Cape Town - Punitive water tariffs and extra electricity tariffs for prepaid users have seen City coffers overflowing by millions.
The City has over-recovered R649million on water and sanitation charges and R83.3m on electricity.
According to the City's September financial monitoring report, the over-recovery for water was because of users not sticking to the restrictions.
The report, compiled by City chief financial officer Kevin Jacoby, and undersigned by mayoral committee member for finance Johan van der Merwe, tallied the over-recovery amount for water at R649m, while services and sanitation amounted to R172m.
“The over-recovery is due to some consumers that are still using water above restriction levels," said Jacoby. "The Level 6 tariffs, implemented to discourage high consumption, have escalated the ‘billed revenue’.
"It must, however, be emphasised that the over-recovery on sales is not cash-backed. High consumption by non-paying customers will mean that the over-recovery on 'billed revenue' will be offset by the over expenditure, as would be reflected by the provision for the non-cash portion of the amount billed. The cash-backed revenue is therefore expected to show a closer correlation with the budgeted revenue,” Jacoby said.
But Jacoby said the introduction of Level 5 tariffs on October 1 will have a further stabilising impact on this variance due to the reduction of the punitive tariffs. “Trends in this regard are monitored and budgetary alignments will be considered during the January 2019 adjustments budget.”
An over-recovery amount of R83.3m on electricity was also recorded. This was due to periodic changes in consumption, as a consequence of changing weather conditions, as well as implementation of alternative energy sources.
“Variances on the different individual sales revenue elements are due to the continuous movement of consumers between the various tariffs, as well as changes to the costs associated with the fixed charge,” said Jacoby. He said for fines, penalties and forfeits, R50.2m was under-recovered.
This was mainly due to traffic fines and traffic fine accruals because of reductions on fines, deployment of staff and unwillingness of the public to pay fines, Jacoby said. At the same time, a R553m allocation from national government was the main reason for an adjustments budget.
The funds must be used in line with its application for the funding of the Cape Flats, Atlantis and Table Mountain group aquifer recharge projects and in terms of the municipal disaster recovery grant conditions.