The House interior committee on Monday accepted the president’s veto on the recently passed sewerage fee bill, and is working on amendments so that a new draft is put to the plenary this Friday.
According to Interior Minister Constantinos Petrides, the outcome is essentially that for this year the total fees charged by all district sewerage boards will be ‘fiscally neutral’ in relation to 2016.
In practice, this means the fees will be about 28 to 30 per cent lower for the entire Nicosia district, and 11 per cent lower for Paphos.
In the meantime, said Petrides, government and parliament will work together in reviewing how charges are calculated so that, starting next year, sewerage fees are levied not solely on a property’s value but on other parameters as well.
Following a law passed on November 3, sewerage board revenue collection was radically overhauled: fees were, for the first time, imposed on land value estimates by the Land Registry in 2013, replacing 1980 land values that in many cases ignored fluctuations in values, which had resulted in suppressed fees.
At the same time the law lowered the applicable rates so as to offset the newly inflated land values.
Sewerage boards – constrained by a ‘cost neutrality’ rule that prevents them from collecting more than is required to build the sewerage systems – then budgeted for revenues equal to total capital expenditure plus loan-servicing costs.
This turned out to be a problem only in Paphos and Nicosia, where total revenues for 2017 exceeded those of 2016 by 30 and 13 per cent, respectively.
But whereas Nicosia had complied with parliament’s plea to keep fees suppressed despite the new law, Paphos mayor Phedonas Phedonos refused on the grounds that last year’s revenues would not cover the board’s loan instalments. He also accused parliament of cheap populism ahead of January’s presidential election.
The issue was further complicated by the fact that at the time, sewerage boards had already sent out the bills to the public, with many owners having already paid their sewerage bill, while others had not ahead of the November 6 deadline for payment.
Parliament responded by extending the deadline for payment to the end of the year and including a provision that anyone who had already paid the higher fee would have the overcharge deducted from next year’s fees.
But President Nicos Anastasiades – on advice from attorney-general Costas Clerides – vetoed the November 3 bill, sending it back to the House for amendment.
The president’s concern was that the term “total fees levied” is not clearly defined in the law, resulting in the possible interpretation by owners that their total fees for the year may not be higher than last year.
According to House interior committee chair Eleni Mavrou, the new law now being crafted will make it explicit that “total fees” refers to the totality of the fees levied by a district sewerage board, and not to individual properties.