Treasury has cracked the whip on Makana’s municipal service charge and electricity increases, if Makana Municipality’s proposed budget is anything to go by.
Treasury has cracked the whip on Makana’s municipal service charge and electricity increases, if Makana Municipality’s proposed budget is anything to go by.
In the draft Budget released at a special council meeting this week, property rates, water, sanitation and sewerage charges in Makana will rise 6% from July 1, the first month of the coming municipal financial year, 2014/15.
Electricity charges will increase by 7.39%.
The service charges are in line with the upper limit of the Reserve Bank’s target range for inflation of 3% to 6%.
The National Electricity Regulator of SA (Nersa) determines electricity tariff increases and has kept a lid on electricity price rises, despite pressure from Eskom for large increases to support building new power stations.
Last year property rates went up by 9%, and other charges by 8% to 8.5%.
In nearby Ndlambe Municipality, electricity tariffs will reportedly go up almost 15%, and rates by 12%, while the sanitation tariff is set to double, and the refuse collection tariff rises by 5,5%.
Makana Municipality said in the proposed Budget, “National Treasury continues to encourage municipalities to keep increases in rates, tariffs and other charges as low as possible. Municipalities must justify in their budget documentation all increases in excess of the 6% upper boundary of the South African Reserve Bank’s inflation target.”
The draft Budget also sets out proposed “stepped water tariffs”, whereby charges will rise as water consumption increases. During “critical periods”, when dam levels are low, rates will be increased to encourage water saving.
And indigent residents will be allowed a free 10 kilolitres of water a month.
The budget makes provision for around 8 000 households to be registered as indigent this coming municipal financial year.
Makana municipal employee salaries are budget to rise slightly above the inflation target, at 6,8%.
Only critical vacancies will be filled, and overtime spending is to be curtailed, being only for “emergency services and other critical functions”.
Councillors, whose remuneration is determined by central government, will also get a 6.8% pay increase.
The municipality anticipates that it will spend much more on operations this coming financial year, so that it will have an approximate R108-million operating budget deficit.
Operating expenditure is budgeted to rise by roughly R133 million compared with the previous year.
Operating revenue, however, is budgeted to be only around R10 million more, at around R344 million.
Some of the difference will be made up by a drop in the capital budget of around R34 million compared to the 2013/14 budget.
The municipality says this is because some projects have been completed, and because of “affordability constraints”.
The rest, a roughly R78 million deficit, will be made up through “internally generated funds,” according to the draft Budget document. It does not give details.
