FMB Report No 2009-01-24

FMB/205/10 2010-07-12

IN YEAR MONTHLY BUDGET STATEMENT REPORT : 30JUNE 2010

EXECUTIVE SUMMARY

INTRODUCTION

The In Year Statement Report is in respect of twelve months ending 30 June 2010.

However, these are draft figures and are subject to finalisation and audit.

This Report is submitted in terms of Sections52 (d) and 71(1)of the Local Government Municipal Finance Management Act No. 56 of 2003 (MFMA).

BUDGET PERFORMANCE ANALYSIS – PARENTMUNICIPALITY

Operational Expenditure and Income Performance

The overall unaudited result indicates a spending of almost 97% of the budgeted operating expenditure of R17billion.

The expenditure on employee related costs is at 97 %of budget, which is deemed reasonable, taking cognisance of the process of filling of posts.

A spend of 100% on Repairs and Maintenanceis an indication that this component is not neglected by the municipality, thus ensuring the longevity of Council’s infrastructure assets.

The water loss in distribution has reduced from 40% experienced during the year to 37.5%,due to interventions to reduce the water loss.

Items of income and expenditure with major deviations from the budget are as follows:

A. INCOME

Rm

(ii) Decrease in income

- Decrease in Rates is mainly attributable to properties defined as income generating

being placed on the Valuation Roll. 55.0

- Reduction in service charges mainly due to reduction in electricity consumption. 137.0

-Reduction in Interest earned-external Investments is due to lower interest rates 241.7

Rm

B. EXPENDITURE

(i) Decrease in expenditure

- Reduction in employee related costs due to time taken to fill vacant posts 105.5

- The decrease in depreciation is attributable to a revision in the useful lives of

certain assets in terms of the Accounting Standards. 25.9

- Reduction in bulk purchases of electricity from Eskom mainly due to energy -

saving measures by consumers. 123.4

Capital Budget Performance

A 100% spend in respect of the Capital Budget has been attained.

The main areas of capital spend are as follows:

Note

1. The increase is due to increased costs in the rehabilitation of the R293 areas.

2. The following projects are funded from the Public Transport Infrastructure Grant and will be

Regularized once final costs are known:-

Kings Park Precinct R23.9m

Nkosi Albert Luthuli R24.3m

Warwick Junction R42.2m

3. The increase is due to the Asbestos Pipe Replacement Programme aimed to cut down on water loss

due to burst pipes and will be regularized from savings, as soon as the final costs are known

4. ClermontSwimming Pool was originally anticipated to be completed in the 2010/2011 financial year for which there is a R10m budget. The completion date was changed to 30 June 2010 and will be regularized from savings.

5. Fast tracking on construction of the Stadium in order that the FIFA deadline was met. This expenditure is funded by National Grants and will be regularized when the final costs are known.

6. Increased costs on Metro Connect Networking (R35m); Fiber Optic Infrastructure (R24m); 311

Diginet Fibre(R14m); Metro Connect Wholesale (R15m); 2010 DCM Upgrade (R9m); Data Centre

Infra (R8m) and Replacement of Communication Console (R5m). The over-expenditure will be

regularized from savings when the final costs are known.

It is encouraging to note that the construction of the stadium to host the 2010 Soccer World had been timeously completed.

Outstanding debtors (Parent Municipality)

Debtors Age Analysis as at 30 June2010 (Consumer and Other)

The comparative debtors’ collection rates for the main services are as follows:

Collection Rate (%)

Other

EXTERNAL LOANS

Total external loans outstanding at 30 June 2010 amounted to R8.7 billion.

There were loan repayments of R295.6 million and interest capitalized of R690.8 million.

Additional loans taken during the year amounted to R2.9 billion.

MUNICIPAL ENTITIES

The International Convention Centre (ICC) and Ushaka Marine World indicate slight

variances to the budget.

This report is submitted for consideration by the Committee.

______

K.A. KUMAR DR. M.O. SUTCLIFFE

DEPUTY CITY MANAGER: CITY MANAGER

TREASURY