Cape Town city is continuing its steady trend of over-recovering on water revenue raking in a staggering R912 million more while sanitation charges topped more than R200 million in December last year.
The City’s chief financial officer Kevin Jacoby must, according to law, compile a monthly report on the financial status of the City.
Jacoby said the over-recovery is due to some consumers still using water above restriction levels.
“This was specifically applicable during the level 6 tariff stage implemented to discourage high consumption in order to keep saving water. It must, however, be emphasized that the over-recovery on sales is not all cash backed. High consumption by non-paying consumers will mean that the over-recovery on “billed revenue” will be offset by the over expenditure as would be reflected by the provision for the non-cash backed portion of the amount billed,” he said.
The introduction of Level 5 restrictions, Jacoby says, has slowed down the over-recovery of “billed revenue” reflecting a closer alignment to the City’s monthly budget.
“This also means that the cumulative effect of over-recovery has stabilised. This stabilising effect is expected to continue under the Level 3 restriction levels and depending on the usage levels (and impact of seasonal usage) the anticipated cash backed portion of the current over-recovery can be used as a buffer potential under-recovery later in the financial year,” he said.