Umvoti council passes 2026/27 budget with R32,9 million deficit after first attempt fails
The budget was passed last Friday after the council initially failed to adopt it during a May 29 sitting, raising concerns about governance.
Umvoti Municipality has approved its 2026/27 budget, adopting a R418,5 million operating expenditure plan — including non-cash items — while projecting a deficit of R32,9 million.
The budget was passed last Friday after the council initially failed to adopt it during a May 29 sitting, raising concerns about governance and the potential for provincial intervention.
ALSO READ | Umvoti budget delayed over widespread criticism
The municipality is relying on service charges, government grants including the equitable share, and internally generated income to fund operations, alongside an ambitious 98% collection rate based on recent trends.
Mayor Gabriel Malembe, who tabled the budget, said strict credit control and debt collection measures would be intensified to improve cash flow.
Panels of debt collectors and attorneys had already been appointed and began work in the final quarter of the 2025/26 financial year.
The budget includes proposed tariff increases largely aligned with inflation and regulatory approvals.
Electricity tariffs are set to rise by 10,5% as approved by the National Energy Regulator of South Africa (Nersa), with an additional 2,5% increase linked to consumption growth.
ALSO READ | Umvoti urges residents to help stop the spread of foot and mouth disease
Refuse removal tariffs will increase by 3,7% in line with the consumer price index (CPI), while other service charges are also expected to rise modestly.
Council also approved a capital expenditure programme of R43,5 million, with the Municipal Infrastructure Grant (MIG) funding nearly 80% of the total and the remainder coming from the municipality’s own revenue.
The bulk of capital spending is directed towards infrastructure through the Technical Services department, allocated R39,8 million.
Of this, R27 million will go towards road infrastructure, R7,7 million towards community halls, and about R5 million for plant and machinery, including graders, compactors and a hydro jet.
A further R2,8 million has been allocated under the Executive and Council vote for the purchase of vehicles for council leadership.
ALSO READ | Legal pressure mounts on Umvoti Municipality
Employee-related costs remain the municipality’s single largest expense at R171 million, accounting for more than 40% of total operating expenditure, with a further R13,5 million allocated to councillors’ remuneration.
Bulk electricity purchases from Eskom are budgeted at R114,7 million.
The budget is based on key assumptions including a 3,7% inflation rate and a 4,75% increase in employee-related costs in line with sectoral wage agreements.
The municipality warned that failure to maintain a funded budget could result in Treasury withholding its equitable share allocation, posing further risks to service delivery.
