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Property rates, water, sanitation and refuse charges in Nelson Mandela Bay will increase by 13% percent from July 1, while the electricity tariff will rise by 11.03%.
A report to a joint meeting of the Mayoral and Budget and Treasury committees that meets on Monday states that tariff increases for the next two financial years will be the same.
In its report, Budget and Treasury states that one of the "significant" challenges in the compilation of the Budget was that continued high tariff increases may soon render municipal services unaffordable.
The Metro is targeting a collection rate for rates and services payments of 95 percent.
Meanwhile, the same reports says the Nelson Mandela Bay's cash-backed and accumulated surpluses reconciliation reflects a shortfall of R196.9m.
The report projects a shortfall of R185.6 million for 2013/14 and a surplus of R24.4 million for 2014/15.
Explaining the situation, Budget and Treasury states that a surplus indicates that "sufficient cash and investments are available to meet commitments" while a shortfall indicates "inadequate cash and investments are available to meet commitments".
Spelling out the principles and guide-lines that "directly informed" the compilation of the budget, Budget and Treasury notes that no loan funding is available to support the capital budget "in view of financial affordability considerations".
Further, no growth in revenue sources has been provided for "in view of cur-rent consumption trends in municipal services," Budget and Treasury pointing to "declining water consumption pat-terns" and factors such as the need to conserve energy and the significant increases in power prices as reasons.
It notes that continued high tariff in-creases "may soon render municipal services unaffordable".
It says further that no growth in property rates has been considered "in view of the depressed property market".
Budget and Treasury says that one of the "significant challenges" faced in preparing the budget was the ability to maintain collection rates at targeted levels.
A collection rate of 95% of property rates and service charges has been set as the target for the next three financial years after discounting Assistance-to-the-Poor (ATTP) subsidies.
The collection of debt in excess of 90 days has been prioritised as a specific strategy "in order to improve the municipality's cash position".
After consideration by the joint commit-tee, the Budget and Integrated Development
Plan (IDP) will be the subject of a public participation process now scheduled to start on Monday.
(Source: Metro Minute - to subscribe mail - metminutes@iafrica.com)
