City improvement districts raise alarm over costs
Cape Town city improvement districts say they can't maintain their current levels of cleansing and security duties because of rising costs, and they have appealed to the city to step up its services in key areas.
City improvement districts say they are struggling to cope with current levels of security and cleaning duties because of rising costs
'We are at a critical point where we don't want to tip over to where we can't provide the same level of service,' said Tasso Evangelinos, chief operating officer of the Central City Improvement District (CCID).
The city improvement districts (CIDs), now known as special rating areas, were established to provide top-up services, particularly in cleansing and security, for a designated area.
They get their income from CID levies added to a property owner's rates account by the city.
The city retains 3 percent of this income owing to the CIDs to cover any shortfall if there is non-payment. Their income stems from the levy that it gets from the ratepayer, via the city.
Subcouncil 16, which covers the city and Atlantic seaboard, yesterday reviewed the financial statements for the June 2013 financial year for the CCID and the Sea Point, Green Point and Oranje-Kloof CIDs.
Evangelinos said the growth of the city's economy and the increased activity, particularly at night, meant the CCID was expected to provide even more services.
'Unfortunately, there are not enough city services to cater for this, so we provide them and we are struggling. We therefore have to invest more in an area to man the services.'
Evangelinos said the service level agreement signed with the city 14 years ago no longer existed, and there was now a 'fine line' between what the city provided and what the CCID was expected to deliver.
The CCID, with a budget of just under R38 million, has a task force of 600 people responsible for providing a top-up cleansing and safety service. This must meet the needs of more than 5 000 residents, 2 300 businesses, 1 200 retailers and about 900 informal traders in the city centre.
Evangelinos said the CCID had for the first time in 14 years received a payment of R2.7m from the city for outstanding arrears. The city still had to recoup a further R9m in unpaid rates and levies.
Heather Tager of the Sea Point CID said this area was booming, with five major developments planned for the next few months.
However, despite recommendations from the CID about where funds were needed, the city tried to 'keep costs down'. This improvement district received a levy income of R3 367 749 from the city for the 2013 financial year.
Mark Truss of the Green Point CID said the increasing cost of providing security and cleansing services meant that entity was 'at high risk' of noncompliance. If it was unable to meet certain requirements, the CID and its service providers risked being fined for noncompliance.
The Green Point CID spends more than 50 percent of its budget on security services, while its cleansing department removes an average of nine tons of waste each month.
'We've become a primary service, which places a huge burden on our budget. We are spending more than we should, but we have no choice.'
The Green Point CID had a deficit of R121 365 for the 2013 financial year, while the OranjeKloof CID showed a deficit of R15 727.
Ernest Sonnenberg, mayoral committee member for utility services, said the solid waste management department would engage with the CIDs to hear their concerns.
'The city does not rely on CIDs for primary or top-up services. The department's programmes are such that we do not have to rely on CIDs; however, the services rendered by the CIDs are of benefit to the city and highly appreciated.'
Deputy mayor Ian Neilson said the city's policing staff did numerous joint operations with the CID.
'While we endeavour to ensure that our enforcement resources are equally spread throughout the city, the high level of activity maintained by the CIDs and their operational requests and fault reporting probably means that they receive a slightly larger share of the enforcement resources than other areas - which is justifiable in the context of the fact that they serve important business areas which drive job creation and economic growth.'
Anyone got any thoughts on this? To me it always a pity when I see that private enterprise is having to step in and fill the gaps left by Local Government ... but ... on the other hand it's also always a pity when we have to pay more taxes.
Commercial and Property Attorney
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I am the elected Chairman on the Gauteng Council of SAPOA. The South African Property Owners Association (SAPOA) is the biggest and most influential institution in the property industry. SAPOA members control about 90% of commercial property in SA, with a combined portfolio in excess of R150 Billion (about $22 Billion). I am also on the National Council and the National Legal Committee of SAPOA.Member of the Institute of Directors South Africa and Member of the Sirdar Governance Panel.
18 February 2014
I am a qualified Attorney. I specialise in Property Law, Commercial Law, Corporate Law and Trusts.
Please visit our website at www.prop-law.co.za for more details.
I am the elected Chairman on the Gauteng Council of SAPOA. The South African Property Owners Association (SAPOA) is the biggest and most influential institution in the property industry. SAPOA members control about 90% of commercial property in SA, with a combined portfolio in excess of R150 Billion (about $22 Billion). I am also on the National Council and the National Legal Committee of SAPOA.
Member of the Institute of Directors South Africa and Member of the Sirdar Governance Panel.