Municipal rate increases mooted
● Massive 15.7% electricity hike among planned tariff adjustments
An increase in Nelson Mandela Bay municipal rates and tariffs is on the cards, with residents likely to dig deep for a whopping 15.7% electricity hike.
Ratepayers will likely pay 6% more for water, sanitation and refuse. Property rates could also increase by 5%.
The increases form part of the draft 2024/2025 budget debated at yesterday’s joint budget and treasury and mayoral executive committee meeting.
The tariffs, if agreed to by the council today, will come into effect from July 1.
The council has until the end of May to approve the draft budget with R18bn for operational costs of running the city, while R2bn is earmarked for capital projects.
The proposed electricity price increase is subject to approval by the National Energy Regulator of SA (Nersa).
Budget and financial accounting senior director Jackson
Ngcelwane, presenting the budget, said the city’s biggest headache was underspending by various departments.
As of February 29, the city had only spent 29% of its total budget with three months left in the financial year.
“In terms of our budget overview, what affects the budget are different issues that are internally and externally driven,” Ngcelwane said.
“And from where we are sitting, we are not sure yet what Nersa will state in terms of electricity tariffs, but we used the circular from the National Treasury and came up with the 15.7% increase.”
Ngcelwane said while the budget was funded, there were several notable challenges.
These include:
● A declining collection rate;
● Inability to budget for a surplus with the operational budget;
● Poor financial performance of the electricity service division;
● Underfunded mandates such as library services negatively affecting the budget; and
● Financial commitments from previous decisions taken by the council.
“One of the things we look at when we prepare the budget is the collection rate.
“We anticipate that we won’t be able to reach a 95% collection rate. We hope for 80.5%.”
Chief financial officer Selwyn Thys urged councillors to heed finance minister Enoch Godongwana’s directive to halt expenditure on councillors’ funerals and scrap the discretionary funding for the mayor’s office.
“The minister has instructed us that no public funds are to be used for the burial of councillors as that is outside the mandate of the institution.”
He said if funds were used for a burial it would be listed as irregular expenditure.
Godongwana instructed municipalities to cease allocating funds to the mayor’s office as it was outside budgeting processes and without the council’s knowledge, thereby lacking transparency.
However, this did not sit well with ANC councillors who insisted they deserved the same treatment as MPs and MPLs who received state-sponsored burials.
ANC councillor Yolisa Pali said she was shocked by Godongwana’s instructions.
“We often get emergency requests from community members and we would encourage them to write to the office of the mayor for assistance.
“This means we won’t be able to assist people any more.”
On burials, Pali said she was disappointed as they risked their lives to serve residents.
Speaker Eugene Johnson
‘We anticipate that we won’t be able to reach a 95% collection rate. We hope for 80.5%’
said her office dealt with the safety of councillors and with the latest spike in threats she was able to use the discretionary fund to keep them safe.
“We often get money from the mayoral discretionary fund to keep councillors safe when funds in my office have been depleted. This means without funding, councillors will not be taken care of.
“We cannot accept that.” ANC councillor Thembinkosi Mafana said it was unfair, and the budget and treasury committee needed to take a stand.
“I believe we can decide on a committee which we can later communicate to the minister and provide reasons through our representatives at the SA local government association.”
Budget and treasury political head Buyelwa Mafaya said the committee was in no position to go against Godongwana’s instruction.
“The CFO [Thys] was merely conveying an instruction from the minister,” Mafaya said.
“There is nothing we can do at the level of this committee because the instruction will apply to all municipalities.
“This means, as the political leadership of this municipality, we can meet outside this meeting and discuss how we will communicate our displeasure on this with the minister.”
The joint meeting occurred without the DA councillors who are part of the budget and treasury committee.
They said they were not informed about the meeting.
At the start of the meeting, Pali claimed that DA councillors had been invited but had opted to snub it.
DA councillor Malcolm Figg said this was not true and that they had deliberately been excluded.
“It’s concerning and unacceptable that the coalition government decided to exclude us from an important meeting that deals with the future of this city’s residents.
“It makes one wonder why.”