Pretoria’s rich to feel the pinch

Pretoria - Super-rich residents of Pretoria will feel the pinch of tariff increases included in mayor Kgosientso Ramokgopa’s budget speech for the 2016/17 fiscal year, delivered at a special council sitting on Friday.

“We remain unapologetic about the fact that poor households must have access to basic services, albeit through direct or indirect methods of subsidisation,” Ramokgopa told the council.

Ramokgopa presented the final budget speech of the current term with an expenditure plan of approximately R32.8 billion - an operational budget of R28.3bn and a capital budget of R4.5bn.

The capital investment will be approximately R12bn, which includes grant funding and borrowings in addition to the city’s own funding.

In addition, the capital investment represented an 11% increase in comparison to the 2015/16 financial year, he said.

“The juxtaposition of our investment choices against the spatial landscape boldly reflects our efforts to dismantle the structure of an inefficient city form into one that better reflects the elements of livability, resilience and efficiency,” he said.

Ramokgopa said the rich would be hit harder in the pocket than the poor when the proposed increases come into effect in July.

The sanitation tariff will rise by 12%, while residents will pay 10% more for refuse removal. The tariff for water will also escalate by 12% and electricity by an average of 9.5%. Property rates go up by 10% this year.

Ramokgopa said tariff increases were affected by a multitude of factors such as the impact of inflation.

He said increases in bulk purchase costs by the city from Rand Water and Eskom were among the reasons for the proposed hikes.

Ramokgopa said the purchase costs had increased beyond the inflation rate at 7.85% and 11.9% respectively.

Indigent households were exempted from paying for refuse removal or property rates, irrespective of the value of their property.

They receive a rebate of 100kWh of electricity and 12K of water. The city subsidised each indigent household per month by more than R560, thus equating to a total subsidy package of R849 million a year, said Ramokgopa.

Pensioners and people with physical and mental disabilities also qualified for rebates.

Ramokgopa used three scenarios to explain how residents would be affected by the proposed tariff structure.

He gave an example of a person living in a property valued at R300 000, consuming, on average, electricity of 350kWh and 20kâ„” of water a month.

The resident’s municipal bill would increase to R1 196.61 from R1 095. This would mean an approximate increase of 9.2% or R101.02 a month.

The second scenario involved a person whose property is valued at R700 000, consuming an average electricity of 850kWh and 30kâ„” of water each month.

The household’s average municipal bill would go up by R253.24 from R2 600.18.

For those with properties valued at R1m and who consumed an average of 1 500kWh of electricity and 50kâ„” of water a month, the total average municipal bill would rise from R4 365.37 to R4 796.96, an approximate increase of 9.9% or R431.58.

Ramokgopa said a Laudium resident living in a property valued at R530 000 and who consumed, on average, electricity of 380kWh and 14k of water per month, was currently paying an average of R1 349.78 in municipal bills.

“The resident will now receive a total municipal account of R1 475.48, which represents an average increase of 9.3% or R125.70.”

A Karenpark resident with a property value of R775 000, who consumed average electricity of 298kWh and 10k of water a month, would see an average increase of R127.75 from R1 354.22.

“Waste removal service tariffs based on the collection of waste of a 240” bin will increase from R214.88 to R236.36, representative of a R21.48 increase in all scenarios, Ramokgopa said.

The cost of an 85” bin would increase from R76.10 to R83.71 representing an increase of R7.61.

“In terms of total operating expenditure, we have spent R73.9bn the past three years, and in the next Medium Term Revenue and Expenditure Framework, the city’s operating expenditure is projected to be R90.5bn,”he said.

Political parties will debate the budget during another special council sitting on Monday.

R117m: Allocation towards health and social development initiatives, which includes the upgrading of clinic dispensaries.

R100m: To be invested in TshWi-Fi.

R210m: Allocation for new energy bulk infrastructure and electrification connections.

R1.5bn: For water infrastructure.

R50m: Construction of the Business Process Outsourcing Park in Hammanskraal.

R22.3m: Development of a brick-making facility, inner city informal trading market and a packaging facility.

R168m: Expanded Public Works Programme.

R52.9m: Tshepo 10 000 programme co-operatives.

R50m: Tswa Daar, the anti-drug and substance awareness campaign.

R304m: Re Aga Tshwane programme.

R90m: For combating illegal actions such as land invasions.