City Council Budget








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City adjusts current 2019/20 budget to deal with additional COVID-19 expenditure, falling income-19 May 2020

The City of Cape Town has adjusted its current 2019/20 Budget to cover R386 million ongoing additional expenditure due to the COVID-19 crisis and to respond to the fall in City income of approximately R860 million since the national lockdown commenced at Level 5. This loss includes income from rates and tariffs, MyCiTi public transport fares, the suspension of events by the Cape Town Stadium and Cape Town International Convention Centre, and parking and development fee decreases, among others.

The City’s Mayoral Committee has today recommended to Council the approval of the Adjustments Budget for the current financial year, which represents the adjusted budget or City financial plan to the end of June 2020 only.

‘The Adjustments Budget (2019/20) clearly shows the COVID-19 crisis is not a once-off disruptive event. It will have long-term impacts on the City’s operations and programmes, it’s income sources for service delivery and on the general socio-economic welfare of its residents and ratepayers.

‘No new funding for the crisis has been made available by the National Government. So the City must see how it can fund what is required with a reduced budget in a sustainable manner that will not impose substantial rates and tariff shocks to residents and businesses over the medium to longer term,’ said the City’s Executive Mayor, Alderman Dan Plato.

Some of the key adjustments and additional expenditure for the current financial year (2019/2020):

  • Reprioritisation and rephasing of projects and programmes
  • Shifting funds within directorates, for example R63,5 million for the provision of water and sanitation to informal settlements, where access to services is limited, is now enabled due to the national disaster declaration; R30,7 million for building management, education and awareness at Community Rental Units
  • Enhanced cleaning of homeless shelters and informal settlements
  • Immediate procurement of Personal Protective Equipment, i.e. masks, sanitisers, soap, gloves and bleach, among others, for frontline staff. To date, 420 095 gloves, 285 760 face masks (N95, FFP2, FFP1 and surgical) and 96 088 units of hand sanitiser and anti-bacterial soap have been issued to members of staff
  • Cleaning materials such as hand sanitisers, chemicals to disinfect floor areas at public transport interchanges and bus depots
  • Humanitarian relief

‘A thorough expenditure analysis was performed by City line departments on all expenditure items/programmes in the current 2019/20 operating budget. This exercise revealed certain programmes/projects will not be implemented and projected an under expenditure of R1,2 billion. These savings will be used to absorb the impact of the COVID-19 pandemic in the current financial year.

‘We continue to encourage residents and ratepayers to make use of our financial relief options, including payment arrangements. We also ask those who have the ability to do so, to please continue to pay their rates and services accounts, as we are dependent on this income to provide basic services. The City is currently using some internal funding sources, originally committed to other programmes and projects, to cover shortfalls. The City will not be able to cover shortfalls indefinitely before it starts to affect basic service delivery. We have worked hard over the past decade to ensure we are a strong and well-run municipality and this is helping us weather the storm for the time being. The municipal funding model in South Africa is structured in such a way that basic service provision is primarily funded from rates and services income. The bottom line is we all need to work together to get through this as one city together,’ said Deputy Executive Mayor and Mayoral Committee Member for Finance, Alderman Ian Neilson.

In addition to the above Adjustments Budget for 2019/20, much work has also been done on amending the City’s 2020/21 Budget for implementation from 1 July this year, to account for the impact of COVID-19. Details will be provided in due course. Council will deal with the current Adjustments Budget as well as the Budget for the new financial year at the end of the month.

Please visit www.capetown.gov.za/coronavirus for more information on the financial relief and interest free payment arrangements on offer.

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Published by: City of Cape Town, Media Office