1. MUNICIPAL STATUS QUO REPORT:FOCUS ON SERVICE DELIVERY AND FINANCIAL MANAGEMENT PRESENTATION TO PARLIAMENTARY POTFOLIO COMMITTEE ON CoGTA 23 JUNE 2015

2. OUTLINE 1. MUNICIPAL BACKGROUND 2. INSTITUTIONAL CAPACITY 3. SERVICE DELIVERY ISSUES 3.1 Water and Sanitation 3.1.1 s139 Implementation 3.1.2 Levels of Access 3.1.3 Status of Water Supply Infrastructure 3.1.4 Status of Sanitation Infrastructure 3.1.5 Blue and Green Drop Status 3.1.6 Water Shortage Hot Spot Areas 3.1.7 General Challenges 3.1.8 Budgeting 14/15 vs 15/16 3.2 Roads Infrastructure 3.3 Electricity Infrastructure 2

3. OUTLINE…. Cont 4. FINANCIAL MANAGEMENT 4.1 Revenue Management 4.1.1 Budget Revenue 4.1.2 Revenue Performance 4.1.3 Debtors Age Analysis 4.1.4 Challenges 4.1.5 Intervention Measures 4.2 Expenditure Management 4.2.1 Outstanding Creditors 4.2.2 Cash Flow Management 4.2.3 MIG Performance 3

4. MUNICIPAL BACKGROUND  Category B, Grade 4 municipality.  Executive Mayoral & Ward Participatory type system.  Madibeng is demarcated into 36 ward with 72 councilors.  Predominantly rural municipality with limited revenue base.  10 urban areas, 21 rural areas, 43 villages & 9000 farm portions.  Population estimate 477 381 (2011 census). 4

5. INSTITUTIONAL CAPACITY 5  High level organogram comprises of post Municipal Manager, 8 Directorates & 32 Divisional Managers.  Municipal Manager and Five posts of Directors are filled. Vacant posts of Chief Financial Officer, Director: Corporate Support Services and Director: Economic Development, Tourism and Agriculture  26 posts of divisional managers are also filled & 6 are vacant (Local Economic Development, Communications, Fire and Disaster, Internal Audit, Human Resources, Fleet and Facilities).  Other levels of employees: vacancy rate:48%

6. Sec.139 (1)b IMPLEMENTATION  Municipality’s Water and Sanitation services was placed under s139 of the constitution during 23 March 2015  Department of Water and Sanitation has given Magalies water directive to assist with the operation of bulk services for water and sanitation  Joint Operating Centre has been established by the Province 6

7. LEVEL OF ACCESS TO WATER SERVICES 7 Level of ServiceNo. of Households WaterSanitation Above RDP59 62852 558 Basic73 45215 590 Inadequate /None27 64492 576 Total160 724

8. STATUS OF INFRASTRUCTURE  Total asset value = R584.2 million  Total replacement value = R776 million  (Source Asset Register 2013/14- GRAP 17) Status of Brits Water Treatment Plant  Supply 60 mega litres and demand 80 Ml per day  Demand in peak season 108 mega litres per day  Age of equipment exceeded it life span, high maintenance cost which is also limited due to financial constraints. 8

9. WATER & SANITATION INFRASTRUCTURE … cont Status of Hartbeespoort Water Treatment Plant  Supply 10 mega litres and demand of 11 mega litres per day  Demand in peak season : 15 mega litres per day  Also under (RBIG) reburshment by DWA  Rand Water bulk augmentation (9Ml/d) Supply of water in rural areas:  Municipality currently tankers water to rural areas through 18 hired and 4 owned water costing approximately R2 million p/m  Water through tankering supplied to 24984 households 9

10. WATER & SANITATION INFRASTRUCTURE … cont Water Losses Network losses: 55% unaccounted for water losses  Technical losses : 20%  Non Technical losses: 35% ( mainly illegal connections) 10

11. WATER & SANITATION INFRASTRUCTURE … cont Water supply to ODI areas  Bulk supply by City of Tshwane in ODI 1 areas approximately 25 Ml/day  Bulk supply by Rand Water in ODI 2 areas approximately 3.5 Ml/day  No revenue collections in the area (historically 5% on domestic) Remedial plans:  Introduction of flat rate billing in areas currently unmetered as part of revenue enhancement programme  Augmentation of water supply through boreholes in the ff areas: Majakaneng (in progress), Maboloka (in progress), Mmakau(in progress), Jericho (in progress), Madidi (in progress)  Programme underway for reticulation and installation of meters(Projects ongoing in Hebron, Rockville and Klipgat) 11

12. WATER & SANITATION INFRASTRUCTURE … cont  Construction of new reservoir and bulk pipeline in Hebron / Kgabalatsane (ODI 1) for direct supply to our consumers completed. (Awaiting final connection and commissioning)  Upgrade of the Brits Water Treatment Plant by 20 megalitres per day in progress. Scheduled for completion in August 2017.  Approvals granted for the implementation of the ACIP and MWIG pragrammes with focus also on water conservation and demand management  Low level organogram currently under review to include a demand management team Status of Brits waste water treatment plant:  Capacity – 12 Megalitres /day  Current load -9 Megalitres /day  Compliance- 30% 12

13. WATER & SANITATION INFRASTRUCTURE … cont Rietfontein waste water treatment plant:  Capacity – 5 Megalitres /day  Current load -3 Megalitres /day  Compliance- 50% Letlhabile waste water treatment plant:  Capacity – 3 Megalitres /day  Current load -2 Megalitres /day  Compliance- 20% Mothuthlung waste water treatment plant:  Capacity – 1 Megalitres /day  Current load -0.4 Megalitres /day  Compliance- None (Vandalized) 13

14. WATER & SANITATION INFRASTRUCTURE … cont Remedial actions in progress  Refurbishment of Hartbeestpoort network pump-stations in progress. A proposed allocation of R7.1 million by DWS  Construction of balancing dam at Rietfontein WWTW inlet  Refurbishment of vandalized plant-Mothotlung WWTW 14

15. BLUE & GREEN DROP STATUS 15 BLUE DROP WSALOG POSITION SCORE 2012SCORE 2011SCORE 2010 Madibeng757.9336.724 GREEN DROP WSALOG POSITION SCORE 2013SCORE 2011SCORE 2009 Madibeng9446.60

16. WATER SHORTAGE HOTSPOT AREAS AreaAffected households interventionFunderImplementing agent Majakaneng7261Boreholes augmentation DWS (ACIP) & IFMMagalies Water Mmakau2703BoreholesDWS (WSOS) and Bojanala DWS & BPDM Letlhabile (centreville, Block F,G & I) 4955BoreholesDHLG (PIG)Magalies Water Maboloka6283BoreholesDWS ( MWIG)Magalies Water Letlhakane908BoreholesDWS ( MWIG)Magalies Water Jericho1800BoreholesDWS (WSOS)Magalies Water Madinyane101BoreholesDWS ( MWIG)Magalies Water Madidi2288BoreholesDWSDWS northern operations Oskraal/Robokala1786BoreholesBojanalaBPDM 16

17. WATER AND SANITATION CHALLENGES  Water treatment Plants are operating beyond their design limits and are aged  Poor raw water quality from the Hartebeesport ( High algal bloom especially during hot seasons)  Lack of Bulk water to meet the demand.  Shortage of the requisite skills and staff complement  Poor maintenance of infrastructure due to budget constraints  Theft and vandalism of water and sanitation infrastructure 17

18. BUDGETING(14/15 vs 15/16)  Total 14/15 operating budget of R1.375 billion comprising of R1 billion own revenue and R375 million, grants and subsidies. Approved 15/16 operation budget R1.523 billion comprising of R1.055 own revenue and R468 million grants and subsidies  Percentage 14/15 allocation for water and sanitation infrastructure maintenance on operating budget is 2 %. Approved allocation for 2015/16 is 7% 18

19. Budgeting(14/15 vs 15/16)..cont  Total 14/15 capital budget of R265.7 million. Approved 15/16 budget R292.4 million  Percentage 14/15 allocation for water and sanitation capex is 37% and the allocation for 15/16 is 39%, excluding grants in kind 19

20. Roads Infrastructure Status  Paved roads 530 km  Unpaved roads 1700 km  Total Asset Value = R1.5 billion Maintenance budget for 2015/16 increased by 135% compared to 2014/15 Upgrade programme (including stormwater management) comprises of 54% of the 2015/16 capital budget 20

21. Electricity Infrastructure  Total Asset Value = R400 million  Replacement Value = R664 million Maintenance budget for 2015/16 increased by 30.7% compared to 2014/15 21

22. FINANCIAL MANAGEMENT 22 Budgeted Revenue  The 2014/15 Total Operating Revenue is budgeted at R1.3 billion, which comprises of R1.01 billion for internal opreating revenue and R375 miilion for operating grants and subsidies. The total operating represent 73.03 % of the total opreating revenue budget, while the operating grants and subsidies equals to 26.97% of the total operating revenue budget.

23. Revenue Performance FINANCIAL MANAGEMENT

24. Table A5: Debtors Age Analysis By Revenue Source as at 31 May 2015 Details 0-30 Days 31-60 Days 61-90 Days over 90 days Total% Debtors Age Analysis By Revenue Source Water Tariffs 11,862,093 12,654,581 12,010,151 163,819,893 200,346,71818% Electricity 28,144,370 24,738,698 19,748,847 74,319,516 146,951,43013% Property Rates 23,957,619 18,182,407 15,282,765 348,867,679 406,290,47037% Sanitation Tariffs 3,038,376 6,213,061 3,503,917 65,885,444 78,640,7997% Refuse Removal 2,135,028 1,827,818 1,727,834 68,807,773 74,498,4547% Other 8,947,260 7,135,055 7,245,771 174,531,351 197,859,43618% Total By Revenue Source 78,084,745 70,751,620 59,519,285 896,231,657 1,104,587,307100% Debtors Age Analysis By Customer Group Government 1,354,895 1,327,141 1,851,214 44,050,031 48,583,2824% Business 34,065,523 31,009,767 22,166,248 145,711,567 232,953,10521% Households 40,598,486 36,773,063 33,928,677 715,270,106 826,570,33275% Other 2,065,841 1,641,649 1,573,146 -8,800,047 -3,519,4120% Total By Customer Group 78,084,745 70,751,620 59,519,285 896,231,657 1,104,587,307100% FINANCIAL MANAGEMENT Debtors age analysis

25. EXPENDITURE MANAGEMENT Oustanding Creditors

26. Cash flow management EXPENDITURE MANAGEMENT

27. EXPENDITURE MANAGEMENT MIG Performance YEARALLOCATIONEXPENDITURE% EXPCOMMENTS 2006/07R67,720,295 100% 2007/08R76,098,432 100% 2008/9R96,228,023.00R96,228,023100% 2009/10R116,553,000 100% 2010/11R136,309,000R24,733,00018%Rollover of R111.576,000.00 (Not Approved) 2011/12R163,940,000 100% 2012/13R198,870,000 100% 2013/14R220,456,000 100% 2014/15R233,615,000R191,797,91582.1%Expenditure as at end May 2015 R11.079 million withheld by NT 27

28. Challenges 28  Data cleansing -Stand Information -Debtor Information -Meter Information -Debtor Profile  There are still challenges with faulty meter, both elctricity and water.  Illegal Connections. There are 6170 prepaid meters not buying electricity and 1086 registering consumption below R50.00  Electricity tarrif dispute by Indudtrialists as they are currently paying 60% of the electricity bill and are high end consumers

29. Intervention Measures  Establishment of Revenue Protection and Enhancement Technical Committee during May 2015  Commencement of data cleansing on 22 June 2015  Council approved implementation of cost containment measures on 24 February 2015 per resolution A. 0671  Critical positions have been identified and are currently in the process of being filled. Five (5) key positions were recently filled (1 st June) in the Budget and Treasury Office. The position of CFO has also been advertised. 29