Tighten your belts: Bay in for rates, electricity price hike shock


Ratepayers and businesses in Nelson Mandela Bay should brace for steeper property rates and electricity price increases, with the municipality proposing hikes of 7.7% and 13%, respectively, from July 1.This is vastly different from the 5% rise in property rates and 6.87% for electricity that it tabled in its draft budget to the council in April.The proposed increases for water, sanitation and refuse remain unchanged at 7.5%.The municipality took the draft budget and integrated development plan (IDP) to public consultation in April – but on the initial tariff proposals.It is a legal requirement that the budget and IDP undergo a proper public participation process before it can be adopted by the council.Councillors are expected to debate the new proposals on Thursday.The 2019/2020 budget and IDP has to be passed by the end of June as the budget takes effect from July 1.The municipality’s budget and treasury portfolio head Mkhuseli Mtsila has defended the changes to the tariff proposals, saying they are only slightly above inflation (which, in fact, slowed to 4.4% in April).The change to the property rates proposal was necessary to accommodate the insourcing of private security and call centre staff, he said.This is also to accommodate the pay increases (of 100%) for ward committee members and (of 27%) for ward councillor support staff.The city has insourced more than 600 security guards over the past two years.Thirty-two call centre staff were also insourced after they went on strike, demanding that the city hire them permanently in February.The jump from 6.8% to 13% for electricity follows the 15.67% increase in the price for bulk electricity purchases from Eskom set by the National Energy Regulator of SA (Nersa).The municipality’s proposed 13% electricity price increase is subject to Nersa’s approval.“The council decided to take them [security and call centre staff] on, so we have to find money to fund this.“At the end of the day, the budget reflects what we are trying to achieve as far as the municipality’s expenditure is concerned,” Mtsila said.He said the amended tariff proposals would not be put out for public comment before being debated in council.“It will depend on what the law says – I don’t think we have to take a tariff increase for public participation,” he said.Asked if other political parties had been consulted, Mtsila said budget steering committee meetings had been held and councillors were invited, but some did not respond.“This budget is more than pro-poor.“[About] 91% is going towards the poor wards and 9% will go towards the so-called better wards.”Nelson Mandela Bay mayor Mongameli Bobani said the initial figures were part of a draft budget and not the final document.“Our tariffs are determined by the rate of inflation.“We are below two digits, and the only one with two digits is electricity because it depends on Nersa.“At least we did not go up to 20%, we have managed to keep it low because we did not want to squeeze residents,” he said.Asked if the new rates were affordable for residents, Bobani said: “Oh yes, our residents can definitely afford this because these tariffs are fair.“And if you compare these rates with other metros, we are one of the metros that is fair with our rates.”He said the insourcing of security staff was a form of service delivery as it would save on costs.Opposition parties have blasted the proposed increases, while the Nelson Mandela Bay Ratepayers’ Association said the hikes could lead to further job losses in the city.Several businesses in the Bay have already had to shed jobs or place staff on short-time due to the sluggish economy.Ratepayers’ association chair Kobus Gerber said the increases were not justified.“I can’t see how they can increase anything over 4.5% at this stage,” he said.“The economy is going to crash – they are putting pressure on already cash-strapped consumers and this will lead to more unemployment.”Gerber said the increases were unsustainable for businesses in the metro.“There’s already no growth in the city.“Every time we get electricity, water and rates increases, more and more companies struggle to keep their heads above water and retrench staff.“They are absolutely choking the economy.”DA councillor Leander Kruger said: “The budget steering committee, which comprises multiple parties, agreed to increases of no more than 5%.“Whoever drafted this budget did not take any of what the parties said into consideration when they introduced these ridiculous increases.“These increases are not the ones that have been taken for public participation, the public has not been given fair warning and there might be procedural irregularities as a result.”ANC councillor Rory Riordan said the tariff increases were a cause for concern.“We are concerned, it’s going up too much, it’s unaffordable and it’s a terrible situation to find ourselves in,” he said.PA councillor Marlon Daniels said: “This is very disturbing and I don’t think residents will take kindly to this.“But it is purely because the collection rate has dropped and it is a challenge that we are faced with.“We have insourcing and there is no budget and we are reliant on ratepayers to make up for this.“I am not happy with the budget as it stands and the PA will not accept this budget”.ACDP councillor Lance Grootboom said: “This is what happens when you put forward illegal motions to insource people without taking into consideration the impact on the financial viability of the municipality.“The ratepayers are being penalised because of this.”

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