BUDGET: Only water and electricity tariffs will increase

The City of Ekurhuleni has decided not to increase municipal tariffs that are within the control of the City, and relaxed credit control and debt management due to the unprecedented Covid-19 circumstances.

This was announced by the Member of the Mayoral Committee for Finance and Economic Development, Clr Nkosindiphile Xhakaza, who delivered the City’s 2020/21 budget at Germiston Council Chamber on Thursday morning.

However, water and electricity tariffs will increase as from July 1.

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Water tariff will increase by 15 per cent due to the water research levy, chemicals, cost of transporting water to households and energy costs, among others.

While the City will be purchasing electricity from Eskom at an 6.9 per cent increase, it will only pass on an increase of 6.23 per cent to the consumer. This means the City will absorb the difference.

We will continue to provide the first 6kl of water for free to all households with a property value of up to R750 000. We will give 100kWh of electricity to every household meeting the requirements of a consumption of 600kWh and below – which is Inclining Block Tariff (IBT) A.

— CITY OF EKURHULENI (@City_Ekurhuleni) June 25, 2020

The Covid-19 pandemic has created additional strain to strained municipal revenues. For instance, the City was forced to adjust the budget downwards from an approved MTREF Capex of R7.4 billion in the current financial year to R4.9 billion in the coming financial year – a move that has massive impact on the City’s infrastructure delivery programme.

“Despite our stretched finances, as a caring and responsive government, we have heeded the call. After carefully considering the dynamics and the resources at our disposal, we are proposing no increase of municipal tariffs that are within the control of the City,” said Xhakaza.

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Tariffs that are not to be increased are assessment rates; sundry; refuse removal; burial and cemetery; and municipal bus services.

This package will come at a cost of R956 million to the City.

We are suspending interest on current arrear debt accrued from 1 April 2020 for a period of six months;
There will be payment extensions;
Debt payment can be arranged;
There shall be no Pre-termination and final notice fees;#CoEbudget2020 #CoEWorks pic.twitter.com/kvflJee8Xm

— CITY OF EKURHULENI (@City_Ekurhuleni) June 25, 2020

The social package is set to increase by R300 million from R3.8 billion to R4.1 billion this financial year. This is in addition to the R956 million relief that comes with the new tariff structure.

“In the quest to bring dignity to our people and provide a better life for all, we will continue with the social package. It must be made clear that we do that because we understand that our people deserve a compassionate government now more than ever,” said Xhakaza.

The indigent relief breakdown is as follows:

• 100% rebate on assessment rates;

• Free refuse removal;

• First 100kWh of electricity per month is free.

This is more than the provision made by national government policy and the City will bear the costs of the difference.