Sedge residents and ratepayers object to draft budget

SEGEFIELD NEWS - News Editor's note: The Sedgefield Residents and Ratepayers Association (SRRA) recently wrote to Knysna-Plett Herald, stating their objections to the tabled draft budget by Knysna Municipality.

The final date by which draft objections can be submitted to the municipality is today, Friday 19 May.

SRRA chairperson Andy Brough writes:

On behalf of the members of the Sedgefield Ratepayers and Residents Association (SR&RA), I submit our comments on and objection to the budget document.

1. We reject this budget as unsustainable and call on the Directorate for Financial Services staff to reapply their minds to this critical document.

2. We appeal to the Knysna Municipality to review the budget for projected revenue and expenditure.

3. This budget has been drafted on the unrealistic assumption of an overall rate increase of 32,9%.

4. We ran nine scenarios using models for vacant land, pensioners, indigents, guest houses, domestic households, businesses, and agricultural property. We were shocked to see that the combined effect of the new property rates (together with the proposed water, sanitation and electricity tariffs) results in us paying anything between 9,4% and 30% more - year on year! Pensioners could expect to pay 21% more. On a R2,2m property, the net effect of the increased electricity tariff and property rates alone would mean an increase of 21%.

5. Property Rates

5.1 The new General Valuation resulted in an overall increase in value of 39%. The General Valuation Roll must be considered in the light of the General Guidelines for the Local Government Municipal Property Rates Act No.6 of 2004, which clearly state:

5.1.1 Significantly high increases in the market values of properties require that the municipality reasonably reduces the cent in the Rand rates to curb excessive rates payable by property owners.

5.1.2 Reducing the cent in the Rand rates when a new valuation role is implemented and where property market values increase significantly must be institutionalised and become best practice.

5.1.3 Keeping the cent in the Rand rates constant for the property categories whose market values have increased significantly will not protect the property owners from significant increases in the rates payable; the rates payable (which is the cent in the Rand rate multiplied by the market value of the property), will also increase.

5.1.4 Keeping the cent in the Rand rate unchanged is insufficient when property market values have increased significantly.

5.1.5 The alternative is to use the current valuation roll for another 12 months.

5.1.6 National Treasury's headline inflation guideline is that increases should be 4,7% - 5,3%.

5.1.7 It is disingenuous to tell domestic property ratepayers that a proposed additional R150 000 will offset these increases as the portion exempted from rates per the MPRA and the Council Rates policy for the MTREF.

This will bring very little relief to homeowners if the cent in the Rand is not adjusted.

5.1.8 I refer you to the letter from Dr K Naidoo (Deputy Director Policy, Governance & Administration, Department of Cooperative Governance (ref 14/5/3/2/9_9/15) dated 15/03/2023 and addressed to the municipal manager and CFO. This letter appears on the last four pages of your Annexure F under your tabled draft budget 2023/2024.

5.2 Comparison with other municipalities in the Garden Route: Using a hypothetical property value of R2 000 000, Knysna Municipality is not aligned with the other municipalities. We can only conclude that benchmarking with neighbouring municipalities did not happen.

SRRA chairperson Andy Brough