Tariff hikes concern

Homeowners can expect to pay much more for water and electricity if proposed City of Cape Town tariff hikes are approved.

Under the new scheme, people living in homes valued at R400 000 or more will no longer get their first 6 kilolitres of water free and those with homes worth R1 million or more will be hit with a R246 monthly electricity charge before they so much as turn on a light.

Pensioners and families living on tight budgets are likely to feel the worst of it.

The new tariffs are out for public comment. If approved they come into effect on July 1.

Green Audits into Action (GAIA) noted that the first 4.2kl of free sewage would also go under the new tariff scheme. Sewage charges would now start at 1kl.

GAIA said the new home user tariff for electricity was R8.21 a day or R246 per 30-day month, irrespective of whether you are at home or away.

The lifeline rate (with 60 kilowatt-hour free) for those using less than 450kWh will also be dropped for those with homes valued at R400 000 or more.

Woodstock Community Outreach Forum chairman Shamiel Abbass said the City was burdening the poor with extra water and electricity costs.

Many in the suburb couldn’t afford to pay more for water and electricity.

“It has already been tough with the water restrictions and if you punch in R50 electricity you only get 25 units which last two days. We stand for the people in dire need and we stand against it,” said Mr Abbass.

Walmer Estate Residents’ Association chairman, Moosa Sydow, agreed.

“I can’t understand where the removal of the water allocation is coming from. It can’t be because of the drought because we’re entering the winter season, so it can’t be a fixed tariff taken away across the board.”

The R246 home user tariff, he said, was unfair because all the homes in Walmer Estate had been valued at over R1million, but that didn’t make the occupants millionaires.

“Times are tough and everyone’s home in this area is valued at over R1million. Five or 10 years ago it was valued at R100 000. People have been living here for years and didn’t ask for their homes to be valued at millions,” said Mr Sydow.

Chairman of the Fish Hoek Valley Residents’ and Ratepayers’ (FHVRRA) Brian Youngblood said the association would take the City to task over the R8.21 a day electricity tariff and the loss of the lifeline rate for homes valued at R400 000 or more.

The association wants the R8.21 charge dropped especially for those with City rebates and it wants the property qualifier for the lifeline rate raised to R1.7million.

“Eskom says to use less electricity, yet now the City proposes penalising everyone for those that have been able to lower their consumption,” he said.

Implementing the R8.21 a day charge represented a 50% minimum to a 500% maximum increase, including loss of lifeline, in electricity bills.

“Pensioners with City rebates want assurance of not qualifying for the home user category tariff increase. Not unlike tax bracket creep, their property valuations have risen, but to realise even a R1 million sale, would not improve their living standards as there is nothing really in a lower price range nearby. Most just cannot afford to live in a retirement village.”

On the other end of the spectrum, he said, were young families with small children. “Due to their existing high debt levels, this translates into house bonds becoming unaffordable with an expected drop in house prices due to over-supply, and possible debt-traps if they have to sell for less than the bond value. Both age groups expect inflation and interest rates to rise – causing even more hardships.”

Mr Youngblood accused the City of being inefficient, saying it had been using electricity to cross-subsidise other departments for years.

“The internal support centres are too expensive and need to be drastically reduced. The number of people employed by the City is astronomical (last known count of 27 000 and rising),” he said.

However, the Cape Chamber of Commerce has welcomed the draft budget proposals, which, it says, feature the lowest rates and tariff increases in 10 years.

“We had a decade of above-inflation increases and we can only hope the new round of increases proves to be a turning point,” said Janine Myburgh, president of the Chamber.

Last year’s 6% increase in rates had proven to be below the eventual inflation rate and now there was a further reduction, to a five percent increase.

“This is welcome, but it does little to wipe out the accumulated effects of a decade of savage rates and tariff increases,” she said.

Xanthea Limberg, Mayoral committee member for informal settlements, water and waste services and energy, said free basic water and sanitation provision would only be phased out for non-indigent properties. “This will mean that only the most vulnerable groupings in our society will be eligible for the free basic service provision,” she said.

The tariff increases were necessary, she said, to maintain service levels and prevent costly infrastructure failures.

She said the home user tariff would ensure that “high-income customers with low consumption contribute equitably to the service”.

“Tailoring the tariffs so that those customers who use less than 600 units a month but live in property valued at over R1 million pay a greater share than previously means that the increase to lower/middle-income residents (that is those who live in property valued at less than
R1 million) could be kept at 2.8% rather than 3.34% which would have otherwise been required,” she said.

The full list of service fees for residential and commercial customers can be viewed at http: www.capetown.gov.za/haveyoursay.To object to the planned tariff incre
ases, email city.manager@capetown.gov.za