Increase in tariffs on the cards for Polokwane residents
The municipality recognised that continuous high tariff increases are not sustainable as there will be a point where services will no longer be affordable.
POLOKWANE – The Polokwane Municipality’s draft budget for the 2024/25 financial year starting on July 1, paints a picture of increased tariffs and no relief for residents and consumers.
The figures released during the current IDP/budget consultation process that is currently in progress, indicate that the tariff for services other than electricity and water will increase by 6% which is CPI plus 1,1%.
Water tariffs will increase by 9% which follows a tariff increase by Lepelle Northern Water (LNW).
Electricity tariffs will increase by 13%, subject to energy regulator Nersa finalising the process before the end of this month. Assessment rates will increase by 3% but the material effect on property owners will be rather higher due to the new valuation roll that is in process.
The total draft budget for the 2024/25 financial year is R5.914b, made up of an operating budget of R5.1b and a capital budget of R814m.
The presentation that was delivered by municipal manager Thuso Nemugumoni during the first public participation meetings, indicated that the main challenges experienced during the compilation of the draft budget were ongoing difficulties in the national and local economy and the increased cost of bulk water and electricity due to tariff increases from LNW and Eskom, which place upward pressure on service tariffs to residents.
The municipality recognised that continuous high tariff increases are not sustainable as there will be a point where services will no longer be affordable. Huge backlogs in service delivery projects and further demands due to urbanisation and the economic slowdown and unemployment will impact on collection rates. Limited available own funding to fund much-needed infrastructure was also identified as a material factor.
In order to mitigate the challenges, the municipality intends to maximise revenue at realistic collection rates and prioritisation of adequate allocation of resources to electricity, water and sanitation, waste and roads projects for capital and operational needs.
Cost optimisation measures, especially in contracted services and overtime, will be implemented and the municipality will, in consideration of the state of the consumer, determine tariff increases while at the same time not compromise financial viability. The municipality will ensure value for providing free basic services to all households and prioritise the filling of critical positions, especially linked to the delivery of basic services.
Finally, the local authority will strive to reduce and limit overall expenditure to offset the impact of load shedding and the resultant poor economic consumer environment and the building-up of cash flow reserves to improve the cash coverage ratios in line with National Treasury norms and standards, while resources will be directed towards revenue generation projects and the maintaining of hefty penalties for businesses and residential consumers who breach or illegally connect meters.
Residents are still able to give their input into the draft IDP and budget and the next round of the public participation process for the city cluster (wards 19, 20, 21, 22, 23 and 39) will take place at the Jack Botes Hall tonight (Thursday) at 18:00.
