Criticism of rate tariffs in Bitou
There has been major criticism following the recent rates and tariff increases in Bitou – especially in comparison with that of neighbouring towns like Knysna – which could see Plettenberg Bay residents paying up to R3 000 more per year for the same services.
One of the biggest points of contention is that of the property rates which residents have complained have more than doubled in some cases.
This despite Bitou decreasing the property rates by 11.9% for the next financial year.
Bitou chief financial officer Vincent Mkhefa said that this was done due to the anticipated increase in the property valuations which were implemented in July this year. “The reduction in rates is as a result of the increase in property values. The rates for some properties will have been very high due to the increase in property value and also the increase in rates,” Mkhefa said. BIG DIFFERENCE IN REFUSE AND SEWAGE TARIFFS
One of the most glaring differences, when comparing Bitou to Knysna costs, is that refuse and sewage tariffs differ greatly. Looking at refuse removal once per week, the annual charge comes to R2 936 for Plett residents while Knysna residents only fork out R1 090. In Plett residents pay R5 360 per year for sewage, for a single residential home with three bedrooms or less, while in Knysna residents pay only R978.
“The cost of providing the service between the two municipalities is not the same. Bitou is incurring more cost relating to transportation of the refuse to Mossel Bay than Knysna due to obvious reasons of distance. It is important to note that when a municipality determines rates especially for trading services as water, electricity, refuse and sewage, the intention is to break even or generate sufficient cash to finance other nonconsumption-based tariffs like street sweeping and parks maintenance. The cost of waste disposal will continue to grow, especially due to transporting of waste to external waste sites,” said Mkhefa. ELECTRICITY CHARGES DIFFER IN PLETT AND KNYSNA
Some residents noticed that the basic charge for electricity in both towns appeared to be based on a different philosophy. In Plett residents pay a high basic charge for electricity, while Knysna does not. Residents pointed out that Plett consumers could therefore not control their costs in a significant way by controlling their consumption, whereas Knysna’s electricity tariff structure left the consumer more in control.
In response Mkhefa said, “The basic charge is not meant to be used as a method of reducing consumption. The basic charge is meant to assist in infrastructure improvement and renewal. Bitou has been engaged in various projects over the years to improve and properly maintain its electricity infrastructure. The maintenance plan of both municipalities is not the same therefore the funding cannot be the same. As mentioned the tariffs are influenced by the needs of the community more than by comparison to another municipality.”
A similar issue was raised about the water tariff structure. In Knysna there is a low basic charge with only 3kl free whereas in Plett there is a high basic tariff and 25kl free.
“It is important to note that the tariff compilation process does not only accommodate conservation objective but rather cost recovery,” Mkhefa said.
“The tariffs for Bitou will never be the same as Knysna’s mainly because of cost both municipalities incur in producing a kilolitre. The municipality is comfortable about the current rates as compared to cost and the block escalating tariffs are meant to penalise high water users.
“The profile of our customer base also has an impact in terms of the basic charge and the 25kl free water. The municipality incurs high demand for water in peak holiday season but requires the maintenance of the infrastructure throughout the year. Therefore the basic charge is meant to afford the municipality to maintain the infrastructure during the low season,” he said.
When comparing all charges including water at 40kl per month and electricity at 500kWh per month Plett residents can expect to pay R27 043 per year while Knysna residents pay R23 660 for the same services.