Cape Town ratepayers, prepare for the rate hike

Through Bulelwa Payi Apr 4, 2021

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Cape Town – Faced with economic hardship, Cape Town taxpayers will now have to pay more for the rates proposed in the new budget.

Cape Town’s R56.48 billion budget proposal for fiscal year 2021/22 will now be made public after being tabled at a council meeting this week.

The budget proposal follows the Auditor General’s (AG) findings of irregular spending, which continued to plague the city despite similar red flags raised the previous year.

The Auditor General gave the city an unqualified audit with conclusions.

The GA report also noted that the city had grossly under-spent its operating budget in the previous fiscal year by 1.5 billion rand and the capital budget of 738 million rand.

The proposed new budget would see water tariffs increase by 5%, largely due to “the modernization and expansion of sewage treatment plants, installation of water connections and testing of water. counters “.

The increase in electricity tariffs will rise by 13%, the city argued, which was much less than Eskom’s hike.

All of the proposed tariff increases were due to take effect on July 1.

In tabling the draft budget, Mayor Dan Plato noted that the Covid-19 pandemic has put “enormous pressure” on residents and on the city’s ability to provide financially viable services.

The cost containment measures would include zero pay increases for employees and advisers, a reduction in reliance on consultants and other contractual services, Plato added.

The VG made important findings on compliance with supply chain management regulations and articles of the Municipal Financial Management Act (MFMA), noting that reasonable measures have not been taken to prevent irregular expenses.

The report found that:

* Certain goods and services were purchased without tendering or obtaining the required prices

* Some tender documents for the production of local content did not stipulate the minimum threshold required by the preferential purchasing regulations of 2017;

* Some contracts have been extended or modified without the approval of a duly delegated official

* The performance of some contractors or suppliers has not been monitored as required by law

The MA noted that a similar non-compliance related to all of the above had been raised the previous year.

The report further noted that management did not ensure that proper contract management and execution processes were in place to monitor contract expiration, resulting in expense even after contracts expired.

He also noted that the financial system used by the City was not configured to prevent payments after contract expiration dates or in excess of contract amounts.

African Christian Democratic Party adviser Grant Haskin blasted the city for “painting a rosy picture of its performance” when it “failed to tackle the challenges comprehensively”.

“The questions raised by the Auditor General have also been raised in previous years. In fact, the municipal public accounts committee has also noted an increase in cases of irregular spending, ”Haskin said.

ANC Council leader Xolani Sotashe also criticized the city for not spending its previous budget on essential services.

“The water and waste service did not spend 587 million rand. It is a lie to say that the city spent its budget well last year. The city does not boast more than one own audit “, he accused.

Cope adviser Farouk Cassim also warned that Covid-19 should not be used as an excuse for not meeting some of the goals.

“This should be the reason why the projects of the Expanded Public Works Program should be doubled or quadrupled … and halt job losses in the long run,” he said.

Cassim also said that the DA-led council’s “business as usual” approach to planning and budgeting could no longer work for the city.

“Where is the money for the transformation of the townships designed as dormitories and 27 years later will remain the same. Will they ever change. No alignment in terms of budget. I will not support this,” Cassim said.

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