Home News While city residents brace for hike in their municipal bill this month...

While city residents brace for hike in their municipal bill this month …

1744
SHARE

... the Sol Plaatje Municipality has warned that it will clamp down on the estimated 6 000 account holders who are bypassing the system.

File image. Picture: Danie van der Lith

As city residents brace for hikes in their municipal bill this month, following a hike in the cost of electricity, water and other municipal services that came into effect at the beginning of this month, the Sol Plaatje Municipality has warned that it will clamp down on the estimated 6 000 account holders who are bypassing the system.

The average tariff increase that came into effect on July 1, is 5.5 percent for water, sanitation and refuse removal. 

Electricity tariffs have shot up by 6.22 percent, while rates have gone up by 6.4%.

The increases follow a deficit in the local authority’s adjustment budget for the last financial year.

The municipality has also predicted a projected loss in income from property rates this year, of almost R11 million, due to a change in the Municipal Property Rates Act. 

The category ‘Property used by Organ of State’ is not stipulated in the Act and will be phased out over the next two years. This amendment resulted in an increase in Property Rates by 6.4 percent.

It has been pointed out that this is a serious concern for the municipality as this loss in income will have to be absorbed elsewhere.

In terms of electricity costs, large power users are billed according to a “Time of Use” electricity tariff, while for residential customers pay according to an “Inclined Block Tariff”.

For residential customers the increase for Block 1 (0 – 50 Kwh) is from R1.67 a unit to R1.77, while for Block 2 (51 – 350 Kwh) the tariff has gone up from R2.33 a unit to R2.47.

Municipal spokesperson, Thoko Riet, said on Monday that the municipality had meanwhile detected an estimated 6 000 account holders who have stopped buying prepaid electricity or have disconnected their meters.

“We will be investigating these households and businesses as this could meant that they are using electricity illegally and this is the reason why they have not been buying or paying for electricity.”

The municipality has also started disconnecting electricity to staff, councillors and local businesses  who are in arrears with their municipal accounts.

In its monthly budget statement for June 2020, it was pointed out that the sharp decline in collections of approximately R66 million over the last three months, did not bode well for the municipality’s already unstable finances. “This sharp decline is mainly attributable to the lockdown which also made disconnections impossible during this period. A positive upward trend is essential in order to improve the municipality’s cash flow position.”

The outstanding debt owed by the municipality to Eskom in June was R114,547 million.

“The municipality did not have sufficient cash available to settle the May account of R40 million. The municipality is in negotiations with Eskom to conclude a new debt agreement, especially in light of the high season which was R74 million for June 2020, another estimated billing of R150 million for July and August 2020.

The outstanding debt owed for water to the Department of Water and Sanitation is R58,476 million. The municipality did not have sufficient cash reserves to settle the outstanding bulk water invoices from December 2019 to March 2020.