Notice: Doornkloof Owners Association (DKOA)

THE NEW PROPERTY RATES ACT HAS BEEN SIGNED INTO LAW BY PRESIDENT THABO MBEKI

Please see articles below and note in particular the sections that read:

1) South African Local Government Association (Salga) spokesperson Mbangwa Xaba said this week municipalities did not have the power to unilaterally raise property rates, and ratepayers were entitled to actively engage in the process of deciding what these should be.

2) The process included voicing concerns through a public participation process in ward committees and through objections tabled before the council.

3) Ratepayers also had access to property valuation courts and the office of the Public Protector if they felt that rates increases were too high.

4) The new act would also standardise the way property rates were worked out across the country's 284 municipalities, he said.

5) In terms of the new act, its rulings can only be implemented by municipalities after the council formulates and adopts a new rates policy to deal with rebates and discounts. The new rates policy can only be adopted after a public participation phase.

6) The Kungwini Local Municipality has denied claims that it was using affluent suburbs as cash cows to subsidise disadvantaged communities in the area.

Kind regards,

David Larsen

Secretary: Doornkloof Owners Association (DKOA)

PLEASE ADVISE AT LEAST THREE OTHER PROPERTY OWNERS OF THE CONTENTS OF THIS NOTICE AND ASK THEM IN TURN TO ADVISE THREE OTHERS
 

'The wealthy are being used as cash cows'

Ashley Smith -  June 19 2004 at 01:50PM

Affluent suburbs are bracing themselves to battle a "wealth tax" - more whopping increases in property rates, courtesy of the country's new Property Rates Act.

And already, there have been threats of rates boycotts in Alberton, where thousands of Meyersdal and New Redruth residents are facing up to 290 percent increases in property rates payable this year. In parts of Centurion, residents are facing hikes of up to 400 percent.

The Cape Town-based Rates Action Group (RAG) has said it wants to mobilise ratepayer organisations on a national level.

RAG recently won a court battle against the City of Cape Town to have the city's rates system - which saw rates payable increase by over 600 percent in some areas recently - declared illegal.

The new Property Rates Act, which has been signed into law by President Thabo Mbeki, will be implemented over the next few years, with the first municipalities expected to be in a position to apply it by the middle of next year. However, most councils may only be able to do so a year later.

There were claims this week that some municipalities were already using the act to justify huge increases this year. Municipal budgets are adopted by councils by July 1.

This follows whopping increases in Johannesburg in 1996, when several municipalities were amalgamated to form the Johannesburg Metro.

RAG has accused the Cape Town municipal authorities of using the wealthy as "cash cows" in providing municipal services to the poor.

The new Property Rates Act has sparked great fears of property rates being further used to "milk" wealthier property owners by charging them a wealth tax on their homes.

Middle and upper-class areas are presently experiencing a unparalleled property boom, with the average price of a home in South Africa just under R500000.

Economists have warned that the upper end of the property market is especially prone to legislation such as capital gains tax and property rates.

However, South African Local Government Association (Salga) spokesperson Mbangwa Xaba said this week municipalities did not have the power to unilaterally raise property rates, and ratepayers were entitled to actively engage in the process of deciding what these should be.

The process included voicing concerns through a public participation process in ward committees and through objections tabled before the council.

Ratepayers also had access to property valuation courts and the office of the Public Protector if they felt that rates increases were too high.

However, the new Property Rates Act is about bringing about equity, as it does not make sense that people in affluent areas were paying the same property rates as those in poor or impoverished areas, Xaba said.

The new act would also standardise the way property rates were worked out across the country's 284 municipalities, he said.

In terms of the new act, its rulings can only be implemented by municipalities after the council formulates and adopts a new rates policy to deal with rebates and discounts. The new rates policy can only be adopted after a public participation phase.

In Alberton, the local Ekurhuleni metro municipality has increased the municipal values of properties by up to 290 percent, while leaving the rates charged at 10,36 cents in the rand of the value of the property.

A plot that was valued at R68000 is now valued at R200000, causing the rates to increase from R352,24 a month, to R1036 a month.

Bruna Haipel, a local councillor in Alberton, said the area had already experienced a huge jump in rates in 1994, when the cents in the rand payable by residents surged from 3,2 cents to 5,36 cents.

She said the new Property Rates Act would further exacerbate the situation.

At the meeting last week, over 2000 residents took a decision to only pay seven percent more on their rates this year and to put the rest of the money in a common account. The money in this account would only be paid to the local council if property tax is lowered.

Haipel said the new Property Rates Act was nothing more than an attempt to implement a wealth tax.

This was because it was up to the local municipality to decide how many cents in the rand should be charged.

Further, the site and improvement value would be used to establish the new property tax, whereas in the past in Johannesburg, only the site (land) value had been used to determine the value on which property rates could be charged.

Haipel said the new act would further skew "the balance" of rates payments in favour of the poor. Middle-class and affluent residents would be "punished" for making improvements to their homes and would be left to shoulder the burden of increasing the revenue collected by municipalities.

Kungwini council invites suggestions

PATRICK HLAHLA

METRO REPORT

The Kungwini Local Municipality has denied claims that it was using affluent suburbs as cash cows to subsidise disadvantaged communities in the area.

Executive mayor Mike Sephiri told residents at a public meeting at Grootfontein, south-east of Pretoria, that it was untrue that the municipality was targeting security villages like Silver Lakes, Mooikloof, Tierpoort and Rietvlei.

"I do not see any reason why we should target these areas," said Sephiri, who informed residents that he would soon be moving to Grootfontein.

Some residents complained that they were paying for services, but not getting anything in return.

The municipality which administers areas like Silver Lakes, Rietvlei, Grootfontein and Mooikloof has proposed a 5% increase for rubbish removal, water and sanitation and a 3,5% increase for electricity

An estimated R34-million has been budeted for capital projects and R184-million has been set aside for the operational budget in the 2004/2005 budget.

Sephiri said the proposed tariff increases were lower than those proposed by the Tshwane Metropolitan Council.

He told residents that he was aware of the need to improve the road network between Garsfontein and Lynnwood roads.

There is also a need to improve Garsfontein Road, which carries a lot of traffic during peak hours.

"We are aware of the problems faced by residents in the Grootfontein, Tierpoort and Mooikloof areas," said Sephiri.

He said the municipality was willing to listen to suggestions from residents' organisations and other stakeholders with regard to the proposed tariff increases.

"We need to have dialogue. We need to work as a family in order to overcome whatever differences we have. If you object, you must come up with proposals or alternatives."

He said the municipality had made copies of the draft budget available to residents' organisations, individuals and other stakeholders. The copies are available at the municipal offices in Shere, Zithobeni, Rethabiseng, Ekangala and Bronkhorstspruit. "The municipality welcomes any comments from residents' organisations and other individuals."

Sephiri said the municipality was faced with major challenges, one of which was the fact that it was operating on a small budget.

"Our area has expanded tremendously especially to the west but we still use the budget which was previously used by the Bronkhorstspruit municipality," said Sephiri.

On complaints that the municipality was expecting residents to pay increased tariffs while it failed to provide services for them, Sephiri said the municipality would do everything in its power to ensure that residents are properly serviced.

"One of our biggest problems is the fact that some of our equipment and vehicles broke down."

Sephiri said the municipality could not provide proper service to residents last year because of threats by some residents to take legal action over the proposed tariff increase which were not implemented.

The municipality had made provision for the appointment of a building control officer to deal with complaints regarding building regulations.

Sephiri said the municipality would also employ more traffic officers to deal with some of the traffic problems in the Kungwini area.

"Traffic control in our area is non-existent and we need to take urgent steps to tackle the issue."

He said he would meet with Silver Lakes residents on Monday to discuss the proposed tariff increases.

By Donwald Pressly

Provincial and Local Government Minister Sydney Mufamadi says guidelines to help guide municipalities implement the new Property Rates Act will be issued within three months.

Speaking in his Budget vote in Parliament on Monday, the minister said: "This legislation is aimed at the progressive nurturing of the solvency of our municipalities and helping define their development strategies."
"We know that some of our communities have been trying to create confusion as to how the new law will (have an) impact (upon) our ratepayers," he told Members of Parliament. He was apparently referring to reports that major municipalities are set to raise rates levels, particularly in well-off areas.

"The department is currently working on guidelines which will help municipalities to implement the Property Rates Act. Councillors must use these guidelines to generate municipal-wide dialogue in order to ensure that those who seek to create unnecessary misunderstanding within our communities do not succeed."

Business Day reported last month that department director-general Lindiwe Msengana-Ndlela said that the Property Rates Act - passed last year - would help municipalities raise more money to enable them to fulfil their mandate of providing free basic services to the poor.

"This will be made possible by the fact that they will now be able to charge levies and rates according to the value of the property," the director general said.

Meanwhile, Mufamadi said R47.3-billion would be allocated to local government over the next three years.
 
The Municipal Infrastructure Grant would allocate R4.4-billion to municipalities for basic services and infrastructure investment, with a figure of R5.1-billion in the next financial year and R5.9-billion for 2006/07.

This grant would target the provision of water, sanitation, roads, solid waste, community lighting and other community facilities.

"This provision of these services and assets will be undertaken within the guidelines of the Expanded Public Works Programme (EPWP) which has been allocated R45-billion over the next five years."

The EPWP allocation includes the 15.6 billion rand allocated to the Municipal Infrastructure Grant. "Our goal is to ensure that over 375,000 households benefit through the provision of clean water and that over 300,000 households benefit through access to basic sanitation in the 2004/05 financial year."

Mufamadi noted that the Municipal Infrastructure Grant would be launched within the next two months.
 
I-Net Bridge

June 22, 2004
By Lynda Loxton

Cape Town - Provincial and local government minister Sydney Mufamadi was yesterday warned by MPs that although the private sector's involvement in the delivery of municipal services was welcome, it should be given "firm guidelines" on how to deal with poor people who could not pay their bills.

Mufamadi was urged to crack down on corrupt provincial and local government officials who were more interested in handing out favours or lining their own pockets than serving the public.

All this emerged during the debate in the national assembly on Mufamadi's 2004/05 budget vote, during which he admitted that there were serious administrative problems in some provincial and local governments.

He hoped that these would be sorted out by "a high-calibre team" that would tour the country to help officials in both levels of government, improve their skills and ability to deliver, and take care of the problems facing the indigent.

A national policy on how to deal with indigents who could not pay their bills would be finalised by the end of the year.

Mufamadi's deputy, Nomatyala Hangana, said the identification and registration of indigents in the 21 development nodes dotted around the country would be a priority in this year.

She hoped that the private sector would "put its money where its mouth is" by showing "unprecedented levels" of investment in previously neglected areas.

Mufamadi also dealt with the ability of provincial and local authorities to increase and broaden their revenue base.

On the recently passed Property Rates Act, he said he was aware that "some in our communities have been trying to create confusion as to how the new law will impact on ratepayers".

As a result, guidelines on how to implement the new law were being prepared and he urged councillors to use them to "generate municipalwide dialogue in order to ensure that those who seek to create unnecessary misunderstanding within our communities do not succeed".

The guidelines would be issued within the next three months, he said.

Although the local economic development fund had done much since its inception in 1998 to set up new economic initiatives to increase job opportunities throughout the country, Mufamadi said it was clear that much more research was needed in this area to "build robust and inclusive local economies".

In the meantime, government had allocated more funds for social grants but had accepted that "this pattern of social expenditure is neither sustainable nor conducive to building national and individual pride within our communities", he said.

"In the medium term, our focus must be to make people less dependent on the social grant system and rather provide them with opportunities to be active producers and consumers in a single, inclusive and vibrant economy."