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idp and budget consultative process

idp and budget consultative process. PRESENTATION ON DRAFT BUDGET RELATED POLICIES. May 2017. Venue: Council Chambers. Introduction.

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idp and budget consultative process

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  1. idp and budget consultative process PRESENTATION ON DRAFT BUDGET RELATED POLICIES May 2017 Venue: Council Chambers

  2. Introduction In terms of chapter 1 (Definitions) of the Municipal Finance Management Act No 56 of 2003; “budget related policy” means a policy of a municipality affecting or affected by the annual budget of a municipality, including – • the tariffs policy which the municipality must adopt in terms of s74 of the Municipal Systems Act No 32 of 2000 • the rates policy which the municipality must adopt in terms of legislation regulating municipal property rates; or • the credit control and debt collection policy for which the municipality must adopt in terms of s96 of the Municipal Systems Act.

  3. Introduction • These policies and other related policies must be reviewed annually and be tabled and approved with the annual budget as per s24(2)(a) (c) of the Municipal Finance Management Act which states that • An annual budget –  (a) must be approved together with the adoption of resolutions may be necessary. (c) approving any changes to the municipality’s budget related policies. • The policies were further approved by the two former municipalities as part of the budget process through items A (3) of 31 May 2016 for Mbombela Local Municipality and item FA. 32 of 30 May 2016 for Umjindi Local Municipality.

  4. List of policies The following policies must further be gazetted into by-laws as mentioned in the report be taken for public participation during the IDP/ Budget public participation process. • Credit Control and Debt Collection and Policy and By Law • Property Rates By Law • Tariff Policy and By Law • Indigent Policy and By- Law • Solid Waste Management By - Law

  5. Process Plan • A rationalisation process, wherein the different sets of policies from the two former municipalities will be realigned must be done on policies where applicable. This process has begun and some policies have been rationalised • The policies which must further be gazetted into by-laws as required by legislation will be included as part of the consultation process during the 2017/18 IDP and Budget Consultative process. • Inputs from different stakeholders will be processed and incorporated (where possible) into the relevant policies • The final policies (with inputs from all stakeholders) will be tabled for adoption and approval by Council with the budget • The policies that need to be gazetted into by-laws will further be processed through the gazetting process for implementation before the start of the new financial year.

  6. Credit Control and Debt Collection Policy and By-Law The objectives of the policy are to • Provide a framework within the municipal council can exercise its executive and legislative authority with regard to credit control and debt collection. • Ensure that all monies due and payable to the municipality are collected and used to deliver municipal services in the best interests of the community, residents and ratepayers and in a financially sustainable manner. • Outline the procedures that will ensure that the members of the local community is afforded the opportunity to contribute in the decision making processes of the municipality and that they are informed of the decisions and affairs of the municipality. (d) Outline credit control and debt collection policy procedures and mechanisms.

  7. Credit Control and Debt Collection Policy and By-Law Proposed amendments • The policies of the two former municipalities are similar. These were further rationalised into one policy for implementation as at 01 July 2017. • One amendment has been effected on the former Umjindi Local Municipality policy in respect of delegations on irrecoverable debt limits as set out in section 5.4.4. The limits for the former Mbombela Local Municipality will be used. • Continuation of the 1% Payment Incentive Scheme in the financial year 2017/18 • The charging of interest on amount due on accounts be charged immediately after the due date.

  8. Property Rates Policy and By- Law Legislative requirements and background • It is enshrined in Section 229 of the Constitution (Act 108 of 1996) that a municipality may impose rates on property within a regulatory framework. • The Municipal Property Rates Act, 2004 (Act no 6 of 2004) (MPRA) provides the regulatory framework to which the municipality must comply with when imposing rates on the property, which includes but is not limited to * the adoption of a rates policy will be implemented and made effective by way of a Rates By- Law * criteria for determination of categories of properties and deferential rates for each category of properties * criteria to be applied for granting rates relief measures * appointment of a municipal valuer for preparation of a general valuation roll and supplementary valuation roll(s)

  9. Property Rates Policy and By- Law • The Property Rates Policies and By – Laws from the former two municipalities will exist concurrently until a new general valuation roll is compiled and implemented with effect from 1 July 2018 for the City of Mbombela • The proposed amendments for the two former municipalities as highlighted herein relates to the rates rebates structure

  10. Property Rates Policy and By- Law PROPERTY RATES REBATES STRUCTURES (IN TERMS OF THE PROPERY RATES POLICY)

  11. Property Rates Policy and By- Law

  12. Property Rates Policy and By- Law

  13. Tariff Policy and By-law The objective of the tariff policy is to ensure that • The tariffs approved during the Budget process by council to fund services must be consistent with this policy. • The municipal services are financially sustainable, affordable and equitable. • The needs of the poor households are taken into consideration. • There is consistency in how tariffs are applied throughout the municipality.

  14. Tariff Policy and By-law Proposed amendments • The Tariff policies for the two former municipalities are similar. A rationalised policy has been developed for implementation as from 01 July 2017. • For Low Tension / High Tension tariff structure where the customer uses more than 50 MWh per month, a time of use (TOU) tariff may be applied. This is reduced from 100MWh. • Tariff for private contractors dumping on the municipal landfill site who provide service in the area where the municipality is providing the service be developed and incorporated into the tariff schedule

  15. Indigent Policy and By-Law Objectives of the policy • The provision of basic services to the community in a sustainable manner within the financial and administrative capacity of the Council. • The financial sustainability of free basic services through the determination of appropriate tariffs that contribute to such sustainability through cross subsidisation. • Establishment of a framework for the identification and management of indigent households including a socio-economic analysis and the indigent exit strategy. • The provision of procedures and guidelines for the subsidisation of basic charges and the provision of free basic energy to indigent households. • To enhance the institutional and financial capacity of the municipality to implement the policy.

  16. Indigent Policy and By - Law Proposed amendments: • The Indigent Policy was approved by Council as per item A (2) of the 4th Special Council meeting held on 28 February 2017. This incorporated both policies of the two former municipalities. • The threshold for income has been aligned to two old age state pension as reviewed annually by the Minister of Finance

  17. Solid Waste Management By- Law Proposed amendments • s21 (1) The municipality shall charge the applicable tariffs on or from the date of issue of the certificate of occupation including a base charge where there is no development or the service is not fully used. • The definition of “property” in the definitions shall refer to property as defined in terms of the Municipal Property Rates Act No6 0f 2004 (MPRA)

  18. New Policies • Deposits and Refunds Policy All matters relating to refunds that happen as a result of monies being in the municipal account that must be refunded to third parties have been incorporated into the Deposit Policy. This policy will now be called the Deposits and Refunds Policy. Clauses within the Credit Control and Debt collection policy regarding deposits and refunds are further referred to this policy. • Proof of Residence Policy A new policy has been developed to guide the issuing of proof of residence within formal and informal areas. It deals mainly with the requirements needed before a proof of residence can be issued. This policy will be implemented from 01 July 2017

  19. Conclusion • The policies are available on the municipal website. • A report will be tabled to Council indicating all the policies that are reviewed, adopted and approved.

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