Civic Association of Rondebosch East voices strong opposition to rate hikes

Secretary Nadine Birch on behalf of: Civic Association of Rondebosch East

Dear Councilor Kleinschmidt

The Civic Association of Rondebosch East (CARE), representing the interests of residents in your ward, demands your immediate and unambiguous opposition to the proposed municipal rates increases and additional cleaning charges being pushed forward by the City of Cape Town.

These increases-based on inflated property valuations and imposed without meaningful public consultation-are unaffordable, unjust, and out of touch with the lived realities of the people you were elected to serve.

A recent poll conducted by CARE among our members reveals an overwhelming majority stand firmly against these proposals and fully support our call for you to oppose them outright in the upcoming Council vote. A total of 301 residents voted in favour of this resolution with only one dissenting vote. Your duty is to represent our voice in Council, not rubber-stamp unjust and unilateral implementation of Party-political policies.

Let us be clear: if you do not vote against these increases, we demand your immediate resignation as councilor. Inaction or silence on this matter will be seen as a betrayal of the community's trust.

We expect, as we hereby do, confirmation of receipt, a direct response and a prompt public statement within the next seven days from date of this letter, confirming your opposition and a commitment to voting against these measures in Council,

Your response or non-response will be posted on all forums.

We advise all other organisations, including interested and affected parties, to conduct a similar Poll, to hold their ward representatives accountable, and to make such findings public knowledge.

We firmly believe that there exist other innovative methods to raise the necessary funding to boost our fiscus - a tactic used by your Party when they opposed the VAT increase and will reveal such Strat plan in an open forum in discussions-cum-negotiations with the City.

Notwithstanding the above, we remind you of the provisions of the MATR and the recent court judgement Others vs Speaker of National Assembly and Others 2023 ZACC14 of May 30, 2023), which underpins our right, ab initio, to constructive public engagement in matters which adversely affect us as residents.

We demand this right forthwith i.e. public engagement with all interested and affected parties in an open forum.

The residents of Rondebosch East are watching, and we will hold you as our elected representative accountable.

Ward 60 Councillor Mark Kleinschmidt responds:

The draft Budget has been rigorously debated ad nauseam with great input by Capetonian residents, and the Executive Mayor Geordin Hill Lewis has considered the economic conditions and the tough times we are prevailing in.

 The draft Budget has not been passed yet and is open for public comment.

 As Ward 60 Councillor the tough economic times we live in has been a great consideration and having amended the Budget impacting on residents with due consideration, I have no alternative but to agree that it has been well thought out, and support the many amendments it has gone under.

• City of Cape Town’s mayco member for finance, Siskeko Mbandezi responds:

This year's budget process is a clear and objective example of the absolute importance that the City places on public input. Given the input received after the first tabling of the draft budget, the City on Wednesday May 28 tabled expanded rates relief measures and other changes to the proposed ‘Invested in Hope’ Budget for 2025/26.

Members of the public have a further opportunity to comment until Friday June 13. The association is welcome to offer constructive and feasible input that will help to balance the required revenue needs for the massive infrastructure investments, continued and expanded service delivery and safety and security enhancements, within the limitations of affordability and income constraints. 

The March budget was designed to protect families living in lower value homes in particular, and was deliberately designed to cross-subsidise this protection from higher value homes. The proposed amendments tabled last week preserve that protection for families in lower value homes, but also considerably soften tariffs for the middle class, whose feedback and concerns we took to heart.

We have thoroughly examined the budget to find ways to achieve this without compromising the critical and urgent investments required for infrastructure to avoid ending up like most other metros and municipalities in South Africa, where the systematic decline in investment and service delivery is so evident. 

The expanded relief measures are:

• Extending the ‘first R450 000 rates-free’ benefit to all homes up to R7 million property valuation (up from R5m)
• More pensioners to benefit by raising the qualifying threshold to R27 000 monthly income per household (up from R22 000), regardless of property value, SA’s widest criteria for pensioner support.
• Significantly reducing City-wide Cleaning charges for all residential properties under R20m compared to the tabled March 2025/26 budget. A pensioner rebate for City-Wide Cleaning has also been included, which will offer up to 100% off this charge.
• Lower fixed water charges for property value bands between R1m and R25m compared to the March tabled budget draft

The above relief measures will lead to lower total monthly bills compared to the March budget approximately as follows (based on average consumption patterns):

• R1.2m home: up to 15% lower
• R2m home: up to 24% lower
• R3m – R4m homes: up to 33% lower
• R5-7m homes: up to 40% lower

For pensioner rebate beneficiaries, the relief will be even greater. 

We have rephased income parameters and tariff reform requirements and remodeled scenarios. Following the relief tabled, 97% of ratepayers won’t experience the often-repeated +20% increase in monthly bills, and virtually no one will experience a 30% increase on any reasonable household consumption scenario, let alone the fabled 40% of recent click-bait reports.

Special ‘lifeline’ electricity protection also continues for indigent households and pensioners. Lifeline customers using 600 units will still pay roughly the same in 2025 as they did three years ago in 2022/23.

Municipal infrastructure must be available for everyone, and must always work. Cape Town would not have a working electricity or water service to speak of if the City only charged people for consumption. Many costs are fixed in nature – pipelines, trucks, chemicals, cables, staff to service it all. These costs remain no matter how much people consume, and so fixed costs must be met with a portion of fixed revenue.

Cape Town cannot sustainably fund infrastructure with lower-income and affluent households making equal contributions.

Hundreds of thousands of households between R500 000 to R1.5m do make meaningful fixed contributions within their means. But we cannot sustainably run a city where a R50 million household makes the same fixed contribution to water and sanitation infrastructure as a R500 000 household.

If a flat charge of say R500 is billed, and one household earns R20 000 while the other earns
R100 000 a month, this charge represents 2.5% and 0.5% of their monthly income respectively. This means the impact on the lower-income household is actually five times more than on the higher-income household.

Cross-subsidising – where the better off among us help to fund services for the less fortunate – is the only sustainable way to ensure a working city of hope for all. All households – whether low-income or affluent – also contribute 15 cents in every rand of rates paid towards free and basic services to indigent households valued under R500 000.

Getting rid of the former ‘pipe levy’ based on pipe size, and basing it now on property value, means that all homes under R2.5m will pay less for their fixed water charges than they would have on the pipe-size system for 25/26. Even when adding the new sanitation charge, 200 000 families in homes under R2.5m will pay less fixed charges for Water and Sanitation together this year, compared to what they would have paid on the pipe-size system.

The R40 billion SA-record infrastructure budget remains intact, and 75% of which will directly benefit lower-income households.

There are no luxury or optional major infrastructure projects in this budget that are not urgently needed. 

Cape Town offers the lowest monthly bills, with the best services and value for money for residents.