Tariffs increase

SECUNDA – Ratepayers should prepare themselves for municipal tariff increases from 1 July.

Water tariffs will be increased by 13,5 per cent and electricity by six per cent.

Ms Lindi Masina, executive mayor of the Govan Mbeki Municipality, delivered the 2015/16 financial year budget speech at a council meeting on Thursday, 28 May.

She said the municipality faces a serious financial challenge, which to a great extent, is caused by the culture of non-payment by consumers.

“The budget has been prepared with a vision of sustaining the financial capability of the municipality in the long term.”

The social package will be increased from R368.10 to R393.75 to cater for indigent and child headed households.

The threshold for free basic services, has increased to R3 000 per month.

“The increase in the package indicates the municipality’s commitment to protect the poor and to ensure that those who cannot afford to pay, are not burdened with unpaid accounts.”

The 2015/16 budget comprises of R1.6-billion for operating expenditure and R106-million for capital investment programmes.

“Municipal revenues and the cash flow are expected to remain under pressure as we still continue to have low income revenue collections with a continued increase in expenditure.

“A revenue enhancement strategy is in place as a turnaround plan.”

The operating budget has increased to R1.6-billion compared to the current adjusted budget of R1.5-billion.

An amount of R106,4-million have been allocated for the capital investment programme, and this is a decline from the R207-million budget for the 2013/14 financial year.

“The main reason for this, is the reduction in the MIG allocation for the year, as well as no allocation from the Department of Human Settlement.”

The property rates show an estimated revenue of R194-million.

The estimated forecast by 30 June 2014 was R163-million.

An amount of R25.1-million is budgeted for the income forgone in terms of rebates and discounts that are offered by the municipality for the indigents, pensioners and the areas where the municipality is not providing services.

Ms Masina said the average water loss is 20 per cent at this stage, because of theft and leakages as a result of old infrastructure.

She said the municipality expierences continuous loss of electricity and the average loss is 40 per cent overall.

“Although the municipality has intervention measures in place to prevent this loss, such steps only minimally reduced the theft.

“Various initiatives have been put in place through which electricity consumption should be managed, such as energy saving and the implementation of automated, split and smart meters.

“The municipality’s outstanding debtors are also on the increase.

A debt collection scheme was implemented where some of the credit control measures were relaxed in order to give relief to consumers.

The scheme is currently under review.

“The municipality will also consider implementing a policy to reward its loyal customers to ensure we have a constant cash flow.

“We are experiencing cash flow challenges as a result of non-payment by some consumers, losses of electricity and water.

“These cash flow constraints also resulted to the inability of the council to pay creditors as they fall due, particularly Eskom.

“A strategic plan has been drawn up to deal with this.

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