The City of Windhoek has resorted to lump residents with tariff increases as the council’s expenses, including a N$1.5 billion wage bill, continue to put pressure on limited resources. Salaries and wages make up the bulk of the wage bill at N$785 million, followed by housing allowances at N$268 million, the medical aid fund at N$138 million, and N$137 million for pension contributions.
Acting CEO George Mayumbelo said although the wage bill represents 35% of its budget, the city only has 2 535 staff, of whom 1 920 are permanent, 615 temporary, 422 City Police employees and 446 interns.
However, the interns are paid from other allocated allowances which are not part of the N$1.5 billion wage bill.
During the budget presentation in April, then chairperson of the management committee Fillemon Hambuda said “the salary-related expenses will be analysed in the coming year to ensure that our human resources’ capacity speaks to the resources required to execute the strategy and transformation plan.”
During the approved budget presentation to the media yesterday, the acting CEO explained that the city is facing pressure due to limited resources, and therefore needed to increase tariffs. Mayumbelo said although the city’s financial year starts in July, this year’s budget was only approved by minister of urban and rural development Erastus Uutoni a month into the new bookyear.
“There is a high influx to Windhoek because of our good performance. If people see opportunities like in Walvis Bay they would stay there. I don’t want to embarrass other towns, but there are towns in the country where people are only living and they don’t see anything else,” he stated.
Mayumbelo was at pains to stress that around 10 000 people migrate to the city annually for better opportunities, and that the city has no control over this influx, which causes pressure on the city’s scarce resources.
The city could also address the land issue, but because of the limited resources, it becomes difficult, he added.
Apart from the wage bill, some of the city’s other expenses include N$2.5 billion for general expenditure, N$216 million for repairs and maintenance and N$36 million in capital charges, bringing the expenditure to N$4.3 billion. The city’s total income is estimated at N$4.6 billion, with the provision of electricity (39%) and water (19%) as well as rates (13%) making up the bulk of the city’s earnings.
The city has raised tariffs on electricity consumption by 3.7% (subject to Electricity Control Board approval), household refuse removal with 5% and solid waste management with 5%, respectively.
City officials state they intend to generate funds for the operating budget of its electricity department. The revenue generated from the proposed 2% tariff increase will be used for the solar plant project the city is planning to install that will have a significant impact on the residents’ tariffs.
Windhoek is seeking private developers to build a 25 megawatt solar energy facility on a build, own, and operate basis.
Interested stakeholders had until 19 August to submit their proposals.
The city’s fire brigade levy was also raised by between N$10 for residents to N$350 for large businesses.
The tariffs and other sustainable additional revenue are also increased to fully fund the sustainable operational budget.
“Another strategy the city will look into is to create a revolving fund from land sales revenue, grant funding (government and other donors), diversification to reduce the reliance on bulk suppliers (25MW solar plant) and identify additional revenue,” said the strategic executive: finance and customer services, Jenny Comalie.
She observed that the city will from now on aggressively go after those engaging in illegal electricity connections.
Mayumbelo continued that the government’s budget allocation of N$41 million is not sufficient because N$39 million will be used for informal settlements’ upgrading, and N$2 million will be used for stabilising services and the restoration of water in Groot Aub.
“We are used to the budget support from the government. But now it’s a step back. We have a lot of pressure on the budget, but we will decrease our deficit. We also managed to limit the wage bill to 35%. It is very difficult to manage because the city has been expanded to Groot Aub. We were recovering well, but Covid-19 has jeopardised the progress,” he noted.
Assessment rates 13%
Refuse removal 8%
Land sales 7%