The City of Johannesburg has tabled its draft Integrated Development Plan (IDP) and the Medium-Term Expenditure Framework Budget for public comment, with ratepayers expected to pay more in a number of areas.
The city’s mayoral committee member for Finance in the City of Johannesburg, Jolidee Matongo, said a big percentage of the city’s annual operational and capital expenditure is funded from property rates tax levied on domestic and commercial properties.
There are also service charges on electricity, water, sewerage and refuse. The city also earns interest from fines, forfeits and penalties. A marginal portion is earned from operating grants. To remain financial sustainable, tariff increases have to be considered.
“The city is not oblivious to the current economic environment, made worse by the current pandemic,” he said.
“We would have preferred to table a zero-increase in tariff proposals, but should we go this route, the City will place its own liquidity at risk. It is also important that we exercise financial prudency to meet service delivery imperatives expected by ratepayers and residents.”
Matongo said that residents can still give feedback in relation to tariff proposals in the reports.
“The post-tabling public consultation process, as stipulated by the Municipal Systems Act, will allow residents and stakeholders to comment on the draft budget and IDP within the next 30 days after the reports have served at Council. Stakeholders will be consulted through various engagement methods.
“We are determined to continue to improve the daily lived experience of our residents and that is why we need residents to give us inputs on the draft budget and IDP.”
All energy charges (c/kWh) across all customer categories are proposed to be increased by 14.59% except for the following customer categories which will be subjected to varied increases to energy charges:
- Conventional business;
- Large Power User Time of Use (LPU TOU);
- Residential Prepaid.
The city plans to limit the increase to conventional business customers’ energy charges (c/kWh) to 10.19% to gradually align to NERSA benchmark tariffs, and to increase the energy charges applicable to LPU TOU customers by 18.59% to achieve greater alignment between this category and the LPU demand category.
It is also proposed for residential and business prepaid customers to start making appropriate contribution to the cost of operating and maintaining the City Power electricity distribution network to be available on demand.
This will include a capacity charge of R200 for residential customers and a R400 for business prepaid customers. It is envisaged that the customer categories will fully align to respective comparative tariffs over a three-year tariff journey, the city said.
The proposed tariff increase for the 2021/22 financial year applicable to the various tariff bands is as follows:
- The first 6 kilolitres will be provided free for residential customers;
- Residential post-paid and prepaid water revenue to be increased on average by 6.8%;
- Residential post-paid and prepaid sanitation tariffs to be increased on average by 6.8%;
- Institutional tariffs to be increased by 8.9% for consumption up to 200Kl and consumption exceeding 200kl by 11.9% to narrow the gap compared to commercial tariff;
- Industrial/Commercial tariffs to be increased by 6.8%;
- Demand Levy to be increased by 6.8%;
- All other tariffs to be increased by an average of 6.8%.