City of Johannesburg

Department of Finance and Economic Development Office of the Budget and Financial Planning

Medium Term Budget 2006/2007

2 2004-05-06

Total Budget for the 2006/07 financial yearTotal Budget for the 2006/07 financial year

Total Operating Budget = R17.8 billion

Total Capital Budget = R3.2 billion

Total Budget for the City = R21 billion

3 2004-05-06

CITY OF JOHANNESBURGTOTAL BUDGET

Revenue 52%

Expenditure48%

Revenue Expenditure

Total Budget for the 2006/07 financial yearTotal Budget for the 2006/07 financial year

4 2004-05-06

Sources of Income COJSources of Income COJ

The City anticipate to raise R17.9 billion, attributed mainly by the following income sources;

• Electricity charges R3.7 billion

• Property Rates R3.1 billion

• Water R3.3 billion

• Subsidies R3 billion

• Refuse R600 million

• Fines and license fees R206 million

• Interest earned on investment R335 million

5 2004-05-06

Sources of Income COJSources of Income COJ

INCOME WHERE IT COMES FROM

Electricity24.8%

Refuse3.0%

Subsidies20.3%

Water and Sewerage20.7%

Property Rates20.7%

Fines,licenses and permits

1.4%

Other6.6%

Interest2.2%

Regional Levies0.2%

Electricity Property Rates Water and Sewerage

Regional Levies Refuse Interest

Subsidies Fines,licenses and permits Other

6 2004-05-06

How is budget spendHow is budget spend

The City’s total operating expenditure for 2006/07 is R17.8 billion.

• The Utilities, Agencies and Corporate Entities make up 55% of the City ‘s total budget.

• City Power ‘s allocation amounts R3.7 billion

• Joburg Water account for R3.3 billion

• Pikitup account for R700 million

• Joburg Roads Agency account for R424 million

• City Parks account for R369 million

• Metrobus account for R352 million

7 2004-05-06

How is budget spendHow is budget spend

The core administration makes up 45% of the City’s total operating budget.

• Finance at R1.6 billion (this includes bad debts, depreciation and debt servicing cost)

• Metro police account for R839 million

• Emergency services account for R376 million

• Housing R473 million

• Corporate services at R382 million

• Community development at R496 million

• Health at R267 million

• Development Planning and Urban Management at R463 million

8 2004-05-06

How is budget spendExpenditure per EntityHow is budget spendExpenditure per Entity

EXPENDITURE: UAC's PER ENTITY

Water36.1%

Pikitup 7.6%

Roads4.6%

Zoo0.5%

Bus3.8%

Civic 0.3%

Property Co.0.4%

Market1.5%

Parks4.0%

Power41.2%

Power Water Pikitup Roads Parks Zoo Market Bus Civic Property Co.

9 2004-05-06

Spending per departmentSpending per department

EXPENDITURE : CORE ADMIN PER FUNCTION

JMPD10.6%

EMS4.7%

Transport.5.5%

Finance20.9%

CSSS4.8%

Economic 0.7%

DPUM5.8%Housing

6.0%Environment

0.8%Water and Energy2.3%

Health3.4%

Community 6.3%

City Manager28.2%

City Manager Economic Community DPUM Environment

Water and Energy Health Housing JMPD EMS

Transport. Finance CSSS

10 2004-05-06

Budget HighlightsBudget Highlights

•Establishment of 2010 project office

•Urban management in the regions

•Appointment of approximately 25 health care workers

•Additional 500 Metro Police Officers per annum

•Establishment of the by-law enforcement unit in JMPD

•Additional allocation for the maintenance of roads infrastructure

•Upgrading of ablution facilities

•The greening of Soweto

•Additional allocation towards street cleaning and Inner - City operations•100 fire fighters

11 2004-05-06

Capital EstimatesCapital Estimates

The City will be investing approximately R9 billion over next three years.

Capital Estimates for three years

Funding Sources 2006/2007

R’000

2007/2008

R’000

2008/2009

R’000

Own Funding 2,412,202 2,041,276 2,000,129

Grant and donations 487,717 625,652 393,870

Municipal Infrastructure Grant 293,300 338,500 296,200

3,193,219 3,005,428 2,690,200

12 2004-05-06

Sources of Funding Capex – 2006/2007Sources of Funding Capex – 2006/2007

CAPITAL BUDGET PER SOURCE

Other Grant funding15.3%

MIG9.2%

Loan & Own funding75.5%

The envisaged capital spending is approximately R3.2 billion and will be financed through a combination of borrowing and surplus cash to the tune of R2.4 billion and R781 million from the Consolidated Municipal Infrastructure programme and other provincial and government transfers.

13 2004-05-06

Capital budgetCapital budget

More money will go towards;

• Electricity infrastructure R713 million

• Water R726 million

• Roads R284 million

• Housing R128 million

• Development Planning R84 million

• Community Development R177 million

• Johannesburg development agency R158 million

• Transportation R335.6 million

14 2004-05-06

Capital budget per entityCapital budget per entity

CAPITAL BUDGET : ME'SPER ENTITY

Tourism Co.0.1%

Zoo0.9%

City Parks1.4%

Roodepoort Civic0.1%

Civic Theatre0.1%

Develop Agency7.4%

Fresh Produce Market2.5%

Property Co.2.8%

Social Housing Co.1.1%

City Power33.4%

JHB Water34.0%

Metrobus0.4%

Roads13.3%

Pikitup2.4%

Metro Trading Co.0.1%

15 2004-05-06

Capital budget per DepartmentCapital budget per Department

CAPITAL BUDGET : CORE ADMINPER FUNCTION

Community Dev.17.0%

Transportation31.8%

Dev. Planning8.0%

Housing10.0%

Environment0.3%

EMS1.6%

Infrustructure & Services0.0%Health

0.9%

OEM1.0%

Finance4.2%

Corp Shared Services1.5%

Economic Dev.0.0%

Rev & Customer Rel Mngmt22.4%

MPD1.3%

16 2004-05-06

Capital budget per DepartmentCapital budget per Department

Total Capital Expenditure for Programmes 2006/2007

The Urban Marginalised Areas Programme (UMAP)

23%

The Regeneration Programme (RP)

14%

Nodal Programme6%

Strategic Transportation Interventions Programme

(STIP)13%

Corridor Development Programme

7%

Strategic Infrastructure Investment Programme

16%

Sustainable Environment Programme

2%

2010 Programme12%

Housing Programme7%

17 2004-05-06

Proposed Tariff increaseProposed Tariff increase

Tariffs 2006/07

Assessment Rates 5.1%

Water 8.1%

Electricity 8.2%

Refuse Removal 5.1%

Minor Tariffs 5.1%

18 2004-05-06

Impact of the Tariff increaseImpact of the Tariff increase

Current Proposed Increase

Diepkloof R249.78 R273.28 R23.50

Eldorado R251 R273.28 R22.28

Ivory Park R60.78 R66.36 R5.58

Randparkridge R992.47 R1 029.12 R36.65

Sandown R3 292.56 R3 451.54 R158.98

19 2004-05-06

Social PackagesSocial Packages

The City is spending approximately R570 million towards the social package

Assessment rates

100% rebate on properties worth less than R20 001

40% remission for pensioners who qualify on properties worth more than R20 001

Water

Free 6 kl per household per month

Electricity

Free 50 kwh per household per month (All customers on lifeline)

20 2004-05-06

Social PackagesSocial Packages

Service subsidy is available to the following categories of people(refuse collection and sanitation)

Total Family income should not exceed the maximum income threshold which will be equivalent to twice the value of National grant plus R1

The unemployed, orphans, pensioners, HIV/AIDS patients and persons with disability grants, are also catered for. (only applicants who qualify in terms of the policy)

21 2004-05-06

THANK YOU