Huge cost of living increases in Kouga budget

The Kouga Council rammed through the 2013/14 budget yesterday which included shock hikes in electricity tariffs of over 60 % and across the board increases of 13 % for property rates, sewage and water.

The potholes are going to get bigger in Kouga
The potholes are going to get bigger in Kouga

The increase of over 60 % in the demand tariff for electricity for bulk users will see developments like Eden Glen and Marina Martinique having to pay substantially more on municipal accounts. The budget was described by the DA as being political suicide for the ANC in their attempt to oppose the approval of the flawed budget.

An operational budget of R 586 447 000 was approved by Council with revenue being sourced as follows:

Property Rates: R 139 092 000
Electricity: R 205 942 000
Water: R 52 489 000
Sewage: R 36 054 000

Electricity has been increased on average by 8 % but this is on a sliding scale where residents who use more electricity, pay more.

This excludes the shock 60 % increases in demand tariffs for bulk users.

Kouga Municipality will spend its money as follows:

Salaries: R 202 834 000
Electricity: R 156 213 000
Water: R 21 000 000
Repairs: R 41 019 000
Bad Debt: R 43 056 955

In an astonishing announcement, the outstanding creditors have been excluded from the Budget as, according to the Council, the creditors will be funded from the debtors.

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However, the Auditor General has stated that they cannot offer an opinion whether Kouga is a “going concern” as current liabilities exceed current assets by R 96 million.

With no draft balance sheets, income statements and cash flow statement, it is impossible to understand just how the Kouga is going to get out of the current financial mess.

Edge Fitness

There is little information on offer as to the quality of the debtor’s book. However, it can be safely assumed that most of the debt is far in excess of 120 days and much of it could be very difficult to collect.

Depreciation of R 71 million was also included in the budget, despite there being no asset register in place and no information was provided as to what assets are being depreciated.

The Democratic Alliance then tabled a motion of exigency in the Council meeting through Councillor Brenton Williams.

The motion of no confidence in Mayor Booi Koerat, which called for him to stand down and for the budget process to be started all over again, was dismissed by the ANC majority in Council.

It looks like another year where sewage will be flowing in our streets, we will be drinking dirty water, dodging more pot holes when driving and we will be paying much more for these dubious honours.

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