Irate KZN ratepayers continue to withhold utility bill payments

While Durban ratepayers are forging ahead with a hard-hitting campaign to hold the eThekwini municipality accountable for poor governance, the business sector has warned the move to withhold utility bill payments will disrupt the city’s fragile economy.

Mounting frustration over poor service, failing infrastructure, alleged maladministration and the recent water, electricity and rates tariff hikes has ignited a revolt by ratepayers affiliated to the newly formed eThekwini Ratepayers Protest Movement (ERPM) — a social justice body born from the Westville Ratepayers Association’s (WRA) stand against the city.

Residents affiliated to the movement are diverting their utility account payments to an account held in trust “in protest of the city’s maladministration, misappropriation, and incompetence which has been cited by the auditor-general”, says the ERPM.

About R1.3m has been diverted to the account since early August says Asad Gaffar, WRA head and one of those leading the charge .

After a public outcry mayor Mxolisi Kaunda revised the tariffs and reduced the electricity tariff from 21.9% to 18.49%; the sanitation tariff from 11,9% to 10.9%; property rates from 8% to 7.9% and refuse removal from 8% to 7%.

The water tariff was not reduced because of hikes imposed by Umgeni Water and remained at 14.9% for domestic use and 15.9% for business.

Now ratepayers, led by WRA, have hauled the municipality to court to stop it from disconnecting the municipal services of any resident who is part of the campaign until a dispute declared by the association over lack of public participation in the tariff hike matter is resolved.

The hearing is set down in Durban high court in November.

The Durban Chamber of Commerce and Industry warned the movement’s stand will prove “detrimental” to the city’s coffers and will lead to an “even worse situation”.

“The city generates a large proportion of its revenue from bulk services and rates. We believe failure to pay for basic services will disrupt the local economy, city’s budget and its proposed plans,” said the chamber’s CEO Palesa Phili.

But she admitted “poor service delivery is evident and has a detrimental impact on business operations” and negatively impacts business confidence.

The latest results of the Durban Business Confidence Index Report shows a big dip from 43.27 in the previous quarter to 37.28.

“This is the second consecutive decline of the index following another dip in business confidence in the municipality from 44.04 in the fourth quarter of 2022 to 43.27 in the first quarter of 2023,” said Phili.

“Whilst businesses and residents are frustrated about the city’s maladministration, misappropriation, and incompetence we cannot resort to illegal activities,” said Phili.

Residents want decisive action.

“The tariff increases are unaffordable, especially for the poor, indigent and elderly. The city continues to be plagued by maladministration and wasteful expenditure,” said Gaffar.

Non-existent

“Service delivery is virtually non-existent. Call centres don’t work. We are hit with estimate readings. Incorrect readings are not addressed timeously and you are forced to pay upfront even when you can prove the readings are incorrect,” he said.

In court papers, which form part of the bid to stop the city from imposing credit controls against protesting residents, Gaffar said the WRA had engaged the municipality many times over rates, water and electricity charges in dispute.

He said the city published its draft budget for the year in April with a deadline for comments at the end of that month.

“There were a objections to these absurd timelines raised by the WRA and other ratepayers’ associations. Chief among these objections was that ratepayers were awarded less than two weeks to say on the draft budget. The association made numerous written requests to the municipality for a meeting to submit its comments on the proposed budget and tariff increases which it failed to reply to,” said Gaffar.

“On May 24 the municipality held the meeting within which WRA delivered an extensive list of objections, highlighting gross noncompliance with the public participation process and the concerns detailed in the auditor-general’s reports, which the metro had not responded to nor had it considered in its proposed budget. Despite the delivery of prior correspondences, eThekwini went ahead and adopted the proposed budget containing the disputed tariff increases with little to no changes.”

Programme co-ordinator of the Pietermaritzburg Economic Justice & Dignity Group, a social justice organisation, Mervyn Abrahams, referring to the campaign said: “Middle class people are moving beyond just complaining into organising. That in itself is big.”

Abrahams said the pushback by residents means municipalities, particularly eThekwini, “will have to sit up and take notice because their revenue base is now directly impacted”.

“It is a critical pushback and people are beginning to claim their right to be consulted.

“Municipalities have to take the question of affordability into its consideration. The middle-class is under enormous financial stress, with increases in rates and taxes, fuel and food prices. It’s not enough to say we apologise after implementing tariff hikes.

“The reality is that South Africans are strained by affordability and we are at the same time seeing many abuses of funds, while infrastructure is collapsing all around us.

“That’s the trigger. People are saying enough is enough. They want value for their money. A movement like this has the potential to force the municipality to become more consultative and ensure better use of funds.

“This is not the first time that this happened. If this trend continues it won’t be the last time that citizens will challenge local government.

“From a democracy point of view it is good that people are now fighting back. But it will have an impact on the municipal finances.

“Municipalities get grants from National Treasury to provide free basic services. Those free basic services should not be impacted because the revenue is coming through National Treasury.

“There is a trust deficit of municipalities among ordinary South Africans. The financial abuse of funds and other issues has eroded all levels of trust.

“Until municipalities increase the level of trust, we will see these incidents increase,” Abrahams said. 

Umhlanga Ratepayers’ and Residents’ Association (URRA), which contributes more than 28% to the municipality, has not joined the fray.

“While we recognise the WRA’s right to express dissatisfaction and voice concerns, we maintain our belief there are more effective and lawful avenues to address these issues,” said URRA secretary Aron Calo.

“URRA remains steadfast in its conviction that withholding rates is not a lawful course of action and can yield unintended repercussions. We pledge to continue engaging with local authorities, advocating for the community’s interests, and pursuing lawful resolutions to address any concerns.”

Municipal spokesperson Gugu Sisilana said it is unlawful to withhold the payment of property rates for any reason.

“To understand why this is the case, we need to distinguish between “rates” and “taxes” and other kind of services (such as electricity and water services). Section 24 (1) of the Municipal Property Rates Act of 2004 states that “a rate levied by a municipality on a property must be paid by the owner of the property, subject to Chapter 9 (Credit Control and Debt Collection) of the Municipal Systems Act.”

Sisilana said the municipality will continue implementing credit control measures in line with the relevant policies and municipal bylaws where accounts are in arrears.

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