OFFICE OF THE EXECUTIVE MAYOR

KANTOOR VAN DIE UITVOERENDE BURGEMEESTER

4 September 2023

Response from Swellendam Municipality on the Memorandum received on the 30th of August 2023

Introduction
As elected officials by the majority of residents of Swellendam Municipality, we take exception to your
statements. We want to express our disappointment with the Councillors, ward committee members and
nominated representatives of the informal settlement for their dishonest behaviour, lies and inaction.

As democratically elected officials and ward committee members, you are responsible for all residents and the
municipality. As a councillor, the code of conduct and your oath to the residents and the municipality bind and
regulate your actions and contributions.

Indigent Support Policy

Background:
• In 2001, the South African Government initiated a policy to provide free basic services to economically
disadvantaged households.
• Municipalities were tasked with identifying indigent households eligible for free or subsidised services like
water and electricity.
• In September 2005, the National Department of Provincial and Local Government introduced a policy
framework for municipalities to develop indigent policies.
• The Indigent Policy Framework of the Department of Provincial and Local Government (DPLG) provides
a basis for municipalities to formulate and implement their indigent policies.
Indigent Household Definition:
• Indigent households are those experiencing extreme poverty and financial hardship.
Indigent Policy Purpose:
• The policy is a tool to address inequality and support the poor and vulnerable in South Africa.
• It works alongside the equitable share policy, which funds free basic services for qualifying indigent
households.
Division of Revenue Act (enacted annually) (DORA)
• Provides for the ‘equitable division of revenue to be raised nationally among the national, provincial
and local spheres of government.
• This is a budgeting instrument detailing how national revenue (collected through taxes) is shared
amongst the spheres of government to support the implementation of the various government
programmes.

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 • The revenue is generally referred to as the ‘equitable share’ and, at the local government level, is
usually used to subsidise the costs of providing basic services to people experiencing poverty.
Equitable Share:
• The equitable share is an unconditional grant the central government provides to local municipalities.
• It funds the delivery of free basic services to impoverished households and covers administration and
core services costs.
Local Government Equitable Share (LGES):
• The Department of Cooperative Governance and Traditional Affairs transfers LGES to municipalities to
subsidise free or subsidised services for indigent households.
Indigent Subsidy:
• The indigent subsidy ensures qualifying indigent households receive free basic or subsidised services.
Constitutional Rights and Access:
• Chapter 7 of the South African Constitution, The Bill of Rights, includes the right to water and social
security.
• Access to water and basic services is essential, especially for vulnerable individuals.
Free Basic Services / Subsidised:
• Municipalities offer free basic services / subsidised services covering electricity, water, sanitation, and
refuse removal, as well as rebates and discounts on property tax.
• Specific quantities of these services are provided to meet the basic needs of indigent households.
Indigent Categories in Swellendam:
1. Indigent households' informal settlements
2. Indigent households with 100% subsidy on basic charges
3. Poor households with a 50% subsidy on basic charges
4. Pensioner households with a 25% subsidy on basic charges
Application for Subsidy
In 2001, South Africa adopted a policy to provide free basic services to poorer households. Under this
policy, municipalities were tasked to identify indigent households that would receive services – such as water
and electricity – for free or at substantially subsidised rates.

Households are required to register with municipalities to qualify for free basic services. A municipality’s role is to
vet every application, selecting only those households that meet various criteria. Successful applicants are
granted indigent status. Municipalities often run awareness campaigns to ensure households know about the
application process.

Indigent status isn’t for life, however. The economic status of a family might improve over time. Municipalities
require registered households to reapply for indigent status regularly, often once a year, to ensure that only the
poorest families are catered for.

There are constraints. A municipality might only be able to service some indigent households that have
successfully registered due to a lack of funds or inadequate infrastructure. Municipalities can also decide on
how much they subsidise an indigent household. The general rule is that indigent households are entitled to 6 kl
of free water per household per month and 50 kWh of free electricity per household per month. The extent to
which sanitation and refuse removal services are subsidised varies from municipality to municipality.

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Public participation
Swellendam Municipality actively engages its residents in public participation, providing avenues for questions,
priority listing, budget inputs, and solutions. Our financial policies undergo annual reviews alongside the budget
and IDP processes. Typically, this comprehensive process spans from September to mid-May, culminating in
budget approval, which informs the IDP. Last year, unforeseen load-shedding schedule changes disrupted IDP
engagements. To compensate, we initiated additional "coffee breaks" across all wards within the municipality,
creating extra opportunities for residents to contribute, inquire, and voice concerns.

Between October 2022 and April 2023, Swellendam Municipality conducted fourteen public engagement
events exclusively in Railton, encompassing the Informal settlement. These initiatives served as a vital means for
the local government to connect with the community, gather valuable input, and address various issues
affecting the residents. The topics discussed during these engagements spanned a wide range, from
infrastructure development to social services and housing, depending on priorities and the concerns expressed
by the Railton community.

We facilitate input through various channels, including verbal and written submissions via email, postal service,
social media platforms, and our website. In a dedicated effort to enhance community involvement, we
introduced a specialised infrastructure WhatsApp number. This allows residents to report breakdowns directly to
the Infrastructure front desk.

Over a year ago, we launched the LINK app for service delivery concerns, enabling residents to report
complaints and service disruptions easily. These initiatives empower residents with accessible means to become
active citizens, reporting service delivery issues effortlessly.
Our policies undergo thorough workshops with all councillors to ensure they are well-informed. This equips them
to explain policy impacts to ward committees and residents effectively.

We will commence during this week with our consultations on budget and IDP preparation. This extensive
process starts every year in September and concludes in mid-May, as mentioned above.

Our consultations with three representatives revealed that nominated leaders, including long-serving
councillors, need a clearer understanding of the indigent policy. This contributed to statements in the press and
the spread of misinformation by the Councillors.

The tragic act of terrorism resulting in the burning of our municipal head office was a meticulously planned and
executed scheme. We possess credible information indicating that an individual provided instructions on
locating hidden tools to forcibly enter gates and doors, enabling the looting of municipal assets. This same
individual continued to issue instructions, ultimately leading to the building being set ablaze using petrol bombs.

Electricity tariffs

Electricity tariff setting in South Africa is a complex process involving various stakeholders, regulatory bodies, and
considerations.
Swellendam Municipality uses the guidelines provided by NERSA to determine tariffs.

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1. Regulatory Framework: The electricity industry in South Africa is regulated by the National Energy
Regulator of South Africa (NERSA). NERSA's primary responsibility is to approve electricity tariffs that are
fair, transparent, and cost-reflective.
2. Public Consultation: Before approving tariffs, NERSA conducts public consultations to gather input from
various stakeholders, including consumers, electricity providers (such as Eskom), and other interested
parties. This helps ensure that the tariffs consider the needs and concerns of different groups.
3. Cost of Supply: The tariff setting begins with a thorough analysis of the cost of supplying electricity. This
includes generation, transmission, distribution, and maintenance costs. Eskom, the state-owned
electricity company, plays a significant role in determining these costs.
4. Revenue Requirements: Eskom and other electricity providers submit their revenue requirements to
NERSA. This outlines the revenue they need to cover costs, invest in infrastructure, and ensure a reliable
electricity supply.
5. Tariff Structure: Tariffs in South Africa are typically structured into different categories, including
residential, commercial, and industrial. Each category may have different tariff structures based on
factors like consumption levels and time of use.
6. Multi-Year Price Determinations (MYPD): NERSA typically uses a multi-year price determination
approach, which sets tariffs for several years. This approach provides some stability and predictability
for both consumers and electricity providers.
7. Balancing Interests: NERSA must balance the interests of consumers, who want affordable electricity,
with the needs of electricity providers, who require revenue to maintain and expand the electricity
infrastructure.
8. Government Policy: Government policy can also influence tariff decisions. For example, there may be a
push to promote renewable energy sources or support low-income households with subsidised tariffs.
9. Tariff Approval: After considering all relevant factors and input from stakeholders, NERSA approves
electricity tariffs. Electricity providers then implement these approved tariffs.
10. Tariff Adjustments: Tariffs can be adjusted periodically, usually annually. Adjustments may be made to
account for changes in costs, inflation, and other factors.
11. Monitoring and Compliance: NERSA monitors the electricity industry to ensure compliance with
approved tariffs and regulations.
12. The National Energy Regulator of South Africa (NERSA) on 10 March 2023 approved the Eskom annual
tariff increases.
13. Over 12 months of the Eskom financial year, commencing on 01 April, an 18.65% increase applies to
Eskom directly supplied or non-municipal tariffs, which refers to Eskom’s standard tariff customers.
14. The Municipal increase of 18.49% is effective on 1 July 2023.

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 15. Eskom will get a further 12.74% in April 2024.
16. Although I need to separate party and state, I want to note that the Democratic Alliance is taking
NERSA tariffs to court.
17. Electricity tariffs have increased by more than 650% since the electricity crisis started in 2007, quadrupling
the inflation rate over the same period. This comes as South Africans are still struggling to recover from
the impact of COVID-19, increasing social vulnerability among poor people.
18. The Municipality uses various initiatives to support socially vulnerable groupings through programs such
as EPWP, indigent support, low-cost housing, grant-in-aid, bursaries, etc. This can only be implemented
subject to financial affordability.

ANC and ESKOM

It would help if you were holding the ANC and ESKOM accountable. ESKOM's failure to provide electricity to all
South African citizens is primarily due to ANC corruption and mismanagement. This has resulted in an
unprecedented increase in the cost of living, disproportionately affecting the underprivileged. As previously
highlighted, the ANC national government's failures and financial burdens have negatively impacted South
Africa. You are affiliated with the ANC, casting your vote in their favour and concealing crucial information
from the general public.

South Africans are choosing to migrate to the Western Cape in large numbers in pursuit of a better life under the
effective governance of the DA in the WCPG and municipalities governed by the DA throughout the province.

It's clear that the ANC-led provinces are facing severe challenges, particularly in healthcare and education,
where the situation is far from satisfactory and is exacerbated by endemic corruption.

Your demands will now be addressed point by point.

1. Indigent Policy
• In September 2005, the National Department of Provincial and Local Government
introduced a policy framework for municipalities to develop indigent policies.
• The Indigent Policy Framework of the Department of Provincial and Local Government
provides a basis for municipalities to formulate and implement their indigent policies.
• The Council has approved the indigent Policy based on the National Framework.
• Policies are reviewed and workshopped annually with all Councillors
• The current approved Indigent Policy will not be changed.
• Resident must apply to qualify

2. Infrastructure Levy
• Every resident makes use of the municipal infrastructure.
• To augment our infrastructure budget to address the backlogs in road maintenance,
an infrastructure levy of R10 plus 15% VAT = R11.50 is the fairest way for everybody to
contribute the price of a half loaf of bread, R11.50 per month or R138 per year.
• The levy will remain in place
3. Property values are not linked to the indigent support
• Property values are not linked to indigent support
• Qualifying indigent households and pensioners get exemption from property tax for the
first R750 000. Poor households get exemption from property tax for the first R375 000

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4. Benefits to Pensioners
• 25% subsidy of the basic levy for water for one service point p/m;
• 25% subsidy of the basic levy for sewerage for one service point p/m;
• 25% subsidy of the basic levy for refuse for one service point p/m;
• 25% subsidy of the basic levy for electricity for one service point p/m;
• The first R750 000 of a property value will be exempted from property tax, which
includes the R15 000 exemption in section 17(1)(h) of the Municipal Property Rates Act
(act 6 of 2004)
• Geodebt is now permanently situated at the Thusong Centre to make access and
travel more accessible for all residents of Railton, including pensioners
• The process is easy, and approval is immediate with all the required documentation.
• Indigent status isn’t for life, as confirmed by COGTA. The economic status of a family
might improve over time. Municipalities require registered households to reapply for
indigent status regularly, often once a year, to ensure that only the poorest families are
catered for.

5. Prudent financial management

Municipalities need to collect revenue from providing services for several important reasons:

• Funding for Services: Revenue collected from services, such as water, electricity,
sanitation, and waste collection, is a primary source of funding for municipalities to
provide these essential services to residents. This revenue covers the operational costs,
maintenance, and infrastructure investments required to ensure service delivery.
• Infrastructure Maintenance and Expansion: Municipalities must maintain and expand
their infrastructure to accommodate growing populations and changing needs.
Service revenue is reinvested into infrastructure projects, ensuring these services remain
accessible and efficient.
• Quality of Life: Reliable and efficient services contribute significantly to the quality of
life for residents. For example, access to clean water, sanitation, and electricity
improves health and living conditions, making a municipality attractive to live and
invest in.
• Economic Development: Adequate services attract businesses and investments, which,
in turn, stimulate economic growth and job creation. A well-functioning municipality
can support local businesses and industries.
• Compliance with Regulations: Many countries have regulations and standards that
require municipalities to provide specific services to their residents. Revenue collection
allows municipalities to comply with these regulations and avoid legal issues.
• Sustainability: Service provision requires ongoing funding. Sustainable revenue
collection ensures municipalities meet their financial obligations without relying heavily
on external sources, such as government grants or loans.
• Community Development: Revenue generated from services can also be channelled
into community development projects, education, healthcare, and other initiatives
that improve the overall well-being of residents.

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 Service Disconnection
• There's a common misconception that a municipality can't disconnect one service if it's not
fully paid. This is not accurate.
• A municipality has the full right to disconnect the supply of any service to a property if
there are undisputed arrears related to any other service associated with that property
(Schindlers Attorneys).
• Residents have the option to make their own arrangements with Geodebt.
• When residents fail to comply with these arrangements, their electricity supply is blocked.
• Geodebt accepts payments but will only unblock electricity once the agreed-upon
amount is paid in full.
• The National Treasury, through the MFMA, mandates municipalities to collect charges. If
these charges go unpaid, the municipality must take action by disconnecting the person's
electricity and restricting the water supply.

6. Electricity supply and illegal connections

• Swellendam Municipality is prohibited from supplying electricity beyond our urban
boundary.
• The Municipality's electrical network lacks the capability to supply electricity to all
regions.
• ESKOM can solely augment our Nominal Maximum Demand (NMD) for the Railton
housing project.
• NMD represents the customer's reserve capacity to meet maximum electricity demand
across all periods.
• In South Africa, engaging in illegal electricity connections is a significant problem, and
the law contains provisions to address such actions. The pertinent legislation addressing
illegal electricity connections includes the Electricity Regulation Act of 2006 and the
Electricity Supply Act of 1985. Below are key points regarding the legal consequences
of illegal electricity connections in South Africa:
6.1 Criminal Offense: Illegally connecting to an electricity supply is criminal. It is unlawful to
tamper with or establish an electrical connection without proper authorisation from the
electricity provider.
6.2 Penalties: Those involved in illegal electricity connections can face penalties, including
fines and imprisonment. The specific penalties can vary based on the nature and severity
of the offence. Penalties range from fines to imprisonment for several years.
6.3 Municipal Bylaws: Many municipalities in South Africa have established their own bylaws
concerning electricity supply and connections. These municipal bylaws can introduce
additional regulations and penalties regarding illegal connections.
6.4 Safety Concerns: Illegal electricity connections pose severe safety hazards beyond legal
repercussions. They can lead to electrical fires, electrocutions, and other dangers.
Authorities treat these safety concerns with utmost seriousness.
6.5 Reporting: Residents are encouraged to report any illegal electricity connections or
suspected tampering to their local municipality or the relevant electricity supplier.
Reporting such activities aids in enforcement and safety efforts.

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6.6 Disconnecting Illegal Connections: Electricity suppliers and municipalities possess the
authority to disconnect illegal connections. This is done to prevent further unauthorised
usage and ensure safety.
6.7 In South Africa, electricity theft is punishable with imprisonment, with sentences ranging
from 1 to 5 years, whether the theft is for personal use or on behalf of third-party consumers.
6.8 Swellendam Municipal Electricity Supply Bylaw was gazetted on 5 June 2015 in the Western
Cape Provincial Gazette to regulate electricity and gas reticulation and activities and
provide for connected matters.
6.9 Section 18. Principles for the resale of electricity
Unless authorised by the Municipality, no person may sell or supply electricity supplied
to their premises to any other person or persons for use on any other premises or permit
or allow such resale or supply to take place.
6.12 Section 19.(1)Right to disconnect supply
The Municipality has the right to disconnect the supply of electricity to any premises-
(a)without notice where there is a grave risk to person or property if the supply is not
disconnected or
there is evidence of tampering as contemplated in section 24 or with reasonable
written notice where
▪ A consumer fails to pay any amount due to the Municipality in connection
with the supply of electricity;
▪ Any provision of this By-law has been contravened, and the consumer has
failed to comply with a notice of compliance;
(iv) access to inspect metering equipment has been denied;
the metering accommodation provided by the consumer is not secure, in
compliance with safety regulations and lockable or
(v) In the opinion of the Municipality, there is a defect in the installation on-
premises or in any appliance used in or on premises which is likely to cause
injury or damage to persons or property.
(2) In contravention of this By-law, the Municipality has the right to limit
the electricity supply to the premises from which electricity is supplied
or sold or to remove and destroy the illegal connections between
premises.
(3) After disconnection for non-payment of accounts or the improper or
unsafe use of electricity, the tariff as prescribed by the Municipality
shall be paid for re-connection of such supply.
(4) In the case where an installation has been illegally re-connected on
premises after having been disconnected by the Municipality, or in
the case where the Municipality's electrical equipment has been
tampered with to prevent the full registration of consumption by the
meter, the Municipality may remove the electricity supply from those
premises.
6.13 Swellendam Municipality has been and will persist in removing illegal connections and
prepaid electricity meters from households engaged in electricity theft.

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7. Streetlights
• Streetlights are turned on during unusual hours for maintenance purposes.
• It is the responsibility of engaged community members to promptly notify the
Infrastructure Department if any streetlights remain lit during daylight hours,
ensuring swift attention to the matter.
• Swellendam Municipality formerly employed daylight switch sensors for this
purpose.
• Daylight switch sensors are commonly used in municipal streetlights to control their
operation based on ambient light conditions automatically.
• Daylight switch sensors are designed to detect the level of natural light in their
surroundings. Comparison: The sensor continuously compares the current ambient
light level with the preset threshold.
• Activation: When the sensor determines it's dark enough, it sends a signal to the
streetlight controller. The controller, in turn, activates the streetlights, illuminating
the area.
• Deactivation: As dawn approaches and the natural light levels increase, the
sensor detects this change and compares it to the preset threshold. If the light level
surpasses the threshold, the sensor sends a signal to the controller to turn off the
streetlights.
• This automatic operation ensures that streetlights are only active when needed,
saving energy and reducing light pollution during daylight hours. Additionally, it
helps municipalities comply with environmental regulations and reduce electricity
costs.
• Due to Railton's elevated location on a hill, sunlight reaches it before it does
Swellendam, which is situated lower. Consequently, the daylight sensors switched
off the streetlights in Railton sooner. This prompted complaints from the Railton
community, alleging discrimination.
• In response, Swellendam Municipality replaced the daylight sensors with timers,
incurring a significant expense. These timers ensure that streetlights in both Railton
and Swellendam activate almost simultaneously. However, due to frequent load
shedding, the timers occasionally lose track, resulting in lights turning on and off at
incorrect intervals. The Electricity department must reset these timers to the correct
time slots.

8. Budget related to service delivery

• The only budget items that do not directly impact service delivery are our annual
payments to South Africa Local Government Association and the Auditor General
• Swellendam Municipality will gladly not pay the combined R6 million to these
organisations, but there will be consequences
• We have cut our spending on staff salaries from 36.5% to 33%
9. Encouragement for Electricity Conservation
• Residents who use electricity efficiently can lower their electricity bills.
• The Municipality cannot offer households incentive units to reduce their electricity
consumption.

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 10. Equitable Share: Receiving Indigent Grant Funds
• The equitable share represents an unconditional grant that enables municipalities to offer
free basic services to impoverished households and subsidise administrative and essential
services.
• Local municipalities receive a share of national tax revenues, administered by the South
African Revenue Service (SARS) under Section 214 of the Constitution, to provide essential
services to eligible indigent households.
• The Department of Cooperative Governance and Traditional Affairs (CoGTA) annually
disburses the Local Government Equitable Share (LES) to municipalities, providing subsidies
for delivering free or reduced-cost essential services to indigent households.
• Section 216 of the Constitution mandates the national government to allocate resources
to municipalities through the annual Division of Revenue Act (DORA), aiding them in
fulfilling their responsibilities and functions.
• This equitable share allocation to municipalities ensures that indigent households,
meeting specific criteria outlined in our Indigent Policy, gain access to water, electricity,
sanitation, and waste removal at no cost or reduced rates.
Applicants must meet these criteria to qualify.

11. Service providers

• Service providers deliver essential services that Swellendam Municipality lacks the
internal capacity and resources to handle directly.

As elected officials, the Swellendam Council and its appointed Senior Management constitute the panel
responsible for engaging with the community through public participation processes. These processes follow
approved timelines set by the Council itself.

Yours in service delivery

Francois du Rand
Executive Mayor

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