SOL APPROVES R2bn BUDGET
THE SOL Plaatje City Council has approved a record budget of just over R2 billion.
From July 1, rates will go up by 6%, electricity by 5.95%, water by 5.9%, sewer and sanitation by 5.95% and cleansing/refuse collection by 6%.
The average tariff increase is 5.96%.
For the first time ever, the municipality’s revenue budget will exceed the R2 billion mark.
Rates and service charges make up almost 80% of the municipality’s total revenue.
Property rates is budgeted to bring in R542 million (26% of the budget), while electricity sales will bring in R728 million, water R268 million, sanitation R63 million, refuse R47.6 million, rental of facilities R11.3 million, interests on investments R20 million, interest on outstanding debtors R130 million, fines R25.7 million, licences and permits R3.5 million, transfers and subsidies R191 million and other revenue R25 million.
A total of R1.1 billion, 54% of the total revenue, is generated from service charges like water, electricity, sanitation and refuse.
For the first time residents will also pay a basic fixed fee of R260 (an availability charge) a month for electricity, over and above their monthly usage.
Municipal CFO, Lydia Mahloko, explained that currently residents paid an all inclusive tariff of R1.42 per unit. This includes the basic charge (AMP per household, as well as peak, off peak and standard demand charges, network charges etc).
“The basic charge is determined by cost of bulk infrastructure and other charges or providing electricity, while the Nersa tariff guidelines provide for unit price of energy for different blocks.”
From July 1, however, the basic charge will be split from the energy charge. “The basic charge will be R260 a month, which covers the costs mentioned above. Residents will also pay the energy charge, which is determined by how much electricity they used.”
Mahloko explained further that both these charges must be recovered at the same time.
“Due to the fact that households and small commercials are on prepaid meters, the basic charge will be paid for per day in arrears. This will work as follows: If you buy electricity on July 3 for R1 000, you will be charged R8.50 per day for July 1 to 3, and be sold units with the remainder, so your slip will show a basic charge of R25.50 and units will be for R974.50. On your next purchase, for example on August 2, you will be charged a basic charge of R260, and receive electricity for R740.00.”
According to Mahloko, the net effect of splitting the two charges will be a 5.95% increase in household electricity cost as proposed in the budget.
According to the budget schedule, residents will pay a basic charge of R260 a month for electricity as well as the unit cost, which is as follows:
0-50 Kwh - R1.05 (currently R1.45 which included the availability cost)
51-350 Kwh - R1.35 (currently R1.99)
351-600 Kwh - R1.90 (currently R2.16)
More than 600 Kwh - R2.29 (currently R2.24)
From this year, the municipality will also be introducing credit profiling of all applicants for municipal services. Those who are identified as a higher credit risk will be required to pay a higher deposit and these customers will also have a pre-paid meter installed before the contract is signed.
The municipality is also considering holding a certain percentage of prepaid purchase value, at the point of sale, for customers who have accounts in arrears for more than 90 days. Customers who default three or more times on their payment arrangements will be blacklisted with the Credit Bureau.
The total capital expenditure budgeted for the coming year is R333 million. This includes R283 million from national government and R50 million from internally generated funds.
Projects on the capital budget include R151 million for the upgrading of the stormwater system in Galeshewe, R15 million for the electrification of Snake Park, R17 million for Lerato Park water, R10.6 million for bulk supply in Ritchie, R20 million for the Thlageng Dam, R20 million for the upgrading of the Lerato Park sewer line and R14 million for the reconstruction of the old zinc toilets in Kutlaw.
A total of R7 million will be spent on street lights and R4 million on the fleet replacement programme.
About 1 589 houses in total will be electrified during the coming financial year.
Concern has been expressed by the DA, however, that the budget does not make provision for infrastructure to cope with the massive developments taking place in the city.
“There is a major problem, for example, with traffic flow in the city but there is nothing in the budget to address that. There are also problems with sewage, while a taxi rank is currently developing in Memorial Road near the malls. There is also nothing in the budget for the maintenance of roads in the CBD – not even in the next three years.”
The party added that another concern was that councillors had never been given a chance to analyse and assimilate the budget.
“In the past, councillors would spend a week going through the budget but now we haven’t really been given a chance to discuss it all and it has just been plonked in front of us that is a major concern.” Danie van der Lith