Municipalities spend most on staff wages and electricity costs

Grants and service charges are the biggest sources of income for municipalities‚ according to Statistics South Africa. Municipalities spend the most on staff wages and electricity.

This is according to the latest Quarterly financial statistics of municipalities released by Stats SA today‚ for the quarter from January 2015 until March 2015.

The largest contribution to total municipal revenue was made by:

•Grants and subsidies‚ which contributed 27‚8% to municipalities’ operating income;

•“Sales of electricity” (25‚8%);

•This was followed by “property rates collected” (17%);

•“Other income” (13‚6%) – this includes fines‚ licences and permits‚ public contributions and donations;

•Sales of water (9‚1%);

•Sewerage and sanitation (3‚9%) and refuse removal (2‚8%).

Turning to how municipalities spent their cash‚ Stats SA said an operating expenditure breakdown for the quarter ended March 2015 shows that the leading contributor to municipal total expenditure was employee-related costs at 26‚7%‚ followed by purchases of electricity (19‚1%).

“Other expenditure” at 14‚2% comprised “collection costs‚ loss on disposal of property‚ plant and equipment‚ amongst others”.

General expenses accounted for 7‚5%‚ while the balance went to ‘depreciation’ (6‚6%)‚ ‘purchases of water’ (5‚8%)‚ ‘repairs and maintenance’ (4‚8%)‚ ‘bad debts’ (4‚4%%)‚ ‘contracted services’ (4‚0%)‚ ‘grants and subsidies paid’ (3‚2%)‚ ‘interest paid’ (2‚5% ) and ‘remuneration of councillors’ (1‚2%).

According to the statistical release‚ sales of electricity decreased by 3‚8% between the quarters ended December 2014 and March 2015. A decrease of 3‚7% was recorded in the sales of water over the same period.

Employee-costs‚ including items such as salaries and benefits‚ decreased by 8‚6% between the quarters ended December 2014 and March 2015‚ Stats SA found.