The Msunduzi Municipality, which has slapped residents with an electricity tariff hike of over seven percent, is unsure if the increase will help improve the council’s finances.
According to budget documents tabled by Msunduzi Mayor, Mzi Thebolla during Monday’s full council meeting in the City Hall, electricity will increase by 7,4% in the 2022/23 financial year.
The increase will then drop to 4,4% in the next financial year.
The municipality had planned to increase electricity prices by 9,6% but revised the increase down to 7,4% after national treasury advised the local government to lower the amount.
The Msunduzi Municipality budget was tabled as residents are battling perennial water and electricity outages due to among other things, ageing infrastructure.
Thebolla, who unveiled the municipality’s R7,1 billion budget, said the bulk of the money will go towards the maintenance of the council’s infrastructure.
“Aligned to the priority being given to preserving and maintaining the city’s current infrastructure, the 2022/23 budget and MTREF (Medium Term Revenue and Expenditure Framework) provide for extensive growth in the area asset maintenance, as informed by the asset renewal strategy and repairs and maintenance plan of the city. The provision for repairs and maintenance as a percentage of property and equipment is seven percent for 2022/23,” he said.
To create jobs while at the same time attending to the needs of the municipality’s poor population, the council has allocated R93,7 million to housing.
Msunduzi generates the bulk of its revenue (80%) from rates and services.
In its 2022/23 budget, the municipality announced a property rate increase of eight percent while hiking the water and refuse tariffs by 6% and 5,8% respectively.
Thebolla said the six percent water tariff increase was imposed on the municipality. “Many of the inputs that we received indicated people were not happy with the proposed increase and we understand their frustration. But this tariff hike is passed to us by the bulk supplier, there is no municipal markup,” Thebolla said.
Despite the steep increase in rates and tariffs, Thebolla could not give a guarantee that the municipality’s finances will improve in the next financial year.
“Taking into account the MFMA (Municipal Finance Management Act) provision that the budget must be funded from realistically anticipated revenue, the municipality opted to use the current revenue base for the purposes of the MTREF. A budget adjustment will be done in future when such a growth in the revenue base materialises,” he said.
While the ANC Msunduzi Caucus welcomed mayor Thebolla’s budget, opposition parties poked holes it.
DA Msunduzi caucus leader, Ross Strachan, said the budget was based on unsustainable revenue sources.
“The less than 40% contributing rate base cannot be the sole carrier of this municipality’s purse, there cannot be two separate rules for two different groups of people. We need to implement our laws without fear or favour.
“Priority must be at the forefront and core functions of basic services must be the bedrock of this municipality. This is to ensure our foundation can hold and unlock our future potential,” he said.
The ACDP said the municipality should jack up its debt collection systems instead of overburdening ratepayers.
“The proposed tariffs are simply unaffordable. The governing party has missed the perfect opportunity to say to the ratepayers, who pay our salaries, we will govern properly our tariffs will be in line with inflation,” ACDP councillor, Rienus Niemand, said.
Property Rates 8%