Special Rating Areas (including City Improvement Districts)
A Special Rating Area (SRA) refers to a clearly defined geographical area, in which property owners contribute additional rates to fund ‘top-up’ services for that specific area as per the approved Business Plan.
SRAs are governed by Section 22 of the Municipal Property Rates Act (MPRA), the Municipal Finance Management Act (MFMA), the Companies Act (Non Profit Company – NPC), the SA Constitution and the City of Cape Town’s Special Rating Area By-law of 2012.
According to the SA Constitution (Sections 152 and 153), the objective of a local authority is to provide all its residents with certain basic services such as water, electricity, sanitation and refuse removal, etc. – up to an equitable standard. For communities who wish to enjoy municipal services of a higher level, an SRA provides them with the option of paying for these additional services, which should be affordable and sustainable.
No. The City is obligated to sustain existing service levels and to provide basic services as per the Constitution. Each SRA will engage with the various service departments regarding the level of services to be provided by the municipality. This enables the SRA to decide on the ‘top-up’ services required.
What are the benefits for SRA members?
By combining their resources in an SRA, individual property owners can enjoy the collective benefits of a well-managed area, a shared sense of communal pride, safety and social responsibility, and access to joint initiatives such as waste recycling, energy-efficiency programs, etc. In the end, these all translate into a tangible boost in property values and capital investments.
No, but an SRA can consist of industrial, commercial and residential components, or a combination of all three.
There are currently 39 SRAs in the City of Cape Town. Two communities are applying for establishment, and many others have expressed interest in establishing an SRA.
An SRA is always initiated by a community, and not by the City.
It usually starts with ‘champions’ within a community who feel the necessity to improve the environment within a defined area. They then compile a five-year business plan (including the motivation report, the implementation plan and a budget) indicating how the improvements are to be achieved, and present this to the community at a public meeting. Thereafter property owners are lobbied for their support where a majority (more than 50% in an area classified as commercial and more than 60% for an area classified as residential) has to give written consent to the formation of a SRA. Once this has been obtained, the steering group has to submit an application to the City. The application is then advertised in the media and property owners are also notified to allow them at least 60 days to render any comments or objections. The City then considers the application with the objections at a full sitting of Council. After the City has approved the application, a NPC is set up and a board is elected. The NPC has to register for VAT, open a bank account and be registered as a vendor with the City, etc. This must all be in place before the City makes any payment to the SRA.
An SRA is a Non-Profit Company (NPC) managed by a board elected by its members, and operated by a management team appointed by the board. Property owners must sign up for NPC membership to allow them to participate in the SRA`s affairs. The City is not involved in their day-to-day operations, but merely exercises financial oversight and legal compliance.
An SRA is governed by the Companies Act (71 of 2008) and manages its own finances and appoints its own auditors. The audited financial statements form part of the City’s consolidated accounts, which are reviewed by the Auditor-General. In addition, monthly financial reports are submitted to the City to monitor and to ensure that expenditure is incurred according to the budget. All SRAs have to submit the Chairman`s report and AFS to the relevant Subcouncil, within two months of their AGM, for noting.
An SRA is funded from the additional rates paid by property owners within the boundary of the SRA. It does not receive any grants or subsidies from the City, but does have the powers to raise additional income.
The SRA management confirms the properties within the boundaries of the SRA, which is then linked by the City to the municipal valuations according to the most recent general valuation roll.
The SRA management annually prepares an overall budget for the year. This is based on the specific needs of the area as set out in the approved Business Plan. Individual contributions are then calculated by dividing up the budget total according to the municipal valuations of each property, proportional to the total valuation of the SRA.
The SRA Policy allows for a differentiation in tariffs for the different types of properties – be it residential, commercial or industrial.
This tariff is then expressed as a Rand in the rand and is applicable over a financial year, which starts on 1 July.
The SRA budget and proposed tariff have to be approved by the City, and advertised for comments and objections as part of the City’s budget process prior to implementation on 1 July.
The City collects the additional rates on behalf of the SRA. It does not go to the City, although they share an invoice to save on collection costs. The additional rate appears as a separate item (improvement district) on the monthly municipal account of each property owner liable to pay the SRA additional rates within the SRA.
The City pays the SRA a monthly amount equivalent to one-twelfth of its approved budget less 3% as a provision for bad debts. The provision for bad debts is kept in a ring-fenced account for the SRA. At the end of the financial year the City reconciles the billing with the SRA budget pay overs and any under or over billing is offset against the accumulated bad debt account. This account is subsequently compared with the arrears as at the end of the financial year. When the latter is less than the accumulated bad debts, 75% of the difference is paid to the SRA as per the Finance Agreement concluded between the City and the SRA.
Yes. Once the City has approved an SRA, the participation of all property owners liable to pay the SRA additional rates, within the boundaries of the SRA, is mandatory. However, there are exceptions in terms of relief.
The following categories of owners / properties will be 100% exempted as per the SRA Policy:
Other properties who qualify for rates relief/exemption as per the City’s Rates Policy
The SRA sets its own budget according to input from its members as per the approved five-year Business Plan. The City does not get involved in this process. Each year, the SRA board has to submit a detailed budget to the City by 31 January. The proposed budget may not deviate materially from the approved business plan. If there is a material deviation, an application in terms of Section 11 of the SRA By-Law is required. The City evaluates the proposed budget for affordability and sustainability.
The valuation base is a snapshot at a point in time (end February) and is used to calculate the additional rate (Rand-in-the-rand) for the following financial year. However, municipal valuations can change within a financial year due to interim valuations, Valuation Court rulings, sub-divisions, rezoning or other technical adjustments. Should the valuation base decrease or increase substantially, the City must inform the SRA in order to recalculate the SRA’s additional rate.
No, it is ring-fenced to be reinvested back exclusively into the SRA.
How does the City resolve additional rates arrears?
Defaulters are subject to the City’s credit control and debt collection policies. As such, they can have their water and electricity services suspended or their clearance certificates withheld.
Absolutely! Every property owner within the SRA should apply in writing to the SRA Board for membership of the NPC. Only then are they able to participate in SRA affairs.
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Portfolio: Marketing
John has many years experience in the property industry, involved in viability studies and the marketing of commercial property development and execution of projects. His responsibilities as part of the asset management team are for property performance, portfolio upgrades and redevelopments, as well as new property development initiatives.
Portfolio: Social
Ielhaam Abrahams of Growthpoint Properties Regional Office – Cape Town
Been in the property management industry for 22 years.
Joined Growthpoint in 2012 and currently a Portfolio Manager.
Board member of the Women’s Property Network since 2019.
Serves as a Trustee on various Commercial Body Corporates.
Passionate about youth development specifically in the sporting community.
Portfolio: Cleansing
Fluent in English and French, Manu is an accomplished and serial entrepreneur, creative and hands-on strategist, successful trailblazer intrapreneur with over 30 years operational involvement in the international business at various capacities across Africa. Manu is a seasoned property entrepreneur and investor with several projects completed or planned in the greater Cape Town area.
Manu has served as Vice President of the Cape Town Regional Chamber of Commerce and Industry (the largest in South Africa) with over 2800 corporate members. Manu is a board member of the Groote Schuur CID and a director of the Voidcon group and Elsma Holdings. Manu currently sits on the Rosebank and Mowbray Civic Association (RMCA) executive committee.
Manu holds a Master of International Affairs from Columbia University New York, a Master of Science from the French Petroleum Institute–IFP- Paris and a MSc Engineering from Cameroon Polytechnic School of Engineering.
Portfolio: Finance, Vice Chairman
Peter Shai Makgoba holds a Master’s Degree in Public Governance and Management and is currently Director: Risk Compliance and Relationship Management the University of Cape Town (UCT) where he is responsible for the Fees Office, Risk and Relationship Management.
Part of his responsibilities include managing Fees Office, risks to the University, its employees, customers, reputation, assets and the interests of stakeholders by identifying and managing all threats to the achievement of its objectives.
In addition, Peter is responsible for governance and oversight of all earmarked grants, liaison with some funders and ensuring compliance with their requirements, as well as fostering and maintaining relationships with key stakeholders. At UCT, Shai is part of the Risk Management Committee, Audit Committee, Finance Committee, Joint Investment Committee, Student Financial Aid Committee and Skills Development Committee.
Prior to joining the University of Cape Town, Peter was Chief Director at the Department of Higher Education and Training (DHET) where his responsibilities encompassed amongst others, working with universities and other stakeholders within the higher education sector, managing the review of the funding framework, developing or revising financial policies and instruments for earmarked grants for universities, and overseeing the analysis and the publication of information on the resourcing of the university system.
Portfolio: Environmental Upgrade
Portfolio: Security
Roland September took office as risk services manager in January, succeeding John Tunstall, who retired at the end of 2009.
Prior to his appointment, September had been traffic manager at UCT since 1999.
Among other gigs, he also did some security work in laidback New Zealand for Group Four Security, where he was security advisor at some big-name events, his first being a concert that double-headlined Billy Joel and Elton John.
Portfolio: Finance, Chairman
CEO of Spire Properties
BA (ECON) (Willam and Mary, Usa), LLB, MBA (UCT)
Gregg started his work career as a lawyer, then moved to the property industry. Having worked in the listed sector for one of the largest listed funds, as well having managed private client portfolios, he has a wide experience in the portfolio and asset management arena.
He has managed a successful commercial division for a number of years within the listed property sector. He has been involved in developments, sales and acquisitions and has a wealth of experience in letting commercial property, and is well known to the brokering community.
Gregg serves and has served as a Trustee on several Boards, in the sectional title and improvement district spheres. He is passionate about the property sector and views it as a major engine for growth in the economy.
Vernon has been employed by the GSCID as a Contract Supervisor for about three years. He has years of previous security experience in surveillance and supervision and stands him in good stead in his current role within the operations sector of the GSCID.
He enjoys the opportunity the position brings to meet an array of people and to help uplift the community. He is always hands on working in the field with our partners and various law enforcement agencies. He is seen as a role model and a brilliant educator.
Ivor has previously worked as a contract supervisor for the GSCID. He has been the Cleaning Manager for about 2 years.
He works passionately alongside his cleansing team within our boundary which includes and is not limited to; weeding, channel cleaning, removing graffiti, picking up dirt and drain cleaning. He goes above and beyond to ensure the area is looking clean.
Nicole Sylvester has recently started working for GSCID.
“I am a self-starter with strong interpersonal skills. I work efficiently both as an individual contributor as well as along with a team. I seek new challenges and try to think out of the box while looking for creative solutions to a given problem. In my free time I love hiking and being out in nature, I also prefer spending my weekends exploring new things.
At GSCID I have found to work with people who are very family-orientated, there is always joy within the office and always a helping hand. Since I have started, I was made to feel comfortable and welcomed, I never felt out of place and still feel like I have been part of the team for many years”.
Bronwin has been working in the security division of the GSCID for a year and two months where she was exposed to all the other departments of the GSCID. During this time, she has become enthralled by the work and objectives of the CID.
“I have always loved helping others and when I started working here, it gave me such a great purpose. I always start the day with a smile on my dial, every day is a different day as thus far I have learnt so much by just being around everyone at GSCID. I look forward to starting my new journey in assisting the General Manager Barbara Breedt, I believe I can only do my best in trying to allow for things to run smoothly”.
Ingrid has been with the GSCID since 21st September 2010, Ingrid has worked in Claremont and Wynberg previously. She has always been willing to help any person whenever she is able to, no obstacle has ever held her back from interacting with anyone in the field.
She initiates and manages the homeless in the GSCID Boundary to assist the GSCID Cleaning team. She has vast set of skills as a field worker, she has a open door policy not only for her homeless clients but Chrysalis interns too. She has built many wonderful relationships with so many organisations, thus allowing her to assist anyone who needs help rapidly.
Barbara Breedt has been GSCID General Manager Since July 2019. Ms Breedt previously held the post of Station Commander at Rondebosch SAPS for four years.
She has 32 years of policing experience with extensive knowledge of security and operational management matters, as well as crime prevention.
Ms Breedt believes that her experience will enable her to always offer support and add value to the GSCID’s short- and long-term strategies.
“At the heart of UCT’s mission is the desire to contribute significantly to society through high quality research, inspired teaching and learning and the development of outstanding graduates, underpinning global efforts to understand our natural and social worlds. We also want to contribute directly to local communities through the education we offer to their children, as a significant employer and through social outreach activities. To achieve our mission, there is a critical need for a vibrant engagement between ‘town and gown.’
The University of Cape Town’s teaching and research facilities cover a significant footprint within this community. Our staff and students live here and contribute in diverse ways to the economy of this area. While UCT brings great value to the areas surrounding the university, we acknowledge that we also contribute to some of the challenges. UCT, with our neighbours, face issues of crime, grime, transport, housing and so on.
Our role and responsibility within the local community require meaningful dialogue between the university and our external stakeholders. It also demands credible partnerships which recognise our interlinking and, occasionally, divergent sets of interests. It is this need – and serious intent – to forge a new social compact with local businesses, property owners and residents, that has brought UCT into the partnership with the Groote Schuur Community Improvement District (GSCID).
We want to be a good corporate neighbour and encourage our students to be good citizens of this area. We want to contribute towards a precinct which is safer, cleaner and more enjoyable for residents, businesses and visitors alike. We want to facilitate urban renewal along the Main Road business districts through appropriate re-development opportunities. These approaches will affirm UCT’s objective to be a world-class university – the premier academic meeting point between Africa and the world.
We look forward to partnering with you in the GSCID.”
