiniCircuitBreaker

1.30 “Meter audits”referstoaninvestigationtoverifythecorrectnessoftheconsumptionandsupplyofelectricityandwater;

(a) 1.30 “Municipality” whenreferredtoas:(b) acorporatebody,meansamunicipalityasdescribedinSection2oftheMunicipalSystemsAct,

2000(ActNo.32of2000);(c) ageographicareameansamunicipalareadeterminedintermsoftheLocalGovernmentMunicipal

DemarcationAct,1998(ActNo.27of1998).

1.31 “ Municipal Manager” meansthepersonappointedasMunicipalManagerintermsofSection82oftheLocalGovernmentMunicipalStructuresAct,1998,(ActNo.117of1998)andincludesanypersonactinginthatpositionortowhomauthorityhasbeendelegated;

1.32 “Municipal services”referstoanyservicesprovidedbythemunicipalityoranyauthorisedandcontractedserviceprovider,availableorappliedfor,orprovisionmadeforanyservice,forwhichitisentitledtochargeafeeorformulateatariff,payablebyacustomeroruser,thereof;

1.33 “Normal office hours “means08h00to16h00onweekdays;

1.34 “Official” referstoanemployeeofTheMsunduziMunicipality

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1.35“Occupier”meansanypersonwhooccupiesanypropertyorpartthereof,withoutregardtothetitleunderwhichheorsheoccupiestheproperty,

1.36“Owner” means(a) Inrelationtopropertyreferredtoinparagraph(a)ofthedefinitionof“property,means

apersoninwhosenameownershipofthepropertyisregistered;(b) Inrelationtoarightreferredtoinparagraph(b)ofthedefinitionof“property”,meansa

personinwhosenametherightisregistered;(c) Inrelationtoalandtenurerightreferredtoinparagraph(c)ofthedefinitionof“property”,

meansapersoninwhosenametheright isregisteredortowhomitwasgrantedintermsoflegislation;or(i) In relation to public service infrastructure referred to in paragraph (d) of the

definitionof“property”,meanstheorganofstatewhichownsorcontrolsthatpublicserviceinfrastructureasenvisagedinthedefinitionof“publiclycontrolled”,providedthatapersonmentionedbelowmayfor thepurposesof thisActberegardedbyamunicipalityastheownerofapropertyinthefollowingcases:

(ii) Atrusteeinthecaseofapropertyinatrustexcludingstatetrustland;(iii) Anexecutororadministrator,inthecaseofapropertyinadeceasedestate;(iv) A trustee or liquidator, in the case of a property in an insolvent estate or in

liquidation;(v) Ajudicialmanager,inthecaseofapropertyintheestateofapersonunder

judicialmanagement;(vi) Acurator,inthecaseofapropertyintheestateofapersonundercuratorship;(vii) Apersoninwhosenameausufructorotherpersonalservitudeisregistered,in

thecaseofapropertythatissubjecttoausufructorotherpersonalservitude;(viii) Alessee,inthecaseofapropertythatisregisteredinthenameofamunicipality

andisleasedbyit;or(a) Abuyer,inthecaseofapropertythatwassoldbyamunicipalityandofwhichpossession

wasgiventothebuyerpendingregistrationofownershipinthenameofthebuyer;(b) 1.37“Property” means-(c) Immovableproperty registered in thenameofaperson, including, in thecaseofa

sectionaltitlescheme,asectionaltitleunitregisteredinthenameofaperson;(d) Aright registeredagainst immovableproperty in thenameofaperson,excludinga

mortgagebondregisteredagainstaproperty;

Alandtenurerightregisteredinthenameofapersonorgrantedtoapersonintermsoflegislation;orPublicserviceinfrastructure;

1.38“Rates”meansamunicipalrateonpropertyenvisagedinsection229(1)(a)oftheConstitution;

1.39 “Service agreement”referstoawrittenagreementfortheconsumptionofelectricityand/orwaterandotherservicesasdeterminedfromtimetotimeincludingaconsolidatedaccount.

1.40 ”Terminated account”refersto:(a) thefinalaccountforservicesafterthecustomerhasleftthepremises,whetherornotthecustomer

hasgivennoticetoterminatethesupplyofservice;OR(b) thefinalaccountforservicesifthecustomerhascontravenedtheserviceprovisionsofthispolicy

andattendantmunicipalbylaws;

1.41 “Variable flow-restricting device” referstoadevicethatiscoupledtothewaterconnectionthatallowsthewatersupplytoberestrictedorclosed;

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1.42 “Visitation fee”referstothefeechargedforattendanceand/ordisconnection/reconnectionofanelectricity/watersupplywhenthesupplyisbeendisconnected/reconnectedduetonon-paymentand/ortampering,orwhereaccesstodisconnect/restricthasnotbeengained,whichfeeshallbedeterminedfromtimetotimebytheCouncil;

1.43 “Garnishee order/emoluments order”referstoacourtorderforthedeductionofanamountofmoneyfromthesalaryorotherincomeofacustomer.

1.44“Municipal Pay-Point”shallmeanallMunicipalCashOfficesandthirdpartyvendorswhoareauthorizedtocollectmoniesonbehalfofCouncil”.

2. INTRODUCTION

TheMunicipalitycannotdevelopthelocaleconomyandprovideacceptableservicestoitsresidentsunlessitreceivespayment,infull,ofallbillsraisedfortheservicesthatitprovides.TheMunicipalitymustdevelop,maintainandimplementacreditcontrolanddebtcollectionpolicythat isconsistentandcomplieswiththerelevantlegislation.WithregardtopaymentsexpectedfromregisteredindigentsandCounciltariffs,thispolicyistobereadinconjunctionwithTheMsunduziMunicipalityIndigentPolicyandTheMsunduziMunicipalityTariffPolicy.

3. OBJECTIVES

TheobjectivesoftheCreditControlandDebtCollectionPolicyare:

3.1Todefineaframeworkwithinwhichthemunicipalitycandevelopaneffectiveproceduretobillandcollectitsrevenues;

3.2Toensurethatallmoniesdueandpayabletothemunicipalityarecollectedandusedtodelivermunicipalservicesinthebestinterestsofthecommunity,residentsandratepayersandinafinanciallysustainablemanner as prescribed by theMunicipal SystemsAct, 2000 (ActNo. 32 of 2000), and other applicablelegislation;

3.3Tomaintainandimplementacreditcontrolanddebtcollectionpolicy,whichisconsistentandcomplieswithSection97oftheMunicipalSystemsAct,2000(ActNo.32of2000).

Toensurethatthemunicipalitydevelopscreditcontrolproceduresandmechanismsthatareconsideredtobeconsistent,fairandeffectivetoallitsconsumers.

4 UNDERLYING PRINCIPLES OF THIS POLICY

4.1Theadministrativeintegrityofthemunicipalitymustbemaintainedatalltimes.TheExecutiveCommitteemustfollowsupervisoryauthorityintermsoftheSystemsAct:Section99(a)(i).

4.2ThispolicyshalltakeeffectandbeenforceablefromthedateofpublicationoftheCreditControlBy-Laws.

4.3Thecollectionprocessmustbecost-effectiveandenforcementofpaymentforservicesrenderedmustbeprompt,consistentandeffective.

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4.4Unauthorisedconsumption,connectionandreconnection,thetamperingwithortheftof meters,servicesupplyequipmentandthereticulationnetworkandanyfraudulentactivity inconnectionwiththeprovisionofmunicipalserviceswillleadtodisconnectionsand/or restrictions,penalties,lossofrightsandcriminalprosecutions.

5. ROLES AND RESPONSIBILITIES OF THE MUNICIPAL MANAGER

5.1 IntermsofSection100oftheMunicipalSystemsAct,2000(ActNo.32of2000),theMunicipalManagerisresponsibleforimplementingthecreditcontrolanddebtcollectionpolicyandaccordinglyshallbe,interalia,responsibleforthefollowing:5.1.1 installandmaintainanappropriateaccountingsystem.5.1.2 billcustomers.5.1.3. demandpaymentonduedates.5.1.4. raisepenaltiesandinterestfordefaulters.5.1.5 appropriatepaymentsreceived.5.1.6. collectoutstandingdebt.5.1.7. providedifferent/alternatepaymentmethods.5.1.8 determinecreditcontrolanddebtcollectionmeasures.5.1.9 determineallrelevantworkproceduresfor,interalia,publicrelations,arrangements,disconnection/

reconnectionofservices,summonses,attachmentsofassets,salesinexecution,write-offofdebts,sundrydebtorsandlegalprocesses.

5.1.10 instructsattorneys toproceedwith the legal process (i.e. attachmentandsale inexecutionofassets,emolumentattachmentorders,etc.).

5.1.11 appointstafftoexecuteCouncil’spolicyandby-laws.5.1.12 determineinternalcontrolprocedures.5.1.13 monitorcontractswithserviceprovidersinconnectionwithcreditcontrolanddebtcollection.5.1.14 The Municipal Manager may delegate these responsibilities to the Chief Financial Officer.

However,thisdelegationdoesnotabsolvetheMunicipalManagerfrombeingheldaccountableforimplementingthispolicy.

5.1.15 TheMunicipalManager is to reportmonthly to theExecutiveCommittee, andquarterly to theCouncil,ontheactionstakenintermsof thispolicy,andonthepayment levelsfor theperiodsconcerned.

5.1.16 Although the Municipal Manager is held accountable for implementing this policy, it is theresponsibilityofallofficialsofthemunicipalitytopromoteandsupportthiscreditcontrolanddebtcollectionpolicy.

6 ROLES AND RESPONSIBILITIES OF THE COUNCIL

6.1 To,togetherwiththeChiefFinancialOfficer,setanannualimprovementtargetfordebtcollection,inlinewithacceptableaccountingratiosandtheabilityandperformanceofanyappointedexternalserviceproviders.

6.2 Toapproveareportingframeworkforcreditcontrolanddebtcollection.

6.3 Toconsiderandapproveby-lawstogiveeffecttotheCouncil’spolicy.

6.4 Toapprovefundsforthetrainingofstaffinconnectionwithcreditcontrolanddebtcollection.

6.5 IntermsofSection99oftheMunicipalSystemsAct,2000(ActNo.32of2000),theExecutiveCommittee,istomonitorandsupervisetheapplicationofthispolicy,andistoreporttoCouncilontheextentandsuccessofthemunicipality’screditcontrolactions.

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7 DUTIES AND FUNCTIONS OF COUNCILLORS

7.1 ToadheretoandconveyCouncilpoliciestoresidentsandratepayers.

7.2 ToadheretotheCodeofConductforCouncillors.

7.3 ThewardcommitteeswillactintermsofrolesandfunctionsasapprovedbyCouncil.

7.4 Thewardcommitteesareencouragedtoactivelypromotethispolicy,andtoensure,atthesametime,thatthemunicipality’scustomerserviceisofastandardacceptabletothecommunity.

8 DUTIES AND FUNCTIONS OF COMMUNITIES, RATEPAYERS AND RESIDENTS

By accessing services provided by the Municipality, customers have a duty, inter alia:

8.1 Topayservicefees,ratesonpropertyandothertaxes,leviesanddutiesimposedbythemunicipalityonorbeforetheduedateforpayment.

8.2 Toobservethemechanismsandprocessesofthemunicipalityinexercisingtheirrights.

8.3 Toallowmunicipalofficialsaccesstotheirpropertytoexecutemunicipalfunctions.

8.4 Tocomplywiththeby-lawsandotherlegislationofthemunicipality.

8.5 Torefrainfromtamperingwithmunicipalservicesandproperty.

9 AREA OF APPLICATION

9.1 This policy shall apply and be enforceable throughout the entire area of jurisdiction of The MsunduziMunicipalityandotherareasofsupplyandinsigninganagreement,thecustomeracknowledgesthatshouldhefallintoarrears,theMunicipalitymayimplementsuchcreditcontrolmeasuresasitdeemsnecessary.

9.2 The Council reserves the right to differentiate between different categories of consumers, debtors,servicesorservicestandardswhenapplyingthispolicy.TheCouncilwill,onapplicationofthispolicy,avoiddiscrimination as forbidden by theConstitution unless it is established that the discrimination is fair asallowedbytheConstitution.

10 APPLICATION FOR SERVICES AND SERVICE AGREEMENTS 10.1 Before being providedwith electricity,water and/or other services, andprior to taking occupation of

premises,onlytheownershallenterintoaserviceagreementfortheprovisionofsuchservices;thatis,notenantwillbepermittedtoenterintoanyserviceagreementinhis/hername,providedthat,intheeventthattheownerisnotresidentwithinthemunicipalarea,hemaysignapowerofattorneywhichpermitssomeotherpersontoactonhisbehalfforthepurposesofenteringintoaserviceagreement.

10.2 TheMunicipalitywillrequire,incaseswheretheownershipofapropertyresidesinatrust,bodycorporate,closecorporationoranyotherentitiyor legalperson,fulldetailsofthepersonresponsibleforpayingsuchaccountonbehalfofthatlegalpersonorentitytogetherwiththeapplicableidentityandregistrationdocumentation.

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10.3 AnewServiceAgreementwillonlybeenteredintoinrespectofaproperty,oncealloutstandingaccountsowedinrespectofthepropertyaresettledinfull.

10.4 Wheretheownerorconsumerhasfailedtoenterintoanagreementfortheprovisionofservices;theowner/consumerresponsibleforthepaymentofratesonthepropertywillbebilledfortheconsumptionofallmunicipalservicechargesapplicabletotheproperty.

10.5 Applicationformsareavailableatthemunicipalofficesandtheapplicationprocessmustoccuratleastten (10)working days prior to taking occupation of the premises.Thiswill ensure that services areavailablewhenoccupation is taken.Failure toadhere to the timeframemay result in customersnothaving theservicesavailablewhenoccupation is taken.Once theapplicationhasbeenapproved,aserviceagreementwillbeenteredintoandserviceswillcommence.

10.6 TheMunicipalitywill render the first account after the firstmeter reading cycle following thedateofsigningtheserviceagreementorassoonasisadministrativelypossible.

10.7 Consumers who illegally consume services without a valid service agreement will be subject todisconnectionand/orremovaloftheserviceandmaybeprosecuted.

10.8 Theserviceagreementshall setout theconditionsunderwhich theservicesareprovidedandshallrequire thesignatories thereto toagree toabideby theprovisionsof theMunicipalitiescreditcontrolpolicyandBylaws.

10.9 Theownerofthepropertyshallbejointlyandseverallyliablewiththeconsumerinrespectofallamountsdueforthemunicipalservicesprovidedtotheproperty.

10.10 Onthedeathofapartnermarried in termsof theapplicablemarriage legislationofSouthAfrica, thesurvivingspousemayhavetheaccounttransferredtogetherwiththeoutstandingdebtintotheirnamebycompletingaserviceagreementandadepositwillnotberequested.

Uponthedeathofaparent,theabovewillnotapplytothesiblings.Siblingswillberequiredtocompleteaserviceagreementwithwrittenconsentfromtheexecutoroftheestateandthenecessarydepositwillneedtobepaid.

10.11 The owner must declare ownership of and/or interest in any property within the jurisdiction of themunicipality. The ProcessManager: Income reserves the right to consider all debt in respect of allpropertiesdeclaredforfullpaymentbeforesuchnewserviceisapproved,intermsofSection102oftheSystemsAct.Councilreservestherighttosupplyservicestoowners/occupiersresidingonpropertieswithillegalstructuresoruses.

11 DEPOSITS AND GUARANTEES

11.1 Anycustomer,includingtheregisteredownersoftheproperty,istopayadepositonapplicationfortheprovisionofmunicipalservicesbeforethemunicipalityrendersanyservicetotheproperty.Depositsarepayablewhennewcustomerssignserviceagreementsandwhenexistingcustomersmovetoanewsupplyaddress.Alldepositsshallbepaidatleast10(ten)dayspriortooccupationofthepropertyorpriortothedateonwhichtheservicesarerequired,ifnotrequiredondateofoccupation.FailuretocomplywiththisclausemayresultinadelayintheconnectionofservicesandtheCouncilshallnotbeliableforanylossorprejudicesufferedbyacustomerasaresultthereof.

11.2 Subjecttotheprovisionsofclauses11.3,11.4and11.5hereunder,thecalculationfordepositsshallbedeterminedbyconsiderationofthefollowing:

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11.2.1 Anamountequaltotwomonthsconsumptionbasedonthreemonthsaverageconsumptionofservices;

11.2.2 Anamountequaltotwomonthsofrates;11.2.3 DepositonrentalasreflectedintheleaseagreementbetweentheMunicipalityandthelessee;11.2.4 Anyotherrelevantchargesandriskcriteria11.2.5 AsreflectedintheapprovedTariffPolicy

11.3 TheChiefFinancialOfficermayre-assesscustomerdepositsforalldomestic,commercialandindustrialcustomersthreemonthsaftertheinitialdepositdateandmay,asaresultofthisreassessment,requireanadditionaldepositfromthecustomer.

11.4 TheChiefFinancialOfficermayreviewandincreasedepositsannuallyand,inthecaseofacustomer’sservicebeingdisconnectedor restrictedasa result of non-paymenton threeoccasionswithina sixmonthperiodortampering,maynotwithstandingtheprovisionsofclause11.3above,increaseorimposeadeposit.ShouldthedepositbeincreasedasaresultofthisreviewthecustomermustmakepaymentoftheincreasedamountinlinewiththeinstructionfromtheChiefFinancialOfficer.Whentheincreaseresultsfromtheservicesbeingdisconnectedorrestrictedasaresultofanypayment/non-paymentortampering,theChiefFinancialOfficermaydemandimmediatepaymentoftheincreasedamountofthedeposit.

11.5 Theoutcomeofthereviewcontemplatedinclause11.4shallbecommunicatedtothecustomerintheeventofanyvariationinthedepositarrangementsbeingrequired.

11.6 Nointerestwillaccumulateorbepaidonanydepositsuponterminationoftheservice.Onlytheoriginaldepositamountwillberefunded,subjecttoensuringthatarrearsonanyaccountsattachedtothepropertyaresettled.

12 ACCESS TO PROPERTY TO READ METERS

12.1 Ifthemunicipalityisunabletoreadanymeteronanypropertybecausethemeterhasbeenrenderedinaccessible,themunicipalityshallestimatetheconsumptionoftheserviceconcernedandthereafterbilltheconsumerforthemonetaryvalueofsuchestimatedconsumption.

12.2 IntheeventthattheCouncilcontinuestobeunsuccessfulinobtainingaccesstothepropertyormeterforaperiodof3monthsand,therefore,isunabletoobtainanaccuratemeterreading,theChiefFinancialOfficer or his authorised representativemay disconnect the supply via the Central Distribution Unit(CDU).

12.3 Themunicipalitywillleavenoticesatpropertieswhenameterreadingcouldnotbeobtained.Itistheobligationoftheownertoensurethatareadingisavailableforbillingpurposesandincasesliketheseownersmustwithin48hoursmakearrangementswiththeMunicipalitytoobtainmeterreadings.

12.4 Readingsprovidedbyconsumersaresubjecttothefollowing:

• Readingswillbepermittedprovidedthemunicipalityobtainsanyfinalreadingshouldtheconsumermovetoanothersupplyaddress.

• Consumersmaybeliableforafeetocoverthecostsofobtainingareadingifnoadvancewarningisgivenandspecialarrangementsarerequiredtoobtainareading.

• TheMunicipalityisentitledtomakesuitableadjustmentstothereadingsshouldaconsumerfailtoensurethatafinalreadingisobtained.

• Anauditreadingduringthenormalreadingcyclesmustbeobtainedatleastonceevery6months.Ifaspecialauditreadingbecomesnecessarythiswillbedoneatthecostoftheconsumer.

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• TheconsumermaysupplyvoluntaryreadingssubjecttocompliancewiththispolicyandBy-laws.TheChiefFinancialOfficermay,however,cancelthisoptioniftheconsumerfailstorenderreadingsontwoormoreconsecutiveoccasions.

13 ACCOUNTS, BILLING AND PAYMENT

13.1 TheCouncilshallproduceandpost/dispatchoneconsolidatedmonthlybill toconsumersforservicessuppliedoravailable (interalia,electricity,water, refuseandseweragecharges)and for rates leviedon property within themunicipal area unless, for whatever reason, the rates account has not beenconsolidatedwiththeservicesaccountinwhichcaseseparatemonthlyaccountswillbeposted.

13.2 Theaccount/invoicewill,interalia,reflectallrequirementsspecifiedintheMunicipalPropertyRatesActandthefollowingdetails:• AccountHolder• Accountnumber;• Postaladdress;• Residence/Erfdetailstowhichtheserviceshavebeensupplied;• Theconsumptionorestimatedconsumptionforeachmeteredservicewithinaspecifiedperiod;• Theapplicabletariff;• Themonthlyamountdueforpropertyratesandthetotalannualamountdue;• Thevaluationoftheproperty;• Theamountdueonanyotherservicecharges;• Thetotalamountdueandpayable;• Theamountinarrears;• Thefinaldateforpayment• Themethodofpayment,nameandlocationofanymunicipalofficesandauthorisedagentswhere

paymentsmaybemade,and• A notification that failure to settle the total amount dueby final datewill result in termination or

restrictionofservices.

13.3 TheMunicipalityshall furnish theconsolidatedaccount to theconsumeraddress, inSouthAfrica,asspecifiedbyeachconsumerintheservicesagreement.However,non-receiptofanaccountdoesnotnegate the responsibilityof thecustomer topay theamountowingbyfinaldatenorprevent interestchargesanddebtcollectionprocedures.Intheeventofnon-receiptofanaccount,theonusrestsontheaccountholdertoobtainafreecopyofthemostrecentaccount,beforethefinaldate.

13.4 TheaccountholdershallnotifytheMunicipalityinwritingofanychangeofaddress,includingane-mailaddress,andcontactdetails.NotwithstandingthefactthataconsumerhasnotreceivedanaccountasaresultofhisfailingtonotifytheCouncilofhischangeofaddressorduetodelaysonthepartofexternalserviceproviders,theaccountholderisneverthelessliableforpaymentofsuchaccount.

13.5 Accountsmustbepaidinfullonorbeforethefinaldateasindicatedontheaccount.Failuretocomplywiththissectionshallresultincreditcontrolmeasuresbeinginstitutedagainsttheconsumer.Interestonarrearswillaccrueafterfinaldateiftheaccountremainsunpaidirrespectiveofthereasonfornon-payment.

13.6 PaymentsforaccountsmustbereceivedataMunicipalPay-Pointbycloseofbusinessonorbeforethefinaldate.Inthecaseofanyelectronicpaymentsthemoneymustbereceivedinthemunicipalbankaccountnolaterthanthecloseofbusinessonthefinaldate.Inthecaseofmoniespaidtoagents,themoneymustbedepositedwiththeagentpriortothecloseofbusinessonfinaldateandproofthereofmayberequiredtovalidateanyclaims.

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13.7 Thefollowingmethodsofpaymentandpaymentpointscanbeused:• Municipalpaypoints• Cash,VisaandMastercardpayments(asavailable)canbemadeatthemunicipality’scashoffices,

anySouthAfricanPostOfficeandtheiragencies,FirstNationalBankandEasypayOutletse.g.Pick&Pay,Checkers,etc.

• Chequepaymentswillonlybeacceptedatthemunicipality’sheadoffice;thatis,no3rdpartyagenciescanacceptcheques;

• Electronicbankingpaymentsdirectlyintothemunicipality’saccount;• Post;• TheMunicipalityreservestherighttodiscontinueacceptingchequepaymentsifchequepayments

weredishonoured.

14 PROPERTY RATES

14.1 IntermsoftheCouncil’sRatesPolicyandinaccordancewiththeapprovedratestariff,propertyrateswillberaisedonamonthlybasis.

14.2 Allpropertyratesnotpaidbyfinaldatewill,inadditiontoanyproceduresasprescribedbesubjecttocreditcontrolanddebtcollectionproceduresasstipulatedinthispolicy.

15 INTEREST ON ARREARS AND OTHER PENALTY CHARGES

15.1 Interestshallbechargedonallarrearcapitalamountsforafullmonth,irrespectiveofwhenpaymentismade.

15.3 TheChiefFinancialOfficerwillbeentitledtoraisethefollowingchargesinadditiontotheinterestchargecontemplatedinclause15.1:• In the case of arrear rates, a collection charge equal to 10%will be raised on all arrear rates

installments,afterthelastworkingdayofthefirstmonthsucceedingthefinaldateforpaymentofthetwelfthmonthlyinstallment.

• chargesfordisconnectionorreconnectionofelectricalservices• Chargesforrestrictionorremovalofwaterservices• chargesforreconnectionorreinstatementofwaterservices• chargesfornoticesofdefaultandothercorrespondence• penaltychargesforillegalreconnections• penaltychargesfordishonouredcheques

16 AGREEMENTS AND ARRANGEMENTS FOR PAYMENT OF ARREAR ACCOUNTS

16.1 TheChiefFinancialOfficerisauthorisedtoenterintoagreementswithaccountholdersinarrearswiththeiraccountsand tograntaccountholdersextensionsof time forsettlementof theamountsdue toCouncil.

16.2 Whereanaccountholderinarrears,isabusinessorcommercialconcern,aminimum of 50% of the total overdue amount and the current amount due, asan initial payment, shall bepaid, and thebalanceoftheaccountshallbepaidinequalinstallmentsoveramaximumperiodofsixmonths.

UponwrittenapplicationbyanaccountholderthemaximumrepaymentperiodmaybeextendedandthedepositreviewedatthediscretionoftheConsolidatedBillingManagersubjecttothesupplyofthepreviousyearsauditedfinancialstatements,sixmonthsbankstatements,validtaxclearancecertificateandanyotherdocumentationdeemedrelevant.

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Anyfuturemonthlycurrentaccountsshallbepaidonorbeforethefinaldatesforthemonthinquestion.Inrespectofbusinessorcommercialaccountholderwhoareinarrears,interest will be raised in terms of this by law and the MFMA section 64 (2)(g).

16.3 Wherea customer in arrears is a domestic consumer,10% of the total overdue balance and the current amount due, as an initial payment, and the balance of the account shall be paid in equalintallmentsoveramaximumperiodoftwelvemonths.

Uponwrittenapplicationbyanaccountholdertherepaymentperiodmaybeextendedtoamaximumofsixtymonthsandapercentagelowerthantheabove10%maybepermittedatthediscretionoftheConsolidatedBillingManager, subject to thesupplyof threemonthsbankstatementsandanyotherdocumentationdeemedrelevant.• Applicationsreceivedfromindigentswithextensivedebtmustincludethedocumentationreferredto

belowandadheretothecriteriasetbelow:• Evidenceofgovernmentgrant• Evidenceofachildgrant• Affidavitfromfamily/persondeclaringassistance• ConversiontotheIndigenttariff• Propertymaybesubjecttoanaudit

InspectiontodeterminecorrectMiniCircuitBreaker(MCB)

Anyfuturemonthlyaccountsshallbepaidonorbeforefinalthedate.Inrespectofdomesticconsumerswhoareinarrears,interest will be raised in terms of this by law and the MFMA section 64 (2)(g).

Any application with a repayment period greater than sixty months will be referred to the Chief Financial Officer or his delegated authority for approval.

16.4 Wherethemunicipalityhasforanyreasonbeenunabletobilltheaccountholderandadebtaccruesinexcessofthenormalaverageaccount,afurtherextensionoftime,inadditiontothe12monthperiodmentioned in16.3above,maybegrantedby theChiefFinancialOfficer,which shall not exceed themaximumperiodequivalenttotheperiodoverwhichtheincorrectchargewasapplied.

16.5 Shouldanaccountholderbreachthearrangementinanyway,thebalanceofthearrearaccount,together with thebalanceof interestoutstandingon theaccount, shall immediatelybecomedueandpayabletothemunicipality.

16.6 Anaccountholderwhofailstocomplywithanycreditarrangementshall not be permitted to enter into any further arrangement or extension of timeforpaymentandshallhavetheservicesterminated,howeveranaccountholderwhobringsthecreditarrangementuptodatebyanimmediatepaymentshallhavetheservicesreconnectedassoonasispracticallypossibleandthearrangementreinstatedonlyonthefirstoffence.

16.7 Anaccountholderwho fails tocomplywithanyarrangementofdebtshallhave theelectricitycreditmeterorprepaidmeterremoved,thewaterservicerestrictedandtheserviceagreementterminated.Thedepositonanyoutstandingamountswillbeallocatedagainstanyarreardebt.

16.8 Onlydebtorswithpositiveproofof identityoranauthorisedagentwithaPowerofAttorneyshallbe

permittedtoenterintoanAcknowledgmentofDebtagreementwiththeCouncil.

16.9 Whereadebtorisaclosecorporation,trust,oracompany,thepersonwhosignsanacknowledgmentofdebtonbehalfofsuchclosecorporation,trustorcompany,shallproducewrittenproofthatheisauthorisedtosignsuchacknowledgmentonbehalfofallmembersand/ordirectorsoftheclosecorporation,trust,orthecompany.

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16.10 Section28oftheMunicipalPropertyRatesActwillbeenforcedtorecoverarrearratesfromtenantsandoccupiers.

16.11 Anyaccountholderwhomakesanarrangement intermsof16.2or16.3shallensurethattheownercompletesawaiverintermsofsection118(i)oftheSystemsAct(Act32of2000).

17 ALLOCATION OF PAYMENTS AND PART-PAYMENTS

17.1 Receiptofthetotaloutstandingmonieswillbeallocatedtothecreditoftheaccountinfull.• Ifadebtorpaysonlypartofanyamountdue,theChiefFinancialOfficershallallocatesuchpayment

inthefollowingorder:• toanyunpaidpropertyrates;• toanyunpaidinterestraisedontheaccount;• toanyothersundrydebtors(miscellaneous);• tohousingrentsandinstallments;• toanyunpaidrefusecollectioncharges;• toanyunpaidseweragecharges;• toanyunpaidwatercharges;• toanyotherunpaidchargesand• toanyotherunpaidelectricitycharges

17.2 AcustomershallnotbeentitledtoallocateanypaymentmadetoanyportionofthetotaldebtduetotheCouncil.

DISHONOURED AND OTHER UNACCEPTABLE CHEQUES

18.1 Refusalbybankstohonourpaymentsbychequeisregardedasnon-payment,uponwhichtherelevantdebtorissubjecttocreditcontrolmeasures.

18.2 Themunicipalityshall,attheearliestopportunity,beentitledtodisconnectorrestrict,asthecasemaybe,theelectricityand/orwatersupplyofacustomerwhohasofferedachequeaspaymentformunicipalservicesifsuchchequeordebitorderisreturnedordishonouredbythefinancialinstitution.

18.3 AconsumertenderingachequereferredtoinClause18.2shallbeliableforalladministrationchargesandbankfeesincurredasaresultofsuchtransaction.

18.4 Dishonouredchequesaretobekeptonfileandcopiesthereofwillonlybeissuedtoaccountholdersonrequestiftheaccount,includinglegalcosts,ifany,ispaiduptodateafterthereversalofthedishonouredpayment.

18.5 Aconsumerwhohastenderedthreedishonouredchequesinany12monthperiodwillnotbeallowedtomakefurtherpaymentsbycheque.AbankguaranteedchequemaybeacceptedbytheChiefFinancialOfficer.

19 QUERIES IN RESPECT OF ACCOUNTS

19.1 Themunicipality’sservicecenterscanbecontactedforallaccountqueries.

19.2 Anyqueryinrespectoftheamountdueandpayableontheconsolidatedbillmustbelodgedinwriting,atthemunicipality.

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19.3 Acustomerwhohaslodgedanenquiryisnotrelievedoftheresponsibilitytomaintainregularpaymentonhisaccount.Intheeventofanaccountholderprovidingreasonablegroundsasabasisforaqueryonanyitemoritemsonthemonthlymunicipalaccount,noactionshallbetakenagainsttheaccountholderprovidedtheaccountholderhaspaid,byduedate,anamountequaltothemonthlyaverageofthethreemostrecentundisputedaccountsinrespectoftheserviceindispute,aswellasallundisputedbalanceson such account.

20 DISCONNECTIONS/RESTRICTIONS OF SERVICES

20.1 TheCouncilisobligedtoissueanyfinalrequestnoticesorotherreminderstocustomerswhoseaccountsareinarrears,priortodisconnectionintermsofthePromotionofAdministrativeJusticeAct,2000(ActNo.3of2000)insofaraspossible.

20.2 Theconsolidatedaccount,ifinarrearsfor30daysormore,shallreflectawarningmessage.

20.3 In theevent that fullpaymentof theconsolidatedaccount, includinganyaccumulatedarrears, isnotreceivedonorbeforeduedate,theelectricitysupplyandthereafterthewatersupplyshallbedisconnected/restricted,unlessaformalacknowledgementofdebthasbeensignedbythecustomerandthenecessaryarrangementforanextensionofpaymenthasbeenapprovedbytheChiefFinancialOfficer.

20.4 Eventhoughacustomermayhaveconcludedsatisfactorycreditarrangements,theCouncilisnotobligedtoeffecta reconnectionofserviceson theday thatpayment is receivedor theagreementhasbeensignedbutshalldosoassoonaspossibleaftersucharrangementhavebeenapprovedbytheChiefFinancialOfficer.

20.5 Whereacustomer’sservicesaredisconnected/reconnected,thecustomershallbechargedavisitationfee,asdeterminedbythecouncilfromtimetotime,whichshallbepaidpriortoservicesbeingreconnected.

20.6 Whereacustomerorowner’saccountisinarrearsandnocreditarrangementforthesettlementofanyoutstandingdebthasbeenenteredinto,and,whethertheservicestothepropertyhavebeendisconnected/restrictedornot,theCouncilmay,regardlessofwhethertheserviceagreementisterminatedornot,implement theprocedures fordebtcollectionassetout inSection23of thispolicy, if suchaction isdeemedbytheChiefFinancialOfficertobeinthebestinterestsoftheCouncil.

20.7 Shouldtheterminationofservices,inrespectofanarrearaccountresultintheendangermentofthelifeofanyperson,theChiefFinancialOfficermayappropriatelyrestrictratherthanterminatetheservicesinquestion.

21 RECONNECTION/REINSTATEMENT OF TERMINATED/RESTRICTED SERVICES

21.1 Serviceswhichhavebeenterminatedorrestrictedshallbereconnectedorreinstatedbythemunicipalityonlywhenallthefollowingconditionshavebeenmet:(a) the arrear account has been paid in full, including the interest raised on such account; or an

acceptablearrangementhasbeenenteredintowiththemunicipalityforthepaymentofthearrearaccount,includingtheinterestraisedonsuchaccount;oraquery,ascontemplatedinSection19,hasbeenresolvedandarrangementsforpaymentasapprovedbytheChiefFinancialOfficerhavebeenconcluded;

(b)arevisedserviceagreementhasbeenenteredintooranexistingonereinstatedwiththemunicipality,ascontemplatedinSection10ofthispolicy;and

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(c) acashdeposit,asdeterminedbytheChiefFinancialOfficerintermsofSection11,hasbeenpaidtothemunicipality.

21.2 Where consumers using prepaid meters have arrear amounts in respect of other ratesand/orservicesrenderedbythemunicipalitytheCouncilmayallocateaproportionateamountasdeterminedbytheChiefFinancialOfficer,ofanyfutureprepaidpurchasestoarrearamountsuntilsuchtimeasthearrearshavebeenbroughtuptodate.

22PERIOD FOR RECONNECTION OR REINSTATEMENT

22.1 Themunicipality shall endeavour to reconnect or reinstate terminatedor restricted serviceswithin 3(three)workingdaysafterthedateonwhichtheconditionssetoutinSection21ofthispolicyhavebeenmet,unlessunabletodosobecauseofcircumstancesbeyondthecontrolofthemunicipality.

23 PROCEDURE FOR DEBT COLLECTION AND WRITE OFF

Whereconsumeraccountsareinarrears,theChiefFinancialOfficerisauthorisedtoinstituteanyremedyavailableinlawforthepurposesofrecoveringsuchdebt.

23.1 TheChiefFinancialOfficermayissueafinaldemandforallamountsinarrears.

23.2 TheChiefFinancialOfficermaywithholdpaymenttosupplierswhoseaccountsareinarrearsintermsoftheSupplyChainManagementpolicy.

23.3 TheAccountingOfficermaydirecttheChiefBuildingInspectortowithhold/rejecttheapprovalofbuilding

plansrelatingtoimprovementsonpropertiesiftherearearrearsonthatproperty.

23.4 Arrearratesmayberecoveredfromtenants/occupiersandoragentsassetoutinsections28oftheMunicipalPropertyRatesActno6of2004.

23.5 Whereconsumersusingprepaidmetershavearrearamountsinrespectofotherratesand/orservicesrenderedbythemunicipalitytheCouncilmayremovetheprepaidmeteredsupplyandanewapplicationforaprepaidsupplywillberequired.Councilreservestherighttorefuseaprepaidsupplyininstancesofhabitualarrears.

23.6 Councilwillhavesolediscretioninapprovinganywriteoffsofdebt.

23.7 TheChief FinancialOfficer shall as soon as possible after 30 June each year, ormore regularly ifrequestedbyCounciltodoso,presenttotheCouncilareportindicatingtheamountofthearrearsthathavebeenwrittenoffduringthefinancialyear,togetherwiththereasonsforthewriteoff.

23.8 TheExecutiveCommitteemayrecommendtheapprovalofpublishingthenamesofaccountholders,personsorentitieswithhighdebtvalue.

24 RECOVERY OF OVERDUE RATES

24.1 TheMunicipalityshalltakeappropriatestepsagainsttheownerofapropertywheretheratespayableonsuchpropertyareinarrearsandshallhavethepowertosueforandrecoverallrateswhicharedueandpayabletotheMunicipality

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24.2 Wheretheratespayableonapropertyareoverdue,anoticestatingthatsuchratesareoverdueshallbeaddressedtotheownerofthepropertyinthemannerprovidedforintermsofSection35oftheMsunduziMunicipality’s Rates Policy calling upon the owner to pay such outstanding rates and the penaltiesaccruedoraccruingthereon.

24.3 Whereapropertyinrespectofwhichtheratesareoverdueorinarrears,andthepropertyisownedbymore thanoneperson, thenoticeprovided for insubsection2above,shallbeserved in themannerprovidedforinSection35(4)oftheMsunduziMunicipality’sRatesPolicy.

24.4 Should the outstanding rates and any penalties on a property not be paid, or should a satisfactoryarrangementnotbemadewiththeMunicipalitybytheownerforthepaymentofsuchoutstandingratesandpenalties,andintheeventthatthereisnoresponsefromtheowner,servicestothepropertyshallbeterminated.

24.5 Atanytimeafterthelastworkingdayofthesecondmonthsucceedingthemonthinwhichtherefallsthe final date for the payment of rates, theMunicipalitymay cause to be published in one ormorenewspaperscirculatingintheareaofjurisdictionoftheMunicipality,anoticestatingthat,ifthearrearsofratesinrespectofthefinancialyearspecifiedinthenoticetogetherwithallpenaltiesinrespectthereofuptothedateofpayment,arenotpaidwithinsixmonthsofthedateofthepublicationofthenotice,applicationwillbemadetoacourtofcompetentjurisdictionforanorderforthesalebypublicauctionofthepropertiesinrespectofwhichsuchratesandpenaltiesareinarrearandforthepaymentoutoftheproceedsthereofofallarrearratestogetherwithpenaltiesandcostsinrespectthereof.

24.6 If,after thepublicationofanotice in termsof subsection5above,such ratesandpenaltiesarenotpaidwithin theperiodstated therein, theMunicipalityshallmakeapplication toacourtofcompetentjurisdictionshowingtheamountofratesandpenaltiestheninarrearandthatallnoticeshavebeengivenandrequestingthecourttoorderanysuchrateablepropertyorsomuchthereofasmaybesufficienttosatisfytheamountsoutstandingintermsofratesandpenalties,tobesoldbypublicauctionandtheproceedsthereoftobepaidintocourt,andtodirectpaymenttotheMunicipalityofallratesandpenaltiesaccruedinrespectofthedateofsuchsaletogetherwiththecostsofobtainingthesaidorderandallexpensesofsuchsale.

24.7 Anyamountsdueformunicipalservicefees,propertyratesandothermunicipaltaxes,leviesanddutiesrecoveredasaresultofthesaleofapropertybypublicauctionintermsofanordergrantedbyacourtof competent jurisdiction, are a charge upon the property so sold and enjoy a preference over anymortgagebondregisteredagainstsuchproperty.

24.8 Ifbeforethesaleofanyrateablepropertyintermsofanordermadeundersubsection6abovethereisproduced to theDeputySheriff orotherpersonchargedwith thesale thereof, a certificateby theMunicipalitythatallamountsowingintermsofoutstandingandarrearratesandpenaltychargeshavebeenpaid,thesaidpropertyshallbewithdrawnfromthesale.

24.9 Notwithstandingthatalloutstandingandarrearratespenaltychargesmayhavebeenpaidbeforethesaidsale, theMunicipalityshallnotbe liable toanypersonforany lossordamagesufferedbysuchpersonby reasonof thesaleofanysuchproperty in respectofwhichnosuchcertificatehasbeenproducedtothesaidDeputySherifforotherperson.

25 ILLEGAL TAMPERING WITH AND/OR THEFT OF SERVICES

TheMunicipalitydoesnotcondonetheftandfraudofmunicipalservicesandwillmonitortheservicenetworks forsignsoftamperingorirregularities.Furthermore,

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25.1 Waterandelectricitymeteringandconnectionequipmentremainthepropertyof themunicipalityandanyoneinvolvedininstancesoftampering,damagingortheftthereofwillbeliableforcriminalprosecution.

25.2 Withregardtoelectricityservices,iftamperingofanynatureortheftofsuchservicesisidentified,theelectricitysupplytothepropertymaybediscontinuedbytheremovalofthemeterandthecableandthewatersupplymayberestrictedand/ordiscontinued.

25.3 Iftherestrictedwatersupplyistamperedwithoranyvariableflow-restrictingdeviceremoved,thewatersupplywillbediscontinued,theserviceconnectionremovedandthecustomer’sserviceagreementwiththeCouncilwillbecancelled.Thecustomer’sdepositshallbeoffsetagainstanyamountsowedtotheCouncil.

25.4 OnceCouncilbecomesawarethatanyterminatedorrestrictedservicehasbeenirregularlyreconnectedorreinstated,thenecessaryactiontoremedythesituation,whichcouldincludetheMunicipalManagerreportingsuchactiontotheSouthAfricanPoliceService,willbeimplemented.

25.5 Alloutstandingamounts,includingallmeteredconsumptionsincethedateoftheillegalreconnection,or theestimatedconsumption ifareliablemeterreading isnotpossible,shallbepaid infull togetherwith the required deposit, before any reconnection/reinstatement and new services agreements areconsidered.However,thereceiptofpaymentwillnotnecessarilyimpactonnorprejudiceanylegalorcriminalproceedingsagainstthecustomer.

25.6 Cost related charges, as reflected in theapplicableRegister ofTariffs andChargeswill be imposedwhereillegaluseofwaterandelectricityisdetected.

25.7 Anamountequaltoanaverageofthreemonthsnormalconsumptioninthecaseofwaterorelectricitywillbeleviedontheaccountintheinterimfortheunmeteredperiodandispayablebeforetheserviceisreinstated.

25.8 If Council isof thereasonableopinionor is inpossessionofprimafacieevidenceindicatingallegedtampering/illegaluse, theCouncilmaypublish thenamesof theaccountholders,personsorentitiesresponsibleforsuchactivity.

26 PROPERTY SERVICES AUDIT

WhentheservicessuppliedbyCounciltoapropertyaresubjectedtoanauditthefollowingrulesshouldbeappliedsubjecttoconfirmationandsupplyofrelevantwrittendocumentationfromtherelevanttechnicaldepartment:

26.1 IftheMCBsizeonthepropertymeterdiffersfromtheMCBsizeraisedontheconsolidatedbillthenthefollowingapplies:• ThedifferenceinAMPStoberaised,backdated36monthsorfromthedateofapplication(maximum

36months)• IftheelectricityconsumptionindicatesthatusageisfarlessthantheactualMCBontheproperty

then theAMPbackchargeshouldbe reversedand theconsumerbe required to re-apply foranMCB change to the originalMCB size required.Where the usage indicates a correlation to theincorrectMCBthenthebackchargeshouldbelimitedto12monthsbecausethecorrect internaladministration/technicalprocedureswerenotcompliedwith.Wherenecessary,aloaddemandtestwillbeperformedbyaregisteredprivateelectricianattheconsumerscost,toconfirmtheexistingdemand.

• Ifasubsequent request foran increase inMCBisdoneafter theaboveallbackchargeswillbereinstated.

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26.2 Ifanactualmeterreadingisraisedontheconsolidatedbillandisgreaterorlessthanthereadingheldonthebillingsystem,therequiredconsumptionmustbeadjustedandtheconsumer,ifrequired,begivenanextendedrepaymentperiodequaltotheperiodofthebackcharge.(Referalsoto16.4)

26.3 FaultyorstoppedmeterswillbereplacedatCouncilscost.Actualreadingswillberecordedoverathreemonthperiodonthenewmeterandtheaverageofthisthreemonthperiodwillbeusedtodetermineachargebasedonamaximumperiodof36months.Anyconsumptionchargesraisedduringthisperiodwillbeoffsetagainsttherevisedcharge.

26.4 Backchargesof36monthswillberaised inrespectofmeters thathavebeentamperedwith for thefollowingreasons:• Brokensealsinordertotamperwiththebridgescrew• Bridgewireillegallyconnected• IllegalbypassingofmeterandofMCB• DirectconnectiontomainsupplyincludingCDU• Directconnectiontoanotherconsumer• MetertamperedwithorMCBratinghasbeenscratchedoff• Anyotherillegalactivitynotcoveredabove

26.5 Ifaconsumerisconductingahomebusinessonadomesticpropertywheredailyratesarechargedforaccommodationorthepropertyisnolongerusedfordomesticpurposesandusedsolelyforbusinesspurposesthenbusinesstariffsmustbeappliedforservices.AletterofconsentfromtheTownPlanningSection or proof of rezoning for business purposesmust be produced by the account holder uponapplicationforservices.Ifdomestictariffshavebeenappliedinerrorandtheaccountholdercanproducea letterofconsentorproofofrezoningthenbusinesstariffswillbeappliedfromthebeginningof theCouncilsfinancialyearinwhichtheerrorisdetected.Ifnoletterofconsentorproofofrezoningcanbeproducedthenbusinesstariffsmustbeappliedforamaximumof36monthsorfromdateofapplicationforservices.

27 WATER LEAkS

Whereawaterleakhasoccurredonapropertytherelevantby-lawswillbeapplied.

28 UNOCCUPIED PREMISES

28.1 Whenaconsumerterminatesaservicesagreementandnonewserviceagreementisenteredintowiththemunicipality,thepropertyshallbedeemedtobeunoccupied.

28.2 Wheneverwaterand/orelectricityconsumptionisrecordedatapropertythatisdeemedtobeunoccupied,anaccountwillberaisedandforwardedtotheownerofthepropertyforpayment.

28.3 Notwithstandingtheabove,themunicipalityshallhavethepowerto invoketherelevantprovisionsofsection24.

29 MUNICIPAL STAFF AND COUNCILLORS

29.1 Any member of staff/ Councillor of the Municipality may not be in arrears with the Municipality forratesand/orservicechargesforaperiodlongerthanthreemonths.TheMunicipalitymaydeductanyoutstandingamountsfromthesalaryofsuchmemberofstaffafterthisperiod,inaccordancewiththeMunicipalSystemsAct,2000(ActNo.32of2000).

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29.2 Iftheemployee/councillorprovidesreasonablegroundsasabasisforaqueryontheaccount,noactionshallbetakenagainstsuchemployee/councillorprovidedthattheemployee/councillorhaspaid,byduedate,anamountequaltothemonthlyaverageofthemostrecentundisputedaccountsinrespectoftheserviceindisputeaswellasanyundisputedbalancesonsuchaccount.

30 REPORTING AND PERFOMANCE MANAGEMENT

30.1 TheChiefFinancialOfficershallreportmonthlytotheMunicipalManagerinasuitableformattoenabletheMunicipalManagertoreporttotheExecutiveCommitteeassupervisoryauthorityintermsofSection99oftheMunicipalSystemsAct,2000(ActNo.32of2000),readwithsection100(c).

If,intheopinionoftheChiefFinancialOfficer,CouncilwillnotachievecashreceiptincomeequivalenttotheincomeprojectedintheannualbudgetasapprovedbyCouncil,theChiefFinancialOfficerwillreportthiswithmotivationtotheMunicipalManagerwhowill immediatelymoveforarevisionofthebudgetaccordingtorealisticallyrealisableincomelevels.

TheExecutiveCommitteeshall,atintervalsof3months,reporttoCouncilascontemplatedinSection99(c)oftheMunicipalSystemsAct.

31 COMMUNICATION OF POLICY TO ACCOUNT HOLDERS

31.1 Themunicipalitywillannually,atitsowncost,publishanoticeoftheCreditControlandDebtCollectionPolicyinthelocalmedia.Acopyofthepolicywillbepostedonthemunicipality’swebsiteandhardcopieswillbedisplayedatallmunicipalofficesandservicecenters.

31.2 Councillorsmust, fromtime to time,addresswardcommitteeson thecontentsof thepolicyandanyamendmentsthereto.

32 BY-LAWS TO BE ADOPTED

32.1 By-lawsshallbeadoptedtogiveeffecttotheCouncil’screditcontrolanddebtcollectionpolicy.

32.2 Theby-lawsare tocomplywith the requirementsof theMunicipalSystemsAct,2000(ActNo.32of2000),theWaterServicesAct,1997(ActNo.108of1997),theElectricityAct,1987(ActNo.41of1987)andtheMunicipalFinanceManagementAct,2003(ActNo.56of2003).

33 ENFORCEMENT OF OTHER LEGISLATION

33.1 Inadditiontothecreditcontrolanddebtcollectionprovisionscontainedinthispolicyandthepublishedby-lawsrelatinghereto,theCouncilmayenforceanyotherrightsorexerciseanypowerconferreduponitbytheMunicipalSystemsAct,2000(No.32of2000),theWaterServicesAct,1997(ActNo.108of1997),thePropertyRatesAct,2004(ActNo.6of2004)andtheMunicipalFinanceManagementAct,2003(ActNo.56of2003)andanyotherapplicablelegislation.

33.2Intheeventofaninconsistencybetweentheprovisionsoftheseandanyotherby-laws,theprovisionsoftheseby-lawsshallprevail.

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indigent Policy

1. Definitions

Inthesebylaws,unlessthecontextindicatesotherwise-

“Childheadedhousehold”meansahouseholdwherebothparentsaredeceasedandwherealloccupantsofthepropertyarechildrenofthedeceasedandareallunderthelegalagetocontractforservicesandareconsideredasminorsinlawbythestate;

“Council” refersTheMsunduziMunicipalityand itssuccessors in lawand includes theCouncilofthatmunicipality or its ExecutiveCommittee or any other body acting by virtue of anypowerdelegatedtoitintermsoflegislation,aswellasanyofficialtowhomtheExecutiveCommitteehasdelegatedanypowersanddutieswithregardtothispolicy;

“Consumption”meanstheordinaryuseofmunicipalservices,includingwater,sanitation,refuseremoval,

andelectricityservicesfordomesticorhouseholdpurposes;

“Electricity” meansthemonthlychargeleviedbythemunicipalityforthesupplyofelectricityinexcessofthefreebasiclimitsaspertheapplicableRegisterofTariffsandCharges;

“Finaldate” intheabsenceofanyexpressagreementinrelationtheretobetweentheCouncilandtheaccountholder,referstothedatestipulatedontheaccountanddeterminedfromtimetotimeasthelastdateonwhichtheaccountmustbepaid;

“Freebasicelectricity” means the maximum amount, volume or consumption of electricitydetermined by resolution of theCouncil from time to time thatwill be provided free ofchargeasreflectedintheapplicableTariffRegister;

“Freebasicwater” meansthemaximumamount,volumeorconsumption,inlinewiththeWaterAct,ofwaterdeterminedbyresolutionoftheCouncilfromtimetotimethatwillbeprovidedfreeofchargeasreflectedintheapplicableTariffRegister;

“Incomelevel” meansthetotal,combinedincome,fromanysourcewhatsoever,oftheresidents,tenants, owner and/or all occupiers of a property, as determined according to nationalpolicyandguidelinesandreflectedinCouncil’sTariffRegister,aspertheratesapprovedincomelimits;

“Indigents” meansanowner/occupierofapropertyasdefinedinthequalificationforconcessions;

“Marketvalue” meansthemarketvalueonaproperty,asreflectedinthemunicipalvaluationroll;

“Municipalservices”referstoanyservicesprovidedbythemunicipalityoranyauthorisedorcontractedserviceprovider,availableorappliedfor,orprovisionmadeforanyservice,forwhichitisentitledtochargedafeeorformulateatariff,payablebyacustomeroruser,thereof;

“Occupier” meansanypersonwhooccupiesanypropertyorpartthereof,withoutregardtothetitleunderwhichhe/sheoccupiestheproperty;

(a) “Owner” means:(b) Inrelationtopropertyreferredtoinparagraph(a)ofthedefinitionofproperty,meansa

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personinwhosenameownershipofthepropertyisregistered;(c) Inrelationtoarightreferredtoinparagraph(b)ofthedefinitionof“property”,meansa

personinwhosenametherightisregistered;(d) Inrelationtoalandtenurerightreferredtoinparagraph(c)ofthedefinitionof“property”,

meansapersoninwhosenametheright isregisteredortowhomitwasgrantedintermsoflegislation;or(i) In relation to public service infrastructure referred to in paragraph (d) of the

definitionof“property”,meanstheorganofstatewhichownsorcontrolsthatpublicserviceinfrastructureasenvisagedinthedefinitionof“publiclycontrolled”,providedthatapersonmentionedbelowmayfor thepurposesof thisActberegardedbyamunicipalityastheownerofapropertyinthefollowingcases:

(ii) Atrusteeinthecaseofapropertyinatrustexcludingstatetrustland;(iii) Anexecutororadministrator,inthecaseofapropertyinadeceasedestate;(iv) A trustee or liquidator, in the case of a property in an insolvent estate or in

liquidation;(v) Ajudicialmanager,inthecaseofapropertyintheestateofapersonunder

judicialmanagement;(vi) Acurator,inthecaseofapropertyintheestateofapersonundercuratorship;(vii) Apersoninwhosenameausufructorotherpersonalservitudeisregistered,in

thecaseofapropertythatissubjecttoausufructorotherpersonalservitude;(viii) Alessee,inthecaseofapropertythatisregisteredinthenameofamunicipality

andisleasedbyit;orAbuyer,inthecaseofapropertythatwassoldbyamunicipalityandofwhichpossessionwas given to the buyer pending registration of ownership in thenameofthebuyer;

(d) “Property”means-(e) Immovableproperty registered in thenameofaperson, including, in thecaseofa

sectionaltitlescheme,asectionaltitleunitregisteredinthenameofaperson;(f) A right registeredagainst immovableproperty in thenameofaperson,excludinga

mortgagebondregisteredagainstaproperty;(g) Alandtenurerightregisteredinthenameofapersonorgrantedtoapersoninterms

oflegislation;or

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Publicserviceinfrastructure;

“Rate” meansamunicipalrateonpropertyenvisagedinsection229(1)(a)oftheConstitutionandin linewith theMunicipalPropertyRatesActand tariffs reflected in theapplicableTariffRegister;

“Refusecharge” means the monthly charge levied by the municipality for the removal of soliddomesticwasteaspertheapplicableTariffRegister;

“Seweragecharge” meansthemonthlychargeleviedbythemunicipalityforthedisposalofdomesticsewageaspertheapplicableTariffRegister.

“Water” meansthemonthlychargeleviedbythemunicipalityforthesupplyofwaterinexcessofthefreebasiclimitsaspertheapplicableTariffRegister;

2. Objective

• TheobjectiveoftheIndigentPolicyistoensurethefollowing:• The provision of basic services to the community in a sustainable manner, within the financial and

administrativecapacityoftheCouncil;and• To provide procedures and guidelines for the subsidisation of basic service charges to its indigent

households,usingtheCouncil’sbudgetaryprovisionsreceivedfromCentralGovernment,accordingtoprescribedpolicyguidelines.

• TheCouncilalsorecognisesthatmanyoftheresidentscansimplynotaffordthecostoffullprovisionandforthisreasontheCouncilwillendeavourtoensureaffordabilitythrough:

• SettingstariffsintermsoftheCouncilsTariffPolicy,whichwillbalancetheeconomicviabilityofcontinuedservicedelivery;and

• Determiningappropriateservicelevels.

3. Indigent Policy Principles

• ThefollowingshouldbetheguidingprinciplesinimplementingtheIndigentPolicy:• TheIndigentPolicyisinaccordancewiththeLocalGovernmentMunicipalSystemActNo32of2000and

otheramendedorrelatedlegislation.• ReliefwillbeprovidedbytheCounciltoregisteredresidentialconsumersofservices.• TheCouncilmust,whereverpossible,ensurethatanyreliefisconstitutional,practical,fair,equitableand

justifiabletoavoidalienatinganygroupofhouseholds.• Thesubsidyforminimumservicelevelsshouldnotresultinthecreationofacomplicatedadministration

thatwouldnotbecosteffectivetoimplement.• Thepaymentofservicesshouldbeaffordabletotheindigent.• TheIndigentPolicywillprevailaslongasfundsareavailable.• Other than those consumerswho are automatically deemed to be indigent byCouncil, the residents

mustformallyapplyontheprescribedapplicationformsforreliefandwillqualifyfortheindigentsupportaccordingtotheprescribedcriteria/principleslaiddownbytheCouncil.Aftertheapplicationformhasbeencompleted,aneffectiveandefficientevaluationsystemshouldbeusedinordertoobtaintheoutcomewithinareasonabletimedeterminedbytheCouncil.

• Ifapersonisfoundtobeindigent, theyshouldbenotedonthedebtorssystemwhichwillprovidethenecessaryreportonCouncil’sIndigentRegister.

• TheonusisontherecipienttoinformtheCouncilofanychangeinhis/herstatusorpersonalhouseholdcircumstances.

• Allindigentsshouldbere-evaluatedannuallytoassesstheprovisionofcontinuedbasicservices.

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• DisciplinarymeasuresdecidedbytheCouncil,shouldbeimposedonpeoplewhomisusethesystemandprovideincorrectinformation.

• AnyotherprinciplesdecidedbytheCouncil.

4. Application for Indigent Support

• Applications for reliefmustbemadeon theprescribed forms.Theapplicantmust complywithall thenecessaryrequirements.

• Theapplicationformistocontain,interalia,thefollowingimportantinformation:• Detailsoftheaccountholder;• Proofofincome;• Proofofresidence;• Certifiedcopiesofidentificationdocuments;• Numberandnamesofdependants;and• Anyotherdocumentationasrequired

Theonusatalltimestore-applyforcontinuedrelieforsubmitproofofchangeincircumstancesrestswiththehousehold.

5. Qualification for concessions

1.Ownersand/oroccupiersofresidentialpropertywherethemarketvalueofsuchpropertyisequalto,orlessthan,thevaluesdeterminedbyresolutionoftheCouncilforthepurposesofqualifyingfortheconcessionssetoutbelow,andasreflectedintheCouncil’sRegisterofTariffsandCharges,shallautomaticallyqualifyforsuchconcessions,assetoutinthispolicy.

2.Ownersand/oroccupiersofresidentialproperty,wherethemarketvalueexceedsthevaluesdeterminedbyresolutionoftheCouncil,subjecttotheprescribedincomelimitsreflectedintheRegisterofTariffsandChargesandanyadditionalqualifyingcriteriaandvaluelimits,shallmakeapplicationtothisCouncilforthepurposesofqualifyingfortheconcessions,assetoutinthispolicy.

3.Concessions:

PropertyRates- 100%rebateonpropertyvaluesfromR15,001toR100,000orless,butnotexceedingavaluemorethanR150,000.

Electricity- FreekWhasdeterminedfromtimetotimebyCouncilandasreflectedintheapplicableTariffRegister.

ElectricityMCB- FreeamperageasdeterminedbyCouncilfromtimetotimeandasreflectedintheapplicableRegisterofTariffsandCharges,subjecttothecompulsoryinstallationofa20AMPMCB.

Water- FreeklvolumeofconsumptionasdeterminedfromtimetotimebyCouncilandasreflectedintheapplicableRegisterofTariffsandCharges.Balanceofconsumptionatnormaltarifffordomesticwater.

Refuse- Indigent refuse tariff as determined byCouncil from time to time and asreflectedintheapplicableRegisterofTariffsandCharges.

Sewerage- IndigentseweragetariffasdeterminedbyCouncilfromtimetotime andasreflectedintheapplicableRegisterofTariffsandCharges.

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4. Acustomerwhomeetstheindigentapplicationcriteria,andwhoisresidentinaFlat,Simplex, Duplex,TownHouse,RetirementComplexandthelike,wherebulkmeteringisusedforthecalculationofwaterconsumption,suchconsumptionwillbedividedbythenumberofunits,andwheresuchconsumptionisinlinewiththedefinitionoffreebasicwater,qualifiesandwillautomaticallyqualifyforfreebasicsewerageandrefuse.

5.Intheeventthattheconsumptionofwater,onapropertythatqualifiesfortheconcessionsreferredtoinSection2.3.exceedsthemaximumvolumedeterminedbytheCouncilasfreebasicwaterforwhateverreason,theowneroroccupiershallbebilledforthetotalconsumptionofwater inexcessofthebasicfreewater,asdeterminedbytheCouncilatthetariffsordinarilyapplicablewithinthemunicipality,andtheamountbilledshallbedeemedpayable.

6.Intheeventthatanowneroroccupierfailstopayanaccountbythefinaldate,theCouncilmay,intermsofitsCreditControlPolicyanditsBy-Laws,disconnecttheelectricitysupply,tothepropertyoccupiedbysuchowneroroccupier.

7.Intheeventthatthereisanyevidenceoftamperingwith,ortheftofCouncil’sservicestoaproperty,theCouncilmayinvoketheprovisionsofSection25oftheCreditControlandDebtCollectionPolicyanditsBy-Laws.

6. CHILD HEADED HOUSEHOLDS

InthecaseofChildHeadedHouseholds,wheretheconditionsforservicesmeetthequalificationcriteriareferredtoinSection5.1and5.2,andthehouseholdisdeclaredindigentandwherethecombinedincomeofallminorchildrenislessthantheamountasdeterminedbytheCouncilforsuchqualification,thehouseholdwillreceivetheapplicableindigentconcessionsoutlinedinSection5.3above.

Theconsolidatedaccountmaycontinueinthenameofthedeceasedparent/suntiltheestateistransferredtotheheir/softheestate.Inthecasewhereanexecutoroftheestateisappointedandhasjurisdictionovertheminorchildren,theexecutorwouldberequiredtomakeprovisionforpaymentoftheconsolidatedaccount.

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municiPal suPPly cHain management Policylocal goVeRnment: municiPal Finance management act, 2003Date of adoption: 23 May 2012

Councilresolvesintermsofsection111oftheLocalGovernmentMunicipalFinanceManagementAct(No.56of2003),toadoptthefollowingproposalastheSupplyChainManagementPolicyoftheMsunduziMunicipality.

TABLEOFCONTENTS

1. Definitions

CHAPTER 1IMPLEMENTATION OF SUPPLY CHAIN MANAGEMENT POLICY2. Supplychainmanagementpolicy3. Amendmentofsupplychainmanagementpolicy4. Delegationofsupplychainmanagementpowersandduties5. Subdelegations6. Oversightroleofcouncil7. Supplychainmanagementunits8. Trainingofsupplychainmanagementofficials

CHAPTER 2SUPPLY CHAIN MANAGEMENT SYSTEM9. FormatofsupplychainmanagementsystemPart 1: Demand management10. SystemofdemandmanagementPart 2: Acquisition management11. Systemofacquisitionmanagement12. Rangeofprocurementprocesses13. Generalpreconditionsforconsiderationofwrittenquotationsorbids14. Listsofaccreditedprospectiveproviders15. Pettycashpurchases16. Writtenorverbalquotations17. Formalwrittenpricequotations 18. Proceduresforprocuringgoodsorservicesthroughwrittenorverbal quotationsandformalwrittenpricequotations19. Competitivebiddingprocess20. Processforcompetitivebidding21. Biddocumentationforcompetitivebids22. Publicinvitationforcompetitivebids 23. Procedureforhandling,openingandrecordingofbids24. Negotiationswithpreferredbidders

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25. Two-stagebiddingprocess26. Committeesystemforcompetitivebids27. Bidspecificationcommittees28. Bidevaluationcommittees29. Bidadjudicationcommittees30. Procurementofbankingservices31. ProcurementofITrelatedgoodsorservices32. Procurementofgoodsandservicesundercontractssecuredbyotherorgansofstate33. Procurementofgoodsnecessitatingspecialsafetyarrangements34. ProudlySACampaign35. Appointmentofconsultants36. Deviationfrom,andratificationofminorbreachesof,procurementprocesses37. Unsolicitedbids38. Combatingofabuseofsupplychainmanagementsystem

Part 3: Logistics, Disposal, Risk and Performance Management39. Logisticsmanagement40. Disposalmanagement41. Riskmanagement42. Performancemanagement

Part 4: Other matters43. Prohibitiononawardstopersonswhosetaxmattersarenotinorder44. Prohibitiononawardstopersonsintheserviceofthestate45. Awardstoclosefamilymembersofpersonsintheserviceofthestate46. Ethicalstandard47. Inducements,rewards,giftsandfavours48. Sponsorships49. Objectionsandcomplaints50. Resolutionofdisputes,objections,complaintsandqueries51. Contractsprovidingforcompensationbasedonturnover

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Definitions1. InthisPolicy,unlessthecontextotherwiseindicates,awordorexpressiontowhichameaninghasbeenassignedintheActhasthesamemeaningasintheAct,and–

“competitive bidding process”meansacompetitivebiddingprocessreferredtoinparagraph12(1)(d)ofthisPolicy;

“competitive bid”meansabidintermsofacompetitivebiddingprocess;

“Emergency”referredtoinsubparagraph36(1)(a)(i)ofthispolicymeansadeviationthatisbasedonitbeinganemergencycasethatisreasonable/justifiablebasedonevidencethat:

• Immediateactionisnecessaryinordertoavoidadangerousorriskysituationormisery;• Thetimeavailablewouldmakeitimpossible/impracticaltogothroughabiddingprocess;• The deviation is not as a result of the need for procurement being identified/agreed upon/budgeted/

plannedinthepastbutnotattendedtotimeouslyand• Thedeviationisnotasaresultofimproperplanning

“final award”,inrelationtobidsorquotationssubmittedforacontract,meansthefinaldecisiononwhichbidorquotetoaccept;

“formal written price quotation”meansquotationsreferredtoinparagraph12(1)(c)ofthisPolicy;

“GCC” meansGeneralConditionsofContract

“in the service of the state”meanstobe–(a) amemberof– (i) anymunicipalcouncil; (ii) anyprovinciallegislature;or (iii) theNationalAssemblyortheNationalCouncilofProvinces;(b) amemberoftheboardofdirectorsofanymunicipalentity;(c) anofficialofanymunicipalityormunicipalentity;(d) anemployeeofanynationalorprovincialdepartment,nationalor provincialpublicentityor

constitutional institutionwithinthemeaningofthePublicFinanceManagementAct,1999(ActNo.1of 1999);

(e) amemberoftheaccountingauthorityofanynationalorprovincialpublic entity;or(f) anemployeeofParliamentoraprovinciallegislature;

“JBCC” meansaprincipalbuildingagreementissuedbytheJointBuildingContractsCommittee

“long term contract”meansacontractwithadurationperiodexceedingoneyear;

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“list of accredited prospective providers” means the list of accredited prospective providers which themunicipality mustkeepintermsofparagraph14ofthispolicy;

“other applicable legislation”meansanyotherlegislationapplicabletomunicipalsupplychainmanagement,including–(a) thePreferentialProcurementPolicyFrameworkAct,2000(ActNo.5of2000);(b) theBroad-BasedBlackEconomicEmpowermentAct,2003(ActNo.53of2003);and(c) theConstructionIndustryDevelopmentBoardAct,2000(ActNo.38of2000);

“Single provider”referredtoinsubparagraph36(1)(a)(ii)ofthispolicymeansadeviationthatisbasedonitbeingansolesupplier/providercasethatisreasonable/justifiablebasedonevidencethat:

• Athoroughanalysisofthemarketwasdoneand• Whererequired,atransparentandequitablepre-selectionprocess.

“Treasury guidelines” meansanyguidelinesonsupplychainmanagementissuedbytheMinisterintermsofsection168oftheAct;

“the Act”meanstheLocalGovernment:MunicipalFinanceManagementAct,2003(ActNo.56of2003);

“the Regulations”meanstheLocalGovernment:MunicipalFinanceManagementAct,2003,MunicipalSupplyChainManagementRegulationspublishedbyGovernmentNotice868of2005;

“Urgency”referredtoinsubparagraph22(1)(b)(2)ofthispolicymeansadeviationthatisbasedonitbeinganurgencycasethatisreasonable/justifiablebasedonevidencethat:

• Theearlydeliveryofthegoods/servicesisofcriticalimportance;• Thetimeavailablewouldmakeitimpossible/impracticaltogothroughabiddingprocess;• The deviation is not as a result of the need for procurement being identified/agreed upon/budgeted/

plannedinthepastbutnotattendedtotimeouslyand• Thedeviationisnotasaresultofimproperplanning

“written or verbal quotations”meansquotationsreferredtoinparagraph12(1)(b)ofthisPolicy.

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CHAPTER 1IMPLEMENTATION OF SUPPLY CHAIN MANAGEMENT POLICY

Supply chain management policy2. (1) Allofficialsandotherroleplayersinthesupplychainmanagementsystemofthemunicipalitymust

implementthisPolicyinawaythat–(a) giveseffectto–

(i) section217oftheConstitution;and(ii) Part1ofChapter11andotherapplicableprovisionsoftheAct;

(b) isfair,equitable,transparent,competitiveandcosteffective;(c) complieswith–

(i) theRegulations;and(ii) anyminimumnormsandstandardsthatmaybeprescribedintermsofsection168ofthe

Act;(d) isconsistentwithotherapplicablelegislation;(e) doesnotunderminetheobjectiveforuniformityinsupplychainmanagementsystemsbetween organsofstateinallspheres;and(f) isconsistentwithnationaleconomicpolicyconcerningthepromotionofinvestmentsanddoing businesswiththepublicsector.

(2) ThisPolicyapplieswhentheMsunduziMunicipality–(a) procuresgoodsorservices;(b) disposesgoodsnolongerneeded;(c) selectscontractorstoprovideassistanceintheprovisionofmunicipalservicesotherwisethanincircumstanceswhereChapter8oftheMunicipalSystemsActapplies,(d) selectsexternalmechanismsreferredtoinsection80(1)(b)oftheMunicipalSystemsActfortheprovisionofmunicipalservicesincircumstancescontemplatedinsection83ofthatAct.

(3) ThisPolicy,exceptwhereprovidedotherwise,doesnotapplyinrespectoftheprocurementof goodsandservicescontemplatedinsection110(2)oftheAct,including–

(a) waterfromtheDepartmentofWaterAffairsorapublicentity,anothermunicipalityoramunicipal entity;and(b) electricityfromEskomoranotherpublicentity,anothermunicipalityoramunicipalentity.

Amendment of the supply chain management policy3. (1) Theaccountingofficermust–

(a) atleastannuallyreviewtheimplementationofthisPolicy;and(b) whentheaccountingofficerconsidersitnecessary,submitproposalsfortheamendmentofthis Policytothecouncil

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(2) Iftheaccountingofficersubmitsproposedamendmentstothecouncil thatdiffersfromthemodel policyissuedbytheNationalTreasury,theaccountingofficermust–

(a) ensurethatsuchproposedamendmentscomplywiththeRegulations;and(b) reportanydeviationfromthemodelpolicytotheNationalTreasuryandtherelevantprovincial treasury.

(3) When amending this supply chainmanagement policy the need for uniformity in supply chainpractices,proceduresandformsbetweenorgansofstate inallspheres,particularlytopromoteaccessibilityofsupplychainmanagementsystemsforsmallbusinessesmustbetakenintoaccount.

(4) Incaseswherecounciladoptspecialprogramstoachievesetpolicyobjectivesandwherethe specialprogramsimpactsonthemechanismofsupplychaintheaccountingofficermust:

(5) Prepareareportsettingoutthearrangementsfortheproject Showtheimpactonsupplychainmanagement

Delegation of supply chain management powers and duties4. (1) Thecouncil herebydelegatesallpowersanddutiestotheaccountingofficerwhichare necessarytoenabletheaccountingofficer–

(a) todischargethesupplychainmanagementresponsibilitiesconferredonaccountingofficersin termsof–

(i) Chapter8or10oftheAct;and(ii) thisPolicy;

(b) tomaximiseadministrativeandoperationalefficiencyintheimplementationofthisPolicy;(c) toenforcereasonablecost-effectivemeasuresforthepreventionoffraud,corruption,favouritism andunfairandirregularpracticesintheimplementationofthisPolicy;and(d) tocomplywithhisorherresponsibilitiesintermsofsection115andotherapplicableprovisions oftheAct.

(2) Sections79and106oftheActapplytothesubdelegationofpowersanddutiesdelegatedtoan accountingofficerintermsofsubparagraph(1).

(3) Theaccountingofficermaynotsubdelegateanysupplychainmanagementpowersordutiesto apersonwhoisnotanofficialoftheMsunduziMunicipalityortoacommitteewhichisnot exclusivelycomposedofofficialsoftheMsunduziMunicipality

(4) Thisparagraphmaynotbereadaspermittinganofficialtowhomthepowertomakefinalawards hasbeendelegated,tomakeafinalawardinacompetitivebiddingprocessotherwisethan throughthecommitteesystemprovidedforinparagraph26ofthisPolicy.

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Sub delegations5. (1) Theaccountingofficermayintermsofsection79or106oftheActsubdelegateanysupplychainmanagementpowersandduties,includingthosedelegatedtotheaccountingofficerintermsofthisPolicy,butanysuchsubdelegationmustbeconsistentwithsubparagraph(2)of thisparagraphandparagraph4of thisPolicy.

(2) Thepowertomakeafinalaward–(a) aboveR10million(VATincluded)maynotbesubdelegatedbytheaccountingofficer;(b) aboveR2million(VATincluded),butnotexceedingR10million(VATincluded),maybe subdelegatedbutonlyto–

(i) thechieffinancialofficer;(ii) aseniormanager;or(iii) abidadjudicationcommitteeofwhichthechieffinancialofficeroraseniormanagerisa

member;(c) notexceedingR2million(VATincluded)maybesubdelegatedbutonly

to–(i) thechieffinancialofficer;(ii) aseniormanager;(iii) amanagerdirectlyaccountabletothechieffinancialofficeroraseniormanager;or(iv) abidadjudicationcommittee.

(3) Anofficialorbidadjudicationcommitteetowhichthepowertomakefinalawardshasbeensub delegatedinaccordancewithsubparagraph(2)mustwithinfivedaysoftheendofeachmonth submittotheofficialreferredtoinsubparagraph(4)awrittenreportcontainingparticularsofeach finalawardmadebysuchofficialorcommitteeduringthatmonth,including–(a) theamountoftheaward;(b) thenameofthepersontowhomtheawardwasmade;and(c) thereasonwhytheawardwasmadetothatperson.

(4) Awrittenreportreferredtoinsubparagraph(3)mustbesubmitted–(a) totheaccountingofficer,inthecaseofanawardby–

(i) thechieffinancialofficer;(ii) aseniormanager;or(iii) abidadjudicationcommitteeofwhichthechieffinancialofficeroraseniormanagerisa

member;or(b) tothechieffinancialofficerortheseniormanagerresponsiblefortherelevantbid,inthecaseof anawardby–

(i) amanagerreferredtoinsubparagraph(2)(c)(iii);or(ii) abidadjudicationcommitteeofwhichthechieffinancialofficeroraseniormanageris

notamember.

(5) Subparagraphs(3)and(4)ofthispolicydonotapplytoprocurementsoutofpettycash.

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(6) Thisparagraphmaynotbeinterpretedaspermittinganofficialtowhomthepowertomakefinal awardshasbeensubdelegated,tomakeafinalawardinacompetitivebiddingprocessotherwise thanthroughthecommitteesystemprovidedforinparagraph26ofthisPolicy.

(7) Nosupplychainmanagementdecision-makingpowersmaybedelegatedtoanadvisoror consultant.

Oversight role of council 6. (1) ThecouncilreservesitsrighttomaintainoversightovertheimplementationofthisPolicy. (2) Forthepurposesofsuchoversighttheaccountingofficermust–

(i) within30daysoftheendofeachfinancialyear,submitareportonthe implementationofthisPolicyandthesupplychainmanagementpolicyof anymunicipalentityunderthesoleorsharedcontrolofthemunicipality,to

thecouncilofthemunicipality;and (ii) wheneverthereareseriousandmaterialproblemsintheimplementationofthis Policy,immediatelysubmitareporttothecouncil.

(3) Theaccountingofficermust,within10daysoftheendofeachquarter,submitareporton theimplementationofthesupplychainmanagementpolicytotheMayor.

(4) Thereportsmustbemadepublicinaccordancewithsection21AoftheMunicipal SystemsAct.

Supply chain management unit7. (1) AsupplychainmanagementunitisherebyestablishedtoimplementthisPolicy.

(2) Thesupplychainmanagementunitoperatesunderthedirectsupervisionofthechief financialofficeroranofficialtowhomthisdutyhasbeendelegatedintermsofsection82 oftheAct.

Training of supply chain management officials8. ThetrainingofofficialsinvolvedinimplementingthisPolicyshouldbeinaccordancewithanyTreasuryguidelinesonsupplychainmanagementtraining.

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CHAPTER 2SUPPLY CHAIN MANAGEMENT SYSTEM

Format of supply chain management system9. ThisPolicyprovidessystemsfor–

(i) demandmanagement;(ii) acquisitionmanagement;(iii) logisticsmanagement;(iv) disposalmanagement;(v) riskmanagement;and(vi) performancemanagement.

Part 1: Demand managementSystem of demand management

10. (1) TheaccountingofficermustestablishandimplementanappropriatedemandmanagementsysteminordertoensurethattheresourcesrequiredbytheMsunduziMunicipality supportitsoperationalcommitmentsanditsstrategicgoalsoutlinedintheIntegratedDevelopmentPlan.

(2) Thedemandmanagementsystemmust–(a) includetimelyplanningandmanagementprocessestoensurethatallgoodsand

servicesrequiredbythemunicipalityarequantified,budgetedforandtimelyandeffectivelydeliveredattherightlocationsandatthecriticaldeliverydates,andareoftheappropriatequality andquantityatafaircost;

(b) takeintoaccountanybenefitsofeconomiesofscalethatmaybederivedinthecaseofacquisitionsofarepetitivenature,

(c) provideforthecompilationoftherequiredspecificationstoensurethatitsneedsaremet;and

(d) takeintoaccountananalysisofthepastspending.(e) To undertake appropriate industry analysis and research to ensure that innovations and

technologicalbenefitsaremaximized.

Part 2: Acquisition managementSystem of acquisition management11. (1) TheaccountingofficermustimplementthesystemofacquisitionmanagementsetoutinthisPart inordertoensure–

(a) thatgoodsandservicesareprocuredby theMsunduziMunicipality inaccordancewithauthorisedprocessesonly;

(b) thatexpenditureongoodsandservices is incurred in termsofanapprovedbudget intermsofsection15oftheAct;

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(c) thatthethresholdvaluesforthedifferentprocurementprocessesarecompliedwith;(d) thattheapprovalofthethresholdsforsupplychainofficialsaresetandreviewedannually;(e) thatbiddocumentation,evaluationandadjudicationcriteria,andgeneralconditionsofa

contract,areinaccordancewithanyapplicablelegislation;and(f) thatanyTreasuryguidelinesonacquisitionmanagementareproperlytakenintoaccount.

(2) When procuring goods or services contemplated in section 110(2) of theAct, the accountingofficermustmakepublicthefactthatsuchgoodsorservicesareprocuredotherwisethanthroughthemunicipality’ssupplychainmanagementsystem,including-

(a) thekindofgoodsorservices;and(b) thenameofthesupplier.

Range of procurement processes12. (1) Goodsandservicesmayonlybeprocuredbywayof–

(a) pettycashpurchases,uptoatransactionvalueofR2000(VATincluded);(b) writtenor verbalquotations forprocurementsofa transactionvalueoverR2000up to

R10000(VATincluded);(c) formalwrittenpricequotationsforprocurementsofatransactionvalueoverR10000upto

R200000(VATincluded);and(d) acompetitivebiddingprocessfor–

(i) procurementsaboveatransactionvalueofR200000(VATincluded);and(ii) theprocurementoflongtermcontracts.

(2) Theaccountingofficermay,inwriting-(a) lower,butnotincrease,thedifferentthresholdvaluesspecifiedinsubparagraph(1);or(b) directthat–

(i) writtenorverbalquotationsbeobtainedforanyspecific procurementofatransactionvaluelowerthanR2000;

(ii) formalwrittenpricequotationsbeobtainedforanyspecific procurementofatransactionvaluelowerthanR10000;or

(iii) acompetitivebiddingprocessbefollowedforanyspecificprocurementofatransactionvaluelowerthanR200000.

(3) Goodsorservicesmaynotdeliberatelybesplitintopartsoritemsofalesservaluemerelytoavoidcomplyingwiththerequirementsofthepolicy.Whendeterminingtransactionvalues,arequirementforgoodsorservicesconsistingofdifferentpartsoritemsmustasfaraspossiblebetreatedanddealtwithasasingletransaction.

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General preconditions for consideration of written quotations or bids13. Awrittenquotationorbidmaynotbeconsideredunlesstheproviderwhosubmittedthequotationorbid–

(a) hasfurnishedthatprovider’s–(i) fullname;(ii) identificationnumberorcompanyorotherregistrationnumber;and(iii) taxreferencenumberandVATregistrationnumber,ifany;

(b) hasauthorisedthemunicipality toobtainataxclearancefromtheSouthAfricanRevenueServicesthattheprovider’staxmattersareinorder;and

(c) hasindicated–(i) whetherheorsheisintheserviceofthestate,orhasbeenintheserviceofthe

stateintheprevioustwelvemonths;(ii) if the provider is not a natural person, whether any of its directors, managers,

principalshareholdersorstakeholderisintheserviceofthestate,orhasbeenintheserviceofthestateintheprevioustwelvemonths;or

(iii) whether a spouse, child or parent of the provider or of a director, manager,shareholderorstakeholderreferredtoinsubparagraph(ii)isintheserviceofthestate,orhasbeenintheserviceofthestateintheprevioustwelvemonths.

Lists of accredited prospective providers14. (1) Theaccountingofficermust–

(a) keepalistofaccreditedprospectiveprovidersofgoodsandservicesthatmustbeusedfortheprocurementrequirementsthroughwrittenorverbalquotationsandformalwrittenpricequotations;and

(b) at leastonceayear throughnewspaperscommonlycirculating locally, thewebsiteandanyotherappropriateways,inviteprospectiveprovidersofgoodsorservicestoapplyforevaluationandlistingasaccreditedprospectiveproviders;

(c) specifythelistingcriteriaforaccreditedprospectiveproviders;and(d) disallow the listing of any prospective provider whose name appears on the National

Treasury’sdatabaseasapersonprohibitedfromdoingbusinesswiththepublicsector.

(2) Thelistmustbeupdatedatleastquarterlytoincludeanyadditionalprospectiveprovidersand anynewcommoditiesortypesofservices.Prospectiveprovidersmustbeallowedtosubmit applicationsforlistingatanytime.

(3) Thelistmustbecompiledpercommodityandpertypeofservice.

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Petty cash purchases15. Theconditionsfortheprocurementofgoodsbymeansofpettycashpurchasesreferredtoinparagraph

12(1)(a)ofthisPolicy,areasfollows–(a) verbalquotationsmustbeobtainedfromatleastthreedifferentproviderspreferablyfrom,but

notlimitedto,providerswhosenamesappearonthelistofaccreditedprospectiveprovidersoftheMsunduziMunicipality,providedthatifquotationsareobtainedfromproviderswhoarenotlisted,suchprovidersmustmeetthelistingcriteriasetoutinparagraph14(1)(b)and(c)ofthispolicy;

(b) IfitisnotpossibletoobtainatleastthreeverbalquotationsthereasonmustberecordedandreportedquarterlytotheChiefFinancialOfficeroranotherofficialdesignatedbytheaccountingofficer;

(c) thenamesofandpricesquotedbythepotentialsuppliersmustberecordedandtheordermustonlybeplacedagainstawrittenconfirmationfromtheselectedsupplier

(d) theChiefFinancialofficermustsetthemaximumnumberofpettycashpurchasesorthemaximumamountspermonthforeachmanagerandthesenumbersoramountsmustbereviewedeachmonthbytheaccountingofficer;

(e) themanagerreportingdirectlytotheChiefFinancialOfficermaydelegateresponsibilityforthepettycashinwritingtoanofficialreportingdirectlytohim;and

(f) amonthlypettycashreconciliationreportfromeachmanagermustbeprovidedtothechieffinancialofficer,including–(i) thetotalamountofpettycashpurchasesforthatmonth;(ii) andreceiptsandappropriatedocumentsforeachpurchase.

(g) theaccountingofficermustreviewthemonthlypettycashreconciliationregularly

Written or verbal quotations16. The conditions for the procurement of goods or services throughwritten or verbal quotations, are asfollows:

(a) Quotationsmustbeobtainedfromatleastthreedifferentproviderspreferablyfrom,butnotlimitedto,providerswhosenamesappearonthelistofaccreditedprospectiveprovidersofthemunicipality,providedthatifquotationsareobtainedfromproviderswhoarenotlisted,suchprovidersmustmeetthelistingcriteriasetoutinparagraph14(1)(b)and(c)ofthisPolicy;

(b) totheextentfeasible,providersmustberequestedtosubmitsuchquotationsinwriting;(c) ifitisnotpossibletoobtainatleastthreequotations,thereasonsmustberecordedand

reportedquarterlytotheaccountingofficeroranotherofficialdesignatedbytheaccountingofficer;

(d) theaccountingofficermustrecordthenamesofthepotentialprovidersrequestedtoprovidesuchquotationswiththeirquotedprices;and

(e) if a quotation was submitted verbally, the order may be placed only against writtenconfirmationbytheselectedprovider.

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(f) a schedule of the accredited prospective providers of the municipality from whom thequotationswererequestedandthedateofrequestmustbekeptandreviewedregularlybytheAccountingofficeragainsttheoveralllistoftheaccreditedprospectiveprovidersonthedatabasetoensurethatrotationofprospectivesuppliersisbeingdone.

Formal written price quotations 17. (1) Theconditionsfortheprocurementofgoodsorservicesthroughformalwrittenpricequotations,areasfollows:

(a) quotationsmustbeobtainedinwritingfromatleastthreedifferentproviderswhosenamesappearonthelistofaccreditedprospectiveprovidersofthemunicipality;

(b) quotationsmaybeobtainedfromproviderswhoarenotlisted,providedthatsuchprovidersmeetthelistingcriteriasetoutinparagraph14(1)(b)and(c)ofthisPolicy;

(c) ifitisnotpossibletoobtainatleastthreequotations,thereasonsmustberecordedandapprovedbythechieffinancialofficeroranofficialdesignatedbythechieffinancialofficer,and

(d) theaccountingofficermustrecordthenamesofthepotentialprovidersandtheirwrittenquotations.

(e) a schedule of the accredited prospective providers of the municipality from whom thequotationswererequestedandthedateofrequestmustbekeptandreviewedregularlybytheAccountingofficeragainsttheoveralllistoftheaccreditedprospectiveprovidersonthedatabasetoensurethatrotationofprospectivesuppliersisbeingdone

(2) Adesignatedofficialreferredtoinsubparagraph(1)(c)mustwithinthreedaysoftheendofeachmonthreporttothechieffinancialofficeronanyapprovalsgivenduringthatmonthbythatofficialintermsofthatsubparagraph.

Procedures for procuring goods or services through written or verbal quotations and formal written price quotations

18. Theprocedurefortheprocurementofgoodsorservicesthroughwrittenorverbalquotationsorformalwrittenpricequotations,isasfollows:(a) when using the list of accredited prospective providers the accounting officer must promote

ongoingcompetitionamongstprovidersby invitingproviderstosubmitquotationsonarotationbasis;

(b) allrequirementsinexcessofR30000(VATincluded)thataretobeprocuredbymeansofformalwrittenpricequotationsmust,inadditiontotherequirementsofparagraph17,beadvertisedforatleastsevendaysonthewebsiteandanofficialnoticeboardofthemunicipality;

(c) offers received must be evaluated on a comparative basis taking into account unconditionaldiscounts;

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(d) theaccountingofficerorchieffinancialofficermustonamonthlybasisbenotifiedinwritingofallwrittenorverbalquotationsandformalwrittenpricequotationsacceptedbyanofficialactingintermsofasubdelegation;

(e) offersbelowR30000(VATincluded)mustbeawardedbasedoncompliancetospecificationsandconditionsofcontract,abilityandcapabilitytodeliverthegoodsandservicesandlowestprice;

(f) acceptable offers,which are subject to the preference points system (PPPFA and associatedregulations),mustbeawardedtothebidderwhoscoredthehighestpoints;

(g) allcontractsawardedbytheMsunduziMunicipalitymustberecordedinacontractsregisterofthemunicipalitydetailingatleast(i)thenameoftheselectedprovider(ii)thedateoftheaward(iii)thedurationofthecontract(iv)retentionpercentageIfapplicable(v)Suretyandorpenaltyamount

Competitive bids19. (1) GoodsorservicesaboveatransactionvalueofR200000(VATincluded)andlongtermcontracts mayonlybeprocuredthroughacompetitivebiddingprocess,subjecttoparagraph11(2)ofthis Policy.

(2) No requirement forgoodsorservicesaboveanestimated transactionvalueofR200000 (VATincluded), may deliberately be split into parts or items of lesser valuemerely for the sake ofprocuringthegoodsorservicesotherwisethanthroughacompetitivebiddingprocess.

Process for competitive bidding20. Theproceduresforthefollowingstagesofacompetitivebiddingprocessareasfollows:

(a) Compilationofbiddingdocumentationasdetailedinparagraph21;(b) Publicinvitationofbidsasdetailedinparagraph22;(c) Sitemeetingsorbriefingsessionsasdetailedinparagraph22;(d) Handlingofbidssubmittedinresponsetopublicinvitationasdetailedinparagraph23;(e) Evaluationofbidsasdetailedinparagraph28;(f) Awardofcontractsasdetailedinparagraph29;(g) Administrationofcontracts (i) Afterapprovalofabid,theaccountingofficerandthebiddermustenterintoawritten

agreement.(h) Properrecordkeeping (i) Original/legalcopiesofwrittencontractsagreementsshouldbekeptinasecureplace forreferencepurposes.

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Bid documentation for competitive bids21. Thecriteriatowhichbiddocumentationforacompetitivebiddingprocessmustcomply,must–

(a) takeintoaccount–(i) thegeneralconditionsofcontractandanyspecialconditionsofcontract,ifspecified;(ii) anyTreasuryguidelinesonbiddocumentation;and(iii) therequirementsoftheConstructionIndustryDevelopmentBoard,inthecaseofabid

relatingtoconstruction,upgradingorrefurbishmentofbuildingsorinfrastructure;(b) include the preference points system to be used , goals as contemplated in the Preferential

ProcurementRegulationsandevaluationandadjudicationcriteria,includinganycriteriarequiredbyotherapplicablelegislation;

(c) compelbidderstodeclareanyconflictofinteresttheymayhaveinthetransactionforwhichthebidissubmitted;

(d) ifthevalueofthetransactionisexpectedtoexceedR10million(VATincluded),requirebidderstofurnish–(i) ifthebidderisrequiredbylawtoprepareannualfinancialstatementsforauditing,

theirauditedannualfinancialstatements– (aa) forthepastthreeyears;or (bb) sincetheirestablishmentifestablishedduringthepastthreeyears;(ii) acertificatesignedbythebiddercertifyingthatthebidderhasnoundisputed

commitmentsformunicipalservicestowardsamunicipalityorotherserviceproviderin respectofwhichpaymentisoverdueformorethan30days;

(iii) particularsofanycontractsawardedtothebidderbyanorganofstateduringthepast fiveyears,includingparticularsofanymaterialnon-complianceordisputeconcerningthe executionofsuchcontract;

astatementindicatingwhetheranyportionofthegoodsorservicesareexpectedtobe sourcedfromoutsidetheRepublic,and,ifso,whatportionandwhetheranyportion ofpaymentfromthemunicipalityormunicipalentityisexpectedtobetransferredoutof theRepublic;and

(e) stipulatethatdisputesmustbesettledbymeansofmutualconsultation,mediation(withorwithoutlegalrepresentation),or,whenunsuccessful,inaSouthAfricancourtoflaw.

(f) allbidsmustbesubmitted inwritingon theprescribedbiddocumentation inasealedmarkedenvelopeandmustbedepositedbythebiddersthemselvesortheirappointedrepresentativesintothedesignatedbidboxbynolaterthanthedateandtimestipulatedinthebiddocumentation.

(g) TheMsunduziMunicipalitymaydisqualifyanyofferorbidsubmittedforthefollowingreasons:(i) thebidderfailedtocomplywithallsubmissionrequirementsasstatedinthetender

document;(ii) the entity or one of its directors are listed on National Treasury’s database as a person

prohibitedfromdoingbusinesswiththepublicsector;(iii) thereareoutstandingmunicipal ratesand taxesorservicecharges fromanymunicipality

bytheentityoranyofitsdirectorsthatareinarrearsforlongerthan3monthsunlesscreditarrangementshavebeenmadeintermsofcouncilpolicies;

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(v) theentityhas failed toperformsatisfactoryonpreviouscontractswithanymunicipalityorother organ of the state, after that entity was givenwritten notice that performancewasunsatisfactory;

(vi) anyofthedirectorscommittedacorruptorfraudulentactincompetingforaparticularcontractorintheexecutionofacontract;

(vii) anofficial or other roleplayer committedanycorruptor fraudulentact during thebiddingprocessortheexecutionofacontractthatbenefitedtheentityoranyofitsdirectors;

(viii)theentityoranyitsdirectorsabusedthesupplychainmanagementsystemorcommittedanyimproperconductinrelationtosuchsystem;

(viiii)anydirectorhasbeenconvictedforfraudorcorruptionduringthelast5years;(x) theentityoranyofitsdirectorshaswillfullyneglected,renegedonorfailedtocomplywithany

governmentmunicipalorotherpublicsectorcontractduringthelast5years;(xi) theentityoranyofitsdirectorshasmisrepresentedfactsorinformationinthetenderdocument

submitted;(xii) theentityoranyofitsdirectorshassubmittedtwotenderdocuments(fromthesamecompany)

unlesstheothertenderdocumentisanalternativeoffer;(xiii)anypersonswhosetaxmattershavenotbeendeclaredasbeinginorderbytheSouthAfrican

RevenueServicesforawardsinexcessofR15000inclVat;(xiiii)theentityoranyofitsdirectorshasfailedtosubmitwiththebiddocumentation,anoriginal,

validtaxclearancecertificate(h) TheMsunduziMunicipalitymaygivepreferencetolocalsuppliersand/orserviceproviders(i) TheMsunduziMunicipalitymayrejectallbidsifandwhendeemednecessaryi.e.whenthereisa

lackofeffectivecompetitionorbidsarenotsubstantiallyresponsive.

Public invitation for competitive bids 22. (1) Theprocedurefortheinvitationofcompetitivebids,isasfollows:

(a) Anyinvitationtoprospectiveproviderstosubmitbidsmustbebymeansofapublicadvertisementinnewspaperscommonlycirculatinglocally,thewebsiteofthemunicipalityoranyotherappropriateways(whichmayincludeanadvertisementintheGovernmentTenderBulletin);and

(b) theinformationcontainedinapublicadvertisement,mustinclude–(i) theclosuredateforthesubmissionofbids,whichmaynotbelessthan30daysin

thecaseoftransactionsoverR10million(VATincluded),orwhichareofalongtermnature,or14daysinanyothercase,fromthedateonwhichtheadvertisementisplacedinanewspaper,subjecttosubparagraph(2)ofthispolicy;

(ii) astatementthatbidsmayonlybesubmittedonthebiddocumentationprovidedbythemunicipality;and

(iii) date,timeandvenueofanyproposedsitemeetingsorbriefingsessions.;

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(2) Theaccountingofficermaydetermineaclosuredateforthesubmissionofbidswhichislessthanthe30or14daysrequirement,butonlyifsuchshorterperiodcanbejustifiedonthegroundsofurgencyoremergencyoranyexceptionalcasewhereitisimpracticalorimpossibletofollowtheofficialprocurementprocess.

(3) Bidssubmittedmustbesealed.

(4) Wherebidsarerequestedinelectronicformat,suchbidsmustbesupplementedbysealedhardcopies.

Procedure for handling, opening and recording of bids23. Theproceduresforthehandling,openingandrecordingofbids,areasfollows:

(a) Bids–(i) mustbeopenedonlyinpublic;(ii) mustbeopenedatthesametimeandassoonaspossibleaftertheperiodforthesubmission

ofbidshasexpired;and(iii) receivedaftertheclosingtimeshouldnotbeconsideredandreturnedunopenedimmediately.

(b) Anybidderormemberofthepublichastherighttorequestthatthenamesofthebidderswhosubmittedbidsintimemustbereadoutand,ifpractical,alsoeachbidder’stotalbiddingprice;

(c) Noinformation,excepttheprovisionsinsubparagraph(b),relatingtothebidshouldbedisclosedtobiddersorotherpersonsuntilthesuccessfulbidderisnotifiedoftheaward;and

(d) Theaccountingofficermust–(i) recordinaregisterallbidsreceivedintime;(ii) maketheregisteravailableforpublicinspection;and(iii) publishtheentriesintheregisterandthebidresultsonthewebsite.

Negotiations with preferred bidders24. (1) Theaccountingofficermaynegotiatethefinaltermsofacontractwithbiddersidentifiedthrough acompetitivebiddingprocessaspreferredbidders,providedthatsuchnegotiation–

(a) doesnotallowanypreferredbidderasecondorunfairopportunity; (b) isnottothedetrimentofanyotherbidder;and (c) doesnotleadtoahigherpricethanthebidassubmitted.

(2) Minutesofsuchnegotiationsmustbekeptforrecordpurposes.

Two-stage bidding process25. (1) Atwo-stagebiddingprocessisallowedfor–

(a) largecomplexprojects;(b) projectswhereitmaybeundesirabletopreparecompletedetailedtechnicalspecifications;

or(c) longtermprojectswithadurationperiodexceedingthreeyears;

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(d) projectswhereevaluationofbidsisbasedonfunctionalityasacriterion(e) projectswhereevaluationofbids isbasedonastipulatedminimum threshold for local

productionandcontent

(2) Inthefirststage:(a) projectsreferredtoinsubparagraphs(1)(a)to(c),technicalproposalsorbidsonconceptual

designor performance specifications should be invited, subject to technical aswell ascommercialclarificationsandadjustments;

(b) projects referred to in subparagraphs (1) (d), proposals or bids must be invited andevaluatedintermsofthefunctionalityevaluationcriteriaembodiedinthebiddocuments

(c) projectsreferredtoinsubparagraphs(1)(e),proposalsorbidsmustevaluatedintermsofthestipulatedminimumthresholdforlocalproductionandcontent.

(3) Inthesecondstage:(a) Projectsreferredto insubparagraphs(1)(a) to(c),final technicalproposalsandpriced

bidsshouldbeinvited.(b) Projectsreferredtoinsubparagraphs(1)(d)to(e),onlyproposalsorbidsthatachievethe

minimumqualifyingscore/percentageforfunctionalityandminimumstipulatedthresholdfor local production and content respectivelymust be evaluated further in accordancewiththe80/20or90/10preferencepointsystemsprescribedinPreferentialProcurementRegulations5and6.

Committee system for competitive bids26. (1) Acommitteesystemforcompetitivebidsisherebyestablished,consistingofthefollowing committeesforeachprocurementorclusterofprocurementsastheaccountingofficermay determine:

(a) abidspecificationcommittee;(b) abidevaluationcommittee;and(c) abidadjudicationcommittee;

(2) Theaccountingofficerappointsthemembersofeachcommittee,takingintoaccountsection117oftheAct;and

(3) Aneutralorindependentobserver,appointedbytheaccountingofficer,mustattendoroverseeacommitteewhenthisisappropriateforensuringfairnessandpromotingtransparency.

(4) Thecommitteesystemmustbeconsistentwith–

(a) paragraph27,28and29ofthisPolicy;and(b) anyotherapplicablelegislation.

(5) Theaccountingofficermayapplythecommitteesystemtoformalwrittenpricequotations.

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Bid specification committees27. (1) Abidspecificationcommitteemustcompilethespecificationsforeachprocurementofgoodsorservicesbythemunicipality.

(2) Specifications–(a) mustbedraftedinanunbiasedmannertoallowallpotentialsupplierstooffertheirgoods

orservices;(b) musttakeaccountofanyacceptedstandardssuchasthoseissuedbyStandardsSouth

Africa,theInternationalStandardsOrganisation,oranauthorityaccreditedorrecognisedbytheSouthAfricanNationalAccreditationSystemwithwhichtheequipmentormaterialorworkmanshipshouldcomply;

(c) must,wherepossible,bedescribedintermsofperformancerequiredratherthanintermsofdescriptivecharacteristicsfordesign;

(d) maynotcreatetradebarriersincontractrequirementsintheformsofspecifications,plans,drawings,designs,testingandtestmethods,packaging,markingorlabelingofconformitycertification;

(e) maynotmakereferencetoanyparticulartrademark,name,patent,design,type,specificoriginorproducerunlessthereisnoothersufficientlypreciseorintelligiblewayofdescribingthecharacteristicsofthework,inwhichcasesuchreferencemustbeaccompaniedbytheword“equivalent”;

(f) muststipulatetheappropriatepreferencepointsystemtobeutilizedintheevaluationandadjudicationofbidsintermsofthepointssystemsetoutinthePreferentialProcurementRegulations2011;and

(g) mustbeapprovedbytheaccountingofficerpriortopublicationoftheinvitationforbidsintermsofparagraph22ofthisPolicy.

(3) A bid specification committee must be composed of one or more officials of the municipalitypreferablythemanagerresponsibleforthefunctioninvolved,andmay,whenappropriate,includeexternalspecialistadvisors.

(4) Noperson,advisororcorporateentityinvolvedwiththebidspecificationcommittee,ordirectorofsuchacorporateentity,maybidforanyresultingcontracts.

Bid evaluation committees28. (1) Abidevaluationcommitteemust–

(a) evaluatebidsinaccordancewith–(i) thespecificationsforaspecificprocurement;and(ii) thepointssystemsetoutintermsofparagraph27(2)(f).

(b) evaluateeachbidder’sabilitytoexecutethecontract;(c) check in respect of the recommended bidder whether municipal rates and taxes and

municipalservicechargesarenotinarrears,and;

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(d) submittotheadjudicationcommitteeareportandrecommendationsregardingtheawardofthebidoranyotherrelatedmatter.

(2) Abidevaluationcommitteemustasfaraspossiblebecomposedof-(a) officialsfromdepartmentsrequiringthegoodsorservices;and(b) atleastonesupplychainmanagementpractitionerofthemunicipality.

Bid adjudication committees29. (1) Abidadjudicationcommitteemust–

(a) considerthereportandrecommendationsofthebidevaluationcommittee;and(b) either–

(i) depending on its delegations,make a final award or a recommendation to theaccountingofficertomakethefinalaward;or

(ii) make another recommendation to the accounting officer how to proceed with the relevantprocurement.

(2) Abidadjudicationcommitteemust consist ofat least four seniormanagersof themunicipalitywhichmustinclude–(a) thechieffinancialofficeror,ifthechieffinancialofficerisnotavailable,anothermanagerin

thebudgetandtreasuryofficereportingdirectlytothechieffinancialofficeranddesignatedbythechieffinancialofficer;and

(b) atleastoneseniorsupplychainmanagementpractitionerwhoisanofficialofthemunicipality;and

(c) atechnicalexpertintherelevantfieldwhoisanofficial,ifsuchanexpertexists.

(3) Theaccountingofficermustappointthechairpersonofthecommittee.Ifthechairpersonisabsentfromameeting,themembersofthecommitteewhoarepresentmustelectoneofthemtopresideat the meeting.

(4) Neitheramemberofabidevaluationcommittee,noranadvisororpersonassistingtheevaluationcommittee,maybeamemberofabidadjudicationcommittee.

(5) (a) Ifthebidadjudicationcommitteedecidestoawardabidotherthantheonerecommended bythebidevaluationcommittee,thebidadjudicationcommitteemustpriortoawardingthe bid–

(i) checkinrespectofthepreferredbidderwhetherthatbidder’smunicipalratesandtaxesandmunicipalservicechargesarenotinarrears,and;

(ii) notifytheaccountingofficer.

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(b) Theaccountingofficermay–(i) afterdueconsiderationofthereasonsforthedeviation,ratifyorrejectthedecision

ofthebidadjudicationcommitteereferredtoinparagraph(a);and(ii) ifthedecisionofthebidadjudicationcommitteeisrejected,referthedecisionof

theadjudicationcommitteebacktothatcommitteeforreconsideration.

(6) Theaccountingofficermayatanystageofabiddingprocess,referanyrecommendationmadebytheevaluationcommitteeortheadjudicationcommitteebacktothatcommitteeforreconsiderationoftherecommendation.

(7) Theaccountingofficermustcomplywithsection114oftheActwithin10workingdays

Procurement of banking services30. (1) Acontractforbankingservices–

(a) mustbeprocuredthroughcompetitivebids;(b) mustbeconsistentwithsection7or85oftheAct;and(c) maynotbeforaperiodofmorethanfiveyearsatatime.

(2) Theprocessforprocuringacontractforbankingservicesmustcommenceatleastninemonthsbeforetheendofanexistingcontract.

(3) Theclosuredateforthesubmissionofbidsmaynotbelessthan60daysfromthedateonwhichtheadvertisementisplacedinanewspaperintermsofparagraph22(1).Bids

mustberestrictedtobanksregisteredintermsoftheBanksAct,1990(ActNo.94of1990).

Procurement of IT related goods or services31. (1) TheaccountingofficermayrequesttheStateInformationTechnologyAgency(SITA)toassist withtheacquisitionofITrelatedgoodsorservicesthroughacompetitivebiddingprocess.

(2) Bothpartiesmustenterintoawrittenagreementtoregulatetheservicesrenderedby,andthe paymentstobemadeto,SITA.

(3) TheaccountingofficermustnotifySITAtogetherwithamotivationoftheITneedsif–(a) the transaction value of IT related goods or services required in any financial yearwill

exceedR50million(VATincluded);or(b) thetransactionvalueofacontracttobeprocuredwhetherforoneormoreyearsexceeds

R50million(VATincluded).

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(4) IfSITAcommentsonthesubmissionandthemunicipality disagreeswithsuchcomments,the commentsandthereasonsforrejectingornotfollowingsuchcommentsmustbesubmitted tothecouncil,theNationalTreasury,therelevantprovincialtreasuryandtheAuditorGeneral.

Procurement of goods and services under contracts secured by other organs of state32. (1) Theaccountingofficermayprocuregoodsorservicesunderacontractsecuredbyanotherorgan ofstate,butonlyif–

(a) the contract has been securedby that other organof state bymeansof a competitivebiddingprocessapplicabletothatorganofstate;

(b) thereisnoreasontobelievethatsuchcontractwasnotvalidlyprocured;(c) therearedemonstrablediscountsorbenefitstodoso;and(d) thatotherorganofstateandtheproviderhaveconsentedtosuchprocurementinwriting.

(2) Subparagraphs(1)(c)and(d)donotapplyif–(a) amunicipal entity procuresgoodsor services througha contract securedby its parent

municipality;or(b) amunicipalityprocuresgoodsorservicesthroughacontractsecuredbyamunicipalentity

ofwhichitistheparentmunicipality.

Procurement of goods necessitating special safety arrangements33. (1) Theacquisitionandstorageofgoodsinbulk(otherthanwater),whichnecessitatespecialsafety arrangements,includinggassesandfuel,shouldbeavoidedwhereeverpossible.

(2) Wherethestorageofgoodsinbulkisjustified,suchjustificationmustbebasedonsoundreasons,including the total cost of ownership, cost advantagesandenvironmental impact andmust beapprovedbytheaccountingofficer.

Proudly SA Campaign34. TheMsunduziMunicipalitysupportstheProudlySACampaigntotheextentthat,allthingsbeingequal, preferenceisgiventoprocuringlocalgoodsandservicesfrom:

• Firstly–suppliersandbusinesseswithinthemunicipalityordistrict;• Secondly–suppliersandbusinesseswithintherelevantprovince;• Thirdly–suppliersandbusinesseswithintheRepublic.

Appointment of consultants35. (1) TheaccountingofficermayprocureconsultingservicesprovidedthatanyTreasuryguidelinesin respectofconsultingservicesaretakenintoaccountwhensuchprocurementsaremade.

(2) Consultancyservicesmustbeprocuredthroughcompetitivebidsif(a) thevalueofthecontractexceedsR200000(VATincluded);or(b) thedurationperiodofthecontractexceedsoneyear.

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(3) Inadditiontoanyrequirementsprescribedbythispolicyforcompetitivebids,biddersmustfurnishparticularsof–(a) allconsultancyservicesprovidedtoanorganofstateinthelastfiveyears;and(b) anysimilarconsultancyservicesprovidedtoanorganofstateinthelastfiveyears.

(4) The accounting officermust ensure that copyright in any document produced, and the patentrightsorownershipinanyplant,machinery,thing,systemorprocessdesignedordevised,byaconsultantinthecourseoftheconsultancyserviceisvestedinthemunicipality.

Deviation from, and ratification of minor breaches of, procurement processes 36. (1) Theaccountingofficermay–

(a) dispensewiththeofficialprocurementprocessesestablishedbythisPolicyandtoprocureanyrequiredgoodsorservicesthroughanyconvenientprocess,whichmayincludedirectnegotiations,butonly–

(i) inanemergency;

(ii) ifsuchgoodsorservicesareproducedoravailablefromasingle provideronly;

(iii) fortheacquisitionofspecialworksofartorhistoricalobjectswherespecifications aredifficulttocompile;

(iv) acquisitionofanimalsforzoosand/ornatureandgamereserves;or

(v) in anyother exceptional casewhere it is impractical or impossible to follow the officialprocurementprocesses;and

(b) ratifyanyminorbreachesoftheprocurementprocessesbyanofficialorcommitteeactingintermsofdelegatedpowersordutieswhicharepurelyofatechnicalnature.

(2) Theaccountingofficermustrecordthereasonsforanydeviationsintermsofsubparagraphs(1)

(a)and(b)ofthispolicyandreportthemtothenextmeetingofthecouncilandincludeasanote totheannualfinancialstatements.

(3) Subparagraph (2) does not apply to the procurement of goods and services contemplated inparagraph11(2)ofthispolicy.

Unsolicited bids37. (1) Inaccordancewithsection113oftheActthereisnoobligationtoconsiderunsolicitedbidsreceived outsideanormalbiddingprocess.

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(2) Theaccountingofficermaydecideintermsofsection113(2)oftheActtoconsideranunsolicitedbid,onlyif–(a) the product or service offered in terms of the bid is a demonstrably or proven unique

innovativeconcept;(b) theproductorservicewillbeexceptionallybeneficialto,orhaveexceptionalcostadvantages;(c) thepersonwhomadethebidisthesoleprovideroftheproductorservice;and(d) thereasonsfornotgoingthroughthenormalbiddingprocessesarefoundtobesoundby

theaccountingofficer.

(3) Iftheaccountingofficerdecidestoconsideranunsolicitedbidthatcomplieswithsubparagraph(2)ofthispolicy,thedecisionmustbemadepublicinaccordancewithsection21AoftheMunicipalSystemsAct,togetherwith–(a) reasonsastowhythebidshouldnotbeopentoothercompetitors;(b) anexplanationofthepotentialbenefitsiftheunsolicitedbidwereaccepted;and(c) aninvitationtothepublicorotherpotentialsupplierstosubmittheircommentswithin30

daysofthenotice.

(4) Theaccountingofficermustsubmitallwrittencommentsreceivedpursuanttosubparagraph(3),includingany responses from theunsolicitedbidder, to theNationalTreasuryand the relevantprovincialtreasuryforcomment.

(5) Theadjudicationcommitteemustconsidertheunsolicitedbidandmayawardthebidormakearecommendationtotheaccountingofficer,dependingonitsdelegations.

(6) Ameetingoftheadjudicationcommitteetoconsideranunsolicitedbidmustbeopentothepublic.

(7) Whenconsideringthematter,theadjudicationcommitteemusttakeintoaccount–(a) anycommentssubmittedbythepublic;and(b) any written comments and recommendations of the National Treasury or the relevant

provincialtreasury.

(8) IfanyrecommendationsoftheNationalTreasuryorprovincialtreasuryarerejectedornotfollowed,theaccountingofficermustsubmittotheAuditorGeneral,therelevantprovincialtreasuryandtheNationalTreasurythereasonsforrejectingornotfollowingthoserecommendations.

(9) Suchsubmissionmustbemadewithinsevendaysafterthedecisionontheawardoftheunsolicitedbidistaken,butnocontractcommittingthemunicipalitytothebidmaybeenteredintoorsignedwithin30daysofthesubmission.

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Combating of abuse of supply chain management system38. (1) Theaccountingofficermust–

(a) takeallreasonablestepstopreventabuseofthesupplychainmanagementsystem;(b) investigate any allegations against an official or other role player of fraud, corruption,

favouritism, unfair or irregular practices or failure to complywith this Policy, andwhenjustified–(i) takeappropriatestepsagainstsuchofficialorotherroleplayer;or(ii) reportanyallegedcriminalconducttotheSouthAfricanPoliceService;

(c) checktheNationalTreasury’sdatabasepriortoawardinganycontracttoensurethatnorecommendedbidder,oranyof itsdirectors, is listedasapersonprohibited fromdoingbusinesswiththepublicsector;

(d) rejectanybidfromabidder–(i) ifanymunicipalratesandtaxesormunicipalservicechargesowedbythatbidder

oranyofitsdirectorstothemunicipality,ortoanyothermunicipalityormunicipalentity,areinarrearsformorethanthreemonths;or

(ii) who during the last five years has failed to perform satisfactorily on a previouscontractwiththemunicipalityoranyotherorganofstateafterwrittennoticewasgiventothatbidderthatperformancewasunsatisfactory;

(e) rejectarecommendationfor theawardofacontract if therecommendedbidder,oranyof itsdirectors,hascommittedacorruptorfraudulentact incompetingfortheparticularcontract;

(f) cancelacontractawardedtoapersonif–(i) thepersoncommittedanycorruptorfraudulentactduringthebiddingprocessor

theexecutionofthecontract;or(ii) anofficialorotherroleplayercommittedanycorruptorfraudulentactduringthe

biddingprocessortheexecutionofthecontractthatbenefitedthatperson;and(g) rejectthebidofanybidderifthatbidderoranyofitsdirectors–

(i) has abused the supply chain management system of the municipality or hascommittedanyimproperconductinrelationtosuchsystem;

(ii) hasbeenconvictedforfraudorcorruptionduringthepastfiveyears;(iii) has willfully neglected, reneged on or failed to comply with any government,

municipalorotherpublicsectorcontractduringthepastfiveyears;or(iv) hasbeenlistedintheRegisterforTenderDefaultersintermsofsection29ofthe

PreventionandCombatingofCorruptActivitiesAct(No12of2004).

(2) TheaccountingofficermustinformtheNationalTreasuryandrelevantprovincialtreasuryinwritingofanyactionstakenintermsofsubparagraphs(1)(b)(ii),(e)or(f)ofthispolicy.

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Part 3: Logistics, Disposal, Risk and Performance Management

Logistics management39. Theaccountingofficermustestablishandimplementaneffectivesystemoflogisticsmanagement,which mustinclude-

(a) themonitoringofspendingpatternsontypesorclassesofgoodsandservicesincorporating,wherepractical,thecodingofitemstoensurethateachitemhasauniquenumber;

(b) thesettingofinventorylevelsthatincludesminimumandmaximumlevelsandleadtimeswherevergoodsareplacedinstock;

(c) theplacingofmanualorelectronicordersforallacquisitionsotherthanthosefrompettycash;(d) beforepaymentisapproved,certificationbytheresponsibleofficerthatthegoodsandservicesare

receivedorrenderedontimeandisinaccordancewiththeorder,thegeneralconditionsofcontractandspecificationswhereapplicableandthatthepricechargedisasquotedintermsofacontract;

(e) appropriatestandardsofinternalcontrolandwarehousemanagementtoensurethatgoodsplacedinstoresaresecureandonlyusedforthepurposeforwhichtheywerepurchased;

(f) regular checking to ensure that all assets including official vehicles are properly managed,appropriatelymaintainedandonlyusedforofficialpurposes;and

(g) monitoringandreviewofthesupplyvendorperformancetoensurecompliancewithspecificationsandcontractconditionsforparticulargoodsorservices.

Disposal management40. (1) Thecriteriaforthedisposalorlettingofassets,includingunserviceable,redundantorobsolete assets,subjecttosections14and90oftheAct,areasfollows:

(i) theaccountingofficermustestablishandimplementanappropriatedisposalmanagementsysteminordertoensurethatthedisposalorlettingofassets,includingunserviceable,redundantorobsoleteassetsisintermsoftheMFMA;

(ii) thedisposalmanagementsystemmust include thedisposalplan,marketassessment,disposalmethod,howtoexecutethedisposalandtheupdatingoftheprocurementplanandassetregister.

(2) Assetsmaybedisposedofby(i) transferringtheassettoanotherorganofstateintermsofaprovisionoftheActenabling

thetransferofasse(ii)transferringtheassettoanotherorganofstateatmarketrelatedvalueor,whenappropriate,freeofcharge;

(ii) sellingtheasset;or(iii) destroyingtheasset.

(3) Theaccountingofficermustensurethat–(a) immovablepropertyissoldonlyatmarketrelatedpricesexceptwhenthepublicinterestor

theplightofthepoordemandsotherwise;(b) movableassetsaresoldeitherbywayofwrittenpricequotations,acompetitivebidding

process,auctionoratmarketrelatedprices,whicheveristhemostadvantageous;

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(c) firearmsarenotsoldordonatedtoanypersonor institutionwithinoroutside theRepublicunlessapprovedbytheNationalConventionalArmsControlCommittee;

(d) immovablepropertyisletatmarketrelatedratesexceptwhenthepublicinterestortheplightofthepoordemandsotherwise;

(e) all fees, charges, rates, tariffs, scales of fees or other charges relating to the letting ofimmovablepropertyareannuallyreviewed;

(f) whereassetsaretradedinforotherassets,thehighestpossibletrade-inpriceisnegotiated;and(g) inthecaseofthefreedisposalofcomputerequipment,theprovincialdepartmentofeducationis

firstapproachedtoindicatewithin30dayswhetheranyofthelocalschoolsareinterestedintheequipment.

Risk management41. (1) Thecriteriafortheidentification,considerationandavoidanceofpotentialrisksinthesupplychain managementsystem,areasfollows:

(a) theChiefFinancialOfficermust;(i) assessthenatureandextentoftherisksassociatedwiththemunicipality’soperation(ii) decidethedegreeoftoleranceoranacceptableleveloflossordegreeoffailure(iii) decidehowtomanageorminimizetherisksidentified(iv)monitor, report and from time to time reassess the level and implication of the risk

exposure(v) maintainariskregisterthatidentifiesandassessesallknownrisksandtheactiontaken

tomanagethoserisks(b) the risk register must be regularly updated and the outcome reported to the Executive

committee

(2) Riskmanagementmustinclude–(a) theidentificationofrisksonacase-by-casebasis;(b) theallocationofriskstothepartybestsuitedtomanagesuchrisks;(c) acceptanceofthecostoftheriskwherethecostoftransferringtheriskisgreaterthanthat

ofretainingit;(d) themanagementofrisksinapro-activemannerandtheprovisionofadequatecoverfor

residualrisks;and(e) theassignmentofrelativeriskstothecontractingpartiesthroughclearandunambiguous

contractdocumentation.(f)theSeniorManagers:Financemusteffectall insurancecoverandmaintainarecordofall

policydetailsfornotedfinancialrisks(g) theStrategicExecutiveManagersareresponsibleforimplementingtheriskmanagement

policy,includingfinancialriskswithintheirbusinessunits(h) projects sureties must be determined according to affordability and risk for different

categoriesofcontractsasfollows:

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Project Type JBCC GCC Project ValueMicro 0% 0% NotExceedingR60000Small 0% 0% NotExceedingR100000Medium 5% 5% NotExceedingR500000Major JBCC GCC ExceedingR500000

(i) theminimum for retentionmonies held froma contractor during the construction periodmustbedeterminedaccordingtoaffordabilityandriskfordifferentcategoriesofcontractsasfollows:

Project Type JBCC GCC Project ValueMicro 2.5% 2.5% NotExceedingR60000Small 3.5% 3.5% NotExceedingR100000Medium 5% 5% NotExceedingR500000Major JBCC GCC ExceedingR500000

(j) paymentsforsmallandmicroprojectsmustbemadewithin14daysaftersubmissionofavalidtaxinvoicewhichhasbeenapprovedbytheMsunduziMunicipality’sRepresentativeorasspecifiedinthemunicipality’sSpecialConditionsofContracts

(k) themunicipalityshallatitsdiscretion,acceptsignedcessionsbySmallMediumEnterprisestosupplierssothatpaymentsaremadedirectlytosuppliersforthesupplyofmaterialsasaformofassistingSmallMediumEnterprises.AllcessionsshallbeintermsoftheconditionsoftheGCCorJBCC,whicheverisappropriate

(l) theserviceprovidermaynotcedeorassignacontractoranymoniesdueorthatmaybecomeduetoit,withoutthepriorwrittenconsentoftheExecutiveSupplyChainManagementorintermsoftheconditionsofthecontract.

(m) penaltiesonlatecompletionofworkshallbeaspertheGCCorJBCCorasspecifiedinthetenderdocuments

(n) the seniormanagers: Financewith the assistance from relevant Seniormanagers shallcarryoutallnegotiationswithinsurers,inrespectofinsuranceclaims,wherenecessary.

(o) thevalueandtheresponsibilityforspecificinsurancesrequiredbycontractorsandserviceprovidersshallbespecifiedinthetenderdocuments

(p) (i) insomeinstancesitmaybeinthebestinterestofthemunicipalitytoallowprice adjustmentsduetoescalation.

(ii) acarefulanalysisofescalationclausesandformulasshouldbetakenintoaccounttoensurethatthebestinterestsofthemunicipalityareserved.

(iii)iftheaccountingofficerresolvestoallowescalation,thismustbespecifiedinthebiddocuments, including the formula and the time framesatwhich intervals such priceadjustmentswillbeconsidered.

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(q) (i) exchangeratefluctuationsmustbeconsideredwhenitemsareimportedorhave importedcomponent.

(ii) thefuturefluctuationsoftherandareparticularlyimportantifthecontractperiodisoveraspecificperiodorifdeliveryisdueatadatesometimeinthefuture.

(iii)theaccountingofficermustmakeadecisionaswhetherornotthemunicipalitywilltakeriskorwhethersupplierswillbeallocatedtherisk.

(v) Thestandardapproachisthatthebiddermustarrangeforforwardcover.(vi)Anawardmadeduringtendervalidityperiodexpiring,thepricewillremainfixedandfirm

(r) (i) extraworksorvariationstoacontractshallbeauthorizedinwritingbytheappropriateSeniormanagerordulyauthorizedofficial(ii)anyvariationwhichwouldproduceanincreaseintheamountofanacceptedtenderor

approvedbudgetshallbereportedtotheadjudicationcommitteeandwill requiretheapprovaloftheAdjudicationCommitteeand/orAccountingOfficerbeforeanypaymentis made.

(iii)contractsmaybevariedorexpandedbynotmorethan15%orR15million(includingallapplicabletaxes)forconstructionrelatedgoods,worksand/orservicesand10%orR10million(includingallapplicabletaxes)forallothergoods,worksand/orservicesoftheoriginalvalueofthecontract,whicheveristheloweramount.

(s) TheMsunduziMunicipalitymay,priortotheawardofthebid,cancelthebidif:(i) duetochangedcircumstancesthereisnolongeraneedthegoodsorservicesforwhich

thebidweresolicited;(ii) fundsarenolongeravailabletocoverthetotalenvisagedexpenditure;or(iii)noacceptablebidswerereceived

(t) TheMsunduziMunicipalitymayrejectallbidsifandwhendeemednecessary.

Performance management42. (1) Theaccountingofficermustestablishandimplementaninternalmonitoringsysteminorderto determine,onthebasisofaretrospectiveanalysis,whethertheauthorisedsupplychain managementprocesseswerefollowedandwhethertheobjectivesofthisPolicywereachieved.

(2) Inthemonitoringofsupplychainmanagementperformance,theaccountingofficertogetherwiththeChiefFinancialOfficer,mustsetgoalsandperformancecriteriaforSCMofficialsagainstwhichperformancecanbemeasured,

(3) Issuesthatneedtobeincludedintherelevantreviewsinclude: (a)achievementofgoals (b)compliancetonormsandstandards (c)savingsgenerated (d)Storesefficiency (e)costvariancesperitemandacrossbusinessunits (f)contractmanagement

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(g)costefficiencyoftheprocurementprocess(h)supplychainmanagementobjectivesinlinewiththeprovisionsoftheCIDBActandregulations(i)principlesofco-operativegovernanceasexpoundedintheConstitutionareobserved(j)regionaleconomicdisparitiesarebeingaddressedandpromoted.

Part 4: Other matters

Prohibition on awards to persons whose tax matters are not in order 43. (1) NoawardaboveR15000maybemadeintermsofthisPolicytoapersonwhosetaxmattershave notbeendeclaredbytheSouthAfricanRevenueServicetobeinorder.

(2) BeforemakinganawardtoapersontheaccountingofficermustfirstcheckwithSARSwhetherthatperson’staxmattersareinorder.

(3) IfSARSdoesnotrespondwithin7dayssuchperson’staxmattersmayforpurposesofsubparagraph(1)bepresumedtobeinorder.

Prohibition on awards to persons in the service of the state 44. Irrespectiveoftheprocurementprocessfollowed,noawardmaybemadetoapersonintermsofthis Policy –

(a) whoisintheserviceofthestate;(b) if thatperson isnotanaturalperson,ofwhichanydirector,manager,principal shareholderor

stakeholderisapersonintheserviceofthestate;or(c) apersonwhoisanadvisororconsultantcontractedwiththemunicipality.

Awards to close family members of persons in the service of the state 45. Theaccountingofficermustensurethatthenotestotheannualfinancialstatementsdiscloseparticulars ofanyaward ofmorethanR2000toapersonwhoisaspouse,childorparentofapersonintheservice ofthestate,orhasbeenintheserviceofthestateintheprevioustwelvemonths,including–

(a) thenameofthatperson;(b) thecapacityinwhichthatpersonisintheserviceofthestate;and(c) theamountoftheaward.

Ethical standards46. (1) AcodeofethicalstandardsassetoutintheNationalTreasury’scodeofconductforsupplychain managementpractitionersandotherroleplayersinvolvedinsupplychainmanagementishereby establishedforofficialsandotherroleplayersinthesupplychainmanagementsystemofthe municipalityinordertopromote–

(a) mutualtrustandrespect;and(b) anenvironmentwherebusinesscanbeconductedwithintegrityandinafairandreasonable

manner.

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(2) GeneralPrinciples(a) themunicipalitycommitsitselftoapolicyoffairdealingandintegrityintheconductingofits

business.Officialsandotherroleplayersinvolvedinsupplychainmanagement(SCM)areinapositionoftrust,implyingadutytoactinthepublicinterest.Officialsandotherroleplayersshould not perform their duties to unlawfully gain any formof compensation, payment orgratuitiesfromanyperson,orprovider/contractorforthemselves,theirfamilyortheirfriends.

(b) OfficialsandotherroleplayersinvolvedinSCMshouldensurethattheyperformtheirduties

efficiently,effectivelyandwith integrity, inaccordancewiththerelevant legislation,policiesandguidelines.Theyshouldensurethatpublicresourcesareadministeredresponsibly.

(c) OfficialsandotherroleplayersinvolvedinSCMshouldbefairandimpartialintheperformance

of their functions. Theyshouldatno timeaffordanyunduepreferential treatment toanygrouporindividualorunfairlydiscriminateagainstanygrouporindividual.Theyshouldnotabusethepowerandauthorityvestedinthem.

(3) Conflictofinterest

Anofficialorotherroleplayerinvolvedwithsupplychainmanagement–(a) musttreatallprovidersandpotentialprovidersequitably;

(b) maynotusehisorherpositionforprivategainortoimproperlybenefitanotherperson;

(c) maynotacceptanyreward,gift,favour,hospitalityorotherbenefitdirectlyorindirectly,includingtoanyclosefamilymember,partnerorassociateofthatperson,ofavaluemorethanR350;

(d) mustdeclaretotheaccountingofficerdetailsofanyreward,gift,favour,hospitalityorotherbenefitpromised,offeredorgrantedtothatpersonortoanyclosefamilymember,partnerorassociateofthatperson;

(e) mustdeclaretotheaccountingofficerdetailsofanyprivateorbusinessinterestwhichthatperson,oranyclosefamilymember,partnerorassociate,mayhaveinanyproposedprocurementordis-posalprocess,orinanyawardofacontractbythemunicipality;

(f) mustimmediatelywithdrawfromparticipatinginanymannerwhatsoeverinaprocurementordis-posalprocessor in theawardofacontract inwhich thatperson,oranyclose familymember,partnerorassociate,hasanyprivateorbusinessinterest;

(g) mustdeclareanybusiness,commercialandfinancialinterestsoractivitiesundertakenforfinancialgainthatmayraiseapossibleconflictofinterest;

(h) shouldnotplacehim/herselfunderanyfinancialorotherobligationtooutsideindividualsororga-nizationsthatmightseektoinfluencethemintheperformanceoftheirofficialduties;and

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(i) should not take improper advantageof their previous office after leaving their official position.

4. Accountability

(a) Practitionersareaccountablefortheirdecisionsandactionstothepublic.

(b)Practitionersshouldusepublicpropertyscrupulously.

(c) Only accounting officers or their delegates have the authority to commit the municipality to anytransactionfortheprocurementofgoodsand/orservices.

(d) Alltransactionsconductedbyapractitionershouldberecordedandaccountedforinanappropriateaccountingsystem.Practitionersshouldnotmakeanyfalseormisleadingentriesintosuchasystemforanyreasonwhatsoever.

(e) Practitionersmustassisttheaccountingofficerincombatingfraud,corruption,favouritismandunfairandirregularpracticesinthesupplychainmanagementsystem.

(f) Practitionersmustreporttotheaccountingofficeranyallegedirregularconductinthesupplychainmanagementsystemwhichthatpersonmaybecomeawareof,including

(i) anyallegedfraud,corruption,favouritismorunfairconduct;

(ii) anyallegedcontraventionofthepolicyoninducements,rewards,giftsandfavourstomunicipalitiesormunicipalentities,officialsorotherroleplayers;and

(iii) anyallegedbreachofthiscodeofconduct.

(g) Anydeclarationsmademustberecordedinaregisterwhichtheaccountingofficermustkeepforthispurpose.Anydeclarationsmadebytheaccountingofficermustbemadetothemayorwhomusten-surethatsuchdeclarationisrecordedintheregister.

5. Openness

(a) Practitionersshouldbeasopenaspossibleaboutallthedecisionsandactionsthattheytake.Theyshouldgivereasonsfortheirdecisionsandrestrictinformationonlyifitisinthepublicinteresttodoso.

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6. Confidentiality

(a) Anyinformationthatisthepropertyofthemunicipalityoritsprovidersshouldbeprotectedatalltimes.Noinformationregardinganybid/contract/bidder/contractormayberevealedifsuchanactionwillinfringeontherelevantbidder’s/contractor’spersonalrights.

(b)Mattersofconfidentialnature in thepossessionofofficialsandotherroleplayers involved inSCMshouldbekeptconfidentialunlesslegislation,theperformanceofdutyortheprovisionsoflawrequiresotherwise.SuchrestrictionsalsoapplytoofficialsandotherroleplayersinvolvedinSCMaftersepara-tionfromservice.

7. BidSpecification/Evaluation/AdjudicationCommittees

(a) Bidspecification,evaluationandadjudicationcommitteesshouldimplementsupplychain managementonbehalfofthemunicipalityinanhonest,fair,impartial,transparent,cost-effective andaccountablemanner. (b) Bidevaluation/adjudicationcommitteesshouldbefamiliarwithandadheretotheprescribed legislation,directivesandproceduresinrespectofsupplychainmanagementinordertoperform effectivelyandefficiently.

(c) Allmembersofbidadjudicationcommitteesshouldbeclearedbytheaccounting officeratthe levelof“CONFIDENTIAL”andshouldberequiredtodeclaretheirfinancialinterestannually.

(d) Nopersonshould-

i. interferewiththesupplychainmanagementsystemofthemunicipality;orii. amendortamperwithanypricequotation/bidafteritssubmission.

8. Combative Practices(a) Combativepracticesareunethicalandillegalandshouldbeavoidedatallcost.Theyincludebut

arenotlimitedto:

(i) Suggestionstofictitiouslowerquotations;

(ii) Referencetonon-existentcompetition;

(iii) Exploitingerrorsinpricequotations/bids;

(iv) Solicitingpricequotations/bidsfrombidders/contractorswhosenamesappearonthe RegisterforTenderDefaulters.

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9. A breach of the code of ethics must be dealt with as follows - (a) inthecaseofanemployee,intermsofthedisciplinaryproceduresofthemunicipality envisaged

insection67(1)(h)oftheMunicipalSystemsAct;(b) inthecasearoleplayerwhoisnotanemployee,throughotherappropriatemeansin

recognitionoftheseverityofthebreach.(c) Inallcases,financialmisconductmustbedealtwithintermsofchapter15oftheAct.

Inducements, rewards, gifts and favours to municipalities, officials and other role players 47. (1) Nopersonwhoisaproviderorprospectiveproviderofgoodsorservices,orarecipientor prospectiverecipientofgoodsdisposedortobedisposedofmayeitherdirectlyorthrougha representativeorintermediarypromise,offerorgrant–

(a) anyinducementorrewardtothemunicipality fororinconnectionwiththeawardofacontract;or

(b) any reward,gift,favourorhospitalityto–(i) anyofficial;or(ii) anyotherroleplayerinvolvedin the implementationofthisPolicy.

(2) The accounting officermust promptly report any alleged contravention of subparagraph (1) totheNationalTreasury for consideringwhether theoffendingperson,andany representativeorintermediarythroughwhichsuchpersonisallegedtohaveacted,shouldbelistedintheNationalTreasury’sdatabaseofpersonsprohibitedfromdoingbusinesswiththepublicsector.

(3) Subparagraph(1)doesnotapplytogiftslessthanR350invalue.

Sponsorships48. TheaccountingofficermustpromptlydisclosetotheNationalTreasuryandtherelevantprovincialtreasury anysponsorshippromised,offeredorgranted,whetherdirectlyorthrougharepresentativeorintermediary, byanypersonwhois–

(a) aproviderorprospectiveproviderofgoodsorservices;or(b) arecipientorprospectiverecipientofgoodsdisposedortobedisposed.

Objections and complaints49. Personsaggrievedbydecisionsoractionstakenintheimplementationofthissupplychainmanagement system,maylodgewithin14daysofthedecisionoraction,awrittenobjectionorcomplaintagainstthe decisionoraction.

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Resolution of disputes, objections, complaints and queries50. (1) Theaccountingofficermustappointanindependentandimpartialperson,notdirectlyinvolvedin thesupplychainmanagementprocesses–

(a) toassistintheresolutionofdisputesbetweenthemunicipalityandotherpersonsregarding(i) anydecisionsoractionstakenintheimplementationofthesupplychainmanagement

system;or(ii) any matter arising from a contract awarded in the course of the supply chain

managementsystem;or(b) todealwithobjections,complaintsorqueriesregardinganysuchdecisionsoractionsorany

mattersarisingfromsuchcontract.

(2) Theaccountingofficer,oranotherofficialdesignatedbytheaccountingofficer,isresponsibleforassistingtheappointedpersontoperformhisorherfunctionseffectively.

(3) Thepersonappointedmust–(a) strivetoresolvepromptlyalldisputes,objections,complaintsorqueriesreceived;and(b) submitmonthly reports to theaccountingofficeronalldisputes,objections,complaintsor

queriesreceived,attendedtoorresolved.

(4) Adispute,objection,complaintorquerymaybereferredtothe relevantprovincialtreasuryif–

(a) thedispute,objection,complaintorqueryisnotresolvedwithin60days;or(b) noresponseisforthcomingwithin60days.

(5) Iftheprovincialtreasurydoesnotorcannotresolvethematter,thedispute,objection,complaintorquerymaybereferredtotheNationalTreasuryforresolution.

(6) Thisparagraphmustnotbereadasaffectingaperson’srightstoapproachacourtatanytime.

Contracts providing for compensation based on turnover51. IfaserviceprovideractsonbehalfofMsunduziMunicipalitytoprovideanyserviceoractasacollector offees,servicechargesortaxesandthecompensationpayabletotheserviceproviderisfixedasan agreedpercentageofturnoverfortheserviceortheamountcollected,thecontractbetweentheservice providerandthemunicipalitymuststipulate–

(a) acaponthecompensationpayabletotheserviceprovider;and(b) thatsuchcompensationmustbeperformancebased.

Commencement52. ThisPolicytakeseffecton07December2011

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taRiFF Policy

INDEX

Section Details

1 Preamble2 Definitions3 Introduction4 Objective5 Principles of the Tariff Policy6 Calculation of Tariffs for Major Services7 Levying of Rates8 Electricity Tariffs9 Water Tariffs

10 Refuse Removal Tariffs11 Sewerage Tariffs12 Other Tariffs13 By-Laws to give effect to the Policy

1. PREAMBLE

In terms of Section 62 (1) of the Municipal Finance ManagementAct (MFMA) theAccounting Officer of aMunicipalityisresponsibleformanagingthefinancialadministrationofthemunicipalityand,intermsofS62(1)(f),mustforthispurposetakeallreasonablestepstoensure–“thatthemunicipalityhasandimplementsatariffpolicyreferredtoinSection74oftheMunicipalSystemsAct”(MSA).

IngivingeffecttoS74(1)oftheMunicipalSystemsAct,themunicipalityadoptsthefollowingasthetariffpolicy.

2. DEFINITIONS

2.1 “Municipal area” meanstheareainrespectofwhichthemunicipalityhasexecutiveandlegislativeauthorityasdeterminedbytheconstitutionandtheNationallegislationanddemarcatedintermsoftheDemarcationAct(Act27of1998);

2.2 “Council” refersTheMsunduziMunicipalityanditssuccessorsinlawandincludestheCouncilofthatmunicipalityoritsExecutiveCommitteeoranyotherbodyactingbyvirtueofanypowerdelegatedtoitintermsoflegislation,aswellasanyofficialtowhomtheExecutiveCommitteehasdelegatedanypowersanddutieswithregardtothispolicy;

2.3 “Tariff policy” meansapolicyon,thelevyingoffees,ratesortaxesforthemunicipalservicesprovidedbythemunicipalityitself,whichcomplieswiththeMunicipalSystemsAct,2000.

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INTRODUCTION

3.1 Rates and TariffsrepresentthechargesleviedbyCouncilonownersandconsumersfortheutilisationofservicesprovidedbytheMunicipalityandareraisedinordertofundtheseservices.Tariffsarecalculateddependentuponthenatureoftheservicebeingprovided.Theymaybesetinsuchamannersoastorecoverthefullcostoftheservicebeingprovidedorrecoverapartofthosecosts,ortobringaboutasurplusthatcanbeutilisedtosubsidiseothernon-economicalservices.

4. OBJECTIVES

Theobjectiveofthetariffpolicyistoensurethat:

4.1 The rates and tariffs of the Municipality comply with the legislation prevailing at the time ofimplementation;

4.2 Municipalservicesarefinanciallysustainable,affordableandequitable;

4.3 Thereisconsistencyinhowtheratesandtariffsareappliedthroughoutthemunicipality;

4.4 Theneedsoftheindigentaretakenintoaccount;and

4.5 Thepolicy is in linewith theprinciplesoutlined inMunicipalSystemsAct,2000 (ActNo.32of2000).

5. PRINCIPLES OF THE TARIFF POLICY

The underlying principles, which should at least be taken into account when formulating a tariff policy, arecontainedinSection74(2)oftheMunicipalSystemsAct,2000(ActNo.32of2000).Thefollowinghavebeentakenintoaccountinthedevelopmentofthispolicy:

5.1 Servicetariffsleviedbythemunicipalityshallbeviewedasuserchargesandtheusersofmunicipalservicesshouldbetreatedequitablywhenapplyingthesetariffs.

5.2 Consumersshouldpay inproportion to theamountofservicesconsumed,as faraspracticallypossible.

5.3 Thetariffsforthefourmajorservicesrenderedbythemunicipality,namelyelectricity,water,refuseremovalandsewerage,aretorecoverinfullorpartially,theexpensesreasonablyassociatedwiththeprovidingofeachserviceconcerned,includingcapital,operating,maintenance,administration,replacementandinterestcharges.

5.4 Tariffsmustbesetataleveltofacilitatefinancialsustainabilityoftheservice,takingintoaccountsubsidizationfromsourcesotherthantheserviceconcerned.

5.5 Themunicipalityistoensurethatthetariffsleviedwithregardtotheabovementionedservicesgenerateanoperatingsurpluswherepossiblehavingregardto5.4above.Thesurplusistobeappliedinreliefofpropertyratesandforthefinancingofaportionofgeneralservicesorforthefuturecapitalexpansionoftheserviceconcerned,orboth.

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5.6 Provisionmaybemadeforthepromotionoflocaleconomicdevelopmentthroughaspecialrateortariffforcertainorallcategoriesofcommercialandindustrialusers.

5.7 Themunicipalityshalldevelop,implementandatleastannuallyreviewanindigentsupportpolicyforthemunicipalarea.Theextentofsubsidizationoftheindigentsistobefullydisclosedintermsofthemunicipality’sindigentpolicy.

5.8 Themunicipalitymaydifferentiatebetweendifferentcategoriesofusersandconsumersinregardtothetariffsthatitlevies.Suchdifferentiationshall,however,atalltimesbereasonableandshallnotresultinunfairdiscrimination,andshallbefullydisclosedineachannualbudget.

5.9 Themunicipalityistoensurethatitstariffsshallbeeasilyexplainable,andtranslatedintolanguageswhichallconsumersandusersaffectedbythetariffpolicyconcernedcanunderstand.

5.10 Theconsumptionofmeasurableservices,suchaselectricityandwater,shallbeproperlymeteredbythemunicipality,andmetersshallberead,wherevercircumstancesreasonablypermit,onamonthlybasis. Thecharges leviedonconsumersshallbeproportionate to thequantityof theservicethattheyconsume.

5.11 Amonthlyavailabilitychargeforaservicemaybeleviedbythemunicipalitywheretheserviceisavailabletoaconsumerandwheretheconsumerdoesnotmakeuseofsuchservice,andthesecharges shall be fixed for each type of property. For example, consumers of electricity couldthereforepaytwocharges:onewhichisunrelatedtothevolumeofconsumptionandis leviedbecauseoftheavailabilityoftheserviceconcerned(i.e.ademandcharge);andanotherwhichisdirectlyrelatedtotheconsumptionoftheserviceinquestion.

5.12 Byadoptingthistariffstructure,namelyafixedavailabilitychargecoupledwithachargebasedonconsumption,themunicipalitybelievesthatit isproperlyattendingtothedemandswhichfutureexpansion,variabledemandcyclesandotherfluctuationswillmakeonservicedelivery.

5.13 In determining the tariffs for services such as electricity andwater, themunicipality shall takeintoaccountthehighcapitalcostofestablishingandexpandingsuchservicesandthefixedandoperatingcostsofmaintainingtheseservices.

5.14 Inordertocomplywithlegislationandtheprinciplesofgenerallyacceptedaccountingpractice,Councilhasadoptedthepolicyofreflectingallincomeforegoneandrebatesasexpenditurewiththecorrespondingamountbeingreflectedasrevenue.Accordingly incaseswherethisapplies,fromabillingperspectivethefulltariffwillberaisedandthenrebatedtoreflectthereducedcharge.

6. CALCULATION OF TARIFFS FOR MAJOR SERVICES

6.1 IntermsofSection75(A)oftheMunicipalSystemsActAmendmentAct51/2002,amunicipalitymay,

• Levyandrecoverfees,chargesortariffsinrespectofanyfunctionorserviceofthemunicipality,• Thatsuchfees,chargesortariffs leviedbyaresolutionpassedbythemunicipalcouncilwitha

supportingvoteofamajorityofitsmembers.• The proposed fees, charges or tariffs will be presented to the community during Council’s

consultations.• Inordertodeterminethetariffsthatmustbechargedforthesupplyofthefourmajorservices,the

municipalityshalltakeintoaccountallthecostsofoperationoftheservices,includingthefollowing:

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• Costofbulkpurchasesinthecaseofelectricityandwater.• Distributioncosts.• Distributionlossesinthecaseofelectricityandwater.• Depreciationexpenses.• Maintenanceofinfrastructureandotherfixedassets.Administrationandservicecosts,including:service charges levied by other departments such as finance, human resources and legal

services;reasonablegeneraloverheads;adequatecontributionstotheprovisionsforbaddebtsandobsolescenceofstock;

• allotherordinaryoperatingexpensesassociatedwiththeserviceconcernedincluding,inthecaseoftheelectricityservice,thecostofprovidingstreetlightinginthemunicipalarea.Theintendedsurplustobegeneratedforthefinancialyear,suchsurplustobeapplied:asanappropriationtocapitalreserves;and/or

• generallyinreliefofratesandgeneralservices.• Thecostofapprovedindigentreliefmeasures.

6.2 Withregardtopre-paidmeters,thetariffshallbedeterminedbasedonthecostofprovisionoftheservice,asnoavailabilitychargeisleviedonpropertieswherepre-paidmetershavebeeninstalled.

7. LEVYING OF RATES

7.1 TheMunicipalityshalllevyratesonallrateablepropertywithinitsarea,providedthatitmay,byresolution,grantexemptionsfrom,rebatesonorreductionsin,ratesleviedintermsofthispolicyor intermsofanationalframeworkprescribedundertheAct.

DIFFERENTIAL RATES

7.2 TheMunicipalitymay,byresolution,andintermsofcriteriasetoutinthispolicy,levydifferentratesfordifferentcategoriesofrateableproperty,whichmayincludecategoriesdeterminedaccordingtotheuseoftheproperty,thepermitteduseofthepropertyorthegeographicalareainwhichthepropertyissituated.

IMPERMISSIBLE DIFFERENTIATION

7.3 TheMunicipalitymaynotlevy-

(a) Different rateson residentialproperties,exceptasprovided for insections11(2) [uniformfixed

amountforrates],21[phasinginofrates]and89[useofexistingvaluationroll/supplementaryroll]oftheAct;

(b) a rate on a category of non-residential properties that exceeds a prescribed ratio· to the rateon residential propertiesdetermined in termsof section11 (1 )(a) [on themarket valueof theproperty]oftheAct:Providedthatdifferentratiosmaybesetinrespectofdifferentcategoriesofnon-residentialproperties.

(c) rateswhichunreasonablydiscriminatebetweencategoriesofnon-residentialproperties; (d)additionalratesexceptasprovidedforinsection22[specialratingareas]oftheAct.

PROPERTIES USED FOR MULTIPLE PURPOSES

7.4 Apropertyusedformultiplepurposeswherethereisnotaseparatecategoryshall,forratespurposes,beassignedtoacategorydeterminedbytheMunicipalityforpropertiesusedforapurposecorrespondingtothedominantuseoftheproperty.

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LEVYING OF PROPERTY RATES ON SECTIONAL TITLE SCHEMES

7.5 (1)Arateonpropertywhichissubjecttoasectionaltitleschemeshallbeleviedontheindividualsectionaltitleunitsintheschemeandnotonthepropertyasawhole.

AMOUNT DUE FOR RATES

7.6 (1)TherateleviedbytheMunicipalityshallbeanamountintheRandonthemarketvalueoftheproperty. (2) Furthermore, in the interest of accelerating the provision of basic services to communities, and

enhancingtheinternationalcompetitivenessoftheSouthAfricaneconomyandmobilizationofforeigninvestmentsandjobcreation,theMunicipalitymayconsiderexemptingfromratingallcomponentsofpublicserviceinfrastructureasdefinedintheAct.

(3) The Municipality acknowledges that the Minister may from time to time increase the monetarythresholdreferredtoinsection21,toreflectinflation.

PERIOD FOR WHICH RATES MAY BE LEVIED

7.7 (1)TheMunicipalityshalllevyratesforonefinancialyearatatime.Attheendofeachfinancialyeartherateleviedforthatfinancialyearshalllapse.

(2)TheMunicipalityshall,annually,atthetimeofitsbudget,settheamountintheRandforrates.

(3)ThelevyingofratesshallformpartoftheMunicipality’sannualbudgetprocessassetoutinChapter4oftheLocalGovernment:MunicipalFinanceManagementAct,2003(ActNo.56of2003).

COMMENCEMENT OF RATES

7.8 RatesleviedbytheMunicipalityshallbecomedueandpayableasfromthestart ofthefinancialyear.

PROMULGATION OF RESOLUTIONS LEVYING RATES

7.9 (1)ArateleviedbytheMunicipalityshallbeadoptedbyresolutionsupportedbyamajorityofthemembersoftheCouncil.

(2)TheMunicipalityshallpublishtheresolutionintheProvincialGazette.

(3)TheMunicipalManagershall,withoutdelay,conspicuouslydisplaytheresolutionforaperiodofatleast30daysattheMunicipality’sheadofficeandsatelliteofficesandlibrariesand,ifapplicable,onawebsiteavailabletoit.

(4)Inaddition,theMunicipalManagershall,withoutdelay,advertiseinthemediaanoticestatingthataresolutionlevyingarateonpropertyhasbeenpassedbytheCouncilandthattheresolutionisavailableforinspectionattheMunicipality’sheadofficeandsatelliteofficesandlibrariesduringofficehoursandontheMunicipality’swebsite,ifapplicable.

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EXEMPTIONS, REDUCTIONS AND REBATES

7.10(1)TheMunicipalityshallnotgrantreliefinrespectofthepaymentofratesotherthanbywayofexemption,rebateorreduction,norshallitgrantsuchrelieftotheownerofapropertyonanindividualbasis.

(2) TheMunicipalManagershallannually table in theCouncilof theMunicipalitya listofallexemptions,rebates and reductions granted by theMunicipality during the previous financial year togetherwith astatementreflectingtheincomeforegonebytheMunicipalitybywayofexemptions,rebates,reductions,exclusionsandthephasing-indiscountgrantedintermsofsection21oftheAct.

(3) TheCouncilshallidentify,andprovidereasonsfor,exemptions,rebatesandreductionswhentheannualbudgetistabledintermsofsection16(2)oftheLocalGovernment:MunicipalFinanceManagementAct,2003.

CATEGORIES OF PROPERTIES FOR EXEMPTIONS, REDUCTIONS AND REBATES

7.11 TheCouncilmay,byresolution,grantexemptions,reductionsandrebatesonthefollowingcategoriesofproperties-(a) residentialproperty;(b) homebusinessproperty;(c) vacantland;

(d) agriculturalproperty; (e) publicserviceinfrastructure; (f) ruralcommunalproperty; (g) impermissibleratesproperty; (h) DSFproperty; (i) miningproperty; (j) sectionaltitlegarages(separatelyregistered); (k) unauthoriseduseproperty (l) publicbenefitorganistionproperty (m) otherproperty

8. ELECTRICITY TARIFFS

8.1 Adjustmentstotariffsshallbeeffectivefrom1Julyeachyearorassoonaspossiblethereafter.

8.2 Categoriesofconsumptionandchargesshallbeasfollows:• Allelectricityconsumersshallbebilledfortheirelectricityconsumptionatthetariffapplicabletothe

categoryinwhichtheparticularconsumerfalls.• IndigentconsumerswhoqualifyintermsoftheIndigentPolicywillreceive50kWhelectricityfreeon

conditionthattheMCBisreducedto20Amp.• All domestic electricity consumers, with the exception of consumers using prepaid meters, shall

additionallybebilledabasicavailabilitychargepermeterinstalledpermonth.• All commercial, industrial andother non-domestic properties shall additionally bebilledademand

chargepermeterinstalledappropriatetotheirrespectivelevelsofconsumption.• Themunicipality’sconsumptionofelectricityshallbechargedatthenormaltariffratesapplicableor

alternativelyataspecialtariffasdeterminedbyCouncil.

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9. WATER TARIFFS


9.2 Categoriesofconsumptionandchargesshallbe:• All domestic consumers shall be charged for actual water consumption at a tariff per kilolitre as

determinedbytheCouncilfromtimetotime.• Indigent consumerswho qualify in terms of the IndigentPolicywill receive 6kl ofwater free.The

balanceofwaterconsumedwillbebilledatthenormalapplicabletariff.• Allotherconsumers,includingbusinesses,industriesandinstitutionalconsumersshallbechargedthe

relevantapplicabletariffperkilolitre,basedonthevolumeofwaterconsumed.• Themunicipality’s consumption of water shall be charged at the relevant tariff as determined by

Council.

10. REFUSE REMOVAL TARIFFS


10.2 Refuseremovalchargesshallbechargedmonthlytotheconsumeraccordingtothecategoryapplicable,basedonthefrequencyoftheservicerendered.

10.3 Domesticindigentconsumerswillbebilledattheindigenttariff.

10.4 Themunicipality’suseoftherefuseremovalserviceshallbechargedattherelevanttariffapplicabletobusinessconsumers.

11. SEWERAGE TARIFFS

11.1 Adjustmentsintariffsareeffectivefrom1Julyeachyearorassoonaspossiblethereafter.

11.2 Categoriesofusageandchargesshallbe:• Afixedmonthlychargeshallbeleviedforseweragefordomesticusers.• Domesticindigentconsumerswillbebilledattheindigenttariff.• Achargebasedonwaterconsumptionshallbeleviedforseweragetoallflats,businesses,industries

andinstitutionalusers.• Achargebasedonwaterconsumptionattherelevanttariffapplicabletobusinessconsumersshallbe

chargedtothemunicipalityfortheuseofsuchservices.

11.3 Wherespecialpurificationmeasureshavetobeutilizedtopurifywastewateremanatingfromfactoriesandotherindustrialusers,aneffluentfeeisfurtherpayablebytheseusers.

12. OTHER TARIFFS

12.1 AllothertariffsaretobeapprovedbytheCouncilineachannualbudget.Thesetariffsmaybesubsidisedbypropertyratesandgeneralrevenues,particularlywhenthetariffswillproveuneconomicalwhenchargedtocoverthecostoftheserviceconcerned,orwhenthecostcannotaccuratelybedetermined,orwhenthetariffisdesignedpurelytoregulateratherthanfinancetheuseoftheparticularservice.

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12.2 Subsidised services are services for which tariffs are fixed in such a way that at least a portion (asapprovedbyCouncil)ofthecostofprovidingtheservicecanberecovered.Theconsumptionoftheseservicescanbemeasuredandcanbeapportionedtoindividualconsumers,but,ifbasedonactualcost,wouldprovetobeexcessiveandunaffordabletotheconsumer.Auserchargeisthereforepayableforusingtheservice,butthetariffismuchlowerthantherealcostofprovidingtheservice.

12.3 Community services are those services for which the municipality is unable to accurately determinetheconsumptionorusageandhenceapportiontoindividualconsumerse.g.municipalparksandopenspaces.Tariffsshall,therefore,notbeleviedfortheiruseasthecostofprovidingtheseservicesisfundedfromgeneralrateincome.

12.4 Economicservicesareservicesforwhichtariffsreflectthefullcostofprovidingtheserviceandthecostsarerecoveredwithoutincurringasurplusordeficit.Theconsumptioncanbeaccuratelydeterminedandapportionedtoanindividualconsumer.

12.5 Certainotherchargesandtariffsshallbeconsideredasregulatoryorpunitive,andshallbedeterminedasappropriateineachannualbudget.

12.6 With regard to the leasingofmunicipalproperties to thepublic,market-related rentalsshall be leviedunlessspecialcircumstancesapply.

13. BY-LAWS TO GIVE EFFECT TO POLICY

13.1 In terms of Section 75 of theMunicipal SystemsAct, 2000 (Act No. 32 of 2000), theCouncil of themunicipalitymustadoptby-lawstogiveeffecttotheimplementationandenforcementofitstariffpolicy.

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municiPal manageR’s Quality ceRtiFicate

IMxolisiANkosi,municipalmanagerofMsunduzi LocalMunicipality, hereby certify that theannualbudgetandsupportingdocumentationhavebeenpreparedinaccordancewiththeMunicipalFinanceManagementActandtheregulationsmadeundertheAct,andthattheannualbudgetandsupportingdocumentsareconsistentwiththeIntegratedDevelopmentPlanofthemunicipality.

MxolisiANkosiMunicipalmanagerofMunicipality(KZN225)Date:30May2012


The City of Choice Second to None

City HallChief Albert Luthuli Avenue

3201Tel: 033 392 3000Fax: 033 392 2397

Website: www.msunduzi.gov.za