GCTCA: Objection to the City of Cape Town proposed Drought Charge

Submitted 15th January 2018
Objection to the City of Cape Town proposed Drought Charge


Dear City of Cape Town

The GCTCA hereby vigorously objects to the drought surcharge which the City of Cape Town has announced will be based on the municipal valuation of Ratepayer’s properties.

We object to the timing of this Public Participation process whereby community participation was requested during the festive holiday season when most Capetonians are away on holiday and generally businesses are closed, making access and participation difficult.

We object to the indefensible and abhorrent expectation that the Ratepayers of Cape Town be subject to punitive surcharges which are not evenly distributed among all water users across Cape Town. These affected ratepayers will be carrying the responsibility of each water user in Cape Town regardless of their individual consumption which is unfair and unreasonable, in fact it is disgraceful and disgusting.

Our further reasoning for objecting to this is:

Ratepayers significant physical and financial investment in water saving

A substantial number of households have, based on what they can afford, made enormous physical and quite ingenious efforts to restrict their water usage and to further reuse the little water they do consume. Many households have also invested in reducing their demand on the City’s potable water supply by installing boreholes, rain water harvesting and grey water reuse systems at significant cost. The proposed Drought Levy is a slap down to these valiant initiatives in water saving. These very same people are now being told that they will, in fact, be paying for water they have saved and never used.

Assistance from State at a time of crisis

It has never been the case, that the victims of natural disasters should be punished. The state has a responsibility to come to the assistance of the people of Cape Town in the same way that it does for the victims of floods, earthquakes, etc. It seems that the city has not put enough pressure on the government to help. If necessary the citizens of Cape Town should demand that the State come to the party. It cannot be in the interests of the national economy that Cape Town suffers serious damage due to the water crisis and the mishandling of the crisis.
The National Water Act 36/1998 recognises that water belongs to the whole nation for the benefit of all people and outlines permissible water usage. The City of Cape Town should therefore insist on the assistance from national government to ease the burden on local ratepayers.

Cooperative governance means that the three spheres of government must work together (cooperate) to provide citizens with a comprehensive package of services. The Constitution states that the three spheres have to assist and support each other, share information and coordinate their efforts.

The city knew of the pending crisis 12 years ago

What is apparent is that the City of Cape Town has not taken responsibility for the water crisis and lack of alternative water supply in an area known for drought (circa 1974 and over time recorded). Unmitigated and unbridled development as a result of the City of Cape Town’s densification policies and the growing disregard for title deed restrictions (that provide for single residential units as opposed to multi-property, large scale developments) contributes much to the water crisis and to add insult to injury, the City of Cape Town has not diligently discharged its responsibility to ensure that all building developments are in balance with their water usage as demanded by such unbridled development and associated water supply.

The city’s need for this abnormal charge, as communicated, is to undertake emergency works. This need arises from years of neglect and inactivity on the part of the City of Cape Town, as the city was fully aware and warned several years ago by credible sources that climate change and declining rainfall would become a reality. The city is grossly negligent for not acting sooner despite full knowledge of city officials and researcher’s warnings more than a decade ago that the region was heading for a dire water crisis.

  • As far back as 2006, Mike Killick, head of bulk water resource and infrastructure planning in City of Cape Town stated “At present consumption and allowing for full use of the Berg river dam, consumption will outstrip supply by approximately 2013, assuming normal rainfall levels.“
  • Mike Killick in the same instant (2006) further stated that “desalination costs have reduced significantly over the last decade and that, ultimately, desalination of sea water would have to be considered by the City.” and “the City of Cape Town was planning to implement a pilot plant to evaluate the technology available.“
  • At this time already (2006), when the City knew of the pending disaster and was looking at augmentation schemes such as desalination, tapping into the Table Mountain Aquifer, river-diversion schemes, raising existing dams, the construction of new dams and the use of the Cape Flats aquifer, Mike Killick stated “there is no doubt that the matter is being investigated and is being taken seriously and is well in hand by the Department of Water Affairs and the City of Cape Town’s Water Services Department.”

If the city took action when it was supposed to, we would not be experiencing this crisis!

Where did all the money go that should be used for water augmentation?

    • In Jan 2017 the Mayor confirmed the City had raised R245 million from additional water revenue arising from the Level 2 water restrictions (at that time). A year later and with Level 6 Water Restrictions, that figure ought to have doubled. Where is that money?
    • The Western Cape Government announced it had raised almost R300 million to assist drought stricken municipalities, some of it was promised to CT. Where is that money?
    • In May 2017 (Level 4b Water Restrictions) Cape Town’s expected water revenue was expected to GROW by R500 million per year from July 2017 to June 2020 (from R3,9 billion to R4,8 billion). Now suddenly there is a R1,6 billion loss. Where is that money?
    • In August, the Department of Cooperative Governance released R20.8 million cash injection towards the City of Cape Town’s emergency disaster relief. Where is that money?
    • From 1st July 2017 non-indigent ratepayers began paying for what was a free basic allocation of 6kl for water and 4.2kl for sanitation. This resulted in the city receiving hundreds of millions of rands more from the already overburdened ratepayers. Where did this money go?
    • During the past decade there has been substantial above CPI inflation increases on the price of water to consumers. Where did this money go?
      • 2009 +11.7%
      • 2010 +10%
      • 2011 +8.28%
      • 2012 + 15.08%
      • 2013 +11.28%
      • 2014 +9.53%
      • 2015 +11%
      • 2016 +9.75%

The City of Cape Town has mismanaged its water related budget for the last 10 years by consistently under spending on its budget. We refuse to now be expected to bail out the city due to its own gross negligence.

  • 2006/07 R35,9 million underspent
  • 2007/08 R109,1 million underspent
  • 2008/09 R35,3 million underspent
  • 2009/10 R72,1 million underspent
  • 2010/11 R207,8 million underspent
  • 2011/12 R86,0 million underspent
  • 2012/13 R96,4 million underspent
  • 2013/14 R132,7 million underspent
  • 2014/15 R84,3 million underspent
  • 2015/16 R112,8 million underspent


The City’s Financial Monitoring Report for November (the latest available) reflects debts outstanding ‘61 days and over‘ of nearly R2.6 Billion owing to it for water. This figure is astronomical given the communicated reasons for the charge. To expect ratepayers to bail out the city due to a lack of fiscal discipline is preposterous.

Adding insult to injury is the cost of a brand new Head Office as reward for the City Water & Sanitation department, costing at least R295 million and R114 million over budget (as at May 2017), at a time when all revenue needs to be directed at augmenting water supplies.

 

The City’s need for the water charge is absolutely ludicrous in the face of the City of Cape Town’s 2017/18 budget statement adopted in May:
QUOTE: “The financial impact of the drought experienced within the City at present was factored in the MTREF. Contingencies or back-up plans are in place to meet financial losses. The respective restriction levels are accompanied by tariff levels, which aim to maintain a revenue neutral status.
Should actual revenue be at a level lower than what was modelled, concomitant expenditure reductions will be effected within the Water & Sanitation department” END QUOTE
 
Legislation that regulates and protects ratepayers from this type of punitive action on the part of the City of Cape Town

The proposed charge is not based on any consumptive parameters but uses property value as base for a scaled charge. The way this charge is calculated is not only socially divisive and inequitable but appears to be an illegal charge in the form of a wealth tax.

The NATIONAL WATER ACT. Act No 36 of 1998, under which regulation the City of Cape Town falls, is explicit.
Section 57(5) refers: – ‘No charge made under this Act may be of such a nature as to constitute the imposition of a tax, levy or duty.’

Finally, we demand that the City of Cape Town cut its grandiose coat according to the cloth that hard pressed residents can afford.
 

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