DURBAN – eThekwini Municipality’s R41.6bn draft budget for 2016/2017 has proposed tariff increases that will hit the pockets of already cash-strapped local consumers.
Unpacking the draft budget at the Moses Mabhida Stadium on Thursday, eThekwini’s head of expenditure, Sandile Mnguni, said rates would increase by 6.9 percent, domestic water by 12.5 percent, business water by 15.9 percent, electricity by 7.64 percent, sanitation by 9.9 percent and refuse removal by 7.9 percent.
He said the top five items in terms of budget expenses were bulk purchases (31.3 percent), salaries and allowances (27 percent), repairs and maintenance (9.8 percent), depreciation (5.7 percent) and interest on loans (2.9 percent).
He said there were numerous challenges that the city had to take into account when drafting the budget, including protests, drought, the current economic climate, infrastructure and service delivery backlogs, the costs of bulk purchases, return on investments, theft of water and electricity and others.
Mnguni said indigent and low income households would continue to receive relief, with pensioners, child-headed households, disability grantees and the medically boarded being exempt from paying rates on the first R460,000 of their property value.
“Residential properties valued up to R185,000 will be exempt from paying rates. All other properties valued above R185,000, the first R120,000 [will see] no rates charged.”
Households with property values under R250,000 would receive their first nine kilolitres of water free, while the first 50kwh of electricity would be free for residents using less than 150kwh per month in Eskom reticulated areas.
In areas using eThekwini reticulation, the first 65kwh of electricity would be free for residents using less than 150kwh per month.
The first 9kl of effluent disposal is exempt for all properties with values under R250,000. In addition, a free basic service is also available to indigent consumer units with VIP’s, urine diversion toilets and in informal settlements serviced by means of a toilet or ablution block within 200m.
Residential property valued up to R250,000 was exempt from the domestic refuse removal tariff. A free basic refuse removal service is also available to indigent consumer units living in rural, informal settlements and non-kerbside residents.
Mnguni said that increases in water and electricity bulk purchases were “beyond the control of the municipality” and were attributed to the National Energy Regulator of South Africa (Nersa) approving an increase of 9.4 percent for Eskom, while the Umgeni Water Board approved an increase of 11.5 percent.
He said that the city had to ensure sustainable revenue streams from revenue generating services.
The budget consists of a R34.9bn operational budget and R6.7bn capital budget. About R22.1bn of the operational budget will be spent on maintaining existing infrastructure, electricity, water and sanitation provision as well as refuse removal for more residents.
When tabling the budget last month, eThekwini mayor James Nxumalo said the budget supported government’s commitment to broadening service delivery, attracting investors and expanding investments in infrastructure, while taking into account the constrained fiscal environment.
“Despite the tough economic times we are currently faced with, we are determined enough to manage and overcome our economic challenges if we act together as public representatives, civil servants, business people, youth, workers and residents,” said Nxumalo.
Nxumalo added: “It is our responsibility to manage finances in a prudent and sustainable way, empower our people, accelerate service delivery, assist the needy and provide interventions to the challenges faced by our communities.
“It is a pro-poor budget and is focused on alleviating poverty and social imbalances through job creation, youth development and advancing the economy by creating an enabling platform for business to flourish,” said Nxumalo.
He urged all residents and stakeholders to give input on the budget before it is adopted at the end of May. Budget consultation hearings will take place across the municipality from 18 April to 7 May.