City coins it from punitive water tariffs

R1bn flows in to city coffers in last financial year in over-recovery

THE DA-run City of Cape Town is laughing all the way to the bank, as its punitive water tariffs continue to swell City coffers It raked in close to R1 billion in the last financial year and now a further R210 million for water and R42m for sanitation has been over-recovered in July alone.

The over-recovery amounts are contained in the City’s July financial monitoring report. July 1 was the start of the City’s 2018/19 financial year.

According to Section 71 of the Municipal Finance Management Act, executive director for finance Kevin Jacoby must by no later than 10 working days after the end of each month submit a financial report to mayor Patricia de Lille and the Western Cape Provincial Treasury.

On water, Jacoby’s report said some consumers were still using water above restriction levels, the level 6 tariffs implemented to discourage high consumption in order to keep saving water, have escalated the “billed revenue”.

“It must be emphasised that the over-recovery on sales is not cash backed. The cash-backed revenue is therefore expected to show a closer correlation with the budgeted cash-back revenue,” he said.

In the 2017/18 financial year, the City raked in more than R900m more than planned due to the punitive charges.

The City has reiterated that it was money meant for Day Zero and not “cash backed”.

There was, however, a R67m under recovery on property rates.

“The under-recovery is due to resolution of appeals and objections, which affected the revenue stream negatively. Revenue forgone is lower than planned as well, due to fewer properties qualifying for exemption,” Jacoby said.

In the traffic fines, penalties and forfeits section there was a R45m under-recovery.

“Under-recovery reflects against Traffic Fines and Traffic Fines-Accruals, due to a lower payment ratio of outstanding fines, the reduction of fines by courts and lesser fines being issued in July 2018,” the report said.

There were also major under expenditure in employee costs and bulk services for water. There was a R214m under expenditure in employee-related costs.

“The variance is mainly due to the turnaround time in filling vacancies; the internal filling of vacant positions; the appointment of seasonal workers and temporary staff, which is dependent on seasonal requirements as and when departments require additional staff; and the 2018/19 salary increases which have not yet been implemented as the final national collective agreement is awaited,” Jacoby reported.

The under expenditure amount for bulk purchases for water and bulk water levy is R57m and is due to outstanding invoices from the National Department of Water and Sanitation for July 2018.

On the capital budget side, the water and sanitation department also underperformed. R15.9m was under spent.

“This was mainly as a result of misaligned cash flows on the Bellville Waste Water Treatment Works extension, Borchards Quarry Waste Water Treatment Works and infrastructure replacements,” it said.

Greater Cape Town Civic Alliance secretary Philip Bam said the above-inflation increases add to residents’ economic woes.

“The reckless increases foisted upon suffering consumers is unfair. To add insult to injury, the City’s billing system is a mess and residents are faced with extraordinarily huge municipal bills,” Bam said.

ANC Mitchells Plain regional co-ordinator Grant Pascoe has led the charge in protest against the City’s water tariff charges.

“Cape Town residents are still using far less water,” he said.