In its R73.3-billion budget statement for the 2021/22 financial year, the City of Joburg (CoJ) has attempted to strike a balance between the needs of residents and the institution’s ability to provide services, considering continued Covid-19 impacts.

The budget comprises R65.1-billion in operating expenditure and R8.2-billion in capital expenditure (capex). This while the medium-term budget to 2023/24 allows for a R25.5-billion capex budget.

Finance MMC Jolidee Matongo says the metropolitan has endeavoured to effect minimal tariff increases for 2021/22.

For the 2020/21 financial year, property rates were increased by 4%; in the new financial year, property rates will increase by only 2%.

Matongo says this is in line with heeding the call from ratepayers against an increase and, simultaneously, also considering the reality of having to ensure that the city has the revenue to continue delivering services to residents.

The electricity tariff increased by 6.2% in the 2020/21 financial year, while the increase earmarked for 2021/22 is 14.59% - which is lower than the National Energy Regulator of South Africa-approved tariff increase of 15.09% that was granted to national power utility Eskom.

This while the water tariff increased by 6.6% in 2020/21, and will increase by 6.8% in the new financial year. Matongo says the increase is anchored on the anticipated bulk water charge from Rand Water.

In the 2020/21 financial year, sanitation tariffs increased by 6.6%. This will increase by 6.8% in 2021/22.

The refuse tariff increased by 5.2% in the 2020/21 financial year and will increase by only 4.3% in the next financial year.

Matongo points out that the city’s debt levels are expected to remain below 40% of operating revenue in 2023.

In its pursuit of financial sustainability, the CoJ continues to monitor revenue trends, tariff structures, changes in the regulatory framework and the economic impact on various consumer categories as part of formulating revenue forecasts.

For the medium term, collection rates for the various services rendered by the city are envisioned at 90.8% for 2021/22, 91% for 2022/23 and 91.1% for the outer years.

Matongo says the CoJ will continue to focus on the priorities stated in its Growth and Development Strategy 2040 in the new financial year, including forging new economic pathways, entrenching transformation, ensuring high impact service delivery and confronting the digital divide.

Since the beginning of the Covid-19 lockdown in South Africa, the CoJ expanded on its rebates to cushion more elderly ratepayers through increasing the pensioner income qualifying criteria by 4.36%.

The city further set out to place back up to R400-million into the pockets of property owners by giving three-month rates rebate on the first R600 000 value of a property during the hard lockdown.

Meanwhile, the CoJ’s medium-term budget focuses on strategic priority infrastructure projects, particularly in Orange Farm, Ivory Park and Kliptown.

Orange Farm and surrounds have been allocated medium-term capital of R625-million and will encompass conversion of open stormwater drains, tarring of gravel roads, the construction of a public transport facility, water demand management and social housing.

In Kliptown, R197-million has been allocated over the medium term for bulk infrastructure and housing projects.

Ivory Park and surrounds has been allocated R331-million over the medium term and will account for community development and housing.

The CoJ’s Sustainable Services Cluster, which is made up of the Environment and Infrastructure Department, Housing, City Power, Johannesburg Water, Pikitup and the Johannesburg Social and Housing Company, has been allocated the largest portion of the medium-term budget.

A capital budget of R13.2-billion across the medium term and an operational expenditure budget of R38-billion in the 2021/22 financial year has been allocated to the cluster.

Particularly, the housing department will receive an operational expenditure budget of R1-billion and a multi-year capital budget of R4.4-billion over the medium term.

A further R90-million is available to provide communities with serviced stands – which Matongo says can go a long way to curb illegal land grabs.

Through a R19-billion operational expenditure budget, City Power will be dealing with streetlight repairs and installations, electricity failures, facility repairs and routine maintenance.

City Power is allocated a R2.8-billion capital budget over the three-year medium term aimed at infrastructure projects, such as electrification of informal settlements and public lighting.

Johannesburg Water’s expected operational surplus amounts to R1.2-billion in the upcoming financial year, with an expenditure budget of R13.4-billion. This will mainly cater for a tariff increase of 6.8% based on a pass through 5.8% increase on the water purchase price from Rand Water.

The entity is further allocated a R3.3-billion multi-year capital budget that comprises R2-billion for water and R1.3-billion for sewers, respectively.

Moreover, the city’s health department’s expenditure budget increases by 3.7% from the previous year to R1.4-billion in 2021/22. This will go towards spending on the expansion of extended clinic hours across the city and the implementation of the city’s Substance Abuse Strategy.

The allocation will also cover the rollout of mobile clinics to increase access to primary healthcare in Johannesburg.

With an allocated R119-million capital budget, the department will further be expanding healthcare access to facilities through new or upgraded clinics in Freedom Park, Naledi, Lawley, Kikhensile and Rawbey Ridge.

The expenditure budget of the Economic Growth Cluster allocation increases by 13.9% from the 2020/21 financial year, which places its three-year capital budget at R7.2-billion.

The Transport Department is allocated a multiyear capital budget of R2.7-billion, with planned projects including redevelopment of the inner city taxi ranks and Rea Vaya infrastructure.

About R800-million has been earmarked for the purchase of new buses for the Phase 1C project of Rea Vaya, while R122-million will be invested in an automated fare collection system.

Transport’s operational expenditure budget allocation is R2-billion, which will see to the operationalisation of the Rea Vaya route between Alexandra, Sandton and the inner city.

The three-year medium term capital budget allocation for the Good Governance Cluster amounts to R3.6-billion and will include a smart city enablement programme rollout and the rollout of 1 00 WiFi hotspots across the city.

Matongo says that, as it stands, the biggest risks to the tabled budget is the unfinalised local government wage negotiations. The CoJ has considered the Consumer Price Index in its planning for financial sustainability, which is estimated at 4.3% for 2021/22, 4.4% for 2022/23 and 4.5% for 2023/24.