The proposed tariff increases in KwaDukuza municipality’s consolidated draft budget for the coming financial year tabled last Tuesday at a virtual council meeting has been met with heavy criticism from opposition parties who say it will be a burden on consumers already struggling from the Covid-19 pandemic.
The R2 billion proposed budget consists of a R217 278 559 capital and R1 875 785 000 operating budget. It is set to be passed next month and is likely to take effect at the start of the new 2020/21 financial year in July.
The public and interest groups have been given only 14 days to comment before the budget is adopted by council on June 25.
According to KDM the draft budget should be available online but was not available by Tuesday.
The proposed increases effective from July 1 are:
• Rates up 6 percent
• Sewer and refuse up 4 percent
• Electricity up 6.9 percent
• Water up 9 percent
The electricity and water increases have been passed on from the National Energy Regulator of SA (Nersa) on behalf of Eskom and the Umgeni Water Board, respectively.
The municipality’s projected 90% collection rate for municipal services has been deemed unrealistic under the current economic crisis.
Opposition councillors said non-payment of services by ratepayers would increase in the next few months as a result of households losing their income and jobs. Both the Democratic Alliance (DA) and Inkatha Freedom Party (IFP) questioned the intended tariff increases.
The municipality receives its major revenue from property rates and providing services such as electricity and refuse collection. Grants and subsidies from national and provincial treasury also form its revenue stream.
According to KDM the consumers’ ability to pay for their municipal services affects the municipality’s ability to meet budgeted revenue targets.
IFP councillor Moosa Motala said: “We believe that a zero percent increase can be achieved if the council and administration eliminates wasteful expenditure, addresses ineffective systems and processes, sticks to only the provision of essential services and reviews the need, frequency and levels of all other municipal services being rendered.
“We must stick with the basics, and the basics only, as our community cannot afford any tariff increases during these times. It cannot be that it is business as usual. We need to protect our households, all of them, because all of them are badly affected.
“Businesses are collapsing, with more to follow and those who manage to stay afloat may report losses for the foreseeable future, which means corporate income, will fall sharply.”
Cllr Motala said a collection rate of 60 percent would be more realistic and produce a credible budget, failing which the IFP would not support the proposed budget.
DA Caucus leader, Madhun Sobram Sing said his party did not support the draft budget, saying it was not realistic or credible in achieving its service delivery objectives and overall performance. Sing said residents would struggle to absorb the increases.
“We have a very depressed economy with rising unemployment figures. During good times the community religiously paid their dues every month while others benefited through indigent and credit control policies. A once-off relief or monthly relief for the financial year should be seriously considered by council.”
Another area of concern was that council had only budgeted a 10.9 percent increase for renewal of existing assets such as roads and electricity infrastructure, while 89.1 percent had been assigned to new assets.
“We call on council to slow new development and allocate adequate funds towards repairs and maintenance on existing infrastructure. We cannot wait for the infrastructure to collapse and then allocate funds as the balancing act,” said Sing.
In addition, the Dolphin Coast Residents and Ratepayers Association (Docrra) has declared a dispute on the KDM stakeholder engagement process.
In a letter last week to KDM municipal manager, Nhlanhla Mdakane, Docrra chairman Deon Viljoen said the municipality’s accelerated process for the required public participation and engagement process was unreasonable and impractical.
Viljoen said in terms of Chapter 4 of the Municipal Systems Act and Chapter 7 of the Constitution of South Africa, due process of engagement and participation had not been facilitated.
“The ability by the community to give fair and transparent input to the proposed document, still to be submitted, is unreasonable, not possible nor practical. In the absence of compliance with due process, we have advised council that we are in dispute with KDM on the proposed stakeholder engagement process.”
The ratepayers and residents organisation represents more than 5 000 households on the Dolphin Coast.
Resident can log onto kwadukuza.gov.za to review the draft budget and provide comments.
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