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Municipal revenue Since 2008, SACN member cities have collectively seen a steady rise in revenue, which has grown at an annual average of 10.5%. Total city revenue increased from R55.3-billion in 2003 to R84.8-billion in 2008 and (after a small decline in 2009) rose steadily to reach R150.6-billion in 2014. Table 7.3 provides a summary of revenue between 2003 and 2014, while Figure 7.5 shows revenue per city for the 2009/10–2013/14 period. Table 7.3: Summary of revenue Aggregate real city revenues by source (constant 2012 R b) 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Property and other taxes 20,976 29,170 32,538 35,876 26,273 26,389 29,126 32,077 32,330 34,564 35,874 40,049 Service charges 30,118 38,483 40,452 39,770 41,840 41,492 46,389 56,200 65,400 74,309 76,874 76,997 Operating grants 15,168 14,773 15,655 TOTAL OPERATING REVENUE 51,094 67,653 72,990 75,645 68,113 67,881 75,514 88,278 97,730 124,041 127,522 132,700 Capital grants 2,341 2,281 4,480 4,909 5,871 11,021 11,287 13,042 12,884 Interest 1,853 2,876 2,883 3,097 3,997 4,484 4,100 2,682 2,307 2,120 3,031 2,808 Other non-operating revenue 0,001 0,227 0,405 0,742 0,763 1,420 0,314 0,311 0,444 0,437 1,585 2,239 TOTAL ALL REVENUE SOURCES 55,288 73,037 80,758 84,394 78,744 84,806 79,928 91,270 100,481 137,885 145,180 150,631 Source: SACN (2015) Figure 7.5: City revenue (2009/10–2013/14) 35 30 Rand (billions) 25 20 15 10 5 JHB CPT ETH TSH EKH NMB MAN BUFF MSU 2010 2011 2012 2013 2014 Source: SACN (2015) 250 State of South African Cities Report 2016
As Figures 7.5 and 7.6 show, Johannesburg collects more revenue than the other cities. Own revenue (mostly property taxes and service charges) has increased its contribution to overall revenue. For cities, property rates represent a significant source of own revenue. Since 2005, municipalities have rated property based on the value of land and improvements, which has resulted in a general increase in property rates but poses a burden for poorer households. In 2009, SACN proposed a range of property tax relief measures including exemptions, exclusions and rebates, indirect property rates instruments to impact market behaviour, special rating areas, and other planning and zoning instruments (SACN, 2009b). Figure 7.6: Revenue by source (2013/14) 40 35 30 Rand (billions) 25 20 15 10 5 JHB CPT ETH TSH EKH NMB MAN BUFF MSU Own Revenue Grants Equitable Share Source: SACN (2015) Although grants still make up a relatively small percentage (between 6% and 14%) of total revenue, some cities are increasingly relying on conditional grant funding, especially for capital expenditure. There is an ongoing debate about the share between the municipal equitable share (an unconditional transfer to municipalities from the national fiscus) and conditional grants allocated to municipalities for specific programmes such as public transport, public works and housing. Many of the CFOs would prefer more funds to be transferred to municipalities in the form of unconditional grants, which would allow cities to make more informed and strategic use of this funding. In response, national government has consolidated some conditional grants to the cities and relaxed conditions to allow for greater flexibility. However, at the same time, equitable share funding to cities is under pressure because of national government’s aim to use it as a redistributive instrument to support smaller municipalities (National Treasury, 2012a). 7 As Figure 7.6 shows, the largest revenue source for cities is own revenue, which is made up of service (utility) charges, property rates and other taxes. Growth in this revenue is mostly because of the increase in utility charges, which are passed on to the consumer. However, the ever-rising electricity prices and load-shedding pose a significant threat to future municipal revenue because electricity Finance and Innovation 251
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State of south african cities Repor
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The cities covered in the SoCR Limp
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FOREWORD by the Chairperson of the
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Buffalo city ekurhuleni ethekwini J
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Overview: State of South African Ci
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CH3 PRODUCTIVE CITIES Spatial trans
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INTRODUCTION Our cities: status quo
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State of Cities Reporting Over the
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Figure 1.2 shows the projected grow
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The consequence of this rapid urban
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LEARNING ACROSS BRICS: from city-re
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Addressing these challenges require
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TRANSFORMING OUR WORLD: THE 2030 AG
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Key issues for South African cities
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! ! ! ! ! ! ! ! ! ! ! ! Cities and
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Figure 1.8: Population change total
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Figure 1.10 shows that, while popul
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Significant densification through b
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Increased densities and demand have
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Global networks versus domestic res
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Informed by five years of research
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Key Messages 1 2 3 4 5 Spatial tran
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In cities, economic and social ineq
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Undesirable current spatial configu
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neighbouring municipalities are not
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! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! !
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Built environment investments not s
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The cost of fragmentation In additi
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associated land uses benefit all, n
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Local government is best placed to
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Competing land interests need to be
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PRE-1994 building POLICY 1994-2003
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The 2011 State of South African Cit
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The most recent National Household
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Figure 2.6: Alternate transport-urb
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SPATIAL TRANSFORMATION: Tracking tr
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Spatial transformation needs respon
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What is Required to Transform South
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Transformation of management and ca
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PRODUCTIVE CITIES Spatial transform
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Introduction South Africa is headin
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Congestion and pressure on resource
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transportation networks. Land-use p
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strategies in separate silos, with
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The Economic Role and Performance o
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• Johannesburg is South Africa’
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Nevertheless, recent economic fores
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• In the last five years, Tshwane
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Figure 3.7 shows the average labour
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Over the last 10 years, at a sector
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There is a marked correlation betwe
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Figure 3.13: Estimated city share o
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Figure 3.15: City gross fixed-capit
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development role set out in the 199
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Table 3.3: Key economic development
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• eThekwini has an active economi
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Both types of township are low-inco
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Informal economy and self-employmen
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South Africa’s Expanded Public Wo
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PRODUCTIVE CITIES 123 3
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Key Messages 1 2 3 4 5 6 Cities sti
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Andile’s story This is based on a
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of that ward participate in making
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Cape Town metro Mangaung Mamre Pell
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These service delivery gains have c
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YOUTH STUDY: Youth potential and vu
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However, when the NWAC is superimpo
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Tshwane, Figure 4.7: Johannesburg C
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As mentioned, urban integration is
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Table 4.2: Change in lowest income
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Ethekwini metro Northdale Hambanath
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Urban safety South Africa’s citie
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City’s unemployment rate is about
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Collective violence 7 Two main dime
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Towards More Inclusive Cities Citiz
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Furthermore, citizen education and
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South Africa requires a spatial pol
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SUSTAINABLE CITIES Leveraging the t
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Introduction Since 1994, the govern
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will need to have low-emissions gro
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Most of South Africa’s energy con
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Figure 5.3: Average baseline energy
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• Tshwane initiated its A Re Yeng
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WASTE: legislation, policies and pl
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500 0 400 200 0 2011 2013 2015 2017
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facility (i.e. waste is sorted manu
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Figure 5.10: Depiction of in- and o
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As Figure 5.12 shows, Cape Town and
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Accelerating the transition to sust
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disadvantaged groups, through facil
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Accelerating the transition to food
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Biodiversity South Africa is the th
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Open spaces Ecological and social o
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in the city and in their homes then
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Emissions reduction to mitigate cli
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Principles of a Sustainable City Ur
Page 199: Recommendations Develop and embed a
Page 202 and 203: Key Messages 1 2 3 4 5 Cities have
Page 204 and 205: informal political and social cultu
Page 206 and 207: Section 51 of the Municipal Systems
Page 208 and 209: While these dynamics are critical a
Page 210 and 211: Blurred intergovernmental responsib
Page 212 and 213: Access to information As many ward
Page 214 and 215: Figure 6.5: Turnout for national an
Page 216 and 217: COMMUNITY-BASED PLANNING: Strengthe
Page 218 and 219: The right people are not necessaril
Page 220 and 221: Local government will require new k
Page 222 and 223: All the cities have performance man
Page 224 and 225: Unethical behaviour is one of the r
Page 226 and 227: Figure 6.9: Municipal audit consist
Page 228 and 229: Service Delivery and Development As
Page 230 and 231: Still playing catch-up on basic ser
Page 232 and 233: knew anything about the city’s ID
Page 234 and 235: The established routines need to ch
Page 237 and 238: FINANCE and INNOVATION Sustainable
Page 239 and 240: Introduction With total expenditure
Page 241 and 242: In 2013/14, unauthorised, irregular
Page 243 and 244: Figure 7.2: Nelson Mandela Bay Muni
Page 245 and 246: The challenge is that the interface
Page 247 and 248: Phase 3: City autonomy and accounta
Page 249: National Treasury uses Uniform Fina
Page 253 and 254: In the case of property development
Page 255 and 256: distribution. Johannesburg’s capi
Page 257 and 258: • Despite this, the overwhelming
Page 259 and 260: Effectiveness of spending and servi
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Page 263 and 264: An encouraging development is that
Page 265 and 266: 3. Political interventions • Some
Page 267 and 268: Smart city strategies Smart city st
Page 269 and 270: encourage non-compliance. If priced
Page 271 and 272: • Municipalities could rightfully
Page 273 and 274: Recommendations If spatial transfor
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Page 278 and 279: Key Messages 1 2 3 4 5 A Call to Ac
Page 280 and 281: 1. The Spatial Transformation chapt
Page 282 and 283: Statements of intent in the SOCR St
Page 284 and 285: WARWICK TRIANGLE: A fragile public-
Page 286 and 287: Arguably, the primary constraint pr
Page 288 and 289: Figure 8.1: The quadruple helix - t
Page 290 and 291: • Completing the National Framewo
Page 292 and 293: development agency) that took place
Page 294 and 295: MILE’s strategic objectives are:
Page 296 and 297: Public participation should be the
Page 298 and 299: The implementation of CBP through t
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According to Cloete (2015) a partne
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The chapters in this State of Citie
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Overall Recommendations Urban space
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Ensuring city transformation throug
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Roadmap to the city dashboards All
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Buffalo City @refinedrevolt
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CITY FINANCE economy Municipal reve
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Overview of flagship programme The
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Reflections While the development o
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People and Households Size of city
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Design Capital Introduction Cities
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Manenberg Contact centre Source: P.
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City of Ekurhuleni @moography
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100% 80% 60% 40% 20% 0% CITY FINANC
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Overview of flagship programme Situ
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the corporate structure and governa
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Go!Durban Introduction Integrated p
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Go!Durban will include new railways
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City of JOHANNESBURG @jayjay_gregor
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100% 80% 60% 40% 20% 0% CITY FINANC
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Overview of flagship programme The
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However, the success of the Corrido
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Naval Hill Introduction Heritage is
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In December 2012, the redevelopment
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Msunduzi @natesvw
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100% 80% 60% 40% 20% CITY FINANCE e
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important tourist sites, there have
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In addition, the PURP includes the
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Safety and Peace through Urban Upgr
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A number of other projects have tak
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City of Tshwane @drae_savvides
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100% 80% 60% 40% 20% 0% CITY FINANC
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Wi-Fi is a significant enabler that
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The coverage map below shows the pl
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Introduction A key part of the deve
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These indicators were evaluated on
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SCODA is a partnership between citi
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Indicator PRODUCTIVE CITIES Definit
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Indicator SUSTAINABLE CITIES Defini
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2016 State of Cities Report Spatial
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Acronyms ACSA Airports Company Sout
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FIGURES Figure 1.1 State of South A
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. . . Figure 6.7 Percentage of seni
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References for Chapter 1 AfDB (Afri
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FFC (Financial Fiscal Commission).
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Cameron B. 2009. Integrated Rapid P
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References for Chapter 4 Balbo M. a
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Venter C and Cross C. 2014. Access
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DPME (Department of Planning and Mo
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National Treasury. 2006. Local Gove
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Tel: + 27 11 407 6471 • Fax: + 27
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