The SRA Business Plan shows a 10-year forecast of revenue and expense. Approximately half the funds will come from the levy. The need for additional funds is clear. We clearly listed a number of sources of funds in our 10 year Business Plan, and that we had discussed with those organisations listed. We also had a portion of our donations still earmarked for the Spit and Beach.
We are only one year into this 10-year plan. We are investigating ways to both reduce our estimated costs and increase our available revenue. We stated from the outset that we must manage three aspects to this SRA initiative ie cost reduction, revenue sourcing and timeline adjustment. We also stated that if we could find the necessary funding to speed up these projects then that is what we would do. If the funding commitments and targets proved a challenge then we would have to adjust the timelines accordingly.
Cost reduction: it is important to understand that our revenue target (or demand for revenue) is reduced if our costs reduce, as is the case with the CCTV cameras. We are looking for ways to reduce the R3m per kilometre on our arterial road project, by using alternative technologies acceptable to the Municipality. The plastic road technology recently piloted in Jeffreys Bay is one such example. There are others being brought to us. The same will apply to the Beach project.
Revenue sources: it is as important that we find ways to secure additional revenue over and above what our partnering organisations are working towards. In particular we are actively seeking co-investors in our projects, as was the case with the Village Entrance (The Links) and the George Road Car Park (two property owners).
Timeline: Expenditure can be spread over a longer period of time if the revenue stream is lagging. Alternatively, if significant funding is secured from Government then the timeline could be shortened.
The projected revenue requirements are what would be required to meet the estimated expenditure on the 3 projects. Clearly these estimates will become more accurate as specific contract work is bid for through our tender processes, as has been the case with the CCTV cameras, the Village Entrance and the George Road Car Park. The CCTV cameras are costing us 68% of what we originally estimated, which represents a saving of R600,000 pa or R6m over 10 years. The Links contributed R340,000 to the Village Entrance project. Two property owners contributed R200,000 to the George Road Car Park. This represented a R540,000 contribution to our revenue. We have been asked, for example, if an investor can build a pier instead of a groyne and use it for commercial purposes eg a restaurant on the pier. These are examples of sources of additional funding that we will continue to work on.
There is no absolute certainty that we will get what has been committed, and at the time we need it. It will not, however, happen on its own. We have to get out there and find the funding we need. We do have the means of changing the timeline if required, and breaking the beach project up into smaller phases to accommodate our cash flow, and similarly for the roads. This is the reality of the uncertain world we live in today. We don’t have all the answers, but we have shown that as an unwavering group of volunteers we have the commitment and drive to make it happen in whatever way we can.
We started with a 50% levy proposal but reduced this to 25% from the feedback we had about its affordability. That obviously required us to source additional revenue elsewhere. We spoke to a number of organisations about how they could contribute to the funding of the River, Spit and Beach project in particular. Clearly the Port’s contribution could only really begin once sand was required for the beach. Our Revenue forecasts have always been indicative of what is possible if we all work together, and we will continue to do so. We would welcome those who oppose the levy to instead help us secure additional funding to speed up these projects. Everybody would benefit.
Sources of funds listed in our Business Plan
The Municipality has assured us that they will commit their share. They have also recently advised us that they are busy applying for additional Government funding for the restoration of the Spit and Beach.
The Riparians and Kromme River Committees are another two sources, that agreed to assist with allocating some of their own revenue to the River, Spit and Beach project. In addition we have been advised that a number of the Kromme River Estates are building up their own cash reserves to contribute to the River, Spit and Beach project. The revenue forecasts were discussed and agreed as targets. These are targets, but there can be no certainty that they will be met fully, because they depend on a number of factors such as boat owners buying boat licences, and the Estates actually collecting their own levies/contributions. The Chairmen of both the River and Riparian Association sit on the SFPO Association Committee, and are fully aware of, and committed to, achieving these revenue targets.
These provisions are not made in the SFPO NPC’s books, but in the books of these other organisations, and at their own discretion.
The sourcing of sand from the Port would obviously only kick in once the beach project has begun.
We have several other possible sources of funding that we are investigating.