EXCERPTS FROM THE BUDGET DOCUMENT AS TABLED AT AN

ORDINARY COUNCIL MEETING ON 27 MAY 2010.

BUDGET FOR 2010/2011 FINANCIAL YEAR.

1.A draft budget was tabled by the Executive Mayor at the end of March 2010
as required by section 16(2) of the Municipal Finance Management Act (Act 56
of 2003) MFMA.

2.After the draft budget was tabled the documents as prescribed in section 17
(3) of the MFMA was made available to the local community and National and
Provincial Treasury as required by Section 23(1) of the MFMA.

3.The parties were invited by advertisement in the local newspaper, to submit

comments on the draft budget.

4.During the months of April/May 2010 a number of public meetings were held
throughout the municipal area to make the community familiar with the
budget and to obtain their views on it.

5.Written comments were received from a number of individuals, Ratepayers

Associations and Political parties.

6.The comments at public meetings and the written submissions are entered
into a register for future reference.

7.Section 18(1) of the MFMA stipulates that an annual budget may only be
funded from:

(a) Realistically anticipated revenues to be collected.

(b)Funds and cash from accumulated funds of previous years committed.

(c)Borrowed funds but only for Capital expenditure

8.Section 19(1) stipulates a municipality may spend money on capital projects

if:

(a)approved and contained in the budget

(b) approved by Council

(c)a dedicated source of funding is available and not elsewhere committed.

9.EXPECTED INCOME:

Property Rates 115 150 000

Service Charges 221 245 000

Investments 637 000

Other 31 977 000

Transfers operational 38 645 000

407 654 000

EXPENDITURE:

Employees costs 143 634 000

Remuneration councillors 4 147 000

Finance charges 10 444 000

Materials and bulk purchases 111 224 000

Transfer of grants 6 658 000

Other expenditure 95 498 000 371 605 000

Surplus 36 049 000

407 654 000

CAPITAL EXPENDITURE: 39 868 000

Transfers recognised 18 168 000

Internally generated funds 21 700 000

39 868 000

Net deficit R 3 829 000

10. Cost of free services:

Water 479 000

Sanitation/sewerage 4 802 000

Energy 16 214 000

Refuse 16 214 000 R 37 709 000

11. Cemeteries Jeffreys Bay

Grave plot: New cemetery 454.50

Old cemetery 317.10

Dig and fill of grave 813.89

Dig only 687.05

Fill only 232.54

12. Election Posters per party/candidate per ward 571.00

13. EMF 28.53 per month

14. Sewerage: The Municipality appointed Engineering Advice Services to

investigate the present tariff structure which is used to generate the bulk of
the municipality’s sewerage income and to submit a report on a proposed new
tariff structure to implement cost effective sewerage tariffs.

The present tariffs are not reflective of the true cost of the service rendered by
the municipality, as it does not take the amount of the services used by the
consumer into account. Ideally the sewerage charges should be based on a
fixed charge component and a variable charge component that is calculated on
the measurable usage of the service, so that the principle of “the user pays”
applies. It is proposed that the sewerage tariff be partly based on consumers
actual water consumption. The new tariff is only intended to replace the
current basis where the cost of conveying and treating sewerage is recovered
from consumers. It is not intended to replace any other sewerage tariffs like
the trade effluent charge and miscellaneous charges. The new hydraulic tariffs
will replace the current basis for “sewerage fees” and “availability fees”.
Jeffreys Bay and Humansdorp contribute more than 92% of the Municipality’s
total sewerage revenue. Hence, the investigation focussed on analysis of the
water consumption data and tariff categories for the two towns.

The new tariff will be partly based on the actual volume of water consumed
that is appropriately reduced by the percentage of water used for other
purposes and not discharged into the sewer, i.e for irrigation purposes, topping
up of swimming pools etc. The proposed tariff structure model calculates the
revenue on two main components per consumer/erf.

The first portion is based on a fixed cost for each erf and the second portion of
the income is based on actual measured water consumption ( the so-called
hydraulic portion) for an erf.

The fixed charge per erf is based on the sewerage conveyance and treatment
cost for an average monthly water consumption per erf which is exceeded by
80% of consumers in the particular category.

The hydraulic portion of the sewerage charge consists of two components:

(a)The first part of the hydraulic charge is calculated on a percentage of the

minimum water consumption specified per erf for each category.

(b) The second part of the hydraulic portion is calculated on the water
consumption in excess of the specified minimum volume up to a specified
maximum consumption per erf domestic/residential categories. No maximum
consumption applies to the non residential categories. The fixed charge is
applicable for every property which has access to the Municipal sewerage
system irrespective of the property still being vacant or if the property uses
the existing system, including the suction tanker service.

The fixed cost component is there for payable irrespective of the service being
used by the consumer or not, therefore this charge will effectively replace the
current “Availability Fee”

After an extensive investigation it is proposed that a tariff of at least R6.50 (exl.

Vat) per kiloliter of sewerage conveyed and treated be used for the
introduction of the hydraulic tariff structure (R7.41kl.) in 2010/2011.
The minimum amount per month payable per single residential B is 70% of

10 Kl. i.e. 7kl. X R7.41 = R 51.87.

The fixed monthly charge will be R55+vat=R62.70.

Suction Tanker Service- Domestic Removal R295.30+vat=R336.65

WATER: The basic tariff for residential properties is R48.54+vat=R55.34

For water used: 0-12kl. R4.33+vat =R4.94

13-25kl. R4.55+vat= R5.19

26-45kl. R5.41+vat= R6.17

REFUSE: R82.46+vat=R94.00

ELECTRICITY: 60A basic per month R120.90

Energy charge R0.669

RATES LEVY:

Expected total Income by vote

Municipal Governance and Administration 159 264

Community and Public Safety 14 576

Economic and Environmental Services 12 286

Trading Services 221 578

R 407 644

Expenditure by vote

Municipal Governance and Administration 100 932

Community and Public Safety 63 179

Economic and Environmental Service 48 220

Trading Services 195 024

 407 355

Surplus 289

R 407 644

Capital Expenditure in Jeffreys Bay Source

Augmentation of Sewer Treatment Plant 1 720 000 MIG funding

Pump station and R Main 1 742 000 MIG funding

Sewer Treatment Plant (Bulk cost 7 150 000) 2 000 000 Own 2010/2011

5 462 000

Total Budget R39 867 800 of which only R31 850 950 is funded.

R8 016 850 unfunded