City Budget Review

The Executive Mayor of the City of Cape Town, Helen Zille, has tabled a record R17,2 billion budget to support economic growth and social development for 2006/07. The capital budget amounts to R3 bn and the operating budget totals R14,2bn. The rates and tariff increases are below the inflation rate of 5,2%. Mayor Zille declared the City's intent to work toward a sustainable growth level of around 6 to 8%.

One of the changes to the budget is an increased rebate for handicapped and retired persons. The rebate has been increased to accommodate people with an income up to a maximum of R3 000 per month. The rest of the social spending in the budget remained unchanged. A total of R385 million has been allocated for a range of free basic services including water, sewage and electricity. This allocation is over and above the rates exemption for some 100 000 properties in the City that are valued at less than R50 000.

The City government believes it can boost its income through improved revenue collection systems. The main tariff increases are as follows:

• Rates, refuse removal and sanitation will go up by 5%.
• Water will increase by 7% of which 4% goes towards the new Berg River Dam project.
• Electricity goes up by 4,9%

Every City ward will receive R100 000 more than anticipated in the draft budget. Each of the City's 105 wards will now receive R400 000 for community projects, of which R200 000 will be for capital projects and R200 000 for operational expenditure.

Major additional infrastructure expenditure has been proposed in the new City Budget. An amount of R75 million has been allocated for Transport, Roads and Stormwater infrastructure, a contingency of R125 million for 2010 Soccer World Cup projects and a further R100 million for the World Cup over the coming two financial years.

Mayor Zille announced an additional capital allocation for the Metro Police and the City's Emergency Services. The Metro Police will get an extra R9,5 million to strengthen their capacity to enforce the law whilst Emergency Services is to receive an additional R6,5 million on top of the R31 million which was announced earlier this year.

Mayor Zille has proposed eight steps to make the City Budget work better:

• Increasing project management capacity and driving projects decisively
• Initiating tender processes earlier in the financial year
• Amending supply chain management policy to speed up delivery
• Opening up of tender processes to public and media
• Introducing a Standing Committee on Public Accounts
• Taking steps to speed up the tender process
• Improving performance management systems
• Filling critical posts