Tough questions, comrades and colleagues, but ones we are legally bound to answer in a transparent and accountable manner to our co-partners in governance -- the broad masses whom we should have sensitized about the constraints and the massive delivery challenges we face.

The acceptance of the versatility and robust caring of our developmental local government and our responses to these tough questions transcend politics because all of us are human and we all must embrace ubuntu.

We are blessed with intra-ideological fluidity in this Chamber and one has only to reflect on speeches by the late Comrade Chris Hani to see how all our concerns at the coalface of interaction with our people converge and what is expected of us.

In defining socialism, Comrade Chris put it aptly (and I quote)

"Socialism is not about big concepts and heavy theory. Socialism is about decent shelter for those who are homeless. It is about clean water for those who have no safe drinking water. It is about health care, it is about a life of dignity for the old. It is about overcoming the huge divide between urban and rural areas. It is about education for all our people. As long as the economy is dominated by an unelected privileged few, the case for socialism will exist."

Does this not capture the very essence of our work as local government development activists, as agents for social change so beautifully captured in President Thabo Mbeki's reference to community development cadres recently.

Comrades and colleagues, I raise these loaded questions within the context of the heavy responsibilities we bear.

I raise it also on the understanding that together with our administrators and citizens within the sphere of co-operative governance, there are benchmarks for progress in the three phases of the developmental local government programme we have embraced:

• Establishment Phase (2000-2003)
• Consolidation Phase (2003-2005)
• Sustainability Phase (2006 and beyond).

We have identified five strategic policy priorities that underpin our Restructuring Plan for which we have applied for grant funding:

• Job creation and economic development;
• Revenue mobilization and management; *Organizational change and institutional stabilization; and;
• Focused and sustainable service delivery.

We need to congratulate our finance people under Chief Financial Officer Brian Shepherd who worked late nights to bring down proposed unacceptable sensationalized hikes.

Our financial technocrats worked under enormous pressure to meet our political imperatives not to financially burden an already burdened citizenry. I thank them.

Only 28% of our people are in formal employment and 10% are pension or grant recipients with 53% of household incomes below R1 500 a month, underlining a high dependency ratio.

It is for this reason I feel proud today to table a budget which is unashamedly pro-poor and which will bring a small measure of relief to 40 000 indigent families through a R167,26 a month subsidy grant.

This welfare package aimed at some 200 000 people includes R110 a month for rates and services, a hiked 50kw/h free electricity and 6kl of free water. Pensioners and disabled qualify for a 40% rate rebate

This social wage is designed to reconstruct and alleviate suffering in the pockets of shameful entrenched poverty throughout our City while maintaining service delivery and infrastructure investment at decent and affordable levels.

I know some people will complain for the basis of the allocation of resources and for the cross-subsidization, but morally we are bound to help the poor who unfortunately will always be with us.

We need a clear collective understanding and ownership of the delivery challenge. Infrastructure backlogs will be with us for some time and it is estimated that within the context of the country, it will take about 15 years to overcome at a cost of over R50 billion.

I believe it may be time for a second Quality of Life Survey because people don't tell you when your service is good. You have to go out and ask because families don't seem to make the direct connection between improved municipal service delivery and quality of life.

The converse is also true of a culture of complaining so prevalent in some sections of our society, sometimes fuelled by racist sentiments about the ability of black people to govern and manage.

My colleagues will give details of the budget later and you will see how we raise the money and how it is spent so that you may judge our efficiency and effectiveness.

You will be able to judge whether we have a coherent approach to poverty alleviation and social as well as economic development and whether we qualify to be stewards of the City's assets.

I would like to return to the tough questions I posed earlier.

We stand today at a crucial moment as we roll out our developmental mandate to reconstruct and transform our City from the embers of its unglorified past and bring services to all our people while maintaining civic dignity in a livable environment.

As we tackle our Consolidation Phase, it is perhaps an opportune moment to do a verbal audit and to reflect on our restructuring aims of turning our institution into a development agency.

A development agency that will refocus our resources where they will be most effective; that will review performance and measure outcomes; that will change manage our bureaucracy for effective and efficient delivery while, most of all, align our institutional capacity with our National Democratic Revolution.

We must reflect to see if we indeed created a sustainable long-term operational base for our vision of a people-centered place of opportunity where the basic needs of all are met in a safe, healthy and sustainable environment.

One of the lesser points of a complimentary peer review done under the auspices of the South African Cities Network, of which we are proud members as one of the nine largest cities in the country, was that we need a major rethink and improvement of our work processes across the organization.

The mandatory review of our Integrated Development Plan, the impending establishment of our Performance Management System, the organic linkage to our budget are all the processes which join to give us strategic direction and enable us to deliver efficiently will no doubt address the criticism.

Since assuming office, I have often criticized the weakness of truncated silo operations within our organization without efforts to converge into a united single vision.

We witnessed this weakness during the budget process where the concerns for turf and the enhancement and promotion of individual efforts transcended the need for the common good.

It must stop and we must develop a clearer understanding and ownership of our vision and mission to build a passionate common commitment to our city-wide strategy as it emerges through the IDP and other processes.

On the whole, however, I happy with our human resource development and the finalization of our organogram.

The population of the new staff structure is underway and 40 appointments have been made to critical posts expected to be on levels 3 to 7 in the new structure and approximately 139 recommendations have been made to close matching of employees in posts expected to be on levels 21 to 22 of the new structure.

The process is still unfolding and the deadline for placement is the end of the month. All new posts on the new structure are to be evaluated and linked to the budget.

We are in a dilemma about the structure and the number of posts because we desperately need to shrink our wage and salary bill down to acceptable 28% to 30% of operational budget. We must interrogate our spending mix and allocate resources more to non-personnel items.

As we know, the budget has to be aligned to the IDP as prescribed in Chapter 5 of Act 32 of the Municipal Systems Act.

Much emphasis will be laid on performance management in the budget to ensure that our technocrats implement the vision of the City by linking their key performance indicators to the vision.

I am unhappy about our inability to spend on projects. I alluded to it in my last year's budget speech and I am sad to report that for various reasons, we have not progressed as much as we would have liked to.

In fact, I am putting it mildly. Whether or not it is a simplistic view, the fact is we have underspent by some 50% of our budget.

I am not a finance fundi. Together with my Mayoral Committee, we listen intently to enable us to decide on matters on the advice of our technocrats.

During the difficult times of trying to cut the budget to keep it in line with our projected revenue, I often wondered how Directorates clamouring for more money would spend it, based on their track records. I believe the time has come for hard decisions on this score. In conjunction with the Budget and Performance Management portfolio holder, Councillor Vuyo Mosana, I want to investigate the possibility of an independent outside assessment for the reasons for this poor performance.

Nevertheless, we are looking at ways of overcoming this by making sure that every Director is held responsible for the Directorate's budget which must give substance to the IDP by ensuring that money is spent and that such money can be supported by the prioritized need as identified in the IDP.

We are looking at a suggested matrix which will see how the spending is aligned with basic needs, job creation, LED, affordability, maintenance as well as being aligned to national and provincial government roll out to track this spending

Overall then, Madam Speaker, just how have we done?

We have had two good bills of health by the SACN peer review and the Local Portfolio Committee on Local Government who undertook a study tour throughout the country.

But perhaps a telling way to perform this task is to benchmark our progress against the shortcomings which denied us metro status and saddled us with the constraints of a B category local municipality within the challenging institutional arrangements of a two-tier system.

You will recall that when the Demarcation Board carried out that exercise before the 2000 election, we came seventh after our sister city, Port Elizabeth, among the 10 top urban areas.

The criteria laid down in Section 2, 4 and 5 of the Municipal Structures Act 1998 (Act No 117 of 1998) for the determination of metropolitan areas, as well as to differentiate between the different categories of municipalities are:

• Density and distribution of population;
• Distribution and structure of employment;
• Movement of people; and
• Land and property markets.

Madam Speaker, I call on the political leadership of the country and the phalanx of administrative decision-makers to look afresh at Buffalo City to assess our alignment with these requirements.

It must be done against the background of our defining settlement patterns being dictated by apartheid, a stubborn monster which we wrestle with daily across the length and breadth of our 2 400 kilometers of municipal land to service our 880 000 people.

In our attempts to promote a socio-economically cohesive East London-Mdantsane-King William's Town axis, our attempt to reconfigure the damaged apartheid space through the R1 billion Mdantsane Urban Renewal Programme (Murp) is but one process to promote a unified industrial, commercial and residential belt with critical mass in the movement of people and goods.

A total of R67 million was earmarked for Mdantsane in this financial year which ends at the end of this month.

We are committed, as the political champion for this project, Sizwe Dikimolo, wrote last year, to changing the face of Mdantsane which was created through the manipulation of the urban space to suit racial dogma.

To this end we budgeted R26m for water and sanitation; R9,9m for roads; R9m for transportation, R11m for housing; R1,3m for local economic development; R6m for community safety; and R2,4m for electrification on top of the previously R75m spent.

The source of these funds are: National and Provincial Government grants R31m and our own funds R39,3m.

Work is progressing in Mdantsane although some of it is underground and is not visible.

Take water reticulation and wastewater treatment as examples. A total of 230 kilometers of the 450 kilometers of pitch fiber cement pipe sewer network throughout the 18 zones had exceeded its design life and is being replaced by PVC piping because the unblocking of the constant blockages results in it crumbling.

The original infrastructure for waste water treatment cannot cope and needed parallel existing sewer to meet demand. Some 74 sewer pipe bridges (river crossing etc) on the main sewer outfalls are being refurbished to extend their design lives and to improve operational efficiency.

These are expensive undertakings that go unseen but have major social impact on the quality of life together with the R1 million transport plan and the millions spent on upgrading the Qumza Highway, improving access to the stations and pavements upgrading as well as street lighting.

The Mdantsane Highway Rank is a veritable hive of economic activity as the confluence point for 100 000 people daily who spill out to work in East London using taxis, buses, trains and private transport

On 26th June this year, we intend to boost that socio-economic activity with the unveiling of the strategies and the launch of the R1 million one-stop shop and

Tourism Information Centre in Mdantsane. This centre is a package of fundamental needs of the small business community - from a hawker to a shoemaker, to a farmer, the business centre will cater for all retail, manufacture, agriculture and any other form of entrepreneurship.

It will cater for start-ups, registration and licensing, skills training and development, counseling on tendering and procurement, market identification and expansion as well as micro-lending.

There is no doubt, Madam Speaker, we are ploughing a development seed in the heart of communities and this will be extended at two important events next month.

On 11th July, we will hold a rural development indaba in King William's Town at which we will address crucial issues of poverty alleviation and job creation in our 300 villages in conjunction with our traditional leaders.

I have had productive talks with King Maxhoba Sandile and the AmaNdlambe Tribal Council on how we can harness the energies of the traditional leaders to promote development. They are keen to lend their much-needed and much-appreciated support.

On the following Friday, we will hold a King William's Town Area Investment Conference to try to address the economic bleeding of the region and try to see how the City can act as a catalyst for growth to reinvigorate the economy.

We have already commissioned high-powered research on a local economic development strategy for King William's Town which will be unveiled at the conference.

The study looks at why so many businesses and people have relocated from the area since the early 1990s and the emergence of King William's Town as a mere transport and service centre.

The conclusions of the research offer some exciting proposals which could lift the area out of its socio-economic morass.

Comrades and colleagues, local economic development through our Tourism Masterplan being drawn up, our urban agriculture project, Umqokozo and our small medium and mircroenterprise strategies will not blossom out of these incubators if we do not have an overarching macro plan in place.

Such a plan is evolving by leaps and bounds as witnessed by the highly successful East London Industrial Development Zone international investors' conference which pulled together beautifully the efforts to create thousands of jobs and push back the frontiers of poverty.

It was developmentally refreshing and encouraging to listen to the complete confidence and optimism DaimlerChrysler's Christoph Kopke showed in our City when he announced that the East London plant would win the W204 bid to build the successor to the C Class.

The announcement will be made later this year and Herr Kopke's confidence overflowed when he said it was not a matter of whether the plant won the bid, but when it won the bid which must not be for the production of 50 000 units but for 100 000 units.

Estimations are that it will double the workforce with a R2 billion injection into the plant. Our auto giant also stands to gain from the R30 billion Taxi Recapitalization Programme which is expected to reach some finality in the second half the year.

The impact on the car terminal in our harbour and our attempts to lure other manufacturers such as BMW to use it to help make us be the automotive export hub of South Africa will be incredible.

We have to work hard, however, to eliminate serious constraints to these efforts. We have to persuade Spoornet to upgrade the Gauteng-East London line to bring goods to our port for export the same as the Umtata-East London line upgrade will increase traffic and tap into the lucrative forestry industry in the Transkei.

I attended a South African Ports Authority conference in Port Elizabeth last week with my support staff and we were pleased to force-feed the question of the line onto the Spoornet agenda as well as to learn about the upgrading of our port and investigations done on building another terminal on the West Bank.

I intend to follow-up the whole Transnet intervention in our macro growth and development strategies with Enterprise Minister Jeff Radebe in conjunction Premier Makhenkesi Stofile and Economic Affairs MEC Enoch Godongwana.

The announcement of the Fort Hare-Rhodes University alignment in the reconfiguration of the tertiary institution has ushered in a new growth industry that will make Buffalo City the repository of intellectual capital for the first time in its history. We are the only major city without a fully fledged university campus.

We must link up with the institution which can be used to popularize progressive alternatives and ideas. I have already held meetings with Vice Chancellor Derek Swartz about the creative partnerships we will forge that will enable us to draw from this rich verdant intellectual bank.

Madam Speaker, these efforts make me buoyant about our City and confident of our status as a metro and our ability to make a contribution to the development of our Province.

My confideence has been further boosted when I look at the international strides we have made through twinning agreements and overseas exchanges.

It has benefited us materially as well as through technology and cultural exchanges. Not a say goes by when we do not read of some other effort being funded by Sida.

Satour has opened an office in Beijing opening a mammoth opportunity for us to link up with the powerful figures we have met who are keen to come to our shores as tourists or investors.

I will soon be co-hosting a delegation from Texas who is reciprocating a visit I paid together with a delegation from the Bisho Legislature led by Speaker Mkangeli Matomela.

All these positive developments make me willing to place before our inter-spherical partners - Premier Stofile and MEC Gugile Nkwinti; Minister Folisani Mufamadi and Deputy Minister Thombazana Botha; and the Demarcation Board -- our integration, growth and development patterns and strategies that will underline our claims to be declared a metro.

I do so in the hope of a fair assessment of whether the development of a prospective metro should be constrained within the challenges of a two-tier system.

We are already performing the tasks of a metro without the privilege of some R72 million levies in Buffalo City which goes to the District Municipality.

We are not convinced that our problems as a B category secondary city will be solved with the implementation of the new allocations of powers and functions to district and local municipalities from July 1 this year.

The failure of implementation of powers and functions in the health sphere has curbed our ability to plan and deliver.

However, we need to project a broader focus which goes beyond powers and functions, on issues such as strategic partnerships with State-owned enterprises and the private sector

Madam Speaker, the extraordinary and unprecedented development phase of our City, which is strategically located in the fastest growing Province in the country, warrants a relook

It is my submission that the earlier criteria for a metro such as property markets and land prices and the resultant competition for space; multi-nodal structures and the contiguous agglomeration of commerce in a singular CBD have changed with some of the exciting development I have outlined here.

The earlier assessment for declaration of metros debated whether the presence of Mdantsane and its associated smaller commercial and industrial nodes qualified us in terms of multi-nodality without reflecting on our acquisitions such as the R250 million Retail Park complex in Beacon Bay or the more than R200 million Hemingway's Casino. City developers have long whispered about the possibility of new such centers and complexes.

The assessment said it seemed improbable, given the limited size of our area, lower land prices, relatively low movement of goods and people that we qualified to be a metro.

It looked at the complexity of the East London/Mdantsane economy as manifested in contributions to employment and GGP as well as the economic diversity of the Greater East London area which showed the following:

Agriculture employment 1,4% and contribution to GGP 5,3%; mining employment 0,2% with no contribution to GGP; manufacturing 22,3% with 28,3% contribution to GGP; electricity 1,25 with 2,8% contribution to GGP; construction 6,6% with 3,2% contribution; commerce 14,*% with 13,1% contribution; transport 6,4% with 10,9% contribution, financing 7,6% with 12,2% contribution and services 39,4% with 24,8% contribution.

The conclusion was that:

Madam Speaker, I pose the question: has our time not come for metro status which will confer on us a special symbolic importance in the place of government's overall development priorities?

Has the prospective metro changed in the growth and complexity of its economy, growth in population size, diversity, emergence of new nodes, incorporation of expanding nodes into metro socio-economy?

Comrades and colleagues, I am sorry for letting my passion for the development of the City get the better of me and force me to wax lyrical, if somewhat boringly.

Nevertheless, I think a return to our crucial questions on delivery and our achievements will give comrades and colleagues a wake up call if they dozed off, especially in view of upcoming elections and our celebration of 10 years of freedom next year.

The perception of the way we run the City and our commitment to our jobs was demonstrated well in jest at a mainline church's men's breakfast last Saturday.

According to a colleague, a joke at the breakfast went like this:

Three little boys are debating the prowess of their dads and the machines they drive.
The first boy said: My father works at J & J and he drives a BMW. He knocks off at 4.30 everyday and is home by 4.45.
The second boy said: My father works at DaimlerChrysler and he drives a C Class Merc. He knocks off at 4.30 and is home by 4.40 everyday.
The third boy said: My father works at Bufalo City Municipality and drives a Toyota Corolla. He knocks off at 4.30 and is home by 3.30 everyday.

Are there many a true words spoken in jest or are we all committed to embracing the vision for our City that requires that we keep it a neat, clean and safe place conducive to creating a better life for all?

It is still my view that we have not mastered and structured a coherent communications strategy which ought to be the lifeblood of our democracy.

Our information flow to underwrite our participatory democracy efforts are not flowing efficiently and effectively. We remain largely with an uninformed community and the Ward Committee system is a telling barometer of the state of this vital aspect of our governance.

Our Social Services Directorate has made strides in cleanliness and was even able to snatch the R500 000 first prize for the Clean City title this week in the Amatole District Municipality competition.

A 12-week cleaning-up, beautification and mowing programme of all priority areas such as the beachfront, entrances to the city and municipal buildings have been carried out and there is a full work programme for the year.

Bi-annual floral displays were developed in all districts and I want to pay tribute to those responsible for the creative eye-catching displays which have adorned the City during important events. Palms have been transplanted in Court Crescent, Lukin Road, Ann Bryant Art Gallery, Western Avenue and Macleantown Road and I am expecting similar beautification strategies in our hinterland.

I am indeed pleased to learn that a partnership has been secured with the Department of Correctional Services in East London, Mdantsane and King William's Town for assistance in general clean-up and horticultural projects.

The multi-million Regional Waster Disposal Site near Berlin has been completed and the site is to be commissioned in September. Significant security and operations improvements have been made at the Second Creek Waster disposal site while the Ducats site closure receipt has been received.

The ability to keep the City clean has been boosted with the purchase of four compactor trucks at a cost of some R900 000 each while a "First Generation" Integrated Waste Management Plan has been completed with the assistance of Sida.

Stubborn littering and illegal dumping continues but the Department is soldiering on. Waste Management Draft by-laws have been completed and is to go through the public consultation process. It is hoped this will help in keeping the City clean.

Special clean-up operations in R293 townships and Duncan Village have been conducted while a shredder machine for composting has been acquired for waste minimization with assistance from Sida. Three composting and recycling projects have been launched at Sinempumlelo, Chume and Nobuntu Primary Schools.

Our amenities are under stress, especially with the SA Games to be held here next year. There has been much press speculation that we will not be able to meet our commitments to this Games which will bring 10 000 athletes into the City.

I am proud to announce that we have budgeted R3 milion and that together with MEC Nosimo Balindlela and the Sports Commission's Dr Joe Phaala, we will make the Games a success.

We have held telephonic conferences on the Games and Councillor Sindiswa Gomba has been chosen to chair the Local Games Committee.

I believe our successful hosting of the World Cricket Cup match as well as other major tournaments has proved we can rise to the occasion and I hope to co-ordinate these efforts.

Other sport facilities in the City have undergone upgrades. The Sisa Dukashe Stadium fencing, change rooms, press boxes and ablutions have been upgraded while Selborne Park where the national tennis tournament was hosted is being fenced. A new clubhouse was built at the Schoeman Stadium as part of the Cricket World Cup Legacy Programme.

Our beachfront will also come under the development spotlight with the launch of the Beachfront Development Agency for which the funding will soon be discussed by the Board of the Industrial Development Corporation.

Safety and security in our City is relatively under control as demonstrated by a report from the Area Commissioner Sandile Hloba's Office while our own Public Safety Department shows 42 500 tickets were given and 41 277 summonses executed while 4 335 arrests were made. Our Department responded to 1 659 fires and calls our for 226 special services and 302 rescues during the past year.

Co-operative venue management was executed by our Department, SAPS and the Defence Force at special events with excellent service being recorded for the Cricket World Cup event.

Our Disaster Management Unit has also done sterling work during the floods and fires which rampaged through our City. The Unit played a major supportive role to families during these tragedies and moved are underway in conjunction with the Provincial Government to upgrade its capacity so that the City complies with the Disaster Management Act.

The floods were a major setback to our Engineering Services Directorate with the estimated damage to repairs to infrastructure running at R70 million.

The understaffed Directorate is facing a mammoth challenge with backlogs and the maintenance of the existing ageing infrastructure.

Accolades are due to the General Manager for Roads and Design, Mr Shaun Peard, and his team who took over the management of the Consolidated Municipal Infrastructure Programme and turned around a huge underexpenditure to use up funds, narrowly averting the loss of the funds on the stipulated deadline.

Water Services powers and functions will devolve to Buffalo City on July 1 this year which will mean rural villages and former R293 townships will now become our responsibility. Transfers have been negotiated and continuity is assured.

Much of the financial sectors operations are outlined in the documentation before us which speaks for itself.

However, I must confess my fear that we are not on a sound financial trajectory and a mammoth task confronts us is mobilizing funds and collecting what is due to us.

We have unacceptably high consumer debt, cash flow shortages, a low revenue base, limited financial skills, inability to properly manage credit control policies and our internal systems are too slow.

My office is constantly fielding a deluge of complaints about our billing and there seems to be inappropriate customer care to sort out some problems which are generated from within.

We must better our debt management. Last December, a National Municipal Debt Indaba was held and it was agreed that we must develop more coherent debt recovery strategies within the context of a National Revenue Enhancement Programme (NREP).

We must monitor this and it must deal primarily with the indigent policy, credit control and billing systems.

We need improved customer care for which we must have an accurate and clear data base. We need to think deeply about our services to our rural consumers and be sensitive to whether they too are enjoying our free basic services.

Comrades and colleagues, the needs and wants of our people are enormous. I believe our IDP is the central tool that allows us to give effective and efficient service delivery, high levels of accountability and co-ordination as well as alignment of budgeting and planning processes.

We must use it if we are to create a better life for all. It represents a major shift from previous forms of planning and budgeting. It underpins the move towards an integrated, accountable and implementation oriented approach to development.

In closing, I want to thank you all for the support throughout the year.

Thank you to the Deputy Mayor Des Halley and all the Mayoral Committee members for the guidance and advice.

Thank you to City Manager Mxolisi Tsika and his band of officials for their support.

A special thank you to Standard Bank for sponsoring our State of the City Address and Budget function as well as our publications. You brought a new meaning to partnership in our municipality.

Lastly, a special thanks to my core support staff whose efforts have made my mayorship possible.

Sindisile Maclean
EXECUTIVE MAYOR
13TH June 2003.

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