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Tariff

Jurisdiction
South Africa · Swartland
Date
12 June 2015
Language
English
Type
Legislation
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Swartland
South Africa

Tariff By-law, 2015

Under the provisions of section 156 of the Constitution of the Republic of South Africa, 1996 the Swartland municipality, enacts as follows:-

1. Definitions

In this by-law, the English text prevails in the event of any conflict with the Afrikaans text, and, unless the context otherwise indicates –“agricultural consumer” includes but is not limited to farms, smallholdings and agricultural show grounds;“availability charges” means a monthly levy that may be levied against immovable property with or without improvements, which is not connected to any municipal service works, where such property can be reasonably so connected;“break even” occurs where the volume sales are equal to the fixed and variable cost associated with the provision of the service;“charitable and welfare institutions and organisations” include but are not limited to any institution managed on a non profitable basis by a church association or a registered charity organisation such as –(a)old age homes;(b)pre-primary schools;(c)care facility for pre-primary children;(d)old age facility;(e)care facilities for the homeless; and(f)children’s homes.“commercial consumer” includes but is not limited to business undertakings, shops, offices, liquor stores, supermarkets, public garages, gathering places, nurseries, places of entertainment, service stations, hairdressing salons, banks, hotels, guesthouses, boarding houses and doctor and dentist consulting rooms;“communityservice”meansservicesclassifiedassuchbythemunicipality in respect of which the tariffs are of a regulatory nature, and set at a level where the costs are not recovered fully from public service charges;“council” means the municipal council of the Swartland municipality;“councillor for financial matters” means the councillor of the municipal council responsible for financial matters;“cost recovery tariff” a tariff which must cover the total cost in respect of the service delivered by the municipality which may include a profit to ensure financial sustainability;“domestic consumer” includes but is not limited to: residential premises, group housing, town houses, semi-detached houses and flats;“economic service” means services classified as such by the municipality for which tariffs are determined with the intention to recover the total costs of the services from consumers;“educational and community institution” includes but is not limited to schools, colleges, or pre-primary schools that are not operated by a registered charity or welfare organisation, libraries, museums, churches, hospitals, clinics, correctional institutions, school hostels and community halls;“fixed costs” means costs which do not vary with consumption or volume produced;“indigent household” means households that are registered as such in terms of the municipality’s Credit Control and Debt Collection By-law;“industrial consumers” includes but is not limited to: industrial undertakings, factories, warehouses, workshops, scrap yards, stores, wine cellars, abattoirs, dairy processing plants and fish markets;“in season” means the period from the 1st December of a year up to 31. January of the following year and from the Monday before the Easter weekend up to and including Easter Monday;“lifeline tariff” means a unit charge calculated by dividing the total cost associated with the service by the volume consumed (units);“municipality” means the municipality of Swartland and includes any delegated official or service provider of the municipality;“municipal services” means “municipal services” as defined in section 1 of the Act, and includes a function or a combination of functions listed in Schedules 4B and 5B of The Constitution of the Republic of South Africa, 1996, and any other service rendered by the municipality;“policy” means the Tariff Policy adopted by the municipality as reflected in the Schedule to this by-law which Schedule refers;“resident” means a person who is an ordinary resident in the municipal area;“special agreement” means a special tariff agreement entered into with a consumer who makes a significant economic contribution to the community and who creates job opportunities;“special refuse” means perishable foodstuffs emanating from abattoirs, fish processing plants, fruit processing plants, etc.“sport and recreation facilities” include but are not limited to –(a)properties used exclusively for sport and recreation purposes;(b)school sport fields which are metered separately for water and electricity consumption; and(c)caravan parks;“the Act” means the Local Government: Municipal Systems Act, 2000 (Act No 32 of 2000);“this by-law” includes the Credit Control and Debt Collection Policy as reflected in the Schedule;“total cost” means the sum of all fixed and variable costs associated with a service;“trading services” means services classified as such by the municipality for which tariffs are determined with the intention to make a profit on the delivery of the services;“two-part tariff” means a tariff in respect of a service as determined by Council which will be levied separately to recover the fixed and variable costs where the fixed costs are calculated by dividing the total fixed costs by the number of customers per category and the variable costs are calculated by dividing the total variable costs by the volume consumed;“units consumed” means the number of units consumed of a particular service and which are measured in terms of the tariff structure reflected in paragraph 9;“variable costs” means costs that vary with consumption or volume produced.

2. Adoption and implementation of tariff policy

(1)The municipality must adopt and implement a tariff policy on the levying of fees for a municipal service provided by the municipality or by way of service delivery agreements which complies with the provisions of the Systems Act, the Local Government: Municipal Finance Management Act, No 56 of 2003 and any other applicable legislation.
(2)The municipality shall not be entitled to impose tariffs other than in terms of a valid tariff policy.

3. Contents of the policy

The municipality’s tariff policy shall –
(a)reflect the principles referred to in section 74(2) of the Systems Act and specify any further principles for the imposition of tariffs which the municipality may wish to adopt;
(b)specify the manner in which the principles referred to in section 74(2) are to be implemented in terms of the tariff policy;
(c)specify the basis of differentiation, if any, for tariff purposes between different categories of consumers, service providers, services and service standards as long as such differentiation does not amount to unfair discrimination; and
(d)include such further enforcement mechanisms, if any, as the municipality may wish to impose in addition to those contained in the Credit Control and Debt Collection By-Law and Policy.

4. Application and enforcement of the policy

(1)The policy shall apply to all tariffs determined by the municipality during the annual budget process; provided that the municipality may determine tariffs during the course of a financial year when –
(a)a new service is introduced;
(b)no tariff for an existing service has previously been imposed; or
(c)it is necessary to correct a tariff already imposed.
(2)Payment of tariffs shall be enforced through this by-law, the Credit Control and Debt Collection By-law and any other enforcement mechanisms determined by the municipality.

5. Repeal of by-laws

The Tariff By-law published in Provincial Gazette 7825 on 11 July 2104 is hereby repealed.

6. Short title and commencement

This By-Law shall be known as the Tariff By-Law of Swartland Municipality and shall become effective on 1 July 2015.

Schedule

SWARTLAND MUNICIPALITY TARIFF POLICY

In terms of section 74 of the Local Government: Municipal Systems Act, 2000, (Act 32 of 2000) the Municipality of Swartland adopts the following Tariff Policy –

1. Objectives of policy

The objectives of this policy are –
(a)to comply with the provisions of section 74 of the Local Government: Municipal Systems Act, 2000 (Act 32 of 2000); and
(b)to give guidance to the councillor responsible for finance regarding tariff proposals to be submitted to council annually during the budget process.

2. Tariff principles

The following principles shall apply –
(a)restricted free services to consumers and financial assistance to indigent households shall be considered only in as far as it can be financed from –
(i)financial allocations by the National Government; and
(ii)a grant for that purpose by the municipality, which shall be determined annually during the budget process.
(b)all consumers of municipal services must be treated equitably and the various categories of consumers must pay the same charges based on the same cost structure;
(c)the amount payable by consumers must be in proportion to usage of the service;
(d)indigent households must at least have access to basic services through lifeline tariffs or direct subsidisation;
(e)tariffs must reflect the total cost of services unless stated otherwise in this policy document;
(f)where provided for in this policy, consumers may choose a tariff from a range of applicable tariffs;
(g)tariffs must be set at a level that facilitates the sustainability of services by ensuring that –
(i)cash inflows cover cash outflows which mean that sufficient provision for working capital and bad debts must be made; and
(ii)access to the capital market is maintained by providing for the repayment of capital, maintaining sufficient liquidity levels and making profit on trading services.
(h)provision shall be made in appropriate circumstances for a surcharge on a tariff which will apply when a restriction of use is required which may include national disasters and periods of droughts;
(i)efficient and effective use of resources shall be encouraged by providing for penalties to prohibit exorbitant use;
(j)the extent of subsidisation of tariffs shall be disclosed;
(k)VAT is excluded from all tariffs and shall be additional to these tariffs when applicable.

3. Categories of consumers

(1)The tariff structure may provide for the following categories of consumers –
(a)domestic consumers;
(b)commercial consumers;
(c)industrial consumers;
(d)agricultural consumers;
(e)municipalities;
(f)consumers with whom special agreements were made;
(g)consumers in certain geographical areas;
(h)sport and recreation facilities;
(i)educational and communal institutions; and
(j)charitable and welfare institutions and organisations.
(k)Government.
(2)The municipality may differentiate between different categories of consumers, debtors, service providers, services, service standards and other matters.
(3)The differentiation shall be based on one or more of the following elements –
(a)infrastructure costs;
(b)volume usage; or
(c)availability and service standards.

4. Service classification

The municipality may, subject to the guidelines provided by the National Treasury and the Mayoral Committee, make provision for the following classification of services:
(a)trading services
(i)water
(ii)electricity
(iii)camping facilities
(b)economic services
(i)refuse removal
(ii)sewage disposal
(c)community services
(i)air pollution
(ii)fire fighting services
(iii)local tourism
(iv)town planning
(v)municipal public works
(vi)storm water management system in built-up areas
(vii)trading regulations
(viii)fixed billboards and the display of advertisements in public places
(ix)cemeteries
(x)control of public nuisances
(xi)control of undertakings that sell liquor to the public
(xii)facilities for accommodation, care and burial of animals
(xiii)fencing and fences
(xv)licensing and control of undertakings that sell food to the public
(xvi)local amenities
(xvii)local sport facilities
(xviii)municipal parks and recreation
(xix)municipal roads
(xx)noise pollution
(xxi)pounds
(xxii)public places
(xxiii)street trading/street lighting
(xxiv)traffic and parking
(xxv)building control
(xxvi)licensing of motor vehicles and transport permits
(xxvii)nature reserves

5. Expenditure classification

Expenditure may be classified as:
(a)Subjective classification which includes –
(i)salaries, wages and allowances
(ii)bulk purchases
(iii)general expenditure
(iv)repairs and maintenance
(v)capital charges (interest and redemption) / depreciation
(vi)contribution to fixed assets
(vii)contribution to funds –
(aa)bad debts;
(bb)working capital; and
(cc)statutory funds
(viii)contribution to reserves
(ix)gross expenditure
(x)less charge-out
(xi)net expenditure
(xii)income; and
(xiii)surplus/deficit
This classification of expenditure each with a unique vote must be applied to all cost centres.
(b)Objective classification in terms of which the following cost centres must be created to which the costs associated with providing the service can be allocated –
(i)department
(ii)section/service
(iii)division/service

6. Cost elements

The following cost elements may be used to calculate the tariffs for the different services –
(a)fixed costs which consist of the capital costs (interest and redemption) on external loans as well as internal advances or depreciation whichever are applicable to the service, and any other costs of a permanent nature as determined by the municipality;
(b)variable cost which includes all other variable costs that have reference to the service; and
(c)total cost which consists of the fixed cost and variable cost;
(d)a cost recovery tariff; or
(e)a combination of any of abovementioned tariffs.

7. Tariff types

In determining the type of tariff applicable to the type of service the municipality may make use of the following five options or a combination thereof –
(a)a single tariff which shall consist of a cost per unit consumed and which will be recovered through unit charges at the level where income and expenditure breaks even. Subject to a recommendation by the Director: Financial Services the municipality may approve profits on trading services which will be added to cost of the service for the purpose of calculating the tariffs.
(b)cost related two-to-three part tariff which shall consist of two to three parts –
(i)management, capital, maintenance and operating costs may be grouped together and be recovered by a fixed charge, independent of consumption for all classes of consumers;
(ii)variable costs may be recovered by a unit charge per unit consumed; and
(iii)three part tariffs may be used to calculate the tariff for electricity and to provide for maximum demand and usage during periods of limited demand.
(c)inclining block tariff which is based on consumption levels being categorised into blocks, with the tariff increasing as consumption levels increase. The first step in the tariffs will be calculated at break-even point and subsequent steps will be calculated to yield a result that would discourage excessive use of the commodity.
(d)declining block tariff which is the opposite of the inclining block tariff and decreases as consumption levels increase. The first step will be calculated by dividing the fixed and variable cost and profit by the volume consumed and will only be used for special agreements;
(e)a cost recovery tariff; or
(f)a regulating tariff which is of a regulatory nature and the municipality may recover the full cost or a portion thereof associated with rendering the service.

8. Tariff structure and methods of calculations

The following tariff structure shall be applied to determine tariffs –
(1)Water
(a)Tariff structure-
(i)fixed tariff per consumer plus a single tariff per unit used (kilolitres used);
(ii)single tariff per consumer; or
(iii)a cost recovery tariff;
(b)Method of calculation-
(i)the fixed costs of the service shall consist of the costs indicated as such by the municipality;
(ii)the number of consumers shall be used to determine the fixed costs per consumer;
(iii)where a fixed cost per consumer is charged, the unit charge shall be calculated by dividing the variable cost by the volume consumed;
(iv)where a fixed cost per consumer is not charged, the unit charge shall be calculated by dividing the total cost by volume consumed;
(v)if for any reason a meter cannot be read or has not been read, the municipality shall be entitled to render an account based on the estimated consumption calculated on the last known 3 months’ average consumption preceding the date on which the meter was last read;
(vi)where a property is not connected to the water reticulation system but can reasonably be so connected, an availability charge equal to the unit tariff per kiloliter, as determined annually by Council;
(vii)profit made on the service shall be added to the fixed and variable cost before tariffs are calculated.
(2)Electricity
(a)Tariff structure –
(i)kWh – Active Energy;
(ii)kVA – maximum demand (thermic or block) register in a half an hour period;
(iii)kVArh – Reactive Energy;
(iv)peak, standard and off-peak time periods – according to bulk purchase tariff structure;
(v)high and low consumption seasons – according to bulk purchase tariff structure;
(vi)allocation of holiday season – according to bulk purchase tariff structure;
(b)Method of calculation –
(i)the guidelines and policy issued by the National Electricity Regulator shall form the basis for calculating tariffs;
(ii)cross subsidisation between and within categories of consumers may be allowed based on the load factors of the categories and consumers within the category;
(iii)portions of the fixed costs will be recovered through an energy or time-of-use charge.
(iv)in applying the abovementioned principle, the cost allocation basis, cost groupings, tariff components and tariff types reflected in the following tables shall be used-
(aa)The one-part single energy rate tariff –All costs allocated to a consumer category which normally makes use of a one-part single energy rate tariff shall be expressed in a single cents/kWh charge, calculated as follows –
(i)the maximum demand costs (rands/kVA/month) of all consumers that will normally use a single tariff will be calculated by considering the average load factor applicable to the type of consumers and added to the variable cost;
(ii)the fixed cost (rand per consumer per month) and the energy cost (kWh) shall be added to the variable cost;
(iii)the total cost (maximum demand, fixed and energy costs) allocated to consumers which normally uses a one-part-single-energy tariff shall be calculated at a break-even point comparable with the number of kWh units determined by Eskom;
(iv)the total cost will be expressed in a cents/kWh tariff.
(bb)The two-part tariff –
(i)a portion of the fixed cost equal to the operating and administrative cost of the Electricity Department shall be recovered through a rands per consumer per month charge;
(ii)the remaining portion of the fixed cost will be added to the variable cost and recovered through a unit charge (cent/kWh charge);
(iii)the tariff consists of a fixed monthly charge plus a variable charge related to metered kWh consumption.
(cc)The three-part tariff –
(i)a portion of the fixed cost as described in sub paragraph (2)(bb)(i) shall be recovered through a rand/consumer/ month charge;
(ii)the remaining portion of the fixed cost shall be recovered through a unit charge (cent/kWh) and maximum demand charge (ran/kVA/month);
(iii)the maximum demand charge (rand/kVA cost) shall be recovered through the capacity charge where applicable;
(iv)the cent/kWh charge shall recover the total variable cost plus portions of re-allocated fixed and demand charges (rand/consumer/month and rand/kVA costs) where applicable.
(dd)Time-of-use tariff –
(i)time-of-use tariffs offered shall be based on the peak, standard and off-peak tariffs and time periods of the supply authority to maintain cost recovery in the event of load profile shifting. Transmission and distribution network charges may be recovered through rand/kVA charges;
(ii)the cents/kWh charge recovers the full variable costs as well as a portion of the reallocated rands/kVA charges where applicable;
(iii)the rands per consumer per month charge is not reallocated;
(iv)the structure of the time-of-use tariff will be calculated according to the purchase structure;
(v)the time-of-use tariff will only be offered in areas where similar tariffs are available to the municipality;
(vi)where a profit is made on the service it will be added to the fixed and variable cost before tariffs are calculated;
(vii)where a property is not connected to the electricity reticulation system but can reasonably be so connected, an availability tariff equal to the fixed costs calculated in accordance with the provisions of sub paragraph (2)(b) shall be payable.
(ee)Net metering –
(i)net-metering import tariff (energy supplied to the consumer) cent/kWh charges shall be based on the average cost of supply including a portion of operating cost, surplus and purchase cost allowing for time-of-use tariff variations;
(ii)net-metering export tariff (energy supplied by the consumer) cent/kWh charges shall not exceed the average cost of purchase allowing for time of use tariffs applicable during the time period of supply;
(iii)a portion of the fixed cost equal to the operating and administrative cost of the Electricity Department shall be recovered through a rands/consumer/month charge.
(3)Waste removal
(a)Unit of measurement-
(i)number of premises whether built on or not, is a basic unit;
(ii)bulk waste removal;
(iii)cost recovery tariff
(iv)special waste;
(v)gate levies/coupons
(b)Method of calculation –
(i)a cost recovery tariff equal to the unit tariff applicable to domestic consumers shall be levied on each premises whether built upon or not;
(ii)a unit tariff per premise, whether residential or other institution, shall be levied which will be calculated by dividing the total cost by the total number of premises;
(iii)where more than one dwelling unit, as defined in the municipality’s scheme regulations, are situated on premises (such as semi-detached units or blocks of flats), each such dwelling unit shall be regarded as separate premises for the purposes of this paragraph;
(iv)for each business on premises a compulsory waste removal tariff shall be charged that will be adjusted according to volume of waste removed. The waste unit for business is two plastic bags or two 85 litre waste bins or a 240 litre wheely bin per week. For residential premises it is unlimited.
(v)a waste tariff equal to the unit tariff levied in terms of sub paragraph (b)(ii) & (iv) in respect of the removal of waste on premises situated within the urban fringe areas of the towns of Malmesbury, Moorreesburg, Riebeek-Wes, Riebeek-Kasteel, Darling, Yzerfontein, Abbotsdale, Kalbaskraal, Chatsworth, Riverlands and Koringberg and Ongegund shall be applicable to waste removal once a week per premises.
(vi)with regard to premises situated outside the above mentioned urban fringe areas, or the occasional removal removal of refuse, a tariff based on a levy per load or part thereof shall be levied;
(vii)the tariff for special waste shall be levied by adding the cost of air space occupied, measured in tons, to the actual cost to treat and cover such waste;
(viii)the coupon prices for waste delivered personally at waste sites, shall be determined according to vehicle capacity, the air space occupied as well as the cost to cover such waste daily;
(ix)waste tariffs shall be levied monthly.
(c)Where a waste removal service is available, whether such service is used or not, an availability tariff equal to the monthly tariff applicable to residential and business premises shall be levied
(4)Sanitation:
(a)Unit of measurement –
(i)number of toilets;
(ii)formula based water flow tariff; or
(iii)a cost recovery tariff.
(b)Method of calculation –
(i)an availability charge may be levied at a tariff equal to the unit tariff applicable to residential consumers where a property is not connected to the sewerage reticulation system but can reasonably be so connected;
(ii)a unit charge per consumer may be charged; the tariff will be calculated by dividing the total cost by the total number of premises connected to the sewerage reticulation system;
(iii)where more than one dwelling unit, as defined in the municipality’s zoning scheme regulations, is situated on premises (such as a semi-detached dwelling or a block of flats etc.), each such a dwelling unit shall for the purpose of this paragraph, be considered to be separate premises;
(iv)a surcharge of 15% shall be levied for each additional toilet in respect of consumers mentioned in paragraphs 3(1)(b) to 3(1)(k).
(v)the tariff payable for the removal of the contents of a conservancy tank shall be equal to the unit tariff levied in terms of sub paragraph 4(b)(i) in respect of conservancy tanks in use on premises situated within jurisdictional area of the municipality; where a third suction is done in the same month during Easter Weekend or school holidays, such suction shall be done at no cost while a fourth suction in the same month shall be done at actual cost.
(vi)a tariff, based on a charge per load to be removed, may be levied for the emptying of conservancy tanks on premises situated outside the urban fringe areas or for the occasional removal of the contents of a septic tank on such premises;
(vii)charges payable in terms of sub paragraph (vi) must be levied by the Insident program monthly;
(viii)where requests by any consumer to whom a waste removal service is received by Emergency Services after ordinary office hours, the actual cost shall be levied by the Insident program;
(ix)industries classified as wet industries (water intensive industries) shall pay a treatment cost based on the following formula in addition to a tariff per cistern:B = 0,85 V[R x COD] / 1000B = Treatment costV = Volume of water used in kiloliterR = Cost of treating of 1 Kilogram COD in R/kilogramCODCOD = Chemical oxygen demand in milligram per litre
(x)industries classified as wet industries and equipped with a flow measurement device to record the effluent volume, the following shall apply:B = V[R x COD] / 1000B = Treatment costV = Volume of effluent in kiloliterR = Cost of treating of 1 Kilogram COD in R/kilogramCODCOD = Chemical oxygen demand in milligram per litre
(xi)sewerage tariffs shall be levied monthly.
(c)Where property is not connected to any water bearing sanitation system or a sanitation pumping system, but can reasonably so connected, a monthly availability charge equal to the fixed cost calculated in terms of sub paragraph (1)(b), shall be levied, provided that such availability charge shall not be applicable not premises where french drains exist.
(5)Community services
(a)Tariff structure –
(i)the tariff structure as reflected in table 1 below shall be used to determine regulatory community and subsidised services.
(b)Method of calculation –
(i)these tariffs may be adjusted annually by a percentage as determined by the council during its budget process, or by a recalculation of the estimated actual cost.

Table 1

9. Notification of tariffs, fees and service charges

(1)The municipality must give notice of all tariffs approved at the annual budget meeting at least 30 days prior to the date that the tariffs become effective.
(2)A notice stating the purport of the council resolution and the date on which the new tariffs shall become operational, must be displayed by the municipality at a place designated for that purpose.
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History of this document

01 July 2015
Commenced
12 June 2015 this version