Provincial Plan of Action

Strategy to assist municipalities with implementation of the Municipal Property Rates Act, 2004.

Introduction

The new Municipal Property Rates Act, 2004, seeks to reform the current system of levying property rates by municipalities and as such introduces fundamental changes to the current system of property rating provided for in the various local Government Ordinances.

The Act seeks to enhance certainty, uniformity and simplicity in property rating and provide local government with sufficient and buoyant source of revenue to fulfil it’s development responsibilities and ensure economic and financial viability of municipalities without debilitating the poor.

Appointment of a service provider

The Department of Local Government and Traditional Affairs has appointed a service provider to develop strategies to assist local municipalities with the implementation of the Municipal Property Rates Act, 2004. The service provider appointed is Janet Channing and Associates, a valuer based company with extensive experience in project management in related fields. The scope of work of the service provider to develop strategies towards assisting Local municipalities with the implementation of the Municipal Property Rates Act.

Provincial Project Implementation Steering Committee: Implementation of the Municipal Property Rates Act

A Provincial Project Steering Committee has been established, with it’s inaugural meeting held on 14th October 2005. The responsibility of the Steering committee is to co-ordinate the implementation of the Act with the assistance of the service provider. Working groups within the Steering Committee will deal with specific aspects of the roll out of the implementation programme.

Broad strategies towards implementation have been identified as follows:

• Capacity building within Local municipalities;
• Preparation of the Rating Policy;
• Preparation of a Property Management System (property information system including aerial imagery, cadastre, ownership details, LUMS, zoning);
• Communication strategy: between Province and the Local municipalities and guidelines for the participatory process between Municipalities and their rate payers;
• Compilation of a General Valuation Roll;
• Integration of the General Valuation Roll with the billing system;
• Maintenance of the Valuation Roll and the data base;
• Transitional arrangements;
• Valuation Appeal Boards;
• Shared services.

Project Steering Committee working groups

• Property Management Information System: Development Planning
• Surveyor General Office
• Deeds Office
• Traditional land

Scope of work

For each Local municipality to be provided with a clean property management information system including spatial imagery, cadastre, land ownership details, LUMS and zoning information. Municipal Valuers will have access to this system towards the compilation of the General Valuation Roll.

Roles and responsibilities

To co-ordinate the programme to attain this objective. It was agreed that priority areas should be identified.

Programme development: Local Government

This work group was expanded to include representatives from each of the Regions as well as Municipal Finance.

Scope of work

To adopt appropriate facilitation strategies toward the timeous and sustainable implementation of the Municipal Property Rates Act.

To align the outputs of the various strategies towards the time frames required by the MPRA and other relevant legislation.

Roles and responsibilities:

To co-ordinate the facilitation assistance to Municipalities provided by the service provider.

To liaise with the other directorates regarding the achievement of required programme objectives.

Procedural guidelines: Service provider

• South African Institute of Valuers
• Msunduzi Municipality

This working group was expanded to include representatives from each of the Regions as well as a representative from Richmond Municipality (to represent the interests of the smaller LM’s). As there was a full compliance requirement it was agreed that Legal Services input would be essential. The guidelines would also require consultation with Municipal Finance, ILGM and IMFO (on behalf of the smaller Local municipalities)

Scope of work

To provide a comprehensive set of procedural guidelines and implementation tools with time frames to each Local municipality to assist with the planning and implementation of the Municipal Property Rates Act.

Roles and responsibilities

To assist the service provider with the compilation of these guidelines.

Budget working group: Development Planning

• Representatives from working groups
• Development Bank of South Africa
• Local Government

Scope of work

To compile Provincial budgetary requirements and cash flows to enable Local municipalities to fund the roll out of the implementation of the MPRA.

Roles and responsibilities

To bring together the resource needs generated by the other working groups and compile funding proposals as required.

Department of Provincial and Local Government workshop programme

DPLG is hosting 2 provincial workshops in KwaZulu Natal: Richards Bay, 10th and 11th November and in Durban on 14th and 15th November 2005.We urge all Local municipalities to ensure that relevant staff attend these sessions. The DPLG programme focuses on guidelines towards implementation of the Act with specific reference to the procurement of private valuers. While we acknowledge that local municipalities are anxious to proceed with the implementation we must stress that full compliance is crucial. The roll out programme to be supplied by Department of Local Government and Traditional Affairs will build on the foundations laid by the DPLG workshops providing practical implementation tools to the Local municipalities.

Business Plans

Various disbursements towards implementation have been made to selected Local municipalities by Department of Local Government and Traditional Affairs. There is also an allocation from DPLG as a Municipal Systems Improvement Grant. Pro forma Business Plans have been prepared by Department of Local Government and Traditional Affairs to assist Local municipalities with complying with their Memorandum of Agreement and their administration of these funds.

Checklist assessment

A comprehensive desk top checklist assessment has been prepared to provide an insight into the capacity profiles of each local municipality with regard to the implementation of the Municipal Property Rates Act. This document is to be completed by the respective Municipal Managers and Chief Financial Officers. The responses will inform the Project Steering Committee and service provider regarding the resources and capacity within each local municipality. The responses will facilitate effective training and skills transfer to the individual local municipalities.

In addition the Department has circulated a set of Rates Policy guidelines to assist local municipalities with the drafting of their Rates Policy. Also included in the information package is a copy of the Municipal Property Rates Act and the Draft Regulations gazetted on 15th October 2005.

Property Information Management System

The objective is to be able to provide each Local municipality/group of Municipalities/District with a system which enables them to capture and link imagery, cadastral and registered surveyor general data with ownership details, LUMS and zoning information. The Municipal Valuer will have access to this system to compile the General Valuation Roll.

It is proposed that this system be developed in a manner that will provide for the property information data base to be regularly updated and maintained by the Local municipalities/groups of Local municipalities and to facilitate the preparation of Supplementary Rolls as well as the preparation of future general Valuation Rolls.

Local municipality Capacity Building programme

The objective is to build local municipal capacity towards enabling them to undertake the Municipal responsibilities and full compliance as required by the Act.

The Department proposes the following roll out programme to assist municipalities with the implementation of the Municipal Property Rates Act:

• two day workshops for local municipalities convened at District level.

Proposed workshop programme

Day one
Opening address: Regional Representative
Overview of the Municipal Property Rates Act and other related legislation (MSA, Municipal Structures Act, Municipal Finance Act, Promotion of Access to Information Act, DORA, Administrative Justice Act).
Rating Policy
General Valuation: overview of valuation process, procurement of private valuers
Procedure manual for implementation
Transitional arrangements
Communication strategy

Day two
Financial procedures: Billing
MSIG, Departmental business plan submissions
Financial Modelling: Tariff policy
Shared services
Objection and appeal procedures
Valuation Roll and property information management system maintenance: Municipal staff
Compliance and monitoring

Procedure Manual

The service provider will be responsible for compiling a Procedure Manual to assist the Local municipalities with the planning and implementation of the Municipal Property Rates Act. This manual will provide detailed step by step guidelines to enable implementation of the MPRA in full compliance of the Act as well as other relevant legislation and accompanying time frames. It will also provide information on the objection and Valuation Appeal process. Steps are in place to ensure that Local municipalities have adequate capacity to maintain the information data base towards the preparation of Supplementary Rolls and future General Valuation Roll. A communication strategy has been included to ensure that Local municipalities comply with the condition of public participation in terms of the legislation.

Rating Policy

A generic set of guidelines towards the Rating Policy has been workshopped by Municipalities. This set of guidelines is available to Local municipalities from the Department.

Information dissemination

The Department undertakes to circulate all relevant information supplied by DPLG to Local municipalities by email as well as publish it on the Departmental website. Current information available includes:

• Draft Guidelines, 15th October 2005
• General guidelines, No 6 of 2004
• Guidelines on specifications for the procurement of private valuers

Helpline

The Department undertakes to provide a help line via email contacts for Local municipalities. This facility will enable Local municipalities to address specific questions to the service provider regarding the implementation of the Municipal Property Rates Act. Response times have been set at 24 hours.

Liaison with other key stakeholders

The service provider in conjunction with the Department undertakes to network with key stakeholders regarding this process. The following have been identified:

• Department of Land Affairs: Database of land reform beneficiaries
• Kwanalu: Organised agriculture
• Traditional land

Valuation Appeal Boards

The Provincial Plan of Action includes the establishment of Valuation Appeal Boards in terms of Section 56 of the Act. The Steering Committee will make recommendations to the MEC for appointment of candidates to serve on the Appeal Boards in accordance with the Minister’s conditions of appointment (Refer regulations in terms of Section 61(3) of the Act).

Closing comments

The Provincial Plan of Action has been compiled towards achieving a uniform implementation and high level of sustainability through the implementation of the Municipal Property Rates Act throughout the Province of KwaZulu Natal. This document is to be amended and extended as the roll out programme evolves. Your contributions as local municipalities in identifying needs are invaluable to local government’s strategies towards implementation. In order to achieve the legislative requirement of equity Local municipalities are recommended to adhere to Provincial guidelines in the strategies adopted towards implementation.

Should you have any queries or would like to make any contributions towards this Plan of Action please direct to Janet Channing, Tel 033-3556329 or email janet.channing@kznlgta.gov.za.

In terms of Section 3(1) The Council of a Municipality must adopt a policy consistent with this Act on the levying of rates on rateable property in the Municipality. A rate Policy adopted in terms of subsection (1) takes effect on the effective date of the first evaluation roll prepared by the Municipality in terms of this Act, and must accompany the Municipality’s budget for the financial year concerned when the budget is tabled in the Municipal Council in terms of section 16(2) of the Municipal Finance Management Act.

The National Department of Provincial and Local Government has developed a set of guidelines on valuations for Municipalities for Local Government Municipal Property Rates Act no. 6 of 2004.

The guidelines consist of the following:

Pre-Valuation Requirements:

• Critical Data
• Rates Policy
• Billing System
• Property Inspections
• Public Awareness

Valuation process:

• Deeds Data
• General Data
• General Market Reports
• Specialised Properties

The Department of Local Government and Traditional Affairs also has a generic draft standard Rates Policy Framework in terms of the Local Government: Municipal Property Rates Act, 2004 (Act no. 6 of 2004) reference no. HO /13/5/8/1/ Local Government.

Local municipalities should consider both sets of guidelines and use the content applicable to their particular needs.