Note to editors: the City’s Executive Mayor, Patricia de Lille, delivered the following speech with the tabling of the City’s adjustments budget during the full Council meeting today, 24 August 2017.

Mr Speaker, before us today is the adjustments budget, which the Municipal Finance Management Act (MFMA) allows for, in stating that an adjustments budget may authorise spending of the funds that were unspent at the end of the past financial year where the under-spending could not reasonably have been foreseen at the time to include projected roll-overs when the annual budget for the current year was approved by Council.

These provisions in the law allow us to maintain effective governance and financial management practices and indeed we have honoured our commitment to residents to maintain prudent financial management practices and ensure that public funds are spent where they are meant to be spent.

This is evident in the City of Cape Town receiving its fourth consecutive clean audit and 13 consecutive unqualified audits.

In terms of our financial performance, again we have performed well on implementation because indications are that for the 2016/17 financial year, we achieved a spend of approximately 92,8% of our R6,4 billion capital budget.

This is up from 89% in the previous financial year and just over 80% in the 2013/14 financial year.

The capital budget for 2016/17 was also the largest that we’ve had over the past five years.

The City has again managed to raise the bar with our financial performance and this achievement is as a result of highly skilled, passionate and dedicated members of staff and project managers.

We have worked hard to overcome some project management challenges over the past year and it is paying off.

The extra transparency that we’ve brought into our systems and the adjustment of processes to ensure that projects are strategically linked and tender-ready prior to being included on the budget have contributed to a better efficiency in the City.

This is important as we are not simply driving expenditure percentages, but have key targets.

A very small percentage of our capital projects have been delayed, largely due to community dynamics or violence in some areas.

Our financial performance shows that our investment and maintenance of infrastructure is solid, that our service delivery projects are on track, and that the money is being spent where it is needed.

It demonstrates that we have the expertise and good governance structures to enable us to spend the money appropriately in the first place.

As part of our Organisational Development and Transformation Plan objectives, we will continue to work towards excellence in service delivery and fulfilling our mandate through the Integrated Development Plan’s commitments to continue being a leader in local government.

The August adjustments budget legislatively mainly provides for roll-overs of carry-over commitments from the 2016/17 financial year.

Conditional grant roll-overs are applied for by the City before the end of August and, if approved by National and Provincial Treasury in October and November, will be added in the January adjustments budget.

The City does not have to apply for the roll-over of the Human Settlements Development Grant as this is a transfer to households as beneficiaries and therefore the unspent portion is included in the August adjustments budget.

In addition to the abovementioned roll-overs, I have authorised in terms of Section 29 of the MFMA that capital expenditure be incurred for the emergency measures required at the Big Bay Beach after the storm damage on 7 June 2017.

An amount of R6,5 million will be utilised for coastal structure rehabilitation funded from the External Financing Fund in the 2017/18 financial year.

In terms of the capital budget, directorate and departmental submissions received for budgetary inclusion totaled R183,5 million, with funding split across a number of sources.

The total roll-overs requested for carry-over commitments amount to R177 million, while the unforeseen and unavoidable expenditure equates to R6,5 million in the 2017/18 financial year.

The major increases for the 2017/18 financial year are outlined as follows:

• Directorates and departments proposed roll-overs of R85,4 million in the 2017/18 financial year
• For the Area-Based Management Directorate, an amount of just over R413 000 for ward allocations
• For Assets and Facilities Management, R10,2 million for facilities management structural rehabilitation and major upgrades to Council rental units
• For the Energy Directorate, R66,1million for projects, including a new City depot and the Bloemhof network control centre
• In the Transport and Urban Development Authority (TDA), R7,8 million for projects including the development of the Atlantis corridor, dualling of Kommetjie Road and Ou Kaapse Weg, and congestion relief projects

In terms of the operating budget, directorates proposed roll-overs of approved 2016/17 private donations and unspent grant allocations from the Western Cape Government

• The Area-Based Management Directorate proposed a roll-over of just over R468 000 for the Community Development Workers project funded from the Western Cape Government. The funding was only received in the latter part of the financial year and the full allocation will be spent in the current financial year.
• The Informal Settlements, Water and Waste Services Directorate has proposed a roll-over of R6,2 million in terms of a Human Settlement Development Grant for the provision of disaster relief. The original allocation was R44,6 million and R6,2 million is the unspent balance as fire and flood kits are expensed as and when the need arises. The unspent funding will be spent in the current financial year.
• The Transport and Urban Development Authority also proposed a roll-over of R6,8 million for funding received from the Development Bank of South Africa for the thermal ceilings retrofitting project. This funding was not spent due to the agreement with the City’s implementing agent being cancelled and re-advertised as the sub-contractor was intimidated by community unrest in Silver City where they were appointed to install 363 units

A new contractor has since been appointed and the funds will be spent in the current financial year.

Mr Speaker, I move that we approve the adjustments budget so that we can continue with the work started on the various projects and continue enhancing service delivery to residents across Cape Town.

Thank you.

End