City of Johannesburg MMC for Finance
Geoffrey Makhubo, MMC for Finance, says the 2014/15 Medium Term Budget continues to focus on the programmes outlined in the Integrated Development Plan (IDP) and the Growth and Development Strategy (GDS).
He notes that the budget is prepared with due consideration of the ongoing difficulties in the international, national and local economy; pressure on disposable income for consumers and the impact on the City’s tariff setting; the need to reprioritise projects and expenditure within the existing resource envelope; balancing remuneration costs in relation to the operating expenditure; availability of affordable capital and borrowing; and the potential impact of the weakening sentiments in the South African economy on the City’s credit ratings.
Of concern in the preparation of the budget were also the facts that 90% of Johannesburg consumers spend more than they earn and that payment for City services is between 10 and 16 in the order of priorities after items such as clothing, car repayments and entertainment.
Budget highlights include:
- A capital budget of R32-billion over the next three years, to 2016/17. For the first time in the municipal sector, the City appropriated a double-digit capital budget of R10.4-billion for the 2014/15 financial year.
- An operating budget of R36.7-billion for the 2014/15 financial year.
- The Sustainable Services Cluster, which oversees and co-ordinates the bulk of the City’s service delivery obligations, is allocated R22.6-billion of the operating budget.
- Environment and Infrastructure Services (EISD) is allocated an operating budget of R144-million for the 2014/15 financial year and a multi-year capital allocation of R87-million.
The Housing Department is allocated an operating budget of R906.9-million in the 2014/15 financial year and a multi-year capital budget allocation of R2.6-billion. This budget will be utilised for the comprehensive upgrading of existing informal settlements; inclusive mixed-use settlements; hostel refurbishment and upgrades.
City Power is allocated an operating budget of R13.2-billion and a multi-year capital budget of R7.3-billion. Main programmes to be undertaken include refurbishment of ageing infrastructure, investment in new bulk infrastructure in various areas such as Rivasdale, Reuven, Berea, Ferndale, Lenasia and Halfway House.
Johannesburg Water is allocated an operating budget for the 2014/15 financial year of R6.4-billion with a multi-year capital budget of R4-billion. This budget will respond to issues of urban water management and provision of water services within the context of the Sustainable Human Settlements Urbanisation Plan.
Pikitup is allocated an operating budget of R1.8-billion for 2014/15 whilst the multi-year capital budget allocation is R470-million. The allocation will be used to fund key projects such as Integrated Waste Management, street sweeping and the removal of illegal dumping.
Johannesburg Social and Housing Company (JOSHCO) is allocated an operating budget of R135-million and a multi-year capital budget of R2-billion.
The operating budget of the Human and Social Development Cluster amounts to R5.2-billion for the 2014/15 financial year. The three year medium-term capital budget of the Human Development Cluster amounts to approximately R1.3-billion.
Community Development receives an operating budget of R927.1-million for the 2014/15 financial year. R307-million is allocated for multiyear capital projects, which include upgrading and renewal of various libraries, swimming pools and community centres.
The Health Department receives an operating budget of R674.7-million and a three-year capital budget of R127-million. The budget will be used for key projects and to refurbish existing clinics and build new clinics.
Social Development is allocated an operating budget for 2014/15 of R159.1-million and capital budget allocation of R47-million, which will fund key initiatives such as the food security programme.
Public Safety’s operating budget allocation amounts to R2.6-billion for 2014/15 whilst its multi-year capital budget allocation is R453-million. The budget will be focusing on various emergency management and safety programmes.
Johannesburg City Parks and Zoo is allocated an operating budget of R732-million for 2014/15 and a three year capital budget of R368-million. Joburg City Theatres is allocated an operating budget of R117-million for the 2014/15 financial year and a multi-year capital budget of R20-million.
The operating budget allocation of the Economic Growth Cluster amounts to R3.7-billion and a three year capital budget allocation of R12.9-billion. Following the reorganisation of clusters during the year, Development Planning and Joburg Development Agency are now included in this cluster, which is pivotal to the implementation of the Corridors of Freedom.
Economic Development Department’s operating budget amounts to R109.6-million in the 2014/15 financial year and R71-million for the three-year capital budget. Transportation’s operating budget amounts to R1.2-billion for the 2014/15 financial year and the three year capital budget allocation is R3.2-billion.
Development Planning’s operating budget amounts to R275-million for the 2014/15 financial year and a three year capital budget of R1.5-billion. Joburg Market receives an operating budget of R304-million for the 2014/15 financial year and a multiyear capital budget of R835-million. Johannesburg Property Company (JPC) receives an operating budget of R425-million for the 2014/15 financial year and a three year capital budget of R507-million.
Johannesburg Development Agency (JDA) receives an operating budget of R79-million for the 2014/15 financial year and a three year capital budget of R612-million. Johannesburg Roads Agency (JRA) has been allocated an operating budget of R814-million in the 2014/15 financial year initiatives. Metrobus is allocated an operating budget of R513-million and a three-year capital budget of R506-million.
The Good Governance Cluster is allocated an operating budget of R7.2-billion for 2014/15 financial and a three-year capital budget of R2.1-billion. The Office of the Executive Mayor receives a total operating budget of R1.2-billion. The three-year capital budget amounts to R360-million.
Group Finance is allocated an operating budget of R3.3-billion for 2014/15 with a significant portion going towards finance charges to service bonds and loans as part of the overall funding model for the City’s capital investment programme that aims to invest R100-billion in infrastructure over a 10-year period.
Group Corporate and Shared Services’ operating budget amounts to R834-million for 2014/15 and the three-year capital budget allocation for Group Corporate and Shared Services is R1.6-billion for various projects.
Speaker: Legislative Arm of Council is allocated an operating budget of R281-million. The multiyear capital budget of R103-million goes mainly towards the renewal of the Council Chamber in the medium-term.
A year of firsts
Reflected in this year’s budget speech were a number of firsts for the City of Johannesburg. The City:
- Was the first municipality to issue municipal bonds, with its first issuance 1.5 times over-subscribed. The City’s first bond issue won the Bond of the Year award from the Bond Exchange of South Africa.
- The first City to issue a listed “green bond” to fund projects specifically identified for their contribution towards sustainable development.
- The first municipality to implement a “cabinet model” approach to the system of executive leadership.
- A first to introduce innovative infrastructure investments and targeted interventions to change the face of its communities. Its first mixed houses model in Cosmo City was later replicated in Lehae and Lufhereng.
- The first City to have its taxi industry redefined by BRT through ownership and transformation of the industry.
This article has been paid for by the City of Johannesburg. Contents and pictures were supplied and signed off by City of Johannesburg.