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The last financial year was a good one for the City. Its economic growth was 6 percent and revenue growth was 14 percent. Major projects are also on track.
Executive mayor Amos Masondo announces the launch of the Jozibonds (Photo: Enoch Lehung, City of Johannesburg)
THE City of Johannesburg performed well in delivering services to its citizens and managing its finances during the 2007/08 financial year.
Tabling Joburg's annual report for the year before the council on Thursday, 29 January, Executive Mayor Amos Masondo commended all City departments for their efforts in working towards achieving the vision of building Johannesburg into a world-class African city.
He said the annual report reflected on the City's performance between 1 July 2007 and 30 June 2008, and aimed to promote accountability to the local community for the decisions taken throughout the year.
The Municipal Finance Management Act requires that the City and its municipal entities prepare an annual report for each financial year, setting out their performances, comparison between targets and performance in the previous year financial year, and measures taken to improve performance.
The annual report will now be submitted to the auditor-general, the provincial treasury, the Gauteng department of local government and to the public for comment from 2 February.
In March 2006, Joburg recommitted itself to the vision of turning the metro into a world-class African city. In addition, Masondo identified key issues and challenges that he intended to prioritise in his 2006 to 2011 term of office.
As part of the 2006 to 2011 Integrated Development Plan (IDP), the City confirmed key strategic interventions for the 2007/08 financial year, namely:
- Accelerating towards 9 percent economic growth;
- Inner city regeneration;
- Strategic transport interventions such as Bus Rapid Transit and Gautrain;
- Soweto development initiatives;
- Twenty Prioritised Townships Project; and
- 2010 FIFA World Cup™.
Economic growth
The annual report notes that the City's economy has grown by more than 6 percent over the last two years, driven by a range of factors. Construction in particular, although a relatively small part of the economy, is growing at over 19 percent per annum. Capital expenditure has increased from R3,4-billion in 2006/07 to R4,5-billion in 2007/08. Operating expenditure has grown from R14,5-billion to R17,2-billion.
The completion of the first BRT station
In 2006/07, the City received an unqualified report from the auditor-general, a major achievement reflecting the drive towards financial management excellence. In addition, it has a positive credit rating:
- Fitch - credit rating was maintained at A+; and
- Moody's - credit rating was upgraded by two notches to Aa2.za.
It successfully issued five municipal bonds with a value of over R4-billon to members of the public to generate income to meet capital expenditure. This has proved to be a massive investment in its service delivery and capital investment projects.
Some R1,9-billion has been raised in the 2007/08 financial year from municipal bonds.
The implementation of the new Municipal Property Rates Act led to the introduction of a new property rates policy supported by a new valuation roll. The new system, which changes significantly the way in which the City levies rates and taxes, has led to the total market value of properties listed on the roll shooting up to R708,4-billion.
Revenue growth
The City's revenue has grown by 14 percent in the current year because of increases mostly in property rates, service charges and grants and subsidies. The biggest percentage increase was in grants and subsides, largely thanks to the City receiving R327-million more in equitable share compared to the previous year.
Plans for Orlando Ekhaya
As a way to increase economic growth, reduce poverty and protect the environment, Joburg initiated the Inner City Regeneration Project. It kicked off in mid-1997 when the then deputy president, Thabo Mbeki, launched a new vision for the inner city.
In May 2007, an Inner City Summit was held involving 1 000 stakeholders from business, community, parastatals and other spheres of government. An Inner City Charter was drafted that proposed among other things to improve safety and security; transport; public spaces; residential development; and economic development.
Several departments have been involved on a day-to-day basis in addressing illegal land uses and identifying buildings that do not comply with building by-laws. Some of the achievements have been the rolling out of the first linear market, the start of construction of the Bus Rapid Transit (BRT) system, the completion of the first BRT station, a number of buildings have been designed as temporary accommodation, and several social housing projects are under way.
In terms of arts, culture and public space, R171-million has been allocated to the public environment in Hillbrow-Berea and Yeoville. Street furniture, lighting, play-spaces and public art are planned.
Transport
There has also been immense investment in the city's public transportation network, with the development of a number of key projects. These include the Rea Vaya Bus Rapid Transit that, on completion, will cover over 300 kilometres of road and focus on reducing the use of private vehicles.
Construction at Soccer City
An amount of R765,5-million will be spent on infrastructure on the BRT programme. Currently, work is course at the Pat Mbatha highway, inner city and Ellis Park precinct.
Phase 1A of the project is well under way and includes major construction work in the inner city as well as along Empire Road in Braamfontein. Phase 1B, which extends the Rea Vaya route to the north of Johannesburg along Oxford Road all the way to Rivonia Road, started in December 2008.
Joburg is also helping with the construction of the Gautrain rapid rail link. It has put aside R3,35-million to monitor and assist with road closures; a mass haulage evaluation report has been received; and the City has stated its requirements for resurfacing of routes.
Improvements in Soweto, the biggest township in Johannesburg, have always been high on the City's development priorities. To attract investment into the township, it launched Orlando Ekhaya, a R1-billion initiative to redevelop Soweto's famous landmarks - the Orlando power station and cooling towers - into a retail and entertainment centre. Phase 2 of the project is 98 percent complete.
The Soweto Empowerment Zone, or SEZ, will be delivered by the City's department of economic development. It will consist of serviced and managed premises with business support facilities to help small and emerging entrepreneurs. The SEZ will be launched in August, when Masondo hosts the Soweto Business Summit.
In addition, 20 sports fields in the township have been identified for greening as part of the City's sports and development programme. Three have already been greened. And almost 100 000 trees have been planted as part of the Greening Soweto initiative. The Mapetla wetlands were rehabilitated into a regional park as part of the Klipspruit Project.
World Cup
A FIFA World Cup project office was created in the Office of the Executive Mayor to ensure that the event takes place successfully and is implemented on time. To achieve this, a framework has been developed that identifies three levels of delivery:
- Stadiums, training venues, safety and security, accommodation, and marketing and branding;
- An outstanding fan experience and;
- Ensure that the energy generated by the event is long term and of sustainable benefit to citizens long after it is over.
In general terms, good progress has been made. The City has developed strategies and detailed operational plans for all project areas and progress is particularly positive at stadiums and on precinct projects.
However, other areas, such as safety and security, need further planning. In 2008/09, the 2010 Office will be stepping up efforts to ensure that sufficient funding is raised from other spheres of government and from the private sector to ensure all projects are adequately funded.
During the financial year, Soccer City, which will host the opening and closing ceremonies as well as eight matches, including the opening and final match, was on track at 44 percent complete. Training venues for the 2010 World Cup, namely Orlando Stadium, Dobsonville and Rand Stadium were completed.
The annual report concedes that the biggest challenge that the City will face in 2008/09 in preparation for the World Cup is making sure that it hosts a successful FIFA Confederations Cup in 2009.
Auditor-general
Reporting on the financial statements accompanying the annual report, the auditor-general said Johannesburg's financial performance for the year 2007/08 "present fairly, in all material respects, the financial position of the City of Johannesburg Metropolitan Municipality".
This was achieved despite the challenges faced by the City in terms of rising interest rates, rising inflation and rising cost of commodities like fuel.
In the consolidated group annual financial statements for the financial year 2007/08, the chief financial officer, Mankodi Moitse, says this is the third year that the City has prepared its financial statements in full compliance with the provisions of the Generally Recognised Accounting Practise (GRAP), Generally Accepted Municipal Accounting Practise (GAMAP) and South African Generally Accepted Accounting Practice (SA GAAP).
Mankodi adds that the City's financial position has improved considerably over the past five years with the largest contributor to its revenue being service charges. Cash and investment balances have also increased by 14 percent from the previous financial year.
Against this background, during the 2007/08 financial year the City provided world-class service delivery with each department achieving most of its goals for the year.
By 30 June 2008, 84,8 percent of households in the City had access to water, 76,7 percent had access to sanitation and 78,4 percent had access to electricity in their homes. The City has committed itself to a target of 95 percent coverage for sanitation and 98 percent coverage for water and electricity services by 2011. Basic water services are already provided to 100 percent of formal and informal households.
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