BCC proposes 416% rates hike

THE Bulawayo City Council has proposed a second supplementary budget with an increase in rates of 416 percent while it pushes for the approval of the first supplementary budget, which sought to increase the rates by 42 percent.

The local authority proposed to increase rates by 42 percent in May after residents rejected a 56 percent increment to finance its supplementary budget.

BCC argued that it was in a crisis and was failing to provide services while residents and the business community said they were already struggling to pay their bills at the current rates.

Speaking during a meeting with the local business community for the 2020 budget consultations, which started on Sunday, acting deputy finance director Mr Tennyson Mpunzi said the 416 percent proposed increase was in line with the prevailing economic situation.

“We’ve proposed increases from 42 percent to 416 percent and that puts our budget at $378 million in terms of revenue budget and the capital budget is $300 million. This talks to what is prevailing on the ground but we’re guided by certain factors which include the exchange rate movement, forex shortage and that fact that council is a price taker. “Each time our suppliers increase costs we’re forced to pass on the increases to the consumers. It’s unfortunate,” said Mr Mpunzi.

He said the council has lost $32 million due to the delay in the approval of the first supplementary budget, adding that if the increases are not implemented, the supply of quality services would continue to be compromised.

“The Town Clerk is in Harare and hopefully he’ll meet the Minister of Local Government, Public Works and National Housing July Moyo over the issue. Before he left he assured us that he’ll make sure that the budget is approved so that we can implement the supplementary budget.

“It’s true that these other percentages should sit on the initial approval of 42 percent but because of the delay we’ve lost $32 million but we’re hopeful that next week we’ll be in a position to talk with confidence that the 42 percent supplementary budget will be implemented by the first week of September,” said Mr Mpunzi.

He said it was clear that the business community was also struggling but the council had no other choice apart from passing the burden to its customers.

“The percentages are on the high side, but as council, it’s our role, function and mandate to provide a conducive environment and it comes with adequate services.

“For us to be efficient we should have money. We’re talking of water supply, solid waste management, provision of health services and other critical services. Without money we can’t provide these services. We understand that most businesses are not operating at 100 percent but we’re hopeful that the economy we’ll improve and they will be able to catch up,” said Mr Mpunzi.

The business community, he added, owes the city council $71 million and it’s divided between industry and commerce.

“Industry owes the council about $41 million and the commercial sector owes $30 million. We understand that they’re struggling but the council continues to provide the services despite the challenges. They’re enjoying our services before paying. Maybe we should adopt the prepayment system so that consumers access the services after paying for them,” said Mr Mpunzi.

The business community expressed reservations on the proposed increases, saying they were not realistic considering that people’s salaries were yet to be increased in line with the exchange rate, while others were already struggling to pay the current rates due to the economic situation.

Last week, some councillors suggested a second supplementary budget to increase rates by up to 1 000 percent arguing that the city was in a crisis.

However, Bulawayo Mayor Councillor Solomom Mguni last week said for effective service delivery, council should embrace international best practices of commercialising some of its entities instead of solely depending on residents’ rates payments to fund its projects.

He said it was prudent for the city council to devise new revenue streams. His sentiments are in sync with calls from Bulawayo residents who have consistently urged council to come up with alternative ways of generating revenue. — @pamelashumba1