Despite an expected 28 percent increase in collections due to higher assessment tax revenue for 2014, Kuala Lumpur City Hall (DBKL) still expects a RM292.7 million deficit next year, the third deficit in a row.

Mayor Ahmad Phesal Talib said this was because more allocations were made for road and bridge projects, which brought its development budget up by nearly 60 percent to RM1.29 billion.

Overall, DBKL will spend RM2.79 billion in 2014, up about 20 percent from 2013.

On the move to raise the property assessment rates, DBKL said that it had initially expected to collect 36 percent more revenue, or a total of RM1.2 billion.

But after rate reduction of one to four percent the federal territories minister announced last week, it now expects to collect 28 percent more, or an increase of only RM200 million.

This is the first increase in 21 years of the assessment rate, which makes up more than half of DBKL's annual revenue.

Justifying the budget, Ahmad Phesal said his administration promises "value-for-money" spending.

"Don't worry about the deficit... sometimes there are savings. We tend to budget on the higher side," he said. "And sometimes we may postpone and reschedule some projects that are not urgent too."

Asked how much was the "actual" budget deficit recorded for the last two years, Ahmad Phesal could only give the deficit figure for 2012, which was RM255 million.

He said DBKL would draw on its reserves to make up for the shortage. The budget was approved on Nov 20 by Federal Territories Minister Tengku Adnan Tengku Mansor, he said.

From the RM2.79 billion to be spent in 2014, DBKL has allocated RM1.499 billion for management expenses, an increase of 6.6 percent compared with the 2013 figure.

A big chunk of the management expenses - RM441 million - would go towards emoluments (salaries and compensation). This portion is 14 percent more than the 2013 allocation.

RM227 million for garbage collection

Ahmad Phesal noted that DBKL has 10,391 employees. of whom 8,863 are permanent staff.

On its main work, DBKL would spend RM227 million on garbage collection, road and drain cleaning and RM103.3 million for repairing some 2,010 km of roads under its purview.

On its development expenses, the bulk of the sum would be to carry out roadworks, including building new road links to major KL roads that face massive traffic jams every time it rains, he said.

DBKL allocated RM268.6 million for 34 of these development projects including on Jalan Genting Kelang, to reinforce cliffs to prevent landslides, Sungai Gombak bridge, a Jalan Segambut to Mount Kiara link and a crossroad at Jalan Ampang-Jalan Jelatek.

Other big item development expenses include RM271.4 million to clean up and beautify the rivers in the city. The bulk of this is for the "River of Life" project under Greater KL/Klang Valley federal budget allocation and RM86.23 million would be spent to upgrade the Perdana Botanic gardens and other parks.

Another RM185.21 million is set aside for office upgrading works and to build markets and sports facilities.

Besides its assessment rate revenues, DBKL will also receive RM135 million in financial grants from the federal government for 2014, besides RM475 million allocated for development projects under the 10th Malaysian Plan, National Key Results Area (NKRA) and Greater KL/Klang Valley development.

Petronas will also contribute its usual sum of RM7.5 million for pedestrian walkway projects.