Ratepayers to pay more

Ratepayers will have to fork out significantly more for municipal services if the proposed budget for the upcoming financial year is approved, which includes a 26.9% water tariff increase.

The proposed budget for the upcoming financial year is R49.1 billion, with R39.8 billion on the operating budget and R9.2 billion for capital expenditure.

Mayor Patricia de Lille tabled the budget for the 2018/2019 financial year during a full sitting of council on Wednesday March 28.

The budget proposes several increases, including rates by 7.2%, electricity by 8.1%, 26.9% for sanitation and a 5.7% increase for refuse.

The mayor has earmarked R9.8 billion for water and electricity bulk purchases from the Department of Water and Sanitation and Eskom, while R5 billion has been allocated to informal settlements, water and waste services, which is 54.9% of the capital budget, R1.7 billion for transport and urban development and R1.1 billion for energy.

In addition to the increases, the City wants ratepayers to pay a fixed charge for water based on their water meter size as well as seven restriction level tariffs.

Domestic customers will be moved to a home user tariff and those with a property valued at more than R1 million will have to fork out a R150 service charge.

“In terms of the proposed tariff increases for the upcoming financial year, the tariffs are set annually to ensure that the City can deliver the level of services required by our residents,” Ms De Lille said in a statement.

The mayor encouraged residents to take part in the public comment process, which closes on Friday May 4.

Oakdale Watch chairman Tommy Milakovic said residents feel they have been “done in” by the City, as most have done their utmost to save water, spending thousands of rands out of their savings or taking out loans… and are now being penalised for it.

“The consensus on the streets is that yes, there is a need for improvement as well as development of much needed infrastructure, but why not first and foremost concentrate on rooting out corruption and improve governance at the highest levels, as this will already free up more funds than any water and sanitation tariff increase. Like any successful business will tell you, first get your own house in order,” he said.

He questioned whether the City considered the knock-on effect this would have on people’s ability to put food on the table as well as the implications for the business sector. “Is the City not using the water crisis as an excuse, to up the tariffs, to try bolster their coffers?” he asked.

“The water usage literally having been halved also means that the income generated from water tariffs to the City has also been halved. The same thing happened not so long ago when we had the electricity crisis. Now the City is having to implement drastic measures to supplement its income. As per usual, it seems the bulk of the burden is going to the middle classes as well as to the small business sector,” he said.

Sandra Dickson, one of the founders of the activist group Stop City of Cape Town COCT, said if the water tariff is approved the already steep Level 6b water tariff increases will grow by another 26.96%.

“The current Level 6b increases represented a 500% plus increase in water tariffs. These new increases effective from 1 July 2018 will add a further 83% increase to your water bill. Added to this steep increase is a levy starting at R56 per month based on the size of the pipe delivering water to homes. This levy is stepped up in increments based on the diameter of your supplying water pipe. A pipe of 15mm attracts a levy of R56 up to a maximum sized pipe of 300mm which will attract a levy of R2 500. This is a stark reminder of the drought charge based on property values which was rejected by the public in January this year,” said Ms Dickson.

Stellenberg resident Richard Heydenrych believes this a losing battle.

“To be honest, I have given up on the situation. Every year, massive increases are imposed, but the actual contributors see very little of these funds being applied in their own communities,” he said.

“It will once again be the middle class that will suffer most. The poor will still not be paying and the rich will not feel it – however these have become less. So it will be the average earner that will become even poorer as salary increases of a max of 6% — do not make up for the overall municipal cost increase in excess of 15%.”

The mayor has allocated about R3 billion to the social package of services, a slight increase from the current R2.7 billion.

“The social package provides financial relief to those who need it most. There are many residents who struggle to make ends meet and, in assisting these residents, the City provides free basic services such as electricity, refuse removal, water, sanitation and rates rebates to residents who qualify,” said Ms De Lille.

The City’s Transport and Urban Development Authority’s (TDA) draft operating budget amounts to R3.6 billion, and the draft capital budget amounts to R1.74 billion.

The bulk of the capital expenditure will be spent on new housing developments, public transport infrastructure related to the roll-out of Phase 2A of the MyCiTi service to Mitchell’s Plain and Khayelitsha, and new roads to relieve traffic congestion.

Most of these capital projects are located within the city’s urban inner core which includes areas adjacent to the N1, N2, N7, and M5 highways; along the R27 to the north and Main Road to the south; along major arterials linking the Metro South-east with Bellville and Kuils River; and the Cape Town International Airport.

The TDA proposes to spend R2.1 billion on the development of new housing opportunities over the next three financial years, with R585 million being budgeted for 2018/2019 alone. The bulk of these housing opportunities will be developed on well-located land close to public transport services and job opportunities. As such, the TDA proposes to spend R105 million on the acquisition of land in the next financial year.

The draft capital budget provides a list of 36 housing developments which are either in the planning phase, already underway, or in the process of being finalised and includes developments in Fisantekraal and Durbanville.

A total of R371 million has been allocated for the construction and upgrade of public transport interchanges in the inner city, Bellville, Retreat, and Somerset West.