The Lekwa Municipality recently approved an unfunded budget. An unfunded budget means a municipality’s expenditure commitments exceed its credibly available revenue.
Residents should brace themselves for tariff increases, with an average increase of 5% for basic charges and 15% on electricity, depending on approval from Nersa.
DA councillor Alberto Franco commented during the past week that any business running an overdraft or servicing loans is on an unfunded budget.
“It is not ideal to approve such a budget, but this is a reality that Lekwa is dealing with,” Franco said.
“The DA is not happy with it.”
According to the councillor, the revenue enhancement processes and reevaluation of the billing system will continue.
“We will follow the directives from the national treasury.”
Freedom Front Plus councillor Wilma Venter, agreed with Franco that the budget was not ideal and added it is a reality the municipality will face for many years to come.
“Management should develop a catch-up plan to improve the implementation of the financial recovery plan,” Venter said.
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“They should take serious action to eliminate distribution losses caused by electricity theft and water leaks. The municipality has to rectify inaccurate billing and focus on revenue enhancement.”
She also said all outstanding money owed to Lekwa should be collected without fear or favour.
“Residents who qualify for an indigent grant should be registered.”
The business community and residents will need to know the figures on property rates. The proposed assessment of the municipality must be aligned to Section 8 of the Amended Municipal Properties Rates Act of 2014. It takes in account the 2021/2022 to 2025/2026 financial years.
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Assessment rates began with a 5.205% increase in 2021/2022 and is projected at 5.2%, 5.3%, 4.9% and 4.9% over the next financial years.
The above includes residential properties, business and commercial properties, agricultural properties, industrial properties, and vacant land.
According to the documents in possession of the Standerton Advertiser, all services are VAT exclusive.
Tariff increases for 2023 include:
• Electricity 15%
• Water 5%
• Refuse removal 5%
• Sewage 5%
• Miscellaneous tariffs of about 11%
• Property rates are about 5%
Increases are below the inflation rate, which stands at an average of 6.8%.
