ANNUAL REPORT FOR 2017/2018 FINANCIAL YEAR
1. FINANCIAL ANALYSIS
The 2017 / 2018 Financial Statements have been compiled by external Auditors, PKF (PE), as a running business and is attached hereto.
The income for the year was R47,477,806.00 of which R21,668,148.00 was paid to the Department of Water and Sanitation for water use charges.
The difference was used for daily expenses of the Association as well as an additional investment of R5,000,000.00.
Budgets have been done in a conservative manner, which included the building of reserve funds for capital and major maintenance expenditure.
The influence of the current economic situation on the Association has been counteracted to a large extent by intense management and stringent financial control.
2. POOL SYSTEM – 2017/2018
Into the Pool 210.50 ha (15 Users)
Amount in the Pool R373,614.35
Less 10 % Admin Fee R 37,361.44
Amount available for distribution R336.252.91
Amount Credited R336,252.91
Additional Income R 0.00
Income from application fees R 3,677.60
Tariff per Ha (Sliding scale not applied) R 1,597.40
The water use charges for 2018/2019 is R1,969.38 / ha for the year and the maximum credit tariff provided to users who placed water in the pool amounts to R1,597.40 / ha.
Income from application fees R23,489.64
Total number of transfers 36
Total hectares transferred 678 ha
3. FINANCIAL SUSTAINABLE PROVISION
3.1 CAPITAL RESERVE FUND
Any unused funds are invested during the year for relative short periods of time and are used for daily expenses.
Interest is received on investments.
3.2 OTHER RESERVE FUNDS
Reserve funds are used for capital expenses, as required.
3.3 MAINTENANCE FUNDS
The total balance of the maintenance funds are used for maintenance of the dams, syphons, valves, computerised system, office upgrades and housing.
Provision is made with the funds to provide for large unforeseen expenses and the maintenance of capital items.
3.4 SUNDRY DEBTORS AND CREDITORS
Sundry Debtors to the amount of R412,945.00 were outstanding at year end, of which R270,998.00 were outstanding water use charges which had already been handed to the attorneys for collection.
The Association, some time ago, adopted a resolution that the Contingency Reserve Fund should be at least 10,0 % of the total Income. With the successful collection of all arrear Billing Agent Commission, the Association has managed to increase the percentage from 3.8 % to 23.0%.
The negative influences of the current economic situation in the citrus industry may also have a negative influence on the Association’s financial position.
Accordingly because of this volatility, it is necessary that reserves continue to be accumulated, to counteract any sudden increases in charges to the water user. The favourable position currently enables the Association to do urgent maintenance to the ageing canal infrastructure.
4. OPERATION AND MAINTENANCE
4.1. CANAL SYSTEM
Extensive sealing of the Veeplaats Main canal section was done where the embankment slipped. The volume of water that can be supplied through the temporary repaired canal, has since been restricted by the Department Water and Sanitation from 13 cumec to 9 cumec.
Consequently the Association requests that no unnecessary water be ordered downstream of the above canal and that dams be kept full as far as possible. The Department of Water and Sanitation is still busy stabilizing the current embankment and has not yet started with the permanent repairs of the main canal. However, the Association is in constant communication with the Department regarding this matter.
During this year external contractors were once again used, especially for the sealing of and the bush clearing along the canals. The Hartmans Krantz section of the Summerville canal, was again inspected and the necessary repairs affected. A section of the Mistkraal 6 canal collapsed and it is planned to replace this section during the current water year using contractors.
The Association once again request that no work (the erecting of fences and bridges, the lay of pipelines or cables, etc.) be done within the servitude of the canal system, without getting written approval from the Association.
Irrigation dams receiving water directly from the canal, must be supplied with a suitable and effective overflow structure to protect these dams, as well as canals.
Water users that constantly assist the Association with the cleaning of canals, the reporting of faults and various other activities, are sincerely thanked for their support.
Due to the drought, rainfall figures are still below average as shown in table 5.1 below.
No further repairs were affected by Department of Water and Sanitation to the steel outlet pipes and sleeve valves at Darlington dam. Currently four of the six outlet valves can be utilized.
At Scheepersvlakte Dam there is still only one valve that supplies water to the Nelson Mandela Bay Metropole, with the other one still not repaired and replaced by the Department of Water & Sanitation.
Darlington dam started at a capacity of 54.038 million m3 (29.88 %) on the 1st July 2017 and ended with 63.918 million m3 (35.35%) on the 30th June 2017.
Refer to table 5.2 for the Darlington Dam balance figures.
4.3. ORANGE RIVER WATER
Currently large parts of the Eastern Cape and also the country are experiencing a drought. If it was not for the water supply from the Gariep dam, the Association would probably not have been able to carry on with normal irrigation activities. The current dam levels of the Gariep and Vanderkloof dams are indicated in Table 5.3 below. Although sufficient water is available for a large part of the water year, the Association requests that this precious commodity be utilized sparingly.
4.4. AUTOMATED SYSTEM
An additional two monitoring stations were added to the Association’s system. These monitoring systems contribute to the effective and correct supply of water from the canal system to water users. It also curbs losses and help with the accurate determination of the water use of the Association as required from Department Water and Sanitation.
See table 5.6, the water use report submitted to the Department of Water and Sanitation for the past water year.
4.5. WATER SUPPLY TO NELSON MANDELA BAY MUNICIPALITY
Due to the drought in other parts of the province, abstraction from the NMBM pipeline to the Nelson Mandela Bay Municipality during the previous water year, drastically increased. See table 5.4.
The expectation is that abstraction in the foresee-able future will further increase, if much needed rainfall is not received soon.
The water quality figures of last three years are also displayed below in table 5.5.