By Nangamso Mabindla
20 April 2004

A NEW strategy to educate Buffalo City residents about the implications of the new Property Rates Bill, to be signed into law in July, will go a long way to ensuring the city is run more effectively, said chief financial officer Brian Shepherd.

"We're preparing in time because we do not want to be faced with problems when we introduce this somewhat controversial bill. We want to make our citizens comfortable with this new change," said Shepherd.

The bill, which is set to create a transparent and uniform national framework for rates or properties, will have rates throughout South Africa based on the total market value of land plus property improvements. In the past, rates were based on the value of the land only, not on the value of the property including the dwellings and improvements.

This will mean that rates on properties will be adjusted in accordance to a new framework, including a re-evaluation of the value of the property.

When the new bill is signed into law, all municipalities will have four years to phase in implementation of the uniform rate policy. According to Shepherd, the new uniform rate policy will:

• make it easier to determine the fiscal capacity of municipalities;
• ensure national monitoring and intervention if necessary; and
• encourage participation of people in rates policy consultation processes.

In order for Buffalo City residents to implement the requirements of the law, Shepherd said, "the municipality will undertake community education projects to assist people to understand how municipal finance works. We want to make our clients comfortable about their moral obligation to pay as well as being aware of the incentives and penalties that come with payment or non-payment."

To assist residents, the municipality has published a booklet that gives a historical and practical overview of the new framework and how it will impact on the city. It also gives simple illustrated answers to the most commonly asked questions.

"The booklet will inform people on how to pay their rates, why they should pay their rates and what services must be delivered by the municipality. It will also assist ratepayers on how tax is calculated and why is property valued," said Shepherd.

When the residents understood the new bill and their responsibilities, they will be armed with the knowledge of how city finances worked and the city will have less financial problems, Shepherd said.