City of Cape Town says rates and tariffs increases ‘conservative’

The City of Cape Town has called its 2020/2021 rates and tariff increase “conservative”, although it said it would have preferred none at all, owing to the economic impact of Covid-19.

Rates have increased by 4%, electricity by 4.8%, water and sanitation by 4.5%, and refuse removal by 3.5%.

Chief financial officer Kevin Jacoby said in a statement on Wednesday that the latest increase was the lowest for a metro in the country, as far as the City was aware.

He said the cost of providing services outpaced the income it received from rates and tariffs.

“The City has experienced increases in its input costs across the board, such as from Eskom for the bulk electricity that the City onsells to its customers. Some 65% of the income from the electricity tariff goes to buying electricity from Eskom,” Jacoby said.

“We have therefore managed to keep increases conservative by cutting costs and expenditure where possible and changing programmes and plans while at the same time, safeguarding service provision at the highest levels.

“All income received from rates and tariffs is used for the provision of basic services, which is our main mandate as a municipality. We do not budget for a profit on this income.”

The impact of the pandemic on the municipality, to date and projected, was about R5.7 billion, he said.

Xolani Sotashe, leader of the official opposition in the City of Cape Town, said ratepayers would only see the impact after next year’s municipal elections.

“People think this is generous. But come 2021 and 2022, then they will feel it,” he said.

“They are dangling a carrot. This is an electioneering budget.”

Meanwhile, Jacoby said the City made R3.3 billion available for rates and services assistance in the new financial year.

“Those severely impacted financially by Covid-19 can contact the City to find out more about the relief options available,” Jacoby said.

“Interest-free payment arrangements are available for those who qualify.”

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