Vellakovil City Development Plan - Municipal

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City Development Plan for Vellakoil Municipality SMEC India Pvt Ltd Final Report TNUDP III S.No. Particulars Table8.5 Consolidated Means of Finance Multi Year Investment Plan 2009-10 2010-11 2011-12 2012-13 2013-14 Total I Project Cost Total Project Cost 1404.42 3067.00 3377.00 639.00 531.00 9018.42 Add : Price Inflation @ 7% 98.31 444.41 759.97 198.60 213.75 1715.04 Total 1502.73 3511.41 4136.97 837.60 744.75 10733.46 II Means of Finance Municipality Own Funds (including Deposits from Public) 96.58 725.29 1075.83 84.68 85.56 2067.94 Grant 1085.38 2021.32 2245.26 752.92 659.20 6764.08 TNUIFSL Loan 320.76 738.46 815.88 0.00 0.00 1875.10 BOOT / Private Sector 0.00 26.33 0.00 0.00 0.00 26.33 Total 1502.73 3511.41 4136.97 837.60 744.75 10733.46 8.4 FINANCIAL SUSTAINABILITY The sustainability analysis assumes that the Municipality will carry out reforms indicated as assumptions for financial projections. A Financial and Operating Plan (FOP) prepared which evaluates the Municipality Fund status for the Full Project scenario. The FOP is a cash flow stream of the ULB based on the regular Municipality revenues, expenditures and applicability of surplus funds to support project sustainability. The FOP horizon is determined to assess the impact of full debt servicing liability resulting from the borrowings to meet the identified interventions. The proposed capital investments are phased over 5 years investment from FY 2009- 10 to FY 2013-14. The full project investment scenario is based on all the proposed investments identified for Vellakoil Municipality and the requirement for upgrading the town’s infrastructure is estimated and phased based on the construction activity. Implications of this investment in terms of external borrowings required, resultant debt service commitment and additional operation and maintenance expenditure are worked out to ascertain sub-project cash flows. Revenue surpluses of the existing operations are applied to the sub-project cash flows emerging from full project investments – the Municipality fund net surpluses indicates the ULB’s ability to sustain full investments. FY 2009-10 is taken as the base year and FY 2028-29 is assumed as the reference year (20 years) to determine the net surpluses and whether the Municipality maintains a debt / revenue surplus ratio as an indication of the ULB’s ability to sustain investments. 8.5 BASIC ASSUMPTIONS FOR PROJECTIONS : The FOP is based on a whole range of assumptions related to income and expenditure. These are critical to ascertain the investment sustenance and would also provide a tool to test certain specific policy decisions regarding revenue and expenditure drivers on the overall Municipality fiscal situation. This section elucidated the key assumptions adopted for the FOP scenario. 65
City Development Plan for Vellakoil Municipality SMEC India Pvt Ltd Final Report TNUDP III The growth rates for the various heads of income and expenditure have been arrived based on the past growth rates and the future estimated population growth. Improvements to the existing current and arrears collection percentages have been assumed for the various revenues directly collected by the Municipality, which implies that the Municipality would have to improve its collection mechanism to sustain full investments. Given below are the various assumptions forming part of the FOP workings : 8.5.1 INCOME a) Property Tax The population of Vellakoil Municipality is estimated to grow at around 2.5% p.a. Based on the same Property Tax Revenue are assumed to increase @ 2.5% per annum. The last revision of Property Tax was carried out on 1-10-98 and it is assumed that the next revision will be carried out in the current year. It is assumed that there will be an increase of 25% due to revision in 2008-09 & that revision would be done @ 15% every 5 years. It has also been established as per the Survey in 2002 that around 27% of the properties are unassessed and further 20-25% of the properties are unassessed. Considering the above, it is assumed that the same shall be set right and together these shall contribute to increase in property tax revenue by 20% from next year viz. 2009-10, after completion of GIS mapping. The Property Tax income is divided between Revenue, Water Supply and Education Fund in the following ratio: Table: 8.6 Ratio of Property tax Description Per Annum General 4.000% Scavanging 2.000% Revenue & Capital Fund Lighting 1.000% Water Tax 2.000% Water Supply & Drainage Fund Drainage 1.000% Education - Education Fund Total 10.000% b) Profession tax Income from Profession Tax is assumed to increase @ 5% per annum. The Profession Tax was last revised on 1.10.2003 and the next revision is due in 2008-09. It is assumed that every revision would contribute to 15% increase Besides, the profession tax base would be increased by carrying out survey in 2010-11. It is assumed that the survey would increase the profession tax base by 20% in 2010-11. c) Assigned revenue Assigned Revenue comprises Entertainment Tax and Surcharge on Stamp Duty. It is assumed the same shall increase as under : Duty on Transfer of Property : 5% Entertainment Tax : 1% 66
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Submitted to CITY DEVELOPMENT PLAN
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Final Report City Development Plan
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Final Report City Development Plan
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Abbreviation and Acronyms ANM : Aux
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EXECUTIVE SUMMARY COUNCIL RESOLUTIO
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TABLES 2.1 Population and growth 4
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City Development Plan for Vellakoil
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Vellakovil City Development Plan - Municipal

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