The middle class, lower middle class and vulnerable groups such as pensioners and single-parent households in Cape Town face poverty, should the proposed new rates and tariff increases be approved.
The draft budget for 2018/19 was presented at a public meeting in subcouncil 2 last Wednesday evening, to the consternation of many, who would have to pay between R500 and R1000 more come 1 July.
It is especially the exorbitant increase in water tariffs and a proposed new levy that threaten the economic survival of Cape Town households.
Proposed rates and tariff increases for 2018/19
•Rates 7.2%
•Electricity, an average increase of 8.14%
•Refuse 5.7%
•Water and sanitation, both 27%
Apart from the 27% increase in water and sanitation respectively, the City also introduced an additional fixed water charge.
This charge will cover the costs of the reticulation and is based on the connection size of the pipe to your system.
A pipe 15mm in diameter will carry a levy of R56, 20mm R100, 40mm R400, 80mm R1600 and so forth.
People living in housing complexes with shared water meters and connection pipes will be hardest hit, according to a TygerBurger source.
“These pipes are the largest and an average complex would pay about R10 000 for this levy, leaving individual unit owners with a levy as high as R400 per month, excluding the normal usage,” the source says.
Poor households and those with a property valued lower than R400 000 will not be affected by these fixed rates.
“Add to this the normal water and sanitation tariff, rates and electricity increase and you’re looking at a municipal account that could be anything between R400 and R1000 more for middle and lower middle class households,” the source says (see table alongside).
Rebates of between 50 and 100% will apply to indigent households and households where the property is valued below R400 000.
A resident who prefers not to be named says: “We are being taxed out of our properties. It is totally unfair.
“Many households just make it each month and will not be able to afford these rates. People will lose their homes. Others won’t be able to pay school fees or afford their monthly grocery bill any longer. Pensioners whose homes were paid up years ago, of which the values were inflated over recent years, won’t be able to pay their municipal accounts at all,” this source says.
“People simply do not have the disposable income to absorb these costs anymore. It portrays a very skew picture of reality.”
The City says the current water crisis is to blame for the proposed water tariff increase.
“There is a need to increase our water and sanitation tariffs substantially to enable us to continue supplying water and providing sanitation services,” says Xanthea Limberg, Mayco member for informal settlements, water and waste services and energy, in response to a TygerBurger media inquiry.
“The draft budget includes strict budget cuts and curtailment in an effort to help the City pay for the effects of the worst drought in recorded history. We need to emphasise that in terms of the municipal budget, we make no profit from water and sanitation services. The service must be self-funded, which means that all revenue is applied to covering expenditure. It is also important to understand that it costs us the same to supply water irrespective of how much or how little water has been used,” she says.
While our daily demand has reduced by around 40% in the past year, according to Limberg, costs have not.
“To be resilient to future droughts, our tariff structure requires greater income certainty and better diversification which is not based on volumetric usage alone. We are therefore proposing fixed delivery charges for water.
The revenue collected from the tariffs charged must cover the costs of providing the service. Due to the current drought and the associated restrictions we’ve seen a substantial drop in water sales. The average City consumption is down year-on-year from 900 million litres per day in February 2017 to just over 500 million litres per day, leading to a shortfall in revenue of nearly R2 billion.
“Further to this we are required to reduce our consumption to 450 million litres per day to adhere to the National Department of Water and Sanitation’s (DWS) prescripts requiring the City to cut water usage by 45%. This is also critical to ensure that we stretch our water supplies in light of the unpredictability of the rainfall.
“Furthermore, for the City to have a resilient, water-secure future, we need to invest in other water sources, such as groundwater abstraction and water re-use, so that we do not rely as much on rainfall.
“The cost of operations of water supply has also increased more than the tariff has over the past number of years.
“It is important to note that we’d like to move to a lower restriction level and thus a lower corresponding tariff as soon as we can. This is entirely dependent on adequate winter rainfall which would prompt the DWS to lower restrictions,” she concludes.
