Significant tariff increases, among them a 10.7% electricity price hike, have been included in Stellenbosch Municipality’s proposed budget for the coming year.
This was discussed when the municipality held its final in-person public participation session for the Integrated Development Plan (IDP) and budget for the 2026/27 financial year last week.
Stellenbosch Town Hall, where the Integrated Development Plan (IDP) and budget public participation meeting took place on Tuesday, 21 April. PHOTO: Yusuf Kosadia-Hassen
Tariff increases are the biggest issue for consumers and businesses. Electricity at 10.71%, water at 5.5%, sanitation and refuse removal at 6%.
Kevin Carolus, the chief financial officer (CFO) of the Stellenbosch Municipality, explained that tariff-setting begins with a cost-of-supply study, first establishing what it costs the municipality to deliver each service, and then determining the revenue needed to cover those costs. Eskom is increasing the price of electricity sold to the municipality by 9.01%, hence the 10.71% increase from the municipality, which will come into effect on 1 July.
”We do not just look at what it will cost to operate during a financial year, but also what capital investments are required for those specific services because you also need to provide funding for any refurbishment and upgrades to maintain the quality of service,” he said.
For electricity, the municipality uses a tiered consumer structure. This enables it to charge lower rates depending on income levels and the amount of electricity used. Domestic households consuming under 600 kilowatt-hours per month qualify for a lower tariff, while indigent households receive 100 kilowatt-hours free per month. “Households [earning R7000 or less] receive 100 kilowatt hours of electricity free per month, 6 kiloliters of water, [sanitation and refuse] also provided as part of the subsidy,” said Carolus.
These tables break down the new tariff increases one would see on their rates bill at the end of the month if the new budget is implemented. This is categorised by the size of the household, including property size (rates), electricity use and water usage. PHOTO: Yusuf Kosadia-Hassen
When asked whether small businesses would receive any relief, Carolus said: “For SMMEs [small, medium and micro enterprises] specifically, we don’t have specific rebates that we provide.”
He noted that the municipality does offer training programmes to help small businesses and new businesses with planning, however, they will not provide any financial support within the budget.
The overall budget of R3.7 billion represents a 7.95% increase in the current year (roughly double the inflation rate). “Seventy-seven percent of our revenue comes from service charges. That is the biggest component,” Carolus said. This budget will be spent on the annual running costs of the city, but also significant investments into housing, safety and dignified living.
These tables break down the new tariff increases one would see on their rates bill at the end of the month if the new budget is implemented. This is categorised by the size of the household, including property size (rates), electricity use and water usage. PHOTO: Yusuf Kosadia-Hassen
Lester van Stavel, senior management for housing development at Stellenbosch Municipality, presented the five priority projects relating to property management and human resource management, aimed at housing and capacity management. These projects run along the next four years, with a large portion of the budget being invested into these projects. ”Stellenbosch is probably going up to capacity and we need to look at other options. That’s why we have certain kinds of developments happening,” said Van Stavel.
Gary Boshoff, director for community and protection services at Stellenbosch Municipality, told attendees that every submission received during the process would be considered before the IDP and budget are finalised, with some restrictions.
“All input will be taken into account when we finalise the final document,” said Boshoff. “But it doesn’t mean we will automatically accept your recommendations, because not all of those goals are mandates of local government. Some of those are the design of [the] national government, and some of [the] provincial government.”
The public participation window closes on 28 April, and once approved by the council, it will take effect from 1 July.