Tariff increases are again on the horizon for residents of Krugersdorp and surrounds as the Mogale City Local Municipality (MCLM) tabled its tariff budget proposal for the 2021/ 2022 to 2022/ 2023 term in late March.
During an online Microsoft Teams meeting, the municipality tabled a summary of the proposal and opened the proverbial floor to councillors to voice their concerns and opinions.
There will be opportunities to adapt this draft budget before it’s ultimately approved in May, adopted in June and come into effect on 1 July 2021. The new tariffs will reflect on the consumer accounts for August, explained Tyrone Gray, Democratic Alliance (DA) Krugersdorp’s Chief Whip.
Of most importance to residents are the following proposed tariff changes:
• 15,6 percent increase in electricity tariffs (following 2020’s increase of 6,22 percent)
• 5,8 percent increase in water tariffs for both residential and business consumers (following 2020’s increase of 6,6 percent). Registered indigents will still receive 6kl free of charge
• 5,8 percent increase in sanitation tariffs (following 2020’s increase of 6,6 percent). Registered indigents will receive free sanitation services
• 3,9 percent increase in refuse/ solid waste removal tariffs and landfill site fees (following 2020’s increase of 6 percent)
• 3,9 percent increase in various other tariffs (following 2020’s increase of 6 percent)
• 3,9 percent increase in fines and penalties tariffs
• zero increase in property rates
• zero increase in cemetery tariffs
The MCLM pointed to the national economic contractions and an increased unemployment rate, saying that, “These economic challenges will continue to exert pressure on the MCLM’s revenue generation and collection levels. Therefore, it’s critical to be conservative for revenue projections.
The budget is projecting a collection of revenue from rates and services charges at 88 percent, increasing to 91 percent over the Medium Term Revenue and Expenditure Framework (MTREF),” as noted in the MCLM’s Tabled Budget report from Mayor Francis Makgatho.
“The MCLM is under pressure to generate revenue due to the economic landscape, the Covid-19 pandemic and an increase in key cost drivers to provide basic municipal services. Customers’ ability to pay services is declining, which results in less revenue collection.”
Councillor Tjaart Steenkamp of the Freedom Front Plus (FF+) Krugersdorp warned that, “Businesses in Mogale City that, to date, survived the Covid 19 pandemic should not expect tax relief from the municipality.
The municipality showed little sympathy with broken households and businesses with the announcement of increased tariffs on electricity, refuse removal, sanitation and water. The only silver lining is that property tax will remain unchanged.”
Tyrone Gray noted, on behalf of his caucus that, “The DA has successfully proposed an increase in the pensioners rebate on property tax to 100 percent for pensioners over 70 with a property value under R1 million, as per the draft budget tabled in council today (31 March 2021). After numerous petitions as well as escalating the matter to the Gauteng Provincial Legislature Petitions Committee, not only has the DA successfully championed the establishment of the local section 79 Petitions Committee, but the petition calling for the increase in the pensioners rebate from 40 percent has been fruitful and yielded results.”
The municipality explained that it faced various challenges in the compilation of the MTREF: Ongoing national and local economic difficulties; aging infrastructure; declining municipal cash position; increased cost of bulk water and electricity supply; load-shedding effects on businesses; wage increases for municipal workers; the need to fill critical vacancies; a larger organisational structure to meet growing service demands; and the affordability of its own capital projects.
The MCLM also noted that municipal expenditure on funded projects has increased by 115 percent (R21 million) to fund revenue-generating projects of about R11,6 million; Chamdor substation upgrade at R5 million; sewer pipeline network extensions and replacements at R7 million; R3 million on miniature substation spares and top transformers; acquisition of personal computers at R3,4 million; acquisition of an indigent management system at R2,5 million; procurement and implementation of an identity service engine at R2 million; and a telemetry system upgrade and refurbishment at R1,5 million.
Regarding expenditure, the report stated that the municipality’s operating revenue for 2021/ 2022 is budgeted at R3,3 billion, which amounts to a decrease of 2,5 percent (R82 billion) from the previous term. MCLM employee salaries were proposed to increase by 3,9 percent, but noted that an additional R141 million to fill vacancies is unreachable, and encourages departments to prioritise critical positions and freeze non-critical positions for the MTREF term. Also of note, the MCLM claimed that its allocation of unconditional grants from the National Treasury decreased by 8 percent (R40 million).
The MCLM proposed a decrease in expenditure of the following contracted services: security services at a decrease of R20 million, water tank rentals at R1,3 million, refuse removal at R5 million, waste water care repairs and maintenance at R10 million, with an increase for roads and storm water repairs and maintenance by R2 million.
