FAQ
Frequently Asked Questions
What is a CID levy?
When a City Improvement District has been established, the Council will levy in accordance with the provisions of relevant legislation, a property rate in addition to the rates that it already charges on the owners of rateable property in the City Improvement District.
The CID levy is the property owner’s contribution to the budget of the CID, proportional to the valuation of their property within the CID area.
How is the CID levy calculated?
The CID levy is a product, expressed as a cent-in-the-rand, of the valuation base (Municipal value of properties within the CID area) and the CID budget. This cent-in-the-rand is applicable over a financial year which runs from 1 July to 30 June.
How is the CID levy collected?
The cent-in-the-rand tariff is applied monthly to the current valuation, as captured on the City’s financial system.
These CID levies appear separately on the monthly municipal account of all the property owners within the CID area.
Is the CID only paid what the City collects?
Each month the City pays over one twelfth of the CID budget as approved for that financial year.
Is the CID levy mandatory to all properties within the CID area?
Yes – once the CID is approved n terms of the CID By-Law and the CID complies with all of the requirements.
How is a property owner informed of the CID levy?
The CID budget and proposed CID tariff is approved by the City during the budget process and advertised in the local press (during April) for comment prior to implementation as from 1 July.
How is the valuation base determined?
The City provides the CID Management with a property database (owners’ detail and Municipal valuation), as per Council records, at the end of February.
The CID Management is responsible to ensure that all properties within the CID area are on the database.
The CID may split the database and budget in respect of commercial and residential properties for the purpose of calculating a different CID levy per usage.
Could the CID budget be changed within the three year Business Plan cycle?
The CID board must submit a detailed budget for the following financial year to the City by 31 January.
The CID shall split its budget in respect of residential and commercial components for the purpose of calculating a differential CID levy per usage.
The proposed budget may not deviate materially from the approved Business Plan and three year budget as approved at conception.
If the proposed budget deviates materially from the approved Business Plan and application in terms of section 11 of the By-Law is required. This application will be submitted as a separate report to the Council.
When is the Municipal property valuation determined?
All Municipal property valuations are based on the year 2000. This means that any new developments or improvements to property are valued as if it were the year 2000.
Previous legislation (before 1 July 2006) stipulated that new developments or improvements to property will be valued as above and added to the valuation roll on 1 July (new financial year). This means that property rates were backdated to the date of completion within the previous financial year.
In terms of the new Municipal Property Rates Act being implemented from 1 July 2006, the valuation roll will now be amended quarterly in the same financial year.
What if the valuation base changes within the financial year?
Valuations change due to interim valuations, technical adjustments, Valuation Court rulings, sub-division, rezoning or other corrective actions within the financial year.
Should the valuation base decrease as a result of the above, Council must inform the CID accordingly. If the levies then billed are not sufficient to meet the required CID budget, in terms of its approved Business Plan, a recalculation of the CID levy would be necessary.
This CID levy adjustment could only be implemented as follows:
- at 1 January for the remaining period of the current financial year;
- backdated at the end of the financial year; or
- incorporated as a special item in the following year’s budget by the CID.
Similarly, should the valuation base increase as a result of the above, Council must inform the CID accordingly. If the levies billed significantly exceed the CID budget, in terms of its approved Business Plan, a recalculation of the CID levy could be required as per the above options.
What about new developments?
Any new developments and other actions initiated by the property owners within the current financial year that could influence the valuation base, will NOT be included in determining the CID levy (cent-in-the-rand) of that financial year.
The valuation base is a snapshot at a point in time (end February) and is used to calculate the cent-in-the-rand for the following financial year.
CID levies will NOT be backdated as is the case with property rates to the date of completion. The valuation as per Council records for the applicable month will be multiplied with the fixed cent-in-the-rand per CID.
Why is the CID management asking property owners to pay their CID levy?
The City provides the Cid with a report, indication the payment status of the levy per property. The CID Board assists the City to pursue such members who are in default. This is required to reduce the arrears and to improve available financial resources for the CID to perform its functions and meet its obligations.
What happens if I am in dispute with the City regarding my Municipal account?
The CID levy is collected by the CITY on behalf of the CID and subsequently paid over to the CID. The levy income is that of the CID and NOT the City although it shares an invoice to keep collection costs to a minimum.
Should you be in dispute with the City you must pay your CID levy regardless. You have to stipulate (if you are only paying the CID levy) otherwise any payment will be directed against Council debts. These stipulated payments can only occur at a Council cash office.
Can my CID levy be spent anywhere s the City?
No as per the By-Law the CID levy can only be spent on additional municipal functions within the CID boundary.
