SRVM faces the following financial challenges: 1) Achieving financial stability in the medium term and long term 2) Increasing the debt collection % 3) Dependence on grant funding 4) Acceptable level of tariff increases trying to balance financial sustainability and affordability – 5) Managing cost 6) Exploring alternative revenue sources 7) Poor/slow indigent registration In order to address the first challenge, the municipality was subsequently placed under financial administration during February 2010 after which an administrator was appointed by the MEC of Local Government. A strategic turnaround plan was developed for the municipality to address key areas that need intervention. The administration was lifted during December 2011. FINANCIAL RISKS Financial risks include: Changes in inflation rate and other variables Unemployment trends Global financial instability FORECAST FOR FUTURE FINANCING AND PERFORMANCE The key to a future prediction is stability in two realms, firstly, management and Council and secondly, the service environment. Needs are ever increasing and funding is a challenge. Trying to kick start development has to be in the way we interact with communities during the IDP and Budget processes. External stakeholders such as provincial departments to subscribe to the same developmental ideas as found in local government. We still find sector departments not being financially capable of adequately supporting development. This limits large developments as the municipality is not financial viable enough to service large loans. The municipality has budgeted for a new refuse which will be acquired either through loan or lease financing. The overdraft facility of R1 million was repaid during 2011/12 financial year. STATEMENT OF INVESTMENT AND MEDIUM-TERM STRATEGY Being a small municipality and not having surplus resources, the action of preserving the future value of is found in a banking practices whereby funds are automatically transferred to a call account bearing a favorable interest rate. All funds received as "trust funds" are deposited in individual banks accounts for independent transactions. The success to the indicative future is to ensure that the current year not only uphold current trends and commitments but also act as a precursor to the future. Importantly it is recorded in the IDP for the successive years. Planning capital and service infrastructure to contemplate future services needs ahead of e.g. housing developments are important. This is also towards a commitment for achieving the 2012/13 objectives.
SRVM faces the following financial challenges: 1) Achieving financial stability in the medium term and long term 2) Increasing the debt collection % 3) Dependence on grant funding 4) Acceptable level of tariff increases – trying to balance financial sustainability and affordability 5) Managing cost 6) Exploring alternative revenue sources 7) Poor/slow indigent registration In order to address the first challenge, the municipality was subsequently placed under financial administration during February 2010 after which an administrator was appointed by the MEC of Local Government. A strategic turnaround plan was developed for the municipality to address key areas that need intervention. The administration was lifted during December 2011. FINANCIAL RISKS Financial risks include: Changes in inflation rate and other variables Unemployment trends Global financial instability FORECAST FOR FUTURE FINANCING AND PERFORMANCE The key to a future prediction is stability in two realms, firstly, management and Council and secondly, the service environment. Needs are ever increasing and funding is a challenge. Trying to kick start development has to be in the way we interact with communities during the IDP and Budget processes. External stakeholders such as provincial departments to subscribe to the same developmental ideas as found in local government. We still find sector departments not being financially capable of adequately supporting development. This limits large developments as the municipality is not financial viable enough to service large loans. The municipality has budgeted for a new refuse which will be acquired either through loan or lease financing. The overdraft facility of R1 million was repaid during 2011/12 financial year. STATEMENT OF INVESTMENT AND MEDIUM-TERM STRATEGY Being a small municipality and not having surplus resources, the action of preserving the future value of is found in a banking practices whereby funds are automatically transferred to a call account bearing a favorable interest rate. All funds received as "trust funds" are deposited in individual banks accounts for independent transactions. The success to the indicative future is to ensure that the current year not only uphold current trends and commitments but also act as a precursor to the future. Importantly it is recorded in the IDP for the successive years. Planning capital and service infrastructure to contemplate future services needs ahead of e.g. housing developments are important. This is also towards a commitment for achieving the 2012/13 objectives.