Residents should brace themselves for higher City of Johannesburg tariffs as the draft budget is open for public comment and scrutiny, says Dr Kenneth Creamer of the School of Economics and Finance at Wits University.
“The draft budget indicates that residents will be required to pay higher-than-inflation increases for electricity, water, and sewage services in the next financial year. The increase for refuse collection is expected to be generally in line with current inflation.”
Ward 117 councillor Tim Truluck is also the DA’s Portfolio Leader on the Oversight Committee of the Legislature and hopes to encourage residents to have their say on the newly released draft City of Johannesburg budget.
The draft budget is open for public scrutiny, and he hopes people will engage with it and the Integrated Development Plan (IDP) public processes.
“This happens every year, and to be honest, most of the comments are never acted on. But sometimes they are listened to, and changes are made. I’s like winning the lottery – if you don’t buy a ticket, you will never win.
“For those of you who are unhappy with the tariff increases, then get reading, writing and attend IDP meetings.
“The coming changes in pre-paid meter charges; sewer charges based on property size instead of water usage; increasing property rates on educational institutions; the fact that Region B has the lowest capital project spend; incredibly low amounts spent on new and old infrastructure, are some of the issues worth considering.
“I know it’s a big schlepp and is boring, but it is an important exercise. The window for public comment ends on April 20.”
Creamer says electricity prices are driven by a nationally determined process through the National Energy Regulator of South Africa (Nersa).
“For several years Nersa pushed back against electricity increases motivated by Eskom to the extent that Eskom successfully took Nersa to court to challenge its tariff determinations. Eskom argued that a significant reason for its ballooning debt was because of non-cost-reflective electricity tariffs. The situation was clearly made worse by corruption and the fact that Eskom’s costs in building new power stations ran significantly over budget.”
He says as more and more companies and households instal rooftop solar power solutions, to counter load-shedding, this puts additional financial strain on the city.
“It is vitally important that the City of Johannesburg (CoJ) does not fall behind other cities in adjusting to these changes in the electricity sector. This should include the city developing its own renewable energy generation capacity, as well as the modernisation of the city’s distribution and metering systems.
“As with electricity, road and water infrastructure is rapidly deteriorating and as the city faces a budget squeeze it is going to have to find ways to invest more in improved infrastructure maintenance and development.”
He says a key objective should be to cut wasteful spending to re-prioritise capital spending on the city’s infrastructure. “An effective billing system will also continue to be crucial as it is reported the CoJ draft budget plans to see revenue increasing by 7% in the next financial year, as compared to a planned 6,5% increase in spending levels.
Truluck gave this overview of the budget and what will be spent on each category by the city in 2024/25.
“Budgets are usually presented by how many millions or billions of rand have been allocated to this and that. But what if it is boiled down to how much is spent of each rand on the different expenses, capital allocations, repairs, and maintenance? Below is the breakdown.”
Operational Expenditure (91.0 cents)
This is what the city must pay to keep it going:
- Salaries: 24.7 cents
- Buying electricity: 18.9 cents
- Loss on electricity: 9.4 cents
- Contractors: 9.3 cents
- Operational costs: 8.2 cents
- Buying water: 7.7 cents
- Depreciation: 6.3 cents
- Interest: 3.1 cents
- Other losses: 3.4 cents.
Capital Expenditure (9.0 cents)
- This is new stuff, not repairs and maintenance:
- Roads and stormwater: 1.7 cents
- Power: 1.4 cents
- Water: 1.1 cents
- Sewers: 0.4 cents
- Solid waste: 0.3 cents
- Housing: 1.2 cents
- Computer equipment: 0.7 cents
- Sports and community: 0.6 cents
- Machinery: 0.5 cents
- Transport: 0.5 cents
- Licences and rights: 0.3 cents
- Other expenses: 0.3 cents.
Repairs and maintenance
This is not specifically listed in the budget but is buried in the various operational line items listed above. If you extract and group them, then this is what the city will spend on each group per rand spent.
- Electricity: 1.69 cents
- Buildings: 1.59 cents
- Water: 1.39 cents
- Roads: 1.00 cent
- Sports and community: 0.39 cents
- Sanitation: 0.38 cents
- Computer equipment: 0.34 cents
- Transport: 0.27 cents
- Housing: 0.14 cents
- Communication: 0.13 cents
- Machinery: 0.11 cents
- Waste: 0.02 cents
- Other: 0.03 cents.
There are three ways to get involved:
1. Go to a meeting
In Region B, Wednesday, April 10 from 15:00 – 17:00 at the Danie van Zyl Recreation Centre in Claremont near Sophiatown.
The meeting will be on MS Teams also, but there are often glitches: Click here to join the meeting
2. Submit your comments online: Click here
3. Email your comments to idpcomments2024@joburg.org.za and ratescomments2024@joburg.org.za
Related article: How the IDP, budget and tariffs will affect you
