Time for city residents to tighten belts

Rate-payers and consumers will pay 6% more on assessment rates and 10% more on municipal services such as water and sanitation, electricity and waste removal when the Polokwane Municipality’s 2016/17 financial year starts on 1 July.
This comes after the draft budget that was approved two months ago was subjected to a public participation process along with the Integrated Development Plan (IDP). Public consultations with stakeholders that included the business sector, municipal wards, traditional authorities and sector departments took place and the inputs were considered by the municipality before final approval by council last Thursday.
In the report that was tabled in council, it was stated that the increases were informed by the 9,47% increase in electricity bulk purchases that was approved by the National Energy Regulator of South Africa (Nersa), an increase of 6,6% on bulk water purchases in line with Lepelle Northern Water’s forecasts, the increase in the CPIX rate and a projected borrowing cost of 10,5% in the case of loans. The salaries and allowances of officials that were increased by 6% and that were in line with the National Treasury’s forecasts and the South African Local Government Association (Salga) bargaining agreement also influenced the tariff increases.
Tariffs for services that are billed, are determined by the operating costs of the schemes, such as salaries and administration and includes redemption of loans. Purchase of bulk supplies from external service providers forms a huge portion of the operational costs. Non self sufficient services such as libraries, swimming pools, the safety and security and transport services are mainly provided for from income derived from assessment rates.
Council also approved a capital budget amounting to R1 096 467 000 which will be funded from a Municipal Infrastructure Grant of R253 668 000 that forms part of the Division of Revenue Act (Dora) allocations to a total of R622 026 000, borrowings of R235 000 000 and own funds to the amount of R239 441 000.
A concerned resident told Polokwane Observer that the increases could not have come at a worse time. “Fuel prices went up yesterday (Wednesday) and some more are expected in the coming months. I don’t know how we are going to make ends meet, but we have no option,” the person said.

Story: BARRY VILJOEN
>>barryv.observer@gmail.com

Photo: Caiphus Mathiba, Speaker of the Polokwane Municipal Council, chairs a previous meeting of the council.