Rates policy review – City of Joburg
24 February 2021
The City of Johannesburg primary task as a local authority is service delivery to its ratepayers, residents and stakeholders. Upon rendering of essential services, the City issues on monthly basis bills of just over a million. These are issued to clients who hold a municipal account with the city. The five key items on the bill are Water, Refuse, Electricity, Sewage and Property Tax levied by the City.
What the City of Joburg uses Revenue for
Revenue management within the City, tasked with effective rates collection, contributed 24% of the overall R86.7-billion through property tax. The 4,00% property tax charged on property owners enable the City to provide regular services such as refuse and waste removal and provision of electricity and water. These basic services are provided on daily basis to all residents of Joburg. In addition, the City took into cognisance the economic downturn precipitated by the Covid-19 extended lockdown period economic downturn. To cushion customers, free 6Kl free water per 30-days cycle was re-installed to all residents. Ratepayers who registered as indigents with the City also continued to receive free water and sanitation as per Council-approved expanded social plan (ESP).
Just over R2-billion of the budget was allocated towards creation of thousands if jobs through the implementation of high-impact projects that include sewer upgrades, storm-water upgrades, tarring of roads, housing developments and upgrading of bridges, . Formalization of informal settlements was allocated R1.2-billion. JMPD was allocated funds to guarantee the availability of 10 officers per ward at any given point. R800m was given towards the second phase of Rea Vaya Transit busses. In line with the Smart City’s strategy and embracing of the technological “new normal” way of doing business, R85-million was allocated over two years for the installation of city-wide Free WiFi spots.
The Role of Property Tax in helping City of Joburg provide services
It is against this backdrop of the magnitude of property tax’s contribution towards the overall budget that the City is currently consulting with property owners through 2021/2022 Rates Policy & Rates By-Law Review participation process. The finalized rates policy will be used to levy rates on property owners as guided by Local Government Municipal Property Rates Act of 2004. The policy will also determine different rates for different categories of properties that will pay rates based on zoning. Section 4 of the Municipal Systems Act of 2000 further requires municipalities to conduct public participation meetings on the draft rates policy. The policy must be reviewed on annual basis.
Rates Policy Review Process – the sequence
The Rates Policy Review Process commenced on the 5th of February with councillors’ briefing session to prepare them adequately. This is crucial aspect of the consultation process councillors are the first port of call for most property owners where there are grievances. Once this briefing was done, the first virtual meeting took place on the 8th of February, 2021. 20 more meetings will be held between now and the 26th of February. This will be followed by the second phase of rates policy and and proposed tariffs – forming part of Integrated Development Plan (IDP) and Budget Meetings in April.
Through the annual reviews, the City is able to factor-in legislative and regulatory framework changes, policy direction and public in-put. It is also a platform through which revenue-generation can be harmonized with the current economic climate. When needed and financially affordable the City is willing to give rebates such as the R400-million paid back in the pocket of ratepayers during level 4 lockdown period. With that said, it is important to emphasize that a balance is maintained between affordability and rates and revenue increases. This balance is critical to guarantee the City’s financial stability. It is only when the City of Joburg is a going concern in its balance sheet that the city will meet its service delivery obligations towards ratepayers and residents as per the legislation.
Notwithstanding legislative alignment to the policy, other changes effected towards 2020/2021 Rates Policy include, among other things, user-friendly and accessible supplemented by a new structure to the policy. The City also added some corrections to categories of properties liable for property tax. Business ratio has been reduced from 2:5 to 2:4. There will also be granting of disaster rebate to residential property owners; multi-purpose residential and business property owners. In line with the Municipal Property Rates Act, public service infrastructure will no longer be billed.
General Valuation Roll
For the City to charge fair and reasonable property tax, it relies on General Valuation Roll (GV) of 2018. A rates policy document will be developed to determine the criteria through which a property will be categorized. GV 2018 is effective until 30 June 2022 with a possible extension until 30 June 2023. The Valuation section of the Property Unit is currently preparing to-revalue properties for the next GV. Once the process is completed, rate payers have a recourse mechanism for objections.
Appeals Board
There are currently two Appeals Board that deal with objections from ratepayers. A third one will be instituted soon pending the approval of Gauteng COGTA MEC. It is worth noting that these are independent from the City of Johannesburg employees. and its Council members. When lodging an objection, ratepayers will be requested to provide exhaustive information on the property they own. There is a specified period to lodge complaints and time will be allocated for feedback to ratepayers.
How to get involved
To take part in this consultation virtual meetings, ratepayers can join any of these meetings outlines below [insert updated list of virtual meetings and functional links for ratepayers]. The meetings are chaired by councillor in the ward in which it would take place. Administrative officials from Group Finance who work in Property Unit and Revenue Enhancement will be on stand-by to answer questions ratepayers. In attendance in all the meetings is the MMC for Finance, Cllr JolideeMatongo. The meetings last between an hour to two and after the meeting participants are encouraged to continue sending questions which will be answered in the chat bot in real time
Deadlines
Due date for submission is 15th of March, 2021. Ratepayers are encouraged to consult information found on this link on the City of Joburg website https://joburg.org.za/Pages/2021%20Notices/February/February-Notices.aspx . Those unable to attend the virtual meetings can still email their input to [email protected]
Issued by City of Joburg, 24 February 2021
