Lekwa Local Municipality 2013/14 - Co-operative Governance and ...

to replace the assets when it becomes obsolete and redundant. The current depreciation is provided for at R 134mil and the operating deficit should not exceed the depreciation.The municipality should provide between 5-8% (R28mil) of its budget to repairs & maintenance but due to cashflow challenges this will be phased in over the MTREF. Furthermore additional 40% of the capital project should bechannelled towards the replacement of aging infrastructure.National Treasury has issued guidelines circular 55,58,59, 66 &67 amongst others which emphasises that duringthis tough economical period the municipalities should tighten their spending and reduced unnecessary or nice tohave expenditures and improve and prioritise service deliveryIn preparation of the 2013/14MTREF it was pivotal ensuring that the budget is funded and affordable in terms ofthe municipal budget reporting regulation. The municipality had to reduce overtime by 60% and the filling ofvacant will be halted until the municipality’s cash flow improves but only critical positions that will also reduceovertime will be filled in the next financial year.Executive SummaryThe proposed budget of Lekwa Local municipality totals R650, 184, 086 comprising of R606, 875, 986 forOperating expenditure and R43,308, 100 for Capital expenditure (see table 1 below). Both operating budget andcapital budget will be funded from own operating revenue to the tune of R362, 673, 246 and grants and subsidyto the tune of R128, 443, 000, which totals to R492, 651, 245.In view of the aforementioned, the following table is a consolidated overview of the proposed 2013/14 MediumtermRevenue and Expenditure Framework:237 | P a g e