Big hikes in PMB tariffs

2010-07-01 00:00

THE Msunduzi council has ratified the city’s proposed budget, which includes above-inflation hikes on all services.

Mayor Mike Tarr said that while the municipality is increasing the electricity tariff by 21% from today, Eskom had increased its bulk electricity tariffs by 25% on April 1.

“A new structure for tariffs will be implemented and special customer tariffs will be phased out over a three-year period,” he said.

Tarr said that although the average rates increase is eight percent, the increase in the randage rate will be 28% because there was no randage increase in the previous financial year.

“This oversight has now created a bigger problem because the budgeted shortfall is close to R500 million.

“In the next three years, the increases will have to be in the same order to at least start to cover for the shortfall.”

Tarr said that with property rates increases of 28% in mind, they also have to implement the Municipal Property Rates Act fully, something the council had failed to do in the last year.

“This effect is now fully visible in the rates for domestic customers. The lower-value houses will pay less than in the current year and the higher-value houses will pay more than the average increase of eight percent,” he said.

For example, Tarr said, a property valued at R1 million will attract a rates increase of 9,26% (R7 600); a property of R1,5 million will face a property rates increase of 14,95% (R11 400); and a property valuation of R2 million will lead to a rates increase of 17,79% (R15 200).

Indigent users will have to apply for the lifeline tariff for small users.

With this tariff, the first 50kWh of electricity is free, as is the first six kilolitres of water.

Tarr said that only consumers who use six kilolitres of water or less will get it free of charge.

Householders who use seven kilolitres, for instance, will pay for the full amount used and not just for the additional one kilolitre.

Indigent users will also qualify for a 50% rebate on sewerage and refuse charges.

“Where the municipality is not distributing electricity [as in some of the townships], water will be used as the trigger for rebates on sewer and refuse charges in the cases where six kilolitres or less is being consumed,” he said.

Tarr said the municipality’s salary bill is likely to come down by five percent when the new internal structure is adopted in the second quarter of the year.

While the Inkatha Freedom Party voted with the ANC for the adoption of the budget, the Democratic Alliance decided to object.

Said DA caucus whip Rodger Ashe, “Our major concern with this proposed budget is the property rates increase, which is 28% minus rebates and was previously stated as being an actual average overall increase of eight percent.”

Ashe said residents were misled, and “while the actual overall increase would be in the region of eight percent, the actual effect and the increased payment to be made by residential property owners varies considerably, and could in some cases be in excess of 20%”.

He said residents will be outraged by this and are “being made to pay for the indiscretions and bad governance during recent years, by the ANC”.

Council plan to cut waste: page 4

Electricity21%

Refuse removal 8%

Water8%

Sewerage charges8%

Other tariffs10%

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