Households will soon be paying between R45 and R60 extra every month as part of a drought levy, if mayor Patricia de Lille has her way in council on Tuesday.
For more affluent households whose properties are valued in excess of R3 million, the drought levy could reach R350 and is to be billed on top of municipal rates and taxes.
Families whose properties are valued under R400 000 will be exempt from the drought charge, which is set to implemented in February.
Last month, De Lille said the city was investigating the possibility of charging a special levy because consumers were saving water so well that they were now paying less, affecting the city’s budget.
“It will no longer be a levy. (We) will be proposing a drought charge to help pay for vital water projects for 2018. We will strive to ensure that it isn’t more than what residents’ water bill was before the drought. An extensive communications campaign will follow where the City will ask for residents’ and businesses input,” De Lille said.
She said the levy would be presented to council on Tuesday.
She said the drought charge, proposed to be based on property valuations, was deemed the most progressive option while being the most equitable and fair to poor households.
“It will not be an excessive amount in relation to resident and businesses rates accounts. It is proposed that the drought charge is only applied to residential properties with a valuation of R400 000 and above,” she said.
It is proposed that a residential property with a valuation of R800 000 could pay a drought charge of R45 and for a property with a valuation of R1m, the proposed drought charge would be R60.
De Lille said the implementation of a drought charge was subject to approval from the Minister of Finance asking of an exemption from provisions in the Municipal Finance Management Act to implement a drought charge from February 1. If council approves the proposal, a public communications campaign will follow until mid-January.
Once public comments had been considered, it would be considered by council at the end of January as part of the adjustment budget, she said.
“The proposed drought charge is intended to smooth the impact on the tariff of drought-related projects being discussed with National Treasury. The City has considered the economic and household impacts of any adjustments that can be made. It must be emphasised that the drought charge is necessary for vital water projects, it is not intended to be punitive as it relates to residents’ water savings,” she said.
Grant Haskin from the ACDP said there was “a strong likelihood” that they won’t support the levy proposal.
“The City has not engaged the public on this proposal to hear what Capetonians have to say or to gather suggestions about alternatives. Capetonians have faced 10 successive years of huge increases to their household rates account for rates, water, electricity, sanitation and waste removal. This new charge adds to Capetonians' financial burden. The City has made Cape Town unaffordable to live in and this additional charge makes it worse
“The City makes no mention of having exhausted all other financial avenues to fund this shortfall, which it ought to have done and which it had time to do had it done financial scenario projections earlier this year or before. Now Capetonians are being penalised for the City's poor planning and for saving water."