Deficit Drives City’s Budget

The Windhoek municipality 20142015 budget seeks to reduce a deficit of N$369 million that has accumulated over the last five years.

The municipality unveiled a N$4,1 billion budget for the 201415 financial year last week, which among other things will also strive to make land available for housing and commercial development.

Of this amount, N$3,5 billion has been set aside for operational purposes while N$567 million was allocated for capital expenditure. Ongoing projects will consume N$436 million while new projects will take up N$131 million.

Tabled under the theme “Expediting Land Delivery”, one of the recommendations made is to hike tariffs so that the deficit that has been haunting the municipality is reduced.

In his budget presentation, the Windhoek municipality management committee chairperson, Moses Shiikwa, said they have implemented strict cost control and saving measures to reduce this deficit and to broaden the revenue base.

A deficits was recorded in the public transport system and it is projected to increase to more than N$100 million. There was, however, no tariff adjustment proposed although a new ticketing system and acquisition of new buses are expected.

There was also a N$400 000 deficit in refuse removal and sewerage works which necessitated an increase in tariffs.

TARIFF INCREASES

Although the tariffs of basic water and communal taps were not increased, excess water consumption charges were adjusted by 10% with effect from tomorrow.

The adjustment was based on the increase by NamWater of its bulk water rates by 10% from tomorrow and a further 8,7% next year. The municipality says its water account is expected to have a positive balance of N$63 million if collection is 90% efficient.

Household and solid waste management rates will, therefore, go up by 10% respectively. Service availability and informal settlement refuse removal charges were adjusted by 5% each.

Sewerage rates for domestic and non-industrial waste went up by 15%, while rates for semi-purified waste were increased by between 0% and 25% to recover costs within the next four years. This high adjustment was necessitated by an expected deficit that could amount to N$19 million.

“It has to be noted that the huge increase in the sewerage account is brought about by the start-up of the new Ujams Waste Water Treatment Plant, which will go into operation in October 2014,” the budget statement says, adding that an increase of 32,7% was required.

Since implementing a 32,7% adjustment was impossible, the municipality proposed a new industrial effluent rate of N$18,44 per square metres.

Property tax went up by 8% while informal settlement refuse removal tariff was adjusted by 5%. Electricity will cost 9,2% more and basic water tariffs had not been adjusted.

Shiikwa said NamPower informed council that it has obtained approval for an average tariff increase of 13,22% effective from tomorrow, and that because of the residential and commercial developments underway, council was granted permission to increase electricity rates.

These increases, Shiikwa said, mean that average low income households will now have to pay N$47,99 more, while the average middle income households’ bill will increase by N$113,48, and average high income households expected to pay N$241,93 more per month.

INCOME AND EXPENDITURE

The municipality’s projected total operational income has been put at N$3,1 billion, up from N$2,8 billion last year while the total operational expenditure has been put at N$3,5 billion, up from N$3,3 billion last year.

Wages, salaries and allowances for the 2 067 workers for 201415 is projected to cost N$1,1 billion compared to N$1 billion last year. General expenditure is expected to be N$1,9 billion repairs and maintenance have been set at N$217 million capital charges at N$279 million administration will cost N$392 million while grants and subsidies were pegged at N$1,34 million.

Some of the capital projects the municipality will focus on are the electrification of low cost housing, the northern industrial switchgear, the electricity master plan implementation, and the service connections and ripple control system, which could cost close to N$14 million.

The municipality also wants to complete Phase One of the Town House extension, sanitation for informal settlements, replacing the reticular network, upgrading the Wanaheda power station and Gammams relief sewer as well as replacing the old sewer pipes at a cost of about N$89 million.

More than N$53 million has been set aside for the construction of low cost housing, micro planning projects, tarring of northern collector and arterial roads and the Academia external arterials.

Eighteen new buses will be bought for N$40 million while a new fire station and fire fighting equipment will be acquired at N$16,3 million.

A new cremation furnace at a cost of N$8,5 million is also planned, together with the extension of the crematorium building, which is expected to cost about N$6 million, up from N$650 000. In addition, there will be a new cemetery in the Goreangab area whose cost has been set at N$2 million.

Developing the Kupferberg landfill site will cost the municipality N$10 million, while other developments such as the skip containers and the open spaces system, health care risk waste treatment facility as well as satellite sites, whose estimated cost is N$36 million, are also planned.

The City Police will have new vehicles that are expected to cost N$3 million while an integrated pro-active crime prevention technology system that will cost N$2,1 million, is also on the cards.

Source : The Namibian