City needs to do the right thing

Faizel Petersen, Goodwood Residents and Ratepayers Association chairman 

I wish to ask the City of Cape Town to do “the right thing” and urgently review the level-1 water restrictions by reviewing the recent increase of 4.5% and completely scrapping the fixed water charge also known at the “pipe levy”.

A report from Monday August 31 shows that we are in a much better position with dam levels (90.7% as opposed to 81.9% at the same time in 2019) and therefore there is a responsibility on you to act in the best interest of all ratepayers. 

The City has not done much to help ratepayers keep their heads above water over the past few months when we were under hard lockdown and businesses were closing, people were losing employment or having their salaries cut. Yes, the City offered some relief to those who applied for it, yet many average-income persons do not have the money to call in and wait for 30 to 60 minutes to get assistance, and the various council offices were closed. Those who fell short or could not make payment, received threatening messages to pay up or face legal action. That’s not a stance of a council that cares for its people. 

We understand that there has been a reduction in water usage, which is what you have asked residents to do. People were also unable to afford the high charges and therefore opted to use less water. The suggestion that the City first wants to see a higher number of water usage before it will review reducing charges makes no sense at all. 

Many businesses had to restructure themselves and weigh-up their new reduced income versus their operational and capital expenses. Many companies had to retrench staff in order to break even. Similarly, the City must cut down on all non critical capex projects, evaluate where opex costs can be reduced and make use of in-house staff as opposed to outsourcing work at higher costs.

The City has many properties that are not in use, which it can sell, such as 10 Spencer Road, Goodwood, a problem building, to raise capital. Vehicles and equipment that are redundant can be auctioned off to generate revenue. 

With about 40% indigent residents in the City, there needs to be a different approach taken and part responsibility pushed back to the national government which is responsible for social development of all, regardless of which province, city or political party they are part of. The costs to the ratepayer cannot forever be pushed up when the economy is unstable and people’s work hangs in the balance.  

The City must review its own finances and rework budgets to be able to operate at an acceptable level and then reduce the water restriction level, the increased charges and pipe levy imposed on all. 

Xanthea Limberg, mayoral committee member for water and waste, responds:

Tariff increases for the 2020/21 financial year were among the lowest in the country with rates at 4%, electricity at 4,8%, water and sanitation at 4,5% and refuse removal at 3,5%.

Residents who are registered as indigent continue to receive a free allocation of water and do not pay the fixed basic charge portion of the water tariff.

Currently we are on level 1 tariffs, which reflect the water consumption projections and realities of the 2020/21 financial year.

When compiling the budget, the City looks at affordability, and attempts to set service tariffs based on the projected consumption trends, so that the income received covers the cost of providing and maintaining the water service. The City does not budget for a profit/surplus from the sale of water and seeks to keep costs of service delivery as low as possible.

The City will be reviewing the status of dam levels, consumption and tariff levels following the conclusion of the hydrological year (end October) in terms of planning and making projections, which is a standard, annual process.

During the drought, the City restructured the water tariff to include a fixed portion (or the fixed basic charge), rather than only a consumptive portion. The fixed basic charge is therefore not an extra charge.The tariff includes a usage/consumption and fixed component which makes up the entire tariff to recover the cost of providing the service. This includes the treatment, operation as well as repairs and maintenance of infrastructure – a 11 500 km water network, 9 500 km sewer infrastructure, 5 600 km stormwater pipelines, 490 wastewater pump stations and 23 wastewater treatment works –  which remain largely the same regardless of the water usage.

The consumptive portion is lower than it would be if there was no fixed portion.

Currently the revenue from the fixed portion of the tariff only covers 20% of the fixed costs of providing the service. The City is proud of the high quality drinking water it consistently and reliably provides, and is committed to continuing to deliver this service standard to residents and businesses.

For more information on indigent grants and financial relief, residents can visit any one of the City walk-in centres, their nearest housing office, or to contact the City’s call centre on 0860 103 089.