SECUNDA – Ratepayers should brace themselves for the new tariff increases coming into effect next month.
The tariffs for service charges have been increased as follows: water by eight per cent, electricity by seven per cent, refuse removal by more than five per cent, town cleansing by one per cent, landfill site rehabilitation by more than two per cent, sewer by eight per cent and miscellaneous by more than five per cent.
Mr Mandla Khayiyane, acting executive mayor of the Govan Mbeki Municipality, delivered the 2014/15 financial year budget during the council meeting in the Council Chambers on Friday, 30 May.
He said they will ensure that the poor are protected through the indigent support scheme as per the indigent policy and debt collection strategy.
The threshold for increasing free basic services has increased to R2 300 per month.
“The increase on the package indicates the municipality’s commitment to protect the poor and also to ensure that those who can not afford to pay, are not burdened with the unpaid accounts.”
The social package will be increased from R345 to R368 to cater for indigent and child headed households.
The budget comprises R1.8 billion for operating expenditure and R141 million for capital investment programmes.
The total operating income budget is R1.59 billion, resulting in an operating deficit of R141.9 million.
Mr Khayiyane said municipal revenues and cash flows are expected to remain under pressure as they still continue to have low income revenue collections with a continued increase in expenditure.
The operating budget deals with day to day operations of the municipality to ensure that service delivery is sustained.
The operating budget has increased to R1.8 billion compared to the current adjusted budget of more than R1.7 billion.
Mr Khayiyane said the trend is that the operating expenditure has been increasing over the years and is driven by salary increments, cost of bulk purchases, the need to adequately budget for debt impairment and depreciation and inflation.
He said an amount of R141.9 million has been allocated for the capital investment programme for the 2014/15 financial year.
“This is a decline from the R310 million budget for the 2013/14 financial year.
“The main reason for this is the reduction in the Municipal Infrastructure Grant allocation for the year as well as non exclusion of Social Labour Plan projects that are still in discussion.”
Mr Khayiyane said the municipality is experiencing a continuous loss of electricity.
The average loss is 40 per cent.
“Various initiatives have been put in place through which electricity consumption should be managed, such as energy saving and the implementation of automated meter readings.”
Mr Khayiyane said the average water loss is 20 per cent at this stage, because of theft and leakages as a result of old infrastructures.
He said a project to conserve water is underway in which Sasol and Rand Water are also taking part to curb these losses.
Mr Khayiyane said the municipality is experiencing an increase in outstanding debtors.
“A service provider has been appointed to collect outstanding debts and negotiation are still under way to finalise the service level agreement.
“The municipality will also consider implementing a policy to reward its loyal customers to ensure a constant cash flow.”
Mr Khayiyane said the municipality experiences a negative cash flow as a result of non-payment and losses of electricity and water.
He said the municipality received a qualified audit opinion mainly on asset management.
He said they are implementing the inclining block tariffs on electricity and water.
