1. Click to edit Master subtitle style 11/25/11 VENTERSDORP LOCAL MUNICIPALITY PRESENTATION TO THE SELECT COMMITTEE ON FINANCE OLD ASSEMBLY BUILDING 23 November 2011 09:00 am

2. 11/25/11 INDEX 1. Municipal Transformation and Institutional Development 2. Basic Service Delivery 3. Local Economic Development 4. Municipal Finance Viability and management 5. Good Governance and Public participation 6. Other Cross Cutting Matters 22

3. 11/25/11 1. Municipal Transformation and Institutional Development Policy Reviewing Process of policy development and review to be undertaken very soon. Organizational Structure The Organisational Structure was successfully reviewed and adopted on the 12th of July 2011. The placement of staff (23) is currently in process and we envisage to finalize it soon. HR will still remain with a lot of challenges as far as in-consistency in post levels. Recruitment and Selection Processes We are in process of filling vacancies within our Top Management Level. The position of the Municipal Manager was advertised, short listing was conducted and interviews were finalized on the 7th of October 2011. Subsequently Council approved the appointment of Mr. B.J. Makade as Municipal Manager on the 3rd of November 2011. The vacant positions of managers directly accountable to the Municipal Manager were also advertised and the closing date for applications was on the 14th of October 2011. Council resolved on the shortlisting and interview panel on the 10th of November 2011 and we envisage to finalize the Selection and Recruitment processes soon. Other critical positions can not be filled because of budget constrains. 33 No: of approved postsFilled Vacant 22314281

4. 11/25/11 Municipal Transformation and Institutional Development Continues Functionality of LLF(Local Labour Forum) The Local Labour Forum is functioning, but not to its full potential. Consultation processes on certain matters is not necessarily finalized immediately in a meeting and lapse over to subsequent meetings. By the time the matter is on the edge of finalization there is a change in management and the process re-starts. (High turnover of accounting officers and section 57 managers) Skills Development The Annual Training Report for 2010 /2011 was compiled and submitted to LGSETA together with the Workplace Skills Plan for 2011/2012. The key responsibilities of the Training Committee is to assist with the development and implementation of the WSP. Due to budgetary constraints training interventions can not enrol accordingly. 44

5. 11/25/11 Transformation and Institutional Development Continues Minimize Labour and litigation cases Adherence to Policies will minimize labour and litigation cases. Development and review by-laws. 55

6. 11/25/11 2. BASIC SERVICE DELIVERY 2.1 Basic Service Delivery (Water ) Ventersdrop Local Municipality is a Water Service Authority & Water Service Provider 13 433 Households provided with portable water Currently there are 1586 households Receives free basic water, and potential of 3200 household, the registration is continuous. 4808 Household connection made to date Villages are dependant on borehole water Water quality test are conducted monthly for the entire area through Midvaal Laboratory The water reticulation backlog in villages is 1.8 km and contractors are on sites. 66

7. 11/25/11 2.2 Basic Service Delivery (Sanitation) 5600 households have access to sewerage. Waste Water Treatment plant is upgraded to the capacity of 4.4ML/day All villages are dependant on Ventilated Improved Pit Latrine (VIP) Planned development units are 535 VIP’s through MIG Funding (Boikhutsong, Boikhutso, Appeldraai, Goedgevonden: Welgevonden: Tsetse) 300 sites at Toevlug are reticulated There is a backlog of 800 units to be provided with sewerage network. Municipality has appointed a service provider to investigate the state of the old sewerage infrastructure and to quantify the cost thereof and list it as the prioritised project for the year 2012/13. 77

8. 11/25/11 2.3. Basic Service Delivery (Electricity) Ventersdorp Local Municipality is the supplier of electricity in the Ventersdorp town, township and the other two(2) villages namely Boikhutsong and Boikhutso. Eskom supplies the following villages :Mogopa, Tsetse, Rentse(Goedgevonden) and Welgevonden. Areas that do not have electricity are the following: Appeldraai village(in the process of electrifying-consultant appointed), Makokskraal, Joko, Muiskraal, Klipgat, Uitkyk, Rysmierbult, Tshing informal settlement and others(Application for funding was done). 13 433 Households have access to electricity. Currently there are no households receiving Free Basic Electricity(50units) and potential 3200 have applied for free basic electricity excluding villages. It was stopped in 2009. 88

9. 11/25/11 Basic Service Delivery (Electricity) continues Municipality allocated Mega Volt Ampere is 7MVA and consumption is 9 MVA and the District Municipality has approved the application to increase the capacity. Ventersdorp LM has about 260km of overhead lines Number of backlog is 2881 and the municipality has made application to the Dept of Energy which the project will be implemented in 2012/13. 99

10. 11/25/11 2.4.Basic Service Delivery (Refuse) A total of 5600 household receive waste collection services Municipality has one unlicensed land fill site and an application for funding has made to the district. The municipality has acquired two compactors and one 4ton truck for weekly refuse collection. The contract between the municipality and two service providers for refuse collection has been terminated and the municipality performs the function. The Municipality does not have integrated refuse management plan and funds to develop the plan is unavailable however the municipality has requested funds from the District Municipality. The DLGTA has assisted the Municipality with a Clean Communities Project contract for six months (April –October 2011). 1010

11. 11/25/11 2.5. Basic Service Delivery (Roads) There is a 30Km surfaced roads in Tshing and 40KM Ventersdorp town. Tshing has a backlog of 18km of road and 8km in Ventersdorp. No surfaced roads in the villages. Municipality has a roads maintenance plan but there is no funds to implement and provision shall be made in the budget for the next financial year. 1111

12. 11/25/11 2.6. Basic Service Delivery( Housing) There are 1000 housing units approval at the following villages: (Goedgevonden; Boikhutsong; Boikhutso; Welgevonden; Ga-Mogopa & Tsetse). 492 housing units completed and handed over to beneficiaries. The housing project in Tsetse could not commence due to dolomatic conditions in the area and the Provincial Department (Human Settlement) has appointed specialist to address the matter. An application has been made for the township establishment to address Tshing for housing backlog. There is a slow process of approval of housing subsidy application and the matter has been brought to the Provincial Department of Human Settlement. 1212

13. 11/25/11 3. LOCAL ECONOMIC DEVELOPMENT The Municipality has an approved LED strategy that is aligned to the District Growth Development strategy. The Municipality did not budget for LED project for the 2011/12 financial year. 1313

14. 11/25/11 4. Good Governance and Public Participation Approved Council Meeting Schedule. The 2009/2010 annual report was adopted. Public participation schedule for 2011/12 has been adopted. The IDP and budget was adopted and approved by council. Six ward committees have been established and trained. Portfolios have been established and functional.  Governance,Administration and Finance.  Infrastructure and Service Delivery.  Economic Development and Investment promotion.  Traffic, Transport and Emergency Services.  Sports, Arts and Culture Recreation and library Services.  Community Services, Health and Transversal Issues. 1414

15. 11/25/11 5. Financial viability  The Municipality is without doubt not financially sustainable. Operating income can potentially increase when there’s proper billing and limited bridging of electricity and water by introducing smart meters.  Credit control measures will be in place for non-payment of services in the 2011/2012 financial year. ( e.g. Water restriction and cutting- off of electricity) A specific goal of this key performance area is to ensure that the 2011/2012 Operating Budget is executed within limited deviance parameters of the approved Budget. 1515

16. 11/25/11 Financial viability :continues The following are some of the findings from the AG’s report: 1. Municipality is currently not a going Concern. 2. Not all internal Controls are in place. 3. Non Compliance with Legislation. 4. Governance (not all policies are developed and /or reviewed annually). 5. Asset Register not in place. 6. Supply Chain Management not fully functional. 1616

17. 11/25/11 Revenue collection 2010/2011 Collection rate Total BilledTotal ReceiptsCollection Rate 47 203 615,5732 561 584 68.98 2011/2012 Collection rate(1st Quarter) Total BilledTotal ReceiptsCollection rate 9 806 6496 562 505 66,92 1717

18. 11/25/11 Revenue Projections OPERATING INCOME11/12 Budget Total property rates-4 8000 000 Total service charged-54 904 000 Total rent facilities and equipments -20 000 Total interest earned ext investments -215 000 Total fines-8 001 000 Total licenses and permits-1 600 000 Total grants subs operating-45 279 300 Total other revenue-509 500 TOTAL OPERATING INCOME -115 328 8000 1818

19. 11/25/11 OPERATING INCOME 10/11 BUDGETACTUAL Total property rates-3 727 7000-2 735 243 Total service charged-35 000-33 003 Total rent facilities and equipments -110 000-141 339 Total int earned ext investments -5 001 500-3 711 010 Total fines-1 200 000-2 270 614 Total licenses and permits -45 279 300-61 781 699 Total grants subs operating -3 727 7000-2 735 243 Total other revenue-336 700-765 976 TOTAL OPERATING INCOME -91 020 800-105 351 863 1919

20. 11/25/11 OPERATING EXPENDITURE 10/11 BUDGETACTUAL Total employee /councillors related costs 27 736 75126 083 049 Total repairs and maintenance 4 660 4503 666 615 Total bulk purchase21 649 78022 009 791 Total contracted services 9 465 0007 516 927 Total general expenses other 19 952 24025 894 956 Contributions to bad debts 6 500 0003 922 058 Total interest expenses external borrow 3 522 0132 908 711 Depreciation03 330 256 TOTAL OPERATING EXPENDITURE 89 548 54495 332 363 2020

21. Click to edit Master subtitle style 11/25/11 OPERATING EXPENDITURE (PROJECTIONS ) 11/12 BUDGET Total employee /councillors related costs 36 003 546 Total repairs and maintenance 5 402 300 Total bulk purchase26 700 000 Total contracted services9 465 000 Total general expenses other28 149 000 Contributions to bad debts5 000 000 Total interest expenses external borrow 3 544 240 Depreciation0 TOTAL OPERATING EXPENDITURE 114 264 086 2121

22. 11/25/11 CONDITIONAL GRANTS EXPENDITURE (current status) 11/12 BudgetComments Electrification of Appeldraai 1 028 500 The Professional services providers are appointed. Electrification of Boikhutsong 2 125 000 The Professional services providers are appointed. Upgrading of sewer plant 5 000 000 Internal network and stand pipes (water) 5 500 000 MIG: Upgrading of internal roads (Welgevonden: 6 000 000 The Professional services providers are appointed. Upgrading of old electrical network 1 500 000 MIG: upgrading of electrical network (Tshing) 2 000 000 TOTAL CAPITAL PROJECTS 23 153 500 2222

23. 11/25/11 Grant 2011/2012 Allocation 2011/2012 Received 2011/2012 Expenditure FMGR 1 250 000,00 R 81 861,00 MSIGR 790 000,00 R 24 700,00 MIGR 20 046 000,00R 4 200 000,00R 0 CONDITIONAL GRANT 2011/2012 2323

24. 11/25/11 CONDITIONAL GRANT 2010/2011 Grant 2010/2011 Allocation 2010/2011 Received 2010/2011 Expenditure FMGR 1 000 000,00 R 1 110 593,00 MSIGR 750 000,00 R 766 351,00 MIGR 16 668 000,00 R 16 939 478,00 MIG PROJECTS Road resealingR4.199,999.93 R6,167,634.86 Internal road TshingR6,000,000.00 R5,728,998.24 VIP toilets 6 villagesR6,219,428.00 R5,625,137.55 2424

25. 11/25/11 CASH FLOW POSITION Municipal Reserves a. Investment Account No: 8074375155 : ABSA BANK R 8 620 178.04  MIGR 4 250 000,00  Department of Local Government R 4 200 000,00 (water related projects: Tshing ext 6 and Rysmierbult)  InterestR 170 178,04 b. Spiral / savings Account No: 34349789 : ABSA BANK R 1 644 351.14 c. Main account : 2250000017: ABSAR 1 900 000.00 ( 21/11/2011) 2525

26. 11/25/11 DEBTORS ACCORDING TO CUSTOMER CATEGORY AND AGE ANALYSIS, AND REPORT ON BAD DEBT WRITE-OFF POLICY. Description0-30 Days31-60 Days61-90 Days91-120 DaysTOTAL Government197 52966 62466 7611 716 1262 047 040 Business2 117 559441 025437 5613 443 7366 439 881 Residential1 556 193463 781431 77719 158 36821 610 119 Other (e.g. churches, old age homes) 1 953 228632 991424 0377 441 26210 451 518 TOTAL5 824 5081 604 4211 360 13631 759 49240 548 558 2626

27. 11/25/11 CREDITORS AGE ANALYSIS AND INDICATE WHETHER THE MUNICIPALITY COMPLIES WITH THE 30 DAY POLICY  Outstanding creditors as at 30 September is R 29 335 630, 00  Major creditors among other include:  Eskom  Auditor General  DWAF  INCA  DBSA  Due to the negative cash flow, the Municipality is unable to pay creditors within the 30 days. 2727

28. 11/25/11 IS THERE AN INDIGENT POLICY, REGISTER, INDICATE THE NUMBER OF INDIGENTS AND REPORT ON HOW THE REGISTER IS MANAGED AND UPDATED AND STEPS THE MUNICIPALITY HAS TAKEN TO COMMUNICATE THE INDIGENT POLICY TO COMMUNITY MEMBERS. The Municipality has an indigent policy that was approved by Council. Registration takes place annually and the current registered indigent as at 30 September stands at 1 544 for the 2011/2012 year. There are still outstanding documents on the 1 198 indigents, upon receipts of those documents, they will be approved. The register is updated on a daily basis, when applicants submit all the required documents; they automatically receive the subsidy retrospective from July 2011. The Municipality has been experiencing problem communicating the policy to the community, and we are looking into ways of involving our ward committees and councilors to assist in this regard. 2828

29. 11/25/11 6. Cross- cutting matters Acquired funds from The Department of Water Affairs ( R 6 m

30. 11/25/11 THANK YOU 3030