Mayoral newsletter for 6 May 2021

With the decline in the number of Covid-19 cases in recent months, it is becoming evident that citizens appear to be more willing to move around again, to travel and participate in social activities again.

ACSA recently commented on the welcome increase in passenger movements through the George Airport. Traffic on the N2 has also increased especially over long weekends as Capetonians head east along the Garden Route. It is also noticeable around George as people gather at popular venues to engage socially or “kuier”.

Along with these activities, my colleagues have also experienced increased interest from entrepreneurs in staging events. These are important “green shoots” that are starting to emerge as we embark on the “new normal”. It is vitally important that there is re-activation of tourism activities around George because of this sector’s importance for employment. Our participation in the Bloomberg Global Mayoral Challenge (“BGMC”) centred on reinvigorating tourism with a focus on the promoting of events. The organising and staging of events will remain risky until lockdown rules are fully relaxed. It is interesting however that entrepreneurs are becoming more innovative in their organisation to minimise costs.

As part of the research for the BGMC project, we identified that the Arts and Crafts sector should play an important role as Tourism gets back on its feet. We are seeing enquiries from Arts and Crafts role-players as they search for additional avenues to market their products. This sector provides livelihoods for many people who have developed creative skills to produce anything from works of art, items of clothing and handiwork through to jewellery, woodwork and leatherwork. There are “cottage industry” opportunities for many participants. Those with the skills could teach, mentor and transfer skills to emerging learners. Ultimately the objective should be to produce quality items that could even attract the interest of the retail or collector market.

At this stage the enquiries relate to how the municipality can facilitate the development of marketing channels for this sector. We are aware of numerous events in the planning stage that could be of benefit to the broader tourism sector. We are planning to engage interested parties shortly to establish how collaboration can best succeed. We would therefore welcome thoughts in this regard that can be sent to: supportbusiness@george.gov.za

As we think of tourism and the arts and crafts sectors we naturally need to connect the dots between the need for people to socially engage and travel and the activities and attractions that we can and do offer in the George area. For George to be successful, we need our citizens to be employed and participants in the economy. This is after all our ultimate objective.

KENNISGEWING: FIN015/2021
2020/21 FINANSIëLE JAAR: AANSUIWERINGSBEGROTING 22 APRIL 2021
Kennis geskied hiermee ingevolge Artikel 28 (2) van die Wet op Plaaslike Regering: Munisipale Finansiële Bestuur, 2003 (Wet no.56 van 2003) en Artikel 23 van die Munisipale Begrotings en Verslagdoening Regulasies 2008 onderskeidelik, dat die Aansuiweringsbegroting goedgekeur is tydens die Raadsvergadering van 22 April 2021.
Ingevolge Artikel 21A van die Munisipale Stelsels Wet, 2000 (Wet no. 32 van 2000), gee George Munisipaliteit hiermee kennis aan die plaaslike gemeenskap dat die raadsbeluit, en alle ander tersaaklike dokumentasie, beskikbaar is op die webwerf van die Munisipaliteit: www.george.gov.za
Navrae in hierdie verband kan gerig word aan die Direkteur: Finansiele Dienste by tel 044 801 9035
DR M GRATZ
WAARNEMENDE MUNISIPALE BESTUURDER
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NOTICE: FIN015/2021
2020/21 FINANCIAL YEAR: ADJUSTMENT BUDGET 22 APRIL 2021
Notice is hereby given in terms of Section 28 (2) of the Local Government: Municipal Finance Management Act, 2003 (Act no.56 of 2003) and Section 23 of the Municipal Budgets and Reporting Regulations 2008 respectively, that the Adjustment Budget was approved during the Council meeting held on 22 April 2021.
In terms of Section 21A of the Municipal Systems Act, 2000 (Act No. 32 of 2000), George Municipality hereby notifies the local community that the Council Resolution, and all other relevant documentation will be available on the website of the Municipality: www.george.gov.za
Enquiries may be directed to the Director: Financial Services at 044 801 9035
DR M GRATZ
ACTINGMUNICIPAL MANAGER

Mayor’s Newsletter: Written 19 April 2021

On 31 March 2021, the Municipality’s draft budget for 2021/22 to 2023/24 was tabled in Council. In an earlier newsletter, I commented on the structuring of electricity tariffs as they form an integral part of municipal budgets.

Over the past decade, high electricity tariff increases have dominated the basket of services provided by municipalities to the extent of limiting realistic tariff increases required for water, sewerage, refuse and property rates to make overall increases to residential and business customers affordable.

Municipalities are “price-takers” for increases granted to Eskom by Nersa for the bulk electricity purchases as well as nationally negotiated salary increases for municipal employees. These two expense categories comprise 50% (R1249m) of our Operational Expenditure budget of R2496m. Contracted services which include the operational expenditure on Housing projects and GIPTN amount to R599m (24%). The remaining expenditure of R648m covers all the other categories.
For the Operational Budget to balance, Revenue needs to exceed the Expenditure. The increases for Employee Related Costs and

Bulk Purchases, therefore, result in other tariffs being much lower to ensure that affordable tariffs are levied to our customers.

Core Services Revenue is budgeted at R1619m (or 62%) out of Total Revenue of R2628m with Grants Received amounting to R707m (27%). The balance comprises Sundry Revenue of R302m (11%) which includes bus fares of R86m. Electricity contributes R875m or 54% of our Core Services Revenue.

In summary, the administered prices have squeezed the flexibility in levying above inflation tariffs on other services that would realistically provide for sufficient funding for the refurbishment of water, sewerage, roads and storm water infrastructure. The poor management at Eskom has therefore resulted in pressures on municipalities who should have been spending more to maintain and upgrade infrastructure that has served us for the past 40-50 years. In the coming years, the next challenge will be to increase expenditure on maintenance and refurbishment.

We have already embarked on a programme of improving productivity in spending less in certain areas to make more money available for upgrades in infrastructure.

As active citizens we all need to be mindful of our environmental footprint to assist in ensuring that our spending is productive. The Clean George campaign that has recently been launched is targeted to spend approximately R1 000 000 per month employing temporary workers to clean up litter, get streets and verges clean, etc. While providing necessary employment in austere times, these funds could be spent more productively to provide greater value to our communities, e.g. facilitating economic activity. By using the available refuse collection channels and stopping littering, our citizens could therefore help in improving the services of the municipality.
We all need to work together.

Die konsep begroting vir die 2021/22 finansiële jaar is verlede week ter tafel gelê en het die nuwe tariewe vir elektrisiteit ingesluit. Ek verduidelik hieronder hoe hierdie tariewe bepaal word.

Nersa (“National Energy Regulator of South Africa”) bepaal die verhoging van elektrisiteitspryse wat Eskom aan verbruikers mag deurgee. Die prys waarteen elektrisiteit aan Munisipaliteite (“Muns”) verkoop styg met 17,8%. ‘n Formule word deur Nersa gebruik om die prysstyging wat Muns aan verbruikers kan deurgee, te bepaal. Bedrae vir onderhoud, salarisse en die netto toelaatbare marges op elektrisiteit word in hierdie jaar se verkoopsprys-styging van 14,59% ingereken.

Eskom verskaf dus elektrisiteit aan Muns teen die grootmaat-prys. Muns is dan verantwoordelik om hul eie verspreidingsnetwerk en substasies in stand te hou om hulle huishoudelike- en besigheids- verbruikers van krag te verskaf. Die kostes om elektrisiteit te versprei sluit onder andere die volgende in: onderhoud op kraglyne, transformators, substasies, onderhoudspanne, waardevermindering op toerusting, asook die interne gebruik van krag (vir pompstasies, straatligte, geboue) en behels ongeveer 30% van die totale aankope.

Daar is verskillende tariewe waarteen Eskom krag aan Muns verkoop afhangende van “piek” of “nie-piek” tye vir “winter” en “somer”. Die totale bedrag vir aankope vir die jaar is dus die kilowatt-ure teen die verskillende tariewe. Die Muns moet gevolglik daagliks statistiek hou van hulle aankope en verkope teenoor die verskillende tariewe en wie die verbruikers is.
Om die verkoopspryse te bepaal moet elke Mun die verbruikspatroon ontleed. Nywerhede word teen “time of use” tariewe gehef; “piek”-tariewe is dus baie duurder as ander tye. Die tarief vir verkope aan huishoudings word teen ‘n gemiddelde prys vir die jaar bepaal wat laer is as die hoë “winter-piek” pryse (maw die Mun verkoop teen ‘n verlies) maar wat ook die laer “somer”- en “nie-piek” tye in ag neem.

Ons Mun gebruik tans (2020/21) nog ‘n eenmalige tarief van 206,4 sent per kilowatt-uur sonder BTW (237,3 sent BTW ingesluit) vir alle verkope aan huishoudelike verbruikers (deernis-gevalle betaal minder vir ‘n getal eenhede). Sommige van ons naburige Muns het alreeds ‘n basiese beskikbaarheids-heffing begin toepas waar huishoudings ‘n bedrag van byvoorbeeld R50 (of R100) per maand betaal voordat hulle kilowatt-uur eenhede aankoop. Die aanvanklike blok eenhede wat aangekoop word sal dan goedkoper wees as die eenmalige tarief wat George hef maar daarna styg die tarief soos addisionele blokke aangekoop word. Hierdie stelsel word ook die “inclining block tariff” stelsel genoem. George moet nog die besluit neem of die laasgenoemde stelsel in die toekoms ingestel gaan word.

Die verkope van elektrisitiet vir 2021/22 word op R875m beraam (teenoor aankope van R616m) wat 54% van George se inkomste uit kerndienste en belasting verteenwoordig. Hierdie inkomstebron is dus uiters belangrik vir ons hele samelewing.

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The draft budget for the 2021/22 financial year was tabled last week and included the new tariffs for electricity. The Executive Mayor Leon Van Wyk, explains below how these rates are determined.

Nersa (National Energy Regulator of South Africa) stipulates the increase in electricity prices that Eskom may pass on to consumers. The price at which electricity is sold to Municipalities (“Muns”) increases by 17.8%. A formula is used by Nersa to determine the price increase that Muns can pass on to consumers. Amounts for maintenance, salaries and the net allowable margins on electricity are included in this year’s sales price increase of 14.59%.

Eskom therefore supplies electricity to Muns at the bulk price. Muns is then responsible for maintaining their own distribution network and substations to power their domestic and business consumers. The costs of distributing electricity include the following: maintenance on power lines, transformers, substations, maintenance teams, depreciation on equipment, as well as the internal use of power (for pump stations, street lights, buildings) and comprises approximately 30% of total purchases .

There are different rates at which Eskom sells power to Muns depending on “peak” or “non-peak” times for “winter” and “summer”. The total amount for purchases for the year is therefore the kilowatt hours at the different rates. The Muns must therefore keep daily statistics of their purchases and sales against the different tariffs and who the consumers are.

To determine the selling prices, each Mun must analyse the consumption pattern. Industries are charged at time of use rates; “Peak” rates are therefore much more expensive than other times. The tariff for sales to households is determined at an average price for the year which is lower than the high “winter-peak” prices (ie the Mun sells at a loss) but which also includes the lower “summer” – and “not peak ”times.

Our Mun currently uses (2020/21) another one-off rate of 206.4 cents per kilowatt hour without VAT (237.3 cents VAT included) for all sales to domestic consumers (indigent consumers pay less for a number of units). Some of our neighbouring Muns have already started applying a basic availability levy where households pay an amount of, for example, R50 (or R100) per month before purchasing kilowatt-hour units. The initial block of units purchased will then be cheaper than the one-time rate charged by George but thereafter the rate will increase as additional blocks are purchased. This system is also called the “inclining block tariff” system. George has yet to decide whether the latter system will be introduced in the future.

Sales of electricity for 2021/22 are estimated at R875m (compared to purchases of R616m) which represents 54% of George’s revenue from core services and taxes. This source of income is therefore extremely important for our entire society.

NEW BANK DETAILS FOR MUNICIPALITY
George Municipality bank account details for the payment of accounts and services are changing from 1 December 2020.
In future, for utilities such as rates, refuse, water and electricity please use:
Bank: First National Bank (FNB)
Account Name: George Municipality
Account Type: Public Sector Cheque Account
Account Number: 62869623150
Branch Code: 210554
Swift Code: FIRNZAJJ

For traffic fines only:
Bank: First National Bank (FNB)
Account Name: George Municipality
Account Type: Public Sector Cheque Account
Account Number: 62869623168
Branch Code: 210554
Swift Code: FIRNZAJJ

• The old account is being phased out, please amend as soon as possible, but is still currently active and payments made so far will have been received.
• If you have a debit order on your account, details will automatically be updated. If you have created an account for online banking, please delete the old account and create a new one with the details as below.

Daar word tans heelwat aandag aan die moeilike tye wat munisipaliteite ervaar in die media gegee. Ek wil graag George se prentjie in die lig hiervan skilder.

Dit word genoem dat indien munisipaliteite sou misluk, dit dan bydra tot die agteruitgang van die land se ekonomie. Baie munisipaitieite buite die Metros en die sekondêre stede sukkel met effektiewe bestuur van die dienslewering wat verskaf moet word. Hulle sukkel om betroubare water, riool-dienste en elektrisiteit te voorsien en betalings vir dienste gelewer in te vorder. Dikwels is hierdie probleme as gevolg van swak bestuur en oorsig deur die stadsrade.

In George is ons tans hard besig met regstellende aksies om te verseker dat dienslewering van hoë gehalte gelewer word. Daar word tans na die versterking van bestuur gekyk asook om toe te sien dat begrotings spandeer word om infrastruktuur te onderhou, te herbou en uit te brei om ekonomiese aktiwiteite te bevorder. Daar word gevolglik klem gesit om ‘n omgewing te skep wat sake sal vergemaklik en beleggers lok om die plaaslike en streeks- ekonomieë te laat uitbrei en werksgeleenthede sal skep.

George is in die gelukkige posisie dat die munisipalitieit een van die 19 “sekondêre stede” in die land is terwyl daar ook die 8 “Metros” bestaan. Ons word dus met Drakenstein en Stellenbosch in die WesKaap vergelyk asook Mbombela, Rustenburg, Emfuleni en Polokwane elders in the die land. Die sekondêre stede vervul dus ‘n belangrik rol om die streeks-ekonomieë te bevorder.

Die agt Metros het in die jaar tot 30 Junie 2020, R249bn (59%) van die totale bedryfs- en kapitaal-uitgawes vir alle munisipaliteite spandeer, terwyl die sekondere stede R49bn (12%) spandeer het. Al die ander kleiner plaaslike munisipaliteite het saam R82bn (20%)  spandeer terwyl die Distrik-munisipaliteite saam R39bn (9%) spandeer het.

Ons is tans ook in die proses om die begroting vir die komende 2021/22 boekjaar voor te berei. Die kern funksies van ‘n munisiplaitieit verlang dat  basiese dienste verskaf moet word: voorsiening van water, riool-dienste, elektrisiteit, vullis-verwydering en strate en stormwater. Hierdie dienste behels tans ongeveer 74% van die bedryfsuitgawes. Bykomende dienste vir ons munisipaliteit bestaan uit beplanning, ekonomiese ontwikkeling en toerisme, brandweer, verkeer en wetstoepassing wat ongeveer 12% van die begroting opneem. Die administrasie insluitend afdelings wat regs-, rekenaar- en interne oudit-dienste insluit, behels ‘n verdere 8,5% van die begroting. Die oorblywende 5,5% van die begroting word gebruik om na gemeenskap en sosiale-dienste verpligtinge om te sien.

Daar word beplan dat die kapitaal-begroting vir die 2021/22 jaar grootliks gebruik sal word om die rioolwerke te vergroot asook om uitbreidings aan die waterwerke te loods. Hierdie beleggings in infrastruktuur word benodig om meer kapasiteit vir die groei van George te verskaf. Ons riool-pompstasies en paaie verg ook aandag.

Mayor Newsletter: 8 February 2021

The recent opening of beaches and of liquor stores has hopefully provided a more positive outlook for all of us as we continue to deal with the new normal that we are experiencing since the arrival of Covid-19.

This news has coincided with the ongoing efforts this past week to examine how the Municipality can improve the effectiveness of its operations. The Acting Municipal Manager is leading this process with exercises being undertaken to examine ways of reducing costs while maintaining productivity.

This exercise provides the opportunity for renewal and is essential as the Municipality needs to ensure cost containment measures are put in place to curtail our Expenditure to the level of Revenue being generated.

It is evident from discussions with the business sector that the second Covid-19 wave halted the more positive outlook that had emerged by October. It is apparent that many in the retail sector experienced a year-on-year decline in turnover over December and January in George. This trend is concerning as virtually all of our customer base have been affected to a lesser or greater extent.

This impacts on the Municipality’s finances through the reduction in Revenue and lower debtor collection rates of our monthly accounts and therefore also on cash flow. We are constantly re-examining the estimated effects on our cash flow for the rest of the financial year to 30 June 2021 and the adjustments that will be required.

While we are dealing with the above financial impact we are also in the midst of a major capital expansion project to enlarge the capacities of our waste water and water treatment plants along with refurbishment that will require the funding and affordability of projects amounting to approximately R1 billion over the next three years. Growth in housing stock and other infrastructure in George has continued year by year resulting in the requirement to undertake the expansion. Amendments are being made to policies to enable the appointment of the necessary expertise to manage these projects.

As I have indicated above we live in interesting times as we search for hope, positivity and optimism. From a municipal perspective, we are striving to balance the present challenges while planning for the future. We will be continuing our engagements with the community under the “First Thursday” brand with the intention of holding collaborative discussions with various sectors to inter alia understand how we can facilitate additional economic activity within the George economy. We need to both preserve and grow jobs. This needs to be our constant objective. Any suggestions for such engagements can be forwarded to: mayor@george.gov.za

Mayor Newsletter: 11 January 2021

In mid-December there was eager anticipation for the holiday period in the Garden Route after enduring the Covid-19 pandemic for many months. We needed an economic boost for the tourism and business sectors so dependent on seasonal business.

At the same time, the second wave of Covid-19 was reaching its peak in George with active positive cases well above the first-wave peak but followed by a decline in numbers in the second half of December. Although healthcare workers were under severe pressure, thankfully they were managing. We saw increases in the numbers of persons who died, including municipal employees. Tragically, many of us now know someone who had have been ill or who have succumbed to the disease.

Suddenly from 15 December, after the announcement of the beach closures, there was a spate of cancellations of accommodation bookings. Many of our businesses rely on the core six-week December-January holiday season to generate 25-30% of their annual turnover which is usually crucial to support their overheads for the rest of the year.

In attempting to manage the financial effects of the pandemic we have become acutely aware of the delicate balance required between health and the effect on the economy. Without the benefit of good turnovers over the holiday period, further jobs could be lost as businesses find it tough in the coming year. As a result, it is likely that the George Municipality will experience a reduction in revenue and debtors’ collection.

The municipality is constantly looking to adapt how it conducts business safely with a hybrid model of working virtually and face-to-face. It is crucial that the health of employees and the public is considered. Our core services continue 24/7 and staff work around the clock to ensure the provision of water, sewerage and electricity, fire services, law enforcement, etc. We encourage our citizens to make use of available online methods of conducting business with the municipality where possible and is being communicated widely. Citizens are encouraged to download the George Municipality mobile application ( https://george.comunity.me ) to their phones which enables the receipt of important notifications.

On Monday 4 January 2021 we welcomed Dr Michele Gratz as Acting Municipal Manager (AMM) as well as Mr Allan Paulse as Acting Director: Community Services. Both are highly experienced administrators. The AMM has immediately commenced with measures that will improve workflow, efficiencies and use of resources and assets. Over the next few weeks and months, we can expect improvements in service delivery as processes are upgraded.

Please continue to keep safe by adopting the Covis-19 health protocols wherever you are. Every citizen needs to adhere to the protocols to ensure our safety.