WATCH: Ekurhuleni approves R60b budget, brace yourself for major tariff hikes

The City of Ekurhuleni (CoE) budget of over R60b 2024/25 was approved on June 14 during an extraordinary council meeting held at the Alberton Civic Centre.

This financial year’s R60b budget marks an increase of 9% from the previous financial year’s budget. It also includes a capital budget of R2.9b, reflecting a 5.4% increase.

The budget was initially tabled on May 31 and June 7 but sent back for further review after opposition parties rejected it in both sittings, preventing it from being adopted.

Again, during hours of deliberations on June 14, political parties expressed mixed reactions to the draft budget, with some opposition parties rejecting it again.

However, after the debates, the speaker of the council, Nthabiseng Tshivhenga, opened the floor for voting on the proposed budget. The majority of the councillors voted in favour of it.

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Tariff increases

The approved 2024/25 budget also comes with major tariff increases, including an electricity tariff increase that ranges between 11.02% and 12.74% for the various tariff categories; a 9% increase in water tariffs, a 4.9% increase in property rates; a 7% increase in sanitation; a 6% increase in refuse removal for domestic and business customers; burial and cemetery tariff increased by 4.9% for residents and 5.9% for non-residents; and the municipal bus services tariffs also increased by an average of 4.8%.

Rejections

The passing of the now revised budget did not come easy with opposition parties, which went through the draft line by line, weighing in with their comments and pointing out some ‘shortcomings’ in the budget.

The Freedom Front Plus had during the deliberations pointed out that with the current economic crisis, the city’s residents are struggling. The party requested to consider this when making tariff adjustments.

However, in its response, the city said tariff increases were determined by the applicable increase in their bulk, as proposed by bulk suppliers and internal services, with the CPI and an additional rate for maintenance and repairs and other costs to provide such services. An example of costs are staff costs, overtime, generators, and fuel.

The DA, among other things, proposed a zero increase in refuse removal and property rates and requested the city to consider increasing the municipal value of property value for assessment from R135 000 to R500 000 in line with the Deemed Indigent Policy.

Regarding the proposed zero increase on refuse removal, the city stated that was not possible, as the waste collection function of the CoE was unfunded. The city needs funds from the capital budget to replace the waste fleet, such as compactors.

The budget also includes social support for the indigent, pensioners and low-income people who qualify for assistance.

Free basic services to deemed and registered indigent households align with national legislation at 6kl for water and sanitation, and electricity at 50kWh per month.

The city pointed out that the current challenge with free basic water is that some indigent households exceed their free basic water. Past trends show that the cost of excess consumption is around R800m and R900m per annum, which puts a strain on the city’s constrained resources.

Mayor and MMC’s comments

Both Ekurhuleni mayor, Doctor Nkosindiphile Xhakaza, and MMC for Planning and Economic Development, Nomadlozi Nkosi, assigned to oversee the finance portfolio, welcomed the budget.

The caretaker MMC of finance, Nkosi, described the budget as a balanced budget of the people, said: “I am delighted that the council has finally managed to pass the budget after two consecutive meetings where the budget failed to go through. Today our councillors critiqued the budget, but they made sure it gets approved so that the city can continue to render services to its communities.

“We have gone through all the participation processes, including community participation, where communities give us an indication of their top five needs and priorities in their respective wards.

“Amid all the economic challenges, we will make every endeavour to attend to at least some priorities for the different wards,” said Nkosi.

Xhakaza shared Nkosi’s sentiments, saying: “I am delighted the collective wisdom of councillors has approved this budget.

“We want to thank all political parties represented in council for their efforts to ensure we finally approve the budget – so that when we start the new financial year on July 1, we have a service delivery that is funded.”

Xhakaza stated the approval of the budget will help to ensure the city continues to deliver service to its people.

The six key pillars announced in the SOCA are now integrated into the municipal plans. The designed programmes achieve their goals of ensuring the city becomes more responsive to delivering services with agility.

Responding to a question about the amendments made to the draft budget to ensure its approval, Xhakaza said: “Council had to emphasise how important it is to focus on revenue enhancement, and extensively dealing with issues of financial sustainability.

“These were important points because you would have noticed some pressures in delivering services. We think that by July we should be more robust in ensuring the revenue can carry all the service delivery imperatives.”

Six key pillars

During the State of the City Address, the mayor highlighted its Six Key Pillars to propel the city forward. They are:
• Provision of quality, equitable and sustainable services
• Repairs and maintenance of infrastructure
• Rebuilding of the fiscus
• Investment in critical infrastructure in partnership with the private sector
• Economic development focusing especially on the aerotropolis, SMMEs and job creation
• Good, ethical and effective governance.

Revenue enhancement plan

As part of the city’s ongoing efforts to improve its financial position, it introduced a Revenue Enhancement Plan.

This plan focuses on identifying revenue leakages, exploring new revenue opportunities, and implementing strategies to optimise revenue collection.

By successfully executing this plan, the city expects to significantly bolster its liquidity status and ensure the continued delivery of quality services to the residents of Ekurhuleni.

“We decided to appreciate the revenue challenges we face, hence we have elevated revenue enhancement.

“We do this because we understand for us to do our work and implement the IDPs as directed by our people, we need money,” concluded Xhakaza.

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