Disgruntled business owners have dubbed Buffalo City Metro an “expensive city to live and do business in” following recently adopted tariff increases which will be charged from July 1.
The increases were passed in a draft of the 2019-2020 financial year tariffs.
According to mayor Xola Pakati’s report, which was adopted by council last month, BCM ratepayers should brace themselves for major tariff increases. Property rates, it is proposed, will increase by 9%, refuse removal will rise by 9.35%, and water services by 9.4%.
BCM’s biggest money spinner, electricity, will increase by by 8.39% every year over the 2019-2022 period,” Pakati said.
He wrote: “The sewerage tariff increase has also been kept below double-digit percentage increase. It is projected to increase by 9.4% for the 2019-2020 (year).”
News of the increases has infuriated home owners, commercial property owners and business owners.
The executive director of the Border-Kei Chamber of Business, Les Holbrook, said: “Anything that is above 4%, which is the inflation rate, is too high. The tariff increases should be in line with inflation and nothing above that. There was supposed to be a breakfast business meeting today, but it was cancelled due to poor attendance. We would have objected to these figures,” said Holbrook.
Disgruntled businessman Noel Nyemba of Grand Select Properties who is a member of the Buffalo City Property Owners Forum, said: “As a group we are not looking at investing in BCM anymore.
“We objected to the tariff increase for property rates last year after we found that for one of our properties the increase was more than 100%. We did lodge an objection and had a meeting with the acting chief financial officer, but he clearly told us that they were not willing to reduce the tariffs.
“East London is not an ideal place to invest right now,” said Nyemba.
He said the forum was preparing legal documents to approach the high court to try and force down the the “high property rates” tariff charged by BCM.
Buffalo City Ratepayers’ Forum secretary Christo Theart said the new increases were a blow to ratepayers.
Pakati said the total consolidated budget which included the operating and capital budget would be R8.71bn in the upcoming financial year. The budget is expected to increase to R9.45bn in the 2020-2021 financial year and grow further to R10.15bn in the 2021-2022.
He said: “Our commitment to respond to our people’s legitimate demand for a better life is reflected in a budget in which the key priorities are water and sanitation, roads and storm water, human settlements development, transport planning, electricity and related critical infrastructure and maintenance,” he said.
DA councillor Geoff Walton said: “The DA cannot support the budget.”
The party recorded a dissent against the adoption “based on its non-affordability to the community and in particular the application of a 9% increase in rates”.
“The increases proposed do not encourage investments by the public. The community are presently hard pressed to meet their commitments to the city as evidenced by the low collection rate. Business is buckling under the cost of doing business in the city. Here an additional 9% increase in rates could be the straw that breaks the camel’s back for many businesses. On average, the increased revenue from rates will have increased by some 35% over two years. The DA simply cannot support these increases,” Walton said.
Asked about the pending objections BCM spokesperson Samkelo Ngwenya said the process of objections and appeals did not affect the budget adoption directly.
“Those that have lodged appeals will be dealt on their cases individually and should an appeal verdict favour one’s submissions, charges and reimbursements will be actioned accordingly.”..