City budget increases in spotlight

Mayor Patricia de Lille. Picture: Tracey Adams/African News Agency/ANA

While the total proposed budget of R49.1 billion for the upcoming financial year includes much needed services like broadband infrastructure, installations of CCTV cameras, upgrading sports and recreation facilities, electrification and roadworks among others, ratepayers will have to dig deep in their pockets for municipal services if the budget is approved.

During the tabling of the budget for the 2018/19 financial year on Wednesday March 28, Mayor Patricia de Lille indicated that R39.8 billion of the R49.1 billion would be allocated for the operating budget and R9.2 billion for capital expenditure.

She proposed several increases including rates by 7.2%, electricity by 8.1%, 26.9% for sanitation and 5.7% for refuse.

In addition, the City wants ratepayers to pay a fixed charge for water, based on the water meter size as well as seven restriction level tariffs while the electricity department is proposing moving domestic customers to the home user tariff where properties are valued at above R1 million as well as introducing a fixed service charge of R150 a month for the properties.

She allocated R9.8 billion for bulk purchases of water and electricity from the Department of Water and Sanitation and Eskom and R5 billion for informal settlements, water and waste services – which is 54% of the capital budget and R1.7 billion for transport and urban development and R1.1 billion for energy.

The proposed tariff increases for the financial year is set annually to enable the City to deliver the level of services required by ratepayers.

Mayor De Lille said she was aware that there were many residents who struggled to make ends meet and to help those residents, the City provided free basic services such as electricity, refuse removal, water, sanitation and rates rebates to residents who qualified.

The basic social package rebates, which are based on property values, are as follows:

* Properties valued at R100 000 and below qualify for 100% rates and refuse removal rebates. These residents also receive 10 500 litres of free water and 7 350 litres of free sanitation.

* Where properties are valued above
R100 000 and below R150 000, residents get a 100% rates rebate, 75% off refuse removal charges, 10 500 litres of free water and 7 350 litres of free sanitation.

* Properties valued between R150 000 and R400 000 all receive 10 500 litres of free water,
7 350 litres of free sanitation and between 50% and 25% off their refuse removal charges.

* There is also relief with electricity charges for consumers on the Lifeline tariff where consumption is on average 250 units a month, and these residents receive 60 units free a month.

* Where consumption is between 250 and 450 units, these households will receive 25 units free each month.

Apart from property value, the City uses household income as a factor to determine which residents qualify for assistance. Households with a gross monthly income of R4 000 or below can get a 100% rates rebate and receive the same benefits as if their properties were valued below R100 000.

A total of R910.5 million has been allocated to area south, which includes R29.6 million for electrification in various areas, R75 million for the Cape Flats wastewater treatment works refurbishment and R15 million for the Masiphumelele taxi rank. In its objection to the proposed increases, the Fish Hoek Valley Residents’ and Ratepayers’ Association (FHVRRA) said the proposed rates increase of 7.2% and refuse tariff increase of 5.7%, were significantly higher than the current annual inflation rate of around 4.4%.

The proposed electricity municipal tariff (R1.8289/kWh) increase is 8.14%, on top of Eskom’s upcoming 30% increase. The City will be moving domestic customers (R1.6115 / kWh) to the home user tarrif, where property value is above
R1 million and a fixed monthly service charge of R150 is to be introduced.

This is down from the proposed R219 amount for 2017/18 and electricity rates will be adjusted to compensate. The FHVRRA added that instead of the water usage and linked sanitation service fee being under-recovered in the normal 2% to 7% range, water is under-recovered by 27% as water usage is down by 20%.

The association indicated that the linked sanitation service fee was only 14% under-recovered yet, both charges would increase by 26.96% to 30.45% (depending upon source). This is on top of the recent tariff increase.

The FHVRRA urges ratepayers to attend the public participation process on Monday April 16, at 6pm, at the Fish Hoek Civic Centre.

The closing dates for comments on the proposed budget, is Friday May 4, at 4.30pm.

* Activist group Stop City of Cape Town (StopCoCT) is leading a protest march in the city centre tomorrow, Friday April 13, from Daling Street, meeting at 10am.