Makana ratepayers could be in for a rates increase well over the national inflation target. This comes as the municipality faces a fifth successive disclaimer in its 2012/13 audit.
Councillor Julia Wells broke the news of the proposed increase this week to residents of Ward 3 and Ward 4.
Makana ratepayers could be in for a rates increase well over the national inflation target. This comes as the municipality faces a fifth successive disclaimer in its 2012/13 audit.
Councillor Julia Wells broke the news of the proposed increase this week to residents of Ward 3 and Ward 4.
She was one of three councillors and two directors speaking about the municipality's draft budget and integrated development plan (IDP) at the Oval sports grounds in Lavender Valley on Monday evening, 19 May.
Wells is the ANC's Chief Whip in the Makana Council.
The meeting was the first of a series this week in Makana Municipality's IDP Roadshows.
"We want to increase ratepayers' payments to Makana," she told 80 or so residents gathered in a marquee under glaring spotlights powered by a generator. "But that will be for those who can afford it."
Her announcement came a day before economists announced the April Consumer Price Index had risen by 6.1% year-on-year. This means it has breached the Reserve Bank's target upper limit of 6%.
Whereas the draft budget tabled in April proposed service charge increases (refuse, sewage and water) of 6%, Wells said this week that Council was now proposing a 9% hike.
Also confirmed in the meeting was that Makana has received its fifth successive disclaimer in the 2012/13 Auditor general's report.
"I want to emphasise that a disclaimer does not only refer to the misuse of funds," infrastructure director Thembinkosi Myalato told the audience in response to a question from Grocott's Mail.
Attributing Makana Municipality's cash flow problems to defaulting ratepayers, Wells said they were paying only 65% of what they owed.
In highlighting key aspects of the IDP, Wells said the municipality was taking on no new projects this year. She pointed the residents to a list of priorities for the coming financial year. These included ageing infrastructure, poverty, unemployment and low economic growth; sustainable human settlements; rural development and land reform and community cleanliness.
In offering reassurance that the municipality is equipped to properly manage its finances, Wells pointed to the fact that in December, Makana Municipality invoked Section 1.54 of the Constitution.
This resulted in the deployment of officials from the provincial treasury to help set up more effective financial systems.
"We have the systems in place," Wells said. "We're just not using them efficiently.
"The help from the province included deploying an acting chief financial officer," Wells said. "Within a month we should have a permanent CFO."
Drama in the meeting came when infrastructure director Thembinkosi Myalato explained, the principle of the haves subsidising the have-nots. In isiXhosa, he began to paraphrase it, saying, people in Ward 4 all had houses, water and sewage, whereas people in Ward 3 didn't.
A resident vigorously protested the statement, saying not all Ward 4 residents had everything they needed. "Some of us don't even have houses," he said.
Economists have warned that the poor will be hardest hit by the upward pressure on interest rates announced this week. FNB Household and Property Sector Strategist John Loos said, "This means downward pressure on real disposable income growth, and the poor get hit harder."
"In addition, high inflation rates in the area of Municipal Rates and Utilities tariffs continue to be a problem, with the CPI for Electricity and Other Fuels inflating at 7.2%, and the CPI for Water and Other Services (rates included) rising by 8% year-on-year," Loos said in a report titled 'Key findings in Consumer Price Index data for April 2014'.
