Mayco member for finance Ian Neilson yesterday admitted that the different levies are there to prop up the City’s coffers. Picture: Karen Sandison/African News Agency(ANA)
Mayco member for finance Ian Neilson yesterday admitted that the different levies are there to prop up the City’s coffers. Picture: Karen Sandison/African News Agency(ANA)

Cape Town ratepayers fume over City’s fixed levies on top of their usual bills

By Marvin Charles Time of article published Oct 28, 2020

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Cape Town - City of Cape Town ratepayers are fuming over the number of fixed levies they are paying in addition to their normal rates and services bill, accusing the DA-controlled City council of trying to circumvent steep rates and water increases to save face with voters.

Currently ratepayers are paying a levy for water, called a pipe levy, a prepaid electricity levy, and those with solar power, a small-scale embedded-generation (SSEG) tariff (for customers with grid-tied feed-in SSEG systems, such as solar PV) for what is essentially a free power source.

Deputy mayor and Mayco member for finance Ian Neilson on Tuesday admitted that the different levies are there to prop up the City’s coffers.

“What we saw particularly during the drought is that water consumption patterns have shifted; we love the fact the consumption patterns have shifted but we had to look at our tariff structure to see whether it is appropriate.

“We left our income streams at risk. If we didn’t have a fixed component then people would end up paying very little, even wealthy residents.”

Neilson said the fixed charges are for maintenance.

“The same for the electricity basic charge. What we have seen is a reduction in consumption. Our peak sales of electricity was in 2009 so for 11 years our electricity sales have dropped 1%-3% a year. And if we don’t have a fixed component, you are not sharing the cost among the consumers, and we are risking the income streams to keep it going,” said Neilson.

Last year. the City imposed the fixed basic (pipe levy) charge and electricity home-user charge. In July, hundreds of Capetonians rejected the City’s 4% rates and services increases which came into effect that month. This after 733 residents objected to the proposed increases during the public participation process of the City’s 2020/21 budget.

According to a report tabled at council, 27.15% of the comments received were objections to the increase of water and electricity tariffs.

In Goodwood, the ratepayers’ association said it had received a number of complaints from residents who were struggling to cope. Its chairperson, Faisal Petersen, said: “The City has used the height of our drought and load shedding to implement the ‘pipe levy’ and ‘basic charge’ for electricity.

“These were supposed to be a temporary solution to cover the costs of the City to put alternative measures in place. Now that load shedding has been suspended and the water restrictions lifted, the City should look at alleviating the financial burden on its ratepayers by removing these unnecessary levies imposed.”

Strandfontein Ratepayers and Residents Association chairperson Mario Oostendurp said: “We have been faced with increases and requested for arrears assistance, as many struggle to keep up with municipal payments. Residents who have gone off grid with water by installing a well point are still bound by the pipe levy.

“Despite attempted saving on electricity and where solar panel installation has been done, residents are also still bound to pay the charge of R140 for the access to pre-paid services.”

Stop COCT founder Sandra Dickson said: “Residents are under the impression that because the drought is over, the pipe levy would be scrapped and because that has not materialised residents feel misled and feel cheated.”

Dickson said the outrage wasn’t politically motivated. “We’re talking about middle-class residents, some who stay on the Cape Flats, some who are working normal contract jobs, they are the ones feeling the burden of this the most. If someone believes this is politically motivated, how do you justify imposing levies without any consultation or public participation?”

Cape Argus

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