Ratepayers to feel the pinch
Faced with economic hardships, North Coast ratepayers will now have to fork out more for basic services as proposed in the new municipal draft budget.
North Coast residents facing rising interest rates and soaring fuel hikes have been dealt another crushing blow with the announcement of KwaDukuza Municipality’s proposed above-inflation tariff hikes.
The draft budget for the 2023/24 financial year tabled in council last Friday will see tariffs for all municipal services increase by a rate more than that of inflation, which is currently at 6.9%.
According to the new draft tariff policy, property rates will increase by 7%, refuse by 10% and water and sanitation by over 13%.
The proposed electricity tariff structure will also see residents pay 15% more from July 1.
Of the R2.8 billion budget a total of R298 million has been allocated for capital expenditure while the operating budget is expected to be R2.4-billion - R400 million higher than the previous financial year.
According to the draft budget, KDM’s main source of income is generated from service charges (electricity and refuse) and revenue from property rates.
In the 2022/23 year the expected service charges will make up 51% of KDM’s operating income, at R1.33 billion while rates revenue is expected to be R689-million.
Meanwhile, provision has been made to honour salary increases of 5.4% for the year ahead, despite a National Treasury warning that the pay hikes are unaffordable.
A total of 25% of KDM’s operating expenditure has been adopted for municipal staff and councillor salaries at R624-million, which is R114-million more than the previous year.
The proposed budget comes amid findings by the Auditor-General (AG) who slammed the municipality for poor financial controls as well as a tolerance for transgressions and lack of consequence management.
The AG report, covering the first two quarters of the financial year ending 31 December 2022 again made for grim reading.
Critical findings were identified in the following areas and further investigations were recommended by the AG:
Underspending of the capital budget - only 24% of the capital budget was spent in the first two quarters of the financial year.
Material energy losses as of 31 December 2022 amounted to R143.5 million.
Continued incurrence of irregular, unauthorised and wasteful expenditure
The AG singled out the poor performances of the various municipal departments with the office of the Municipal Manager achieving the lowest score of 44%.
Human Resources and payroll were referred for investigation after ghost employees were discovered on the system.
Other issues included irregular procurement processes, underspending of the infrastructure grant, poor financial management and deteriorating governance.
Lack of accountability and consequence management continued to plague KDM, and allegations of financial misconduct and fraud were not investigated said the AG.
KDM mayor, Linda Nhaca who called the budget balanced and pro-poor received a standing ovation from the ANC after tabling the draft budget.
However, the proposed tariff increases were widely rejected by all the opposition parties calling it a death knell for the average person already struggling with the high costs of living.
Nhaca justified the tariff increases saying they were aligned with the local environment and the national economic outlook.
“We read recently that some municipalities have also proposed significant increases in their rates and tariffs. Our average rates and tariff increases, though high, are still lower than these municipalities.”
The draft budget will be open for public participation until the end of April.
