Cape Town ratepayers can look forward to some relief in tariff increases this year, with proposed increases as from July 1 lower than last year.

The highest increases will be for water and sanitation – 9.75 percent – followed by electricity at 7.78 percent.

Domestic users will be paying a less-than-average electricity tariff increase of about 6.6 percent. This is because the city has decided not to increase the electricity tariff for all categories of consumer.

The city will be reducing its property rates tariff for residential properties by 7 percent.

Cape Town Mayor Patricia de Lille tabled the city’s draft 2016/17 budget before council on Thursday morning, the last budget of the DA’s current term of office.

For the first time the city’s total budget will be about R40 billion – R34bn budgeted for operating expenditure and R6bn for capital projects. More than half of the capital budget (52 percent) will go towards utility services, followed by transport (23.7 percent).

De Lille said the city’s budget was informed by the difficult economic situation, with the risk of a credit-rating downgrade, a lack of confidence in national government and low growth rates.

“Our proposed budget is a representation of our commitment to continue funding the work of making this great city even greater, but budgets cannot be developed by a government alone.

“They should be the product of collaboration between a government and the people it represents,” said De Lille.

Speaking ahead of the budget tabling, Deputy Mayor Ian Neilson told journalists that the country was in a financial “crunch” and all city departments would also have to make do with less.

“It’s time to tighten the belt a bit on expenditure, to stick with this budget.”

The city had decided to base its proposed tariff increases on a Consumer Price Index of 5.9 percent, slightly less than the National Treasury’s March 7 advisory of 6.6 percent for 2016/17.

The City’s proposed average tariff increases for 2016/17 are:

* Property rates – 6 percent down from 10 percent last year

* Electricity – 7.78 percent down from 10.82 percent last year

* Water – 9.75 percent down from 11 percent last year

* Sanitation – 9.75 percent down from 11 percent last year

* Refuse – 7.92 percent down from 8.33 percent last year

* Disposal – 12.08 percent

Nersa approved a bulk service increase to Eskom of 7.8 percent for 2016/17. Electricity is the City’s largest revenue source, set to earn about R11.8bn in the coming financial year. Neilson said 70 percent of this revenue would go to paying the municipality’s bill to Eskom. Electricity sales were down due to energy-saving plans and high tariffs which were expected to continue at an annual 1.5 percent.

Based on the new property valuations, open for public objections, the city expects to earn about R7bn in 2016/17. Neilson said the city had decided to reduce the cent in the rand property rates tariff from 0.6879 to 0.639.

The residential deduction remains at R200 000. Any household with a gross monthly income of R4 000 or less will get a 100 percent rates rebate.

The indigent rate rebate for ratepayers younger than 60 years has been increased from a maximum monthly household income of R5 000 to R6 000. The rate rebate maximum for senior citizens and disabled people increases from R12 000 to R15 000.

[Source: Cape Argus]