INTRODUCTION

It has come to the writers attention that Pickitup has recently published its own set of tariffs on its website, which can be found here: Tariffs – Pikitup. These tariffs are not in line with those that are published on the City of Johannesburg’s (“COJ”) website. As such, this article examines the legality of these tariffs and whether or not Pickitup is lawfully allowed to charge consumers for charges based on its own internal tariffs, through COJ on a consumers municipal account.

The first area that needs to be examined is who, in terms of the law, is entitled to issue tariffs which are binding on the consumers within the jurisdiction of the COJ.

Section 24(2)(c)(ii) of the Local Government: Municipal Finance Management Act (“MFMA”) (read with sections 4(1)(c)(i), 11(3)(h),(i), (l), (m) and (n), as well as sections 73, 74, 75 and 75A of the Local Government: Municipal Systems Act (“Municipal Systems Act”), set out that only the Municipal Council has the power to determine tariffs. Section 24(2)(ii) of the MFMA, section 74 and section 4(1)(c) of the Municipal Systems Act are quoted below for your ease of reference. I also set out the definition of the municipal council in terms of the Municipal Structures Act.

APPROVAL OF THE TARIFFS IN TERMS OF SECTION 24(2) THE MUNICIPAL FINANCE ACT:

“Approval of annual budgets

24(2) An annual budget—
(c) must be approved together with the adoption of resolutions as may be necessary—
(ii) setting any municipal tariffs for the budget year;”

POWERS RELATING TO TARIFFS BEING CHARGED IN TERMS OF THE MUNICIPAL SYSTEMS ACT.

Rights and duties of municipal councils in terms of section 4 of the Municipal Systems Act

(4)(1) The council of a municipality has the right to—
(c) finance the affairs of the municipality by—
(i) charging fees for services; and
(ii) imposing surcharges on fees, rates on property and, to the extent authorised by national legislation, other taxes, levies and duties.

SECTION 74 OF THE MUNICIPAL SYSTEMS ACT DEALS WITH TARIFF POLICY

74(1) “A municipal council must adopt and implement a tariff policy on the levying of fees for municipal services provided by the municipality itself or by way of service delivery agreements, and which complies with the provisions of this Act, the Municipal Finance Management Act and any other applicable legislation.”

Taking into account the above-mentioned provisions, it is only the Municipal Council that has the power to make a budget and therefore the tariffs applicable for any particular time period (ordinarily for the period of 01 July to 30 June). The Municipal Council is a body of elected officials, who make decisions with regard to the running of the City.

On a yearly basis the Municipal Council agrees on a budget required to run the municipality and how same can be recovered from its consumers. The recovery from its consumers is set out in the Tariffs that are approved and published every year. This document then lets the consumers know on what basis they can and will be billed by the City, depending on the type of property owned within the jurisdiction of the City.

As such, in essence, the Directors or officials of Pickitup that created their own internal tariffs, are not authorised by law to create those tariffs. As such, those tariffs cannot be on-billed to the public. Therefore  it is only the Municipal Council that must and can adopt and implement a tariff policy on the levying of fees for municipal services provided by the municipality itself or by way of service delivery agreements, and which complies with the provisions of the Municipal Systems Act, the Municipal Finance Management Act and any other applicable legislation. This ensures transparency and consistency in determining tariffs for services such as water, electricity, refuse removal, and sewerage.

This means that the Municipal Council is the only body that has the power to determine and approve municipal tariffs.  Pickitup is not a Municipal Council, nor do its directors form part of the Municipal Council, it is a SOC with a Service Level Agreement with the City of Johannesburg and therefore this power (being the right to determine tariffs to be on-billed to the public) is not vested in them. Therefore, Pikitup is acting ultra vires in so far as it is holding consumers liable for any refuse removal charges, which are not specifically outlined in the City of Johannesburg’s tariffs. Ultra vires acts are any acts that lie beyond the authority of a corporation or a government body to perform.

As such, should you be being billed for refuse charges, which are not reflected in the COJ’s tariff document, but rather in terms of the tariff document published by Pikitup directly, you are being billed for unlawful charges, as they have not been approved and budgeted for by the Municipal Council who is the only body in law that is allowed to issue tariffs. Examples of these unlawful charges, are per-bin charges being levied to business buildings.

Should you be receiving municipal invoices from the City of Johannesburg, which include refuse removal charges, which are not specifically outlined in the City of Johannesburg’s tariffs, we would recommend that you speak to a legal professional, to assist you in having such charges removed from your account.