STATEMENT ON CALLS FOR REVALUATION OF PROPERTIES AND RATES

The Nelson Mandela Bay Municipality has noted, with some concern, that a certain "T Mokorotlo" has placed a rather expensive advertisement in a local publication, which makes some remarkable claims, and which further calls on ratepayers in Nelson Mandela Bay to block the implementation of the Property Rates Act.

Whilst the Municipality will not give credence to some of the outrageous "statements" made in the advertisement by responding thereto, it is important for all residents of the city to note:

* The Nelson Mandela Bay Municipality’s total budget for the 2009/10 financial year is R 7,6 billion, made up of R 5,3 billion for Operational expenditure and R 2,3 billion for Capital projects.

* These funds are used primarily for infrastructural development, such as roads, recreational facilities’ upgradings, and 2010 infrastructure; and service delivery, including housing, water, electricity, libraries, arts & culture, waste management, refuse collection, sewage, parks & greening, beaches, grants-in-aid, and customer service initiatives and activities such as paypoints.

* Funding of the budget is obtained from various revenue sources including national and provincial government grants, external borrowing, service charges, fines, interest earned and property tax (referred to by most people as "rates").

* Property tax (or "rates") only makes up about 10% of the total revenue for the Municipality (the rest of the NMBM’s revenue is from the other sources mentioned). In other words, the aggregate or total amount of all ’rates’ that the NMBM receives from ratepayers constitutes about one-tenth of the NMBM’s revenue.

* This total property tax revenue amount (for the 2009/10 budget is R774,5 million) is then divided by the aggregate value of all properties in Nelson Mandela Bay and the rate-in-the-rand is so derived.

* It is extremely important to note that:

- If all properties in Nelson Mandela Bay were proportionately decreased in value, it would NOT affect an individual’s property tax, as every property owner’s tax is worked out in relation to - and as a percentage of - the total property tax revenue amount. In the same way, increasing all property values across Nelson Mandela Bay, will again NOT affect one’s property tax.

- Embarking on another general property valuation exercise will cost the NMBM (and thus the ratepayer) approximately R35 million, an amount that the NMBM and its residents can ill-afford at this time.

- According to the Property Rates Act, valuations must be undertaken every four (4) years.

* Finally, the Property Rates Act was passed in to law (in other words, became legally binding on all Municipalities and residents) in 2004. Its key objective was, and still is, to ensure a more equitable calculation of property tax, given the previous unfair, unequal and divisive manner in which property taxes were calculated.

* The NMBM’s Rates Policy (adopted in 2009) provides generous exemptions, rebates and reductions to marginalised and special groups such as pensioners, NPOs, people with disabilities, and sporting bodies.

* The Rates Policy (of 2009) and the 2009/10 Budget (like all NMBM Budgets) was extensively consulted with the public and all stakeholders before its drafting and, in the case of the Budget, imminent adoption.

* Unfortunately, the NMBM has no record of any correspondence from or engagement with "T Mokorotlo". We encourage any resident of Nelson Mandela Bay to engage with us, should s/he require any clarifications on the 2009/10 Budget, the valuation of properties and/or Property Tax. In this regard, kindly call our call-centre at 041 506 5555 or visit our website www.nelsonmandelabay.gov.za

Thank you.