‘Water tariff too high’

2013-09-06 00:00

UMGUNGUNGNDLOVU District Municipality (UMDM) stands accused of miscalculating water tariff increases and misleading residents in six municipalities into believing that they would face increases of no more than 11%. Residents, however, claim their latest accounts reflect water tariff hikes of between 16% and 295%.

Calculations have been carried out by different organisations including the DA, the Umgeni Residents/Ratepayers Association (URA) as well as residents in Mooi River, who have all independently come to the conclusion that the municipality’s calculations are incorrect.

DA finance spokesperson in the district, Mike Bond, said his party is on record warning the administration that the calculations were wrong. “At a joint executive committee and finance meeting councillor Rodger Ashe challenged the actual percentage increases, saying that it was incorrect,” said Bond.

He added that he was fielding complaints daily from residents in Impendle, Mooi River, uMngeni, uMshwathi, Richmond and Mkhambathini. All of them cannot believe how their water accounts have sky rocketed, as they were expecting increases of no more than 11%.

Rorie Anderson and Tim Lindsay-White of URA have done extensive research on the problem. In a statement issued to The Witness they say: “Analysis of new and old accounts reveals that the hardest hit are the lower volume users, from one to six kilolitres (kl), who are expected to pay from 55% to 295% more, due to the imposition of a basic tariff. The majority of users, meanwhile, fall within the 40-60% increase range.

“The fact that the most frugal and most vulnerable users have been targeted with the highest percentage increases indicates an unsettling lack of consideration or research in arriving at the new tariff levels. Naïve mathematics may be at fault, however, resulting in not only false comparisons between the new and old tariffs, but in an economically immoral and unsound financial model,” the URA statement said.

According to Anderson and Lindsay-White, the previous tariff bands of 7-15 kl (R8,38 excl. per kl) and 16-25 kl (R9,12 excl. per kl) were erroneously added to form a comparative previous tariff of R17,50 p/kl, implying a reduction of about 30% instead of increases up to 48%. Likewise, in comparing the higher tariff band for 61 kl and above, all the lower bands were added together to create a prior band of R32,99 p/kl (instead of R9,76), against a new tariff of R21,37, implying a reduction of 35%, instead of an increase of 119%.

They added that the problem was further compounded by tariff bands being merged at higher tariffs, the imposition of VAT not having been declared on the tariff card, and prior consumption on the old tariff (meters read three months ago) being charged at the new exorbitant tariffs. “Unless corrected, the new tariff structure will bring in a multi-million rand windfall each month to the district municipality, whilst helping to unfairly impoverish its paying citizens and undermine its local economy,” the URA said.

Bond said that the DA had pushed for the tariff increase to be eight percent, which was in line with the hike set by water authority Umgeni Water. He added that in light of the arithmetic error in the calculations of the tariff increases, his party would push for corrections to be made during the mid-term budget review, expected to take place in December.

The municipality’s response

Umgungundlovu District municipal manager Sibusiso Khuzwayo responds to the allegations that the municipality’s calculations are incorrect.

Khuzwayo said:

On 1 July 2013, uMgungundlovu District Municipality implemented the approved tariffs structure, after a series of public engagement [meetings]. This follows a directive from National Treasury that our tariff structure must be cost reflective.

It will take some time to charge tariffs that reflect the cost of production as we have an obligation to make tariffs affordable at the same time. It is a critical balancing act. The basic principle is that the higher the usage, the higher the tariff in an effort to promote water conservation and demand management.

Please find two scenarios with water and sanitation using both the new and old tariffs. The first band has a seven percent increase, which is what will encourage households not to exceed.

Anyone consuming in excess of the recommended consumption cannot claim to be poor and must pay according to higher tariffs.

There are no straight percentage increases after six kilolitres because the band structure has changed, which was communicated to the public through public meetings. Our tariffs are in line with the neighbouring WSA (Pietermaritzburg and Durban) and we are still affordable.

The effective increase for household consuming 30 kilolitres varies from 18% to 35% depending on whether there is sewer or not, so there is no fixed increase as the basis of calculation has changed drastically.

Some customers will see increases of seven percent, 18%, 35%, depending on the level of consumption.

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