1. BUFFALO CITY  POPULATION 900 000  URBAN 650 000  RURAL 250 000  REVENUE BUDGET: R1,1bn DOMESTIC 50% BUSINESS 50%  CAPITAL BUDGET: R352 million Nb. ONLY ACTUAL FUNDED ITEMS ARE INCLUDED IN THE CAPITAL BUDGET

2. NATURE OF CITY 1  SECONDARY CITY  PROVINCIAL CAPITAL  REGIONAL LABOUR AND BUSINESS HUB  MAJORITY OF POPULATION IN FORMER R293 TOWNS  HAS ALL CHARACTERISTICS OF METROPOLITAN AREA

3. NATURE OF CITY 2  MULTIPLE CBD’s  INTENSE POPULATION MOVEMENT  INTERDEPENDANCE OF COMPONENTS OF CITY  DIVERSIFIED ECONOMY WITH NATIONAL INFLUENCE IN MOTOR INDUSTRY  HARBOUR EXPORTS NATIONALLY FOR MOTOR INDUSTRY  REGIONAL EDUCATIONAL AND ADMINISTRATIVE HUB  IDZ PROCLAIMED AND DEVELOPING

4. VISION AND STRATEGIES 1  VISION: A PEOPLE CENTRED PLACE OF OPPORTUNITY WHERE THE BASIC NEEDS OF ALL ARE MET IN A SAFE, HEALTHY AND SUSTAINABLE ENVIRONMENT.

5. VISION AND STRATEGIES 2  STRATEGIC LEADERSHIP WITH INSTITUTIONAL STABILISATION & TRANSFORMATION  SUSTAINIBLE FINANCIAL MANAGEMENT  ECONOMIC DEVELOPMENT AND JOB CREATION  FOCUSED AND SUSTAINIBLE SERVICE DELIVERY  PRIMARY HEALTH AND HIV /AIDS

6. RESTRUCTURING  APPLICATION PROCESS WELL ADVANCED  KEY ISSUES: R293 TOWNSHIPS : REPAIRS BACKLOG : RATES BASE : RURAL DEVELOPMENT : SUSTAINIBLE SERVICE DELIVERY : UNIFORM RATES AND TARIFF POLICY WITH PRO POOR FOCUS

7. EQUITABLE SHARE ALLOCATION2002/3 2003/4 FREE BASIC WATER 15% 16% FREE BASIC ELEC. 7% 14% POOR RELIEF 27% 30% R293 SALARIES 32% 26% RURAL WATER COSTS 4% 5% RURAL INFRASTRUC 15% 9% TOTAL R126m R175m

8. INDIGENT DISCUSSION POINT PRESENT DISPENSATION FOR POOR RELIEF IS “ BASIC SERVICES FOR EXISTANCE” SHOULD IT NOT BE “ BASIC SERVICES FOR COMFORT” 6 kl vs 12 kl AND 50 kwh vs 100 kwh

9. INDIGENT  PROVISION: FREE BASIC SERVICES : R100 SUBSIDY FOR OTHER SERVICES  REGISTERED 2003 31 000 FAMILIES 2004 40 000 FAMILIES Nb THIS EXCLUDES RURAL HOMES NATIONAL AVERAGE % POOR HOUSEHOLDS IS 22% BUFFALO CITY IS 32%

10. REVENUE STRATEGY COMPONENTS  REVENUE PERFORMANCE 1. TAX AND TARIFF RATES 2. INTER-GOVERNMENT TRANSFERS 3. DEBTORS 4. SUBSIDIES 5. CUSTOMER CARE

11. GRANT ALLOCATION  SEE HANDOUT

12. ABILITY TO USE GRANTS THIS IS BASED ON BUDGETRY PERFORMANCE BCM BUDGET IS BASED ON 1. A CASH BASED BUDGET 2. ALL CAPITAL PROJECTS HAVE IDENTIFIED FUNDING SOURCES 3. DELIVERY IS PLANNED FOR BUDGET PERIOD

13. GRANT PERFORMANCE AS AT 1 MARCH 2003 SOURCE PROJECTS IN PROGRESS CLF 145 122 BCMET 9 9 CMIP 43 41 LGH/PHB 38 21 NEP/NER 5 5 RESTRUC 8 7 TRANSITION 11 8 ADM42 33 THESE FIGURES INDICATE ABILITY TO DELIVER

14. COMMENT ON GRANTS FROM THE PREVIOUS SLIDES IT WILL BE NOTICED THAT PERFORMANCE IS EASIER WHEN THE CHANNEL BETWEEN THE SOURCE OF FUNDS AND THE USER OF FUNDS IS A DIRECT ONE. IN TERMS OF THE CONSTITUTION THE IS NO HIERACHY OF SPHERES OF GOVERNMENT. THIS PARTICULARLY APPLIES TO CMIP BCM IS UNDERFUNDED IN TERMS OF INFRASTRUCTURE GRANTS. R934 BEING RECEIVED PER POOR HOUSEHOLD COMPARED TO NATIONAL AVERAGE OF R1634 IN THE 2002/3 YEAR

15. FISCAL CONSTAINTS A VERY IMPORTANT PROBLEM IN THE MUNICIPAL FINANCIAL SPHERE IS THE INEQUITABLE IMPOSITION OF INCREASES ON MUNICS.  TREASURY LIMITS BUDGET INCREASE TO 5.5%…..but  PARASTATALS INCREASE 8 to 80%  INFLATION 10 to 13%  SALARIES 10 to 12%