AMATHOLE DISTRICT MUNICIPALITY TARIFF POLICY
AMATHOLE DISTRICT
MUNICIPALITY
TARIFF POLICY
2013/14
1
INDEX
1. Preamble
2. Objectives
3. Definitions
4. General Principles
5. Categorisation
6. By - Laws to give effect to policy
7. Water Tariffs
8. Sanitation Tariffs
9. Minor Tariffs
10. Annexure – Legal Requirements
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1. PREAMBLE
1.1
In line with requirements of Section 74 (1) of the Municipal Systems Act, 32 of
2000, the municipal council of Amathole District Municipality (ADM), must
adopt and implement a tariff policy on the levying of fees for municipal services
provided by the Municipality itself or by way of service delivery agreements and
which complies with the provisions of the Systems Act, the Municipal Finance
Management Act and any other applicable legislation.
1.2
The Municipality’s tariff policy will undergo revision annually and be tabled
with the multi – year Annual Tabled Budget to the Council for consideration and
approval for public scrutiny and comments.
1.3
Comments received by the Municipality on the contents and stipulations of the
Policy will be considered by the Council for possible amendment to the reviewed
policy to be approved by the Council annually before 31 May.
1.4
Should the principles contained in the Tariff Policy be changed by Council
Resolution, an Adjustment Budget will have to be prepared by the Municipality
to reflect the resulting effect.
2. OBJECTIVES
2.1
To provide a framework in which the Accounting Officer can institute and
maintain a tariff policy, which is transparent, cost – effective for the Municipality
and is easily understood by all.
2.2
This policy outlines the principles to be employed by Amathole District
Municipality in the levying of fees for services provided by the Municipality.
2.3
These principles have been informed by the vision and mission of Amathole
District Municipality, as well as, the Municipal Systems Act (32 of 2000).
2.4
This Policy document is intended to guide the annual setting of tariffs
This Policy document does not make specific tariff proposals. The nature
and basis for the differentiation of tariffs is set out in the Schedule of
Tariffs.
2.5
Any differentiation must be consistent with the framework set out under the
differentiation between different categories of users, debtors, service providers,
services, service standards, geographical areas and other matters for tariff
purposes as long as the differentiation does not amount to unfair discrimination
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and must be defined in the Municipal Service By laws as stated in section 74 (3)
of the Municipal System’s Act..
3. DEFINITIONS
3.1
“Consumer” means;
a) Any person who occupies property to whom, and in respect of premises
thereon, the Council –
i) has agreed to provide services;
ii) is actually providing services;
iii) has entered into an agreement with the Council for the provision of
services to or on any property;
b) the owner of any property to which the Council is providing services;
c) where services are provided through a single connection to a number of
accommodation units or consumers or occupiers, means the person to
whom council agreed to provide such services; and
d) any end user who receives services from the Council.
3.2
“Indigent” means any household which is responsible for the payment of
municipal services, earning a combined gross income equivalent to or less than
two times the Government social grant as published by the National Department
of Finance or in line with the National Indigence Framework issued by the
Department of Co-Operative Governance and Traditional Affairs (COGTA), who
qualify, according to the policy, for rebates/remissions, support or a services
subsidy. Examples hereof include pensioners, the unemployed and child-headed
families who are unable to fully meet their payment obligations for municipal
services.
3.3
“Industrial Water” means the use of water for mining, manufacturing,
generating electricity, land based transport, construction or any related purpose
3.4
“Municipal area” means the area in respect of which the Municipality has
executive and legislative authority as determined by the constitution and the
national legislation and as demarcated by the Local Government Municipal
Demarcation Act 27 of 1998.
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3.5
“Municipal council” means a municipal council as referred to in Section 157 of
the Constitution and for this Policy includes a municipal local council and a
municipal district council, as the case may be.
3.6
“Municipality” means the municipal council of the Amathole District
Municipality.
3.7
“Municipal tariff or tariffs” shall mean a tariff for services which the
Municipality may set for the provision of a service to the local community, and
may include a surcharge on such service. Tariffs for major services shall mean
tariffs set for the supply and consumption or usage of water and sanitation, and
minor tariffs shall mean all other tariffs, charges, fees, rentals or fines levied or
imposed by the Municipality in respect of other services supplied including
services incidental to the provision of the major services.
3.8
“Person” means any natural person, an unincorporated or incorporated body, and
includes a voluntary association or trust, and an organ of state as defined in
section 239 of the Constitution of the Republic of South Africa, 1996 (Act 108 of
1996)
3.9
“Property” shall mean:
(a)
immovable property registered in the name of a person, including
in the case of a sectional title scheme a sectional title unit
registered in the name of a person;
(b)
a right registered against immovable property in the name of the
person, but excluding a mortgage bond registered against the
property;
(c)
a land tenure right registered in the name of a person or granted to
a person in terms of legislation;
(d)
public service infrastructure.
and for purposes of services availability charges, “property’ shall be
deemed to include any piece of land, the external surface boundaries of
which are delineated on –
(i)
a general plan or diagram registered in terms of the Land Survey
Act, 8 of 1997, or in terms of the Deeds Registries Act, 1937 (Act
No. 47 of 1937);
(ii)
a sectional plan registered in terms of the Sectional Titles Act,
1986 (Act No. 95 of 1986); or
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(iii)
3.10
a register held by a traditional authority or in accordance with a
sworn affidavit made by a traditional authority;
“ Register”
a)
means to record in a register in terms of(i) the Deeds Registries Act, 1937 (Act 47 of 1937); or
(ii) the Mining Titles Registration Act, (Act 16 of 1967); and
b)
includes any other formal act in terms of any other legislation to record–
(i) a right to use land for or in connection with mining title purposes;
or
(ii) a land tenure right
3.11
“Tariff policy” shall mean a policy on the levying of fees for major and minor
services rendered by the Municipality. itself or by way of service delivery
agreements, and which complies with the provisions of the Systems Act, the
Municipal Finance Management Act and any other applicable legislation.
4. GENERAL PRINCIPLES
4.1
COST RECOVERY
Tariffs must be set at a level that will allow recovery of all costs related to provision of a
particular service.
4.2
AFFORDABILITY
Tariffs must be set at a level that will be affordable to all consumers, that includes
domestic, businesses etc.
4.3
FINANCIAL SUSTAINABILITY
Tariffs must be set at levels that facilitate the financial sustainability of the service, taking
into account subsidization from sources other than the service concerned.
4.4
SURCHARGES ON TARIFFS
Provision may be made in appropriate circumstances for a surcharge on the tariff for a
service.
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4.5
DROUGHT PROVISIONS
As part of its efforts to address water shortages during periods of drought, the
Municipality will implement special tariffs aimed at reducing water consumption levels,
especially for consumers who use excessive amounts of water. During drought periods,
an additional surcharge as determined by Council during declaration of drought will
therefore be charged for all consumption levels in excess of 6 kilolitres per month to all
consumers in the affected areas.
5. CATEGORISATION
Tariffs may differentiate between different categories of users, debtors, service providers,
services, service standards, geographical areas and other matters as long as the
differentiation does not amount to unfair discrimination.
The tariff structure of Amathole District Municipality may make provision for the following
categories of users, debtors and consumers, properties and geographical areas without
limitation thereto:
(a) categories of debtors and consumersi. natural persons and juristic persons;
ii. business and commercial;
iii. municipality;
iv. government;
v. government institution or entity;
vi. non profit organizations;
vii. association or trust;
viii. community based organizations;
(b) categories of usersi. Domestic;
ii. Business and commercial
iii. industrial;
iv. institutions such as (
similar );
schools, clinics,
museums and other
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v. non profit institutions such as ( Churches, old age homes,
orphanage, sport clubs, and other similar );
vi. agriculture;
vii. rural and peri urban;
viii. municipal services;
ix. government services;
x. public infrastructure;
xi. special agreements;
xii. geographical areas;
xiii. undeveloped land;
xiv. mixed use;
xv. public infrastructure;
xvi. informal settlements;
xvii. Developers
(c) Categories of geographical areas – differentiation based on geographic area may
be used if the service provided is at least the basic service and one of the
following criteria is meti. the topography must have an impact on the cost of delivering the
service;
ii. significant capital cost are needed to develop services
infrastructure in the area;
iii. the Integrated Development Plan of the municipality identifies the
area as having strategic development importance;
(d) categories of properties as defined in the Local Government Municipal Property
Rates Act 6, ( Act 6 of 2004).
6. BY-LAWS TO GIVE EFFECT TO POLICY
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In line with Section 75 (1) of the Municipal Systems Act, the Municipality must adopt
by-laws to give effect to the implementation and enforcement of the ADM tariff policy.
These by-laws may differentiate between different categories of users, debtors, service
providers, services, service standards and geographical areas as long as such
differentiation does not amount to unfair discrimination.
In accordance with sections 21(1)(d) and (3)(b)(iii) of the Water Services Act, 108 of
1997, the by-laws shall provide that the determination and structure of tariffs for water
services, including water for industrial use and treatment of industrial effluent, shall be
set out in tariff resolutions approved in terms of Section 24(2)(c)(ii) of the Local
Government: Municipal Finance Management Act, 56 of 2003.
7. WATER TARIFFS
A new connection fee will be levied to new consumer accounts upon request for
connection to the main water supply as determined by council from time to time. In the
event that the costs for providing the service are greater than the approved tariff, the
quotation figures will be applicable.
Because water is a scarce national resource, and the Municipality is committed to the
prudent conservation of such resources, the tariff levied for domestic consumption of
water shall escalate according to the volume of water consumed. The tariff for domestic
consumption shall be based on monthly consumption as follows:
Consumption
Indigents
Domestics
Churches, Sports
Clubs and other
Non- Governmental
Organizations
0 - 6 KL
Free
Free
Step Tariff
Above 6 to 10 KL
Free
Step Tariff
Step Tariff
Above 10 to 15 KL
Step Tariff
Step Tariff
Step Tariff
Above 15 to 25 KL
Step Tariff
Step Tariff
Step Tariff
above 25 to 40 KL
Step Tariff
Step Tariff
Step Tariff
Above 40 to 500 KL
Step Tariff
Step Tariff
Step Tariff
Above 500 KL
Step Tariff
Step Tariff
Step Tariff
Tariffs for non-domestic consumption shall be based on a single charge per kl consumed,
irrespective of the volume of consumption concerned.
Tariffs for pre-paid meters will include a water availability charge portion that is levied to
consumers that are using conversional water meters.
The categories of water consumers as set out below shall be charged at the applicable
tariffs, as approved by the council in each annual budget.
Tariff adjustments shall be effective from 1 July each year.
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Subject to such further differentiation as may be made in the tariffs, the general structure
of the categories of consumption and charges shall be:
*
All domestic water consumers shall receive free the first 6 (six) kl of water
consumed per month. Consumers registered as indigents with the Municipality
shall receive free 10 kl of water consumed per month subsidized. Thereafter a
stepped tariff per kl as determined by the council from time to time shall be
applicable on metered water consumption, as set out in this policy. This stepped
tariff means the tariff payable increases as the monthly volumes of water
consumed increase.
*
All other domestic consumers shall be charged for actual water consumption at a
stepped tariff per kl as determined by the council from time to time.
*
A basic (availability) charge per month shall be charged for undeveloped erven,
where municipal services exist, irrespective of their permitted or intended use.
Consumers will however be responsible for ensuring that local municipality
valuation rolls are correctly updated where erven have been consolidated or
subdivided and developed as the Municipality will levy the availability charges
for erven reflected as vacant on the local municipality valuation rolls.
*
The tariff applicable to domestic consumption of water shall not exceed 75% per
kl of the tariff applicable to other consumers.
*
A basic (availability) charge, per developed erf as determined by the council from
time to time, shall be charged on all water consumers.

A flat rate, per developed erf for non metered consumers is charged at 6kl of
deemed consumption, based on the lowest domestic water tariff for domestic
consumers, sports clubs, churches and for other Non-Governmental
Organizations. For other debtor types a different flat rate will be applied as
determined by council from time to time.

Undetected Underground Water Leaks – Tariff Rebate;
Rebates shall only be granted in the case of undetected leaks which are
underground and not visible to the eye on the property or premises
50% rebate shall be granted for excess water caused by the leak and the
consumer be liable for the other 50%. The rebate will only be granted to
consumers with the plumbers report/invoice confirming that the leak was
underground and it has been fixed.
The increased water consumption emanating from the leak will be determined by
establishing the difference between the average consumption of the consumer
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over the same period in the previous year, or if this is not possible, the estimated
consumption of a similar consumer in the same geographical area.
The total period over which the rebated water tariff will extend is limited to 3
billing months or 3 billing periods based on actual water consumption..
All water tariff rebate claims will be subject to the claimant producing a
registered plumber certificate indicating the date, location, nature and the steps
taken to repair the leak.
The municipality reserves the right to inspect the water reticulation and plumbing
system before and after the leak is repaired.
The Director Engineering Services of the municipality has delegated authority to
approve any such claim at the discretion of the municipality.
A property or premises shall be limited to the approval of two claims in each
twelve month period not exceeding 2 years.
The Municipality may make certain discretionary exceptions to waive the total
cost of the higher consumption emanating from the leak for Indigent households
and community based organisations or any other low income consumer
categories.
Repairing of leaks inside the owners’ property will be provided by the municipality in
the event the owner or occupant is unable to afford the costs of hiring a plumber. This
service will be provided to domestic consumers who are not indigent and a fee for
such service will be levied against the customer account. The fee will be a fixed
charge as determine by council from time to time. This service will also be provided
to indigent consumers at a fee that will eventually be off-setted by the subsidy
provided that the consumer is a registered Indigent customer.
A Bulk water supply tariff will be determined by council on an annual basis for the
provision of bulk water to consumers external to the Municipality, such as other
district municipalities who are dependent or part of their potable water supplies from
Amathole District Municipality
8. SANITATION TARIFFS
The categories of sanitation users as set out below shall be charged per month at the
applicable tariff as approved by the council in each annual budget.
Tariff adjustments will be effective from 1 July each year.
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Subject to such further differentiation as may be made in the tariffs, the general structure
of the categories of usage and charges shall be:
*
A basic (availability) charge per month shall be charged for undeveloped erven,
where municipal services exist, irrespective of their permitted or intended use.
Consumers will however be responsible for ensuring that local municipality
valuation rolls are correctly updated where erven have been consolidated or
subdivided and developed as the Municipality will levy the availability charges
for erven reflected as vacant on the local municipality valuation rolls.
*
A fixed monthly charge based on the costs of the service shall be charged for
domestic users.
A fixed monthly charge based on the costs of the service per sewer point/toilet
shall be charged to all other categories of users as differentiated in the Schedule
of Tariffs
An effluent fee may further be payable by factories and other industrial users
where the wastewater emanating from such users requires special purification
measures by the Municipality. Such fees shall be based on the toxic content of
the wastewater concerned and the costs of the purification
*
*
*
For conservancy tank sanitation services the waste collection charges will be as
set out in the municipal tariffs and shall cover a fixed collection rate per load.
“Charges in the removal or collection of conservancy tank contents shall be set
out in the municipal tariffs, and shall be based on –
a. the volume removed or collected, taking into consideration the cost of
waste water treatment required;
A special tariff for conservancy tank services should be determined for private
customers who collect the contents of their conservancy tank. The tariff should
reflect the cost related to the waste water treatment works.
9. MINOR TARIFFS
All minor tariffs shall be approved by the council in each annual budget, and shall, when
deemed appropriate by the Municipality, be subsidised by the Levy Replacement Grant
and general revenues, particularly when the tariffs will prove uneconomical when
charged to cover the cost of the service concerned, or when the cost cannot accurately be
determined, or when the tariff is designed purely to regulate rather than finance the use of
the particular service or amenity.
All minor tariffs over which the Municipality has full control, and which are not directly
related to the cost of a particular service, shall annually be adjusted at least in line with
increases in the prevailing consumer price index, unless there are compelling reasons
why such adjustment should not be effected.
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9.1
-
-
9.2
-
-
The following services shall be considered as subsidised services, and the tariffs
levied shall cover 50% or as near as possible to 50% of the annual operating
expenses budgeted for the service concerned:Fire Levy and Availability Fees
A Fire Levy charge is raised to all domestic and non-domestic consumers where
fire services are immediately available within their towns.
A Fire Availability Levy charge is raised to all domestic and non-domestic
consumers where fire services are not immediately available within their own
towns and the response time is greater than 30 minutes for the nearest fire service
station.
A different fixed rate is levied per domestic and non-domestic consumers as
determined by council from time to time.
Fire Levy and Fire Availability Levy are only applicable to the following Local
Municipalities:
 Mbhashe Local Municipality
 Mnquma Local Municipality
 Great Kei Local Municipality
 Ngqushwa Local Municipality
Fire Levy or Fire Availability is raised to the owner account per ERF.
Waste Site Management
Two waste sites are being owned and administered by Amathole District
Municipality, one in Mbhashe Local Municpality and the other in Mnquma Local
Municipality.
A fixed monthly charge will be raised to each municipality account as determined
by Amathole District Municipality.
An excess fee will be levied per ton exceeded on the determined threshold of tons
to be dumped by each municipality on a monthly basis.
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9.3
General
The following services shall be considered as economic services, and the tariffs levied
shall cover 100% or as near as possible to 100% of the budgeted annual operating
expenses of the service concerned:
-
rentals for the use of municipal halls and other premises (subject to the
proviso set out below)
building plan fee
water, sanitation, new connection fees
water meter installation fee for non metered consumers
photo copies and fees
clearance certificates
solid waste tariffs
The following charges and tariffs shall be considered as regulatory or punitive, and shall
be determined as appropriate in each annual budget:
-
-
water: restrictions (in respect of arrear accounts), disconnection and
reconnection fees
penalty and other charges imposed in terms of the approved policy on
credit control and debt collection
penalty charges for the submission of dishonoured stale, post-dated or
otherwise unacceptable cheques.
penalty on non-compliance of environmental health inspections.
-
administration fee of 2,5% on all card payments in excess of R5 000
water meter installation fees for non metered consumers
-
The offences and fines shall be considered as violation of the municipal by laws, and
shall be determined in each annual budget.
Market-related rentals shall be levied for the lease of municipal properties.
In the case of rentals for the use of municipal halls and premises, if the Municipal
Manager is satisfied that the halls or premises are required for non-profit making
purposes and for the provision of a service to the community, the municipal manager may
waive 50% of the applicable rental.
The Municipal Manager shall determine whether an indemnity or guarantee must in each
instance be lodged for the rental of municipal halls and premises and in so determining
shall be guided by the likelihood of the Municipality’s sustaining damages as a result of
the use of the facilities concerned.
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ANNEXURE: LEGAL REQUIREMENTS
SECTION I: WATER SERVICES ACT NO. 108 OF 1997
SECTION 10: NORMS AND STANDARDS FOR TARIFFS
A municipality, in its capacity as a water services institution, must apply a tariff for water
services which is not substantially different from any norms and standards which the
Minister of Water Affairs and Forestry, with the concurrence of the Minister of Finance,
has prescribed in terms of the present Act.
SECTION 21: BY-LAW
A municipality, in its capacity as water services authority, must make by-laws which
contain conditions for the provision of water services, and which provide for at least the
following (inter-alia):
-
-
the standard of the services;
the technical conditions of supply, including quality standards, units or
standards of measurement, the verification of meters, acceptable limits
of error and procedures for the arbitration of disputes relating to the
measurement of water services provided;
the determination and structure of tariffs in accordance with Section 10
of the present Act.
If the Municipality, in its capacity as water services authority, has imposed conditions
under which water services are provided, such conditions must be accessible to
consumers and potential consumers.
If the Municipality, in its capacity as water services authority, provides water for
industrial use, or controls a system through which industrial effluent is disposed of, it
must make by-laws providing for at least the following:
-
the standards of the service;
the technical conditions of provision and disposal;
the determination and structure of tariffs.
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