Click to edit Master subtitle style

11/25/11

VENTERSDORP LOCAL MUNICIPALITY

PRESENTATION TO THE SELECT COMMITTEE ON FINANCEOLD ASSEMBLY BUILDING 23 November 201109:00 am

11/25/11

INDEX1. Municipal Transformation and Institutional Development2. Basic Service Delivery3. Local Economic Development4. Municipal Finance Viability and management5. Good Governance and Public participation6. Other Cross Cutting Matters

22

11/25/11

1. Municipal Transformation and Institutional Development Policy Reviewing• Process of policy development and review to be undertaken very soon. Organizational Structure

The Organisational Structure was successfully reviewed and adopted on the 12th of July 2011.

The placement of staff (23) is currently in process and we envisage to finalize it soon. HR will still remain with a lot of challenges as far as in-consistency in post levels.

Recruitment and Selection Processes We are in process of filling vacancies within our Top Management Level. The position of the Municipal Manager was advertised, short listing was conducted and

interviews were finalized on the 7th of October 2011. Subsequently Council approved the appointment of Mr. B.J. Makade as Municipal Manager on the 3rd of November 2011.

The vacant positions of managers directly accountable to the Municipal Manager were also advertised and the closing date for applications was on the 14th of October 2011. Council resolved on the shortlisting and interview panel on the 10th of November 2011 and we envisage to finalize the Selection and Recruitment processes soon.

Other critical positions can not be filled because of budget constrains.

33

No: of approved posts Filled Vacant

223 142 81

11/25/11

Municipal Transformation and Institutional Development Continues

Functionality of LLF(Local Labour Forum)

The Local Labour Forum is functioning, but not to its full potential. Consultation processes on certain matters is not necessarily finalized immediately

in a meeting and lapse over to subsequent meetings. By the time the matter is on the edge of finalization there is a change in management and the process re-starts. (High turnover of accounting officers and section 57 managers)

Skills Development The Annual Training Report for 2010 /2011 was compiled and submitted to LGSETA

together with the Workplace Skills Plan for 2011/2012. The key responsibilities of the Training Committee is to assist with the development

and implementation of the WSP. Due to budgetary constraints training interventions can not enrol accordingly .

44

11/25/11

Transformation and Institutional Development Continues

Minimize Labour and litigation cases

Adherence to Policies will minimize labour and litigation cases . Development and review by-laws.

55

11/25/11

2. BASIC SERVICE DELIVERY

2.1 Basic Service Delivery (Water)

Ventersdrop Local Municipality is a Water Service Authority & Water Service Provider

13 433 Households provided with portable water Currently there are 1586 households Receives free basic water, and potential of

3200 household, the registration is continuous. 4808 Household connection made to date Villages are dependant on borehole water Water quality test are conducted monthly for the entire area through Midvaal

Laboratory The water reticulation backlog in villages is 1.8 km and contractors are on sites.

66

11/25/11

2.2 Basic Service Delivery (Sanitation)

• 5600 households have access to sewerage.• Waste Water Treatment plant is upgraded to the capacity of 4.4ML/day• All villages are dependant on Ventilated Improved Pit Latrine (VIP)• Planned development units are 535 VIP’s through MIG Funding (Boikhutsong,

Boikhutso, Appeldraai, Goedgevonden: Welgevonden: Tsetse)• 300 sites at Toevlug are reticulated• There is a backlog of 800 units to be provided with sewerage network.• Municipality has appointed a service provider to investigate the state of the old

sewerage infrastructure and to quantify the cost thereof and list it as the prioritised project for the year 2012/13.

77

11/25/11

2.3 . Basic Service Delivery (Electricity)

• Ventersdorp Local Municipality is the supplier of electricity in the Ventersdorp town, township and the other two(2) villages namely Boikhutsong and Boikhutso.

• Eskom supplies the following villages :Mogopa, Tsetse , Rentse(Goedgevonden) and Welgevonden.

• Areas that do not have electricity are the following: Appeldraai village(in the process of electrifying-consultant appointed), Makokskraal, Joko, Muiskraal, Klipgat, Uitkyk, Rysmierbult, Tshing informal settlement and others(Application for funding was done).

13 433 Households have access to electricity .

Currently there are no households receiving Free Basic Electricity(50units) and potential 3200 have applied for free basic electricity excluding villages. It was stopped in 2009.

88

11/25/11

Basic Service Delivery (Electricity) continues

• Municipality allocated Mega Volt Ampere is 7MVA and consumption is 9 MVA and the District Municipality has approved the application to increase the capacity.

• Ventersdorp LM has about 260km of overhead lines

• Number of backlog is 2881 and the municipality has made application to the Dept of Energy which the project will be implemented in 2012/13.

99

11/25/11

2.4.Basic Service Delivery (Refuse)

A total of 5600 household receive waste

collection services

Municipality has one unlicensed land fill site

and an application for funding has made to the

district.

The municipality has acquired two

compactors and one 4ton truck for weekly

refuse collection.

The contract between the municipality and

two service providers for refuse collection has

been terminated and the municipality

performs the function.

The Municipality does not have integrated

refuse management plan and funds to develop

the plan is unavailable however the

municipality has requested funds from the

District Municipality.

The DLGTA has assisted the Municipality with

a Clean Communities Project contract for six

months (April –October 2011).

1010

11/25/11

2.5. Basic Service Delivery (Roads)

• There is a 30Km surfaced roads in Tshing and 40KM Ventersdorp town.

• Tshing has a backlog of 18km of road and 8km in Ventersdorp.

• No surfaced roads in the villages.

• Municipality has a roads maintenance plan but there is no funds to implement and

provision shall be made in the budget for the next financial year.

1111

11/25/11

2.6. Basic Service Delivery( Housing)

There are 1000 housing units approval at the following villages: (Goedgevonden;

Boikhutsong; Boikhutso; Welgevonden; Ga-Mogopa & Tsetse).

• 492 housing units completed and handed over to beneficiaries.

• The housing project in Tsetse could not commence due to dolomatic conditions in

the area and the Provincial Department (Human Settlement) has appointed

specialist to address the matter.

• An application has been made for the township establishment to address Tshing for

housing backlog.

• There is a slow process of approval of housing subsidy application and the matter

has been brought to the Provincial Department of Human Settlement. 1212

11/25/11

3. LOCAL ECONOMIC DEVELOPMENT

The Municipality has an approved LED strategy that is aligned to the District Growth Development strategy.

The Municipality did not budget for LED project for the 2011/12 financial year.

1313

11/25/11

4. Good Governance and Public Participation

Approved Council Meeting Schedule. The 2009/2010 annual report was adopted. Public participation schedule for 2011/12 has been adopted. The IDP and budget was adopted and approved by council. Six ward committees have been established and trained. Portfolios have been established and functional. Governance ,Administration and Finance. Infrastructure and Service Delivery. Economic Development and Investment promotion. Traffic, Transport and Emergency Services. Sports, Arts and Culture Recreation and library Services. Community Services , Health and Transversal Issues.

1414

11/25/11

5. Financial viability

The Municipality is without doubt not financially sustainable. Operating income can potentially increase when there’s proper billing and limited bridging of electricity and water by introducing smart meters.

Credit control measures will be in place for non-payment of services in the 2011/2012 financial year. ( e.g. Water restriction and cutting- off of electricity)

A specific goal of this key performance area is to ensure that the 2011/2012

Operating Budget is executed within limited deviance parameters of the approved

Budget.

1515

11/25/11

Financial viability :continues

The following are some of the findings from the AG’s report: 1. Municipality is currently not a going Concern. 2. Not all internal Controls are in place. 3. Non Compliance with Legislation. 4. Governance (not all policies are developed and /or reviewed annually). 5. Asset Register not in place. 6. Supply Chain Management not fully functional.

1616

11/25/11

Revenue collection

2010/2011 Collection rate

Total Billed Total Receipts Collection Rate

47 203 615,57 32 561 584 68.98

2011/2012 Collection rate(1st Quarter)

Total Billed Total Receipts Collection rate

9 806 649 6 562 505 66,92

1717

11/25/11

Revenue Projections

OPERATING INCOME 11/12 Budget

Total property rates -4 8000 000

Total service charged -54 904 000

Total rent facilities and equipments

-20 000

Total interest earned ext investments

-215 000

Total fines -8 001 000

Total licenses and permits

-1 600 000

Total grants subs operating

-45 279 300

Total other revenue -509 500

TOTAL OPERATING INCOME

-115 328 8000

1818

11/25/11

OPERATING INCOME

10/11 BUDGET

ACTUAL

Total property rates

-3 727 7000 -2 735 243

Total service charged

-35 000 -33 003

Total rent facilities and equipments

-110 000 -141 339

Total int earned ext investments

-5 001 500 -3 711 010

Total fines -1 200 000 -2 270 614

Total licenses and permits

-45 279 300 -61 781 699

Total grants subs operating

-3 727 7000 -2 735 243

Total other revenue

-336 700 -765 976

TOTAL OPERATING INCOME

-91 020 800 -105 351 863

1919

11/25/11

OPERATING EXPENDITURE

10/11 BUDGET

ACTUAL

Total employee /councillors related costs

27 736 751 26 083 049

Total repairs and maintenance

4 660 450 3 666 615

Total bulk purchase

21 649 780 22 009 791

Total contracted services

9 465 000 7 516 927

Total general expenses other

19 952 240 25 894 956

Contributions to bad debts

6 500 000 3 922 058

Total interest expenses external borrow

3 522 013 2 908 711

Depreciation 0 3 330 256

TOTAL OPERATING EXPENDITURE

89 548 544 95 332 363

2020

Click to edit Master subtitle style

11/25/11

OPERATING EXPENDITURE (PROJECTIONS )

11/12 BUDGET

Total employee /councillors related costs

36 003 546

Total repairs and maintenance

5 402 300

Total bulk purchase 26 700 000

Total contracted services 9 465 000

Total general expenses other

28 149 000

Contributions to bad debts

5 000 000

Total interest expenses external borrow

3 544 240

Depreciation 0

TOTAL OPERATING EXPENDITURE

114 264 086

2121

11/25/11

CONDITIONAL GRANTS EXPENDITURE (current status)

11/12 Budget

Comments

Electrification of Appeldraai

1 028 500 The Professional services providers are appointed.

Electrification of Boikhutsong

2 125 000 The Professional services providers are appointed.

Upgrading of sewer plant

5 000 000

Internal network and stand pipes (water)

5 500 000

MIG: Upgrading of internal roads (Welgevonden:

6 000 000 The Professional services providers are appointed.

Upgrading of old electrical network

1 500 000

MIG: upgrading of electrical network (Tshing)

2 000 000

TOTAL CAPITAL PROJECTS

23 153 500

2222

11/25/11

Grant 2011/2012 Allocation

2011/2012 Received

2011/2012 Expenditure

FMG R 1 250 000,00 R 1 250 000,00 R 81 861,00

MSIG R 790 000,00 R 790 000,00 R 24 700,00

MIG R 20 046 000,00 R 4 200 000,00 R 0

CONDITIONAL GRANT 2011/2012

2323

11/25/11

CONDITIONAL GRANT 2010/2011

Grant 2010/2011 Allocation

2010/2011 Received

2010/2011 Expenditure

FMG R 1 000 000,00 R 1 000 000,00 R 1 110 593,00

MSIG R 750 000,00 R 750 000,00 R 766 351,00

MIG R 16 668 000,00 R 16 668 000,00 R 16 939 478,00

MIG PROJECTS

Road resealing R4.199,999.93 R4.199,999.93 R6,167,634.86

Internal road Tshing R6,000,000.00 R6,000,000.00 R5,728,998.24

VIP toilets 6 villages R6,219,428.00 R6,219,428.00 R5,625,137.55

2424

11/25/11

CASH FLOW POSITION

Municipal Reservesa. Investment Account No: 8074375155 : ABSA BANK R 8 620 178.04

MIG R 4 250 000,00 Department of Local Government R 4 200 000,00 (water related projects: Tshing ext 6 and Rysmierbult) Interest R 170 178,04

b. Spiral / savings Account No: 34349789 : ABSA BANK R 1 644 351.14

c. Main account : 2250000017: ABSA R 1 900 000.00 (21/11/2011)

2525

11/25/11

DEBTORS ACCORDING TO CUSTOMER CATEGORY AND AGE ANALYSIS, AND REPORT ON BAD DEBT WRITE-OFF POLICY.Description 0-30 Days 31-60 Days 61-90 Days 91-120 Days TOTAL

Government

197 529 66 624 66 761 1 716 126 2 047 040

Business 2 117 559 441 025 437 561 3 443 736 6 439 881Residential 1 556 193 463 781 431 777 19 158 368 21 610 119Other (e.g. churches, old age homes)

1 953 228 632 991 424 037 7 441 262 10 451 518

TOTAL 5 824 508 1 604 421 1 360 136 31 759 492 40 548 558

2626

11/25/11

CREDITORS AGE ANALYSIS AND INDICATE WHETHER THE MUNICIPALITY COMPLIES WITH THE 30 DAY POLICY Outstanding creditors as at 30 September is R 29 335 630, 00

Major creditors among other include:

Eskom

Auditor General

DWAF

INCA

DBSA

Due to the negative cash flow , the Municipality is unable to pay creditors within the 30 days.

2727

11/25/11

IS THERE AN INDIGENT POLICY, REGISTER, INDICATE THE NUMBER OF INDIGENTS AND REPORT ON HOW THE REGISTER IS MANAGED AND UPDATED AND STEPS THE MUNICIPALITY HAS TAKEN TO COMMUNICATE THE INDIGENT POLICY TO COMMUNITY MEMBERS.

The Municipality has an indigent policy that was approved by Council. Registration takes place annually and the current registered indigent as at 30 September stands at 1 544 for the 2011/2012 year. There are still outstanding documents on the 1 198 indigents, upon receipts of those documents, they will be approved.

The register is updated on a daily basis, when applicants submit all the required documents; they automatically receive the subsidy retrospective from July 2011. The Municipality has been experiencing problem communicating the policy to the community, and we are looking into ways of involving our ward committees and councilors to assist in this regard.

2828

11/25/11

6. Cross- cutting matters

Acquired funds from The Department of Water Affairs ( R 6 m

11/25/11

THANK YOU

3030