Ratepayers in Kouga can sleep easy at night with the knowledge that the finances of Kouga Municipality are being well-managed, despite the uncertainty caused by the COVID-19 pandemic.
Last year, Council decided to budget on an 85 % collection rate for the 2020/21 financial year as the economy of the region was being negatively impacted by the COVID-19 pandemic and subsequent lockdown – including the closing of beaches, which was devastating for the tourism industry.
At that point in time (March 2020), Council was collecting 96% of revenue. However, it was recognised that the pandemic would have an impact on the stability of ratepayers to meet their financial obligations.
“We settled on a prudent approach and decided to budget on an 85% collection rate as the consequences of hard lockdowns and the shutting down of the tourism industry would have an effect on our ratepayers,” said Kouga Finance Portfolio Councillor, Brenton Williams.
“We are really grateful for the vote of confidence that the ratepayers of Kouga have placed in the leadership of the municipality by paying their municipal accounts and ensuring we could continue with service delivery during the turbulent times we went through during the 2020/21 financial year.”
According to Williams, in February 2021, Council adjusted their collection rate upwards to 90% and by the end of the financial year in June, the actual collection rate was 94%.
“This is probably the best collection rate in the Eastern Cape with some municipalities collecting between 30% and 40% under their budgeted collection rates,” he said.
“At the same time, we had to make provision for COVID-19 related expenditure, such as having to supply masks and sanitisers, as well as supporting a homeless shelter in Jeffreys Bay.
“We also had to budget for drought related expenditure, which included bringing additional bore holes online,” said Williams.
Revenue and expenditure
Property rates brought just over R200 million into the municipal coffers, while sales of electricity amounted to R289 million.
Water revenue amounted to R80 million.
The biggest expenditure items were employee related costs of R316 million, which came in at 10% under budget after overtime was reduced. This despite COVID-19 related regulations, which meant that the municipality had to assist the police with the enforcement of the regulations – often after hours.
Bulk purchases of electricity came in at R254 million, while other expenditure amounted to R117 million.
“This amount included payments totaling R6 million to the Bargaining Council, said Williams.” This is a result of the illegal municipal workers strike, which the municipality successfully defended legally, while keeping municipal infrastructure safe which also came in at a financial cost.”
Hire charges amounted to R33 million, primarily due to hiring extra suction tankers as well as water tankers.
R60 million was spent on the repair and maintenance of municipal properties, which was 92 % of the approved budget.
“These figures are unaudited, and the Auditor General will conduct their audit of the financial information over the next few months,” said Williams.
“Kouga Municipality received a clean audit on the finances during the 2019/20 financial year. Findings were made on performance management within the institution.”