MOSSEL BAY NEWS - According to Sadesh Ramjathan of the Local Government Budget Analysis department at National Treasury, the ACDP representative in the Mossel Bay municipal council, Councillor Jeanette Gouws, was correct in her understanding regarding the legality of reducing tariffs during a financial year.
This follows an urgent motion brought by Councillor Gouws at a previous council meeting to address rates, tariffs and changes to subsidies affecting pensioners, who increasingly find it difficult to afford municipal service charges.
The Democratic Alliance majority in council, after a short caucus, refused to allow the urgent motion. The executive mayor, Alderman Harry Levendal, at the time said that the municipality had already embarked on a Cost of Supply study that would review the municipality's tariff policy, including the indigent policy and tariffs.
"The Cost of Supply study would specifically investigate several scenarios before guidelines would be proposed.
"Once ready, a thorough public participation process would follow and adjustments will be in line with the findings of the investigation.," Alderman Levendal said. Mossel Bay Municipality has decided not to adjust tariffs prior to the completion of the full investigation and recommendation from its officials.
"We intend to start the public participation processes early in 2019 to test the principles on which we want to base the recommendations," municipal manager Advocate Thys Giliomee said.
Pensioners' predicament
Councillor Gouws shared with council the predicament pensioners face, saying they were "residents who make up a huge percentage of the account holders of this municipality".
She said: "I have had dozens of calls from distressed and irate account holders who are deeply upset by changes to policies and tariffs because of the impact this has had on their accounts," Councillor Gouws said.
Many, but not all municipal account holders she had spoken to had been SASSA pension recipients and she said pensioners literally could not afford the new municipal service charges.
"We all know the economic circumstances in South Africa, but I feel we have a duty to care in practical ways for our pensioners who have contributed for years to the growth and development of our country." Ramjathan seemingly concurred with Councillor Gouws, saying the Municipal Finance Management Act - MFMA, through section 28(2)(a), allows municipal councils to pass an adjustment budget to adjust their revenue and expenditure estimates downwards if there is a material under-collection of revenue during the current year.
"You should also take note of the provisions in chapter 2 part 4 of the Municipal Budget and Reporting Regulations which sets out the broader framework for municipal adjustment budgets, specifically from a format, timelines, submission and approval perspective.
"In our opinion, the answer lies in the authority of a municipality to impose tariffs.
A new tariff may be set at any time and the only limitation on changing a tariff is in section 28(6) of the MFMA which prohibits the increase of a tariff, i.e. setting a higher tariff, during a financial year.
"Therefore, from the legislation it is clear that municipalities can reduce their tariffs in-year provided it is done consistent with the framework discussed above."
Ramjathan said: "We trust that this will also be considered, taking into account the impact on the local economy, development and financial sustainability of the municipality and so forth."
Councillor Gouws said she would again table an urgent motion in this regard.
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