Plett: tariff changes
PLETTENBERG BAY -
On Thursday 28 March, Bitou Mayor Claude Terblanche announced an average tariff increase of between 6% and 7,5%, "depending on the cost drivers that impact on the cost of rendering the services".
Terblanche said the only exception is electricity where tariff increases are largely influenced by the Eskom tariff increase and Nersa tariff guidelines, and for this a provisional 10,92% increase is proposed.
Described as pro-poor, Terblanche's draft budget has a sharp focus on communities and a special drive to deal with ageing infrastructure and service delivery.
"Under my leadership, we are focusing the municipal resources to address critical service delivery issues, especially in the poorer communities, and to ensure that their dignity is restored through the provision of good quality basic services to everyone," he said.
Terblanche said qualifying indigent households will receive an indigent support package consisting of 50 units of free electricity, 6 000 litres of free water as well as a 100% subsidy on a standard household refuse and sewerage tariff per month. Basic charges in respect of these services will also be exempted.
Households with a combined household income of less than R5 000 per month will qualify for the subsidy.
In addition, households with a municipal property valuation of R350 000 or less will be exempted from the payment of assessment rates.
Tough decisions
He said operational revenue is budgeted to grow with 7,18% and tariff decisions were extremely difficult to make in the current economic environment.
"The draft budget tabled here today was again compiled under challenging circumstances as we are expected to improve the livelihood of our communities against the backdrop of a looming economic crisis that was brought about as a result of a combination of the energy crisis, the dragged-out war in the Ukraine, the conflict in the Middle East and the rising cost of commodities, the cost of living and a continued increase in unemployment and poverty," he said.
"We are indeed proud of the first clean audit that the municipality has obtained in eight years, and I have to express my sincere appreciation to all that were involved in this achievement.
“Economic growth forecasts for 2024 remain bleak and National Treasury has forecasted an average GDP growth of 1,6% over the next two financial years. These targets currently seem unachievable as they are based on a reduction in the frequency of power cuts and lower inflation which appear to be very optimistic.”
The numbers
"The continued increase in the price of electricity remain a huge concern and Nersa has confirmed that the Eskom increase to municipalities will be 12,72%, which is resulting in the tariff increase of 10,92 percent to the end user.
"To ensure the financial viability of the services rendered, proposed tariff increases vary between 6% and 7,5%.
"Employee-related cost absorbs R369m or 38,1% of the budget, electricity purchases from Eskom amount to R232m or 23,9% of the budget, debt impairment and depreciation charges combined amount to R59m or 6,1% of the budget.
“Contracted services amount to R104m or 10,7% of the budget and other operational expenditure items amount to R91,7m or 9,45% of the budget. The operational budget increases with 7,17% when compared to the 2023/2024 final budget allocation.
"The struggling economy and associated economic performance has led to grant funding to municipalities diminishing and is therefore causing the municipality to absorb the cost associated with projects and programme that were supposed to be funded from either national or provincial allocations. The municipality is therefore put further under pressure to deliver on unfunded and underfunded mandates."