Property Rates Bill: deliberations

Meeting report

PROVINCIAL AND LOCAL GOVERNMENT PORTFOLIO COMMITTEE
27 November 2003
MUNICIPAL PROPERTY RATES BILL: DELIBERATIONS

Chairperson: Mr Y Carim (ANC)

Relevant Documents
Working draft of Local Government: Municipal Property Rates Bill (15 November version)
Summary of public submissions

SUMMARY
The afternoon session dealt with Chapter 6 on Valuation Rolls. An amendment to Clause 41 dealing with the information required for valuation rolls now allows for some leeway where this information is difficult to obtain by stating "to the extent that such information is reasonably determinable". The Committee agreed there was no reason rural property should be excluded from the important process of placing them on the valuation rolls. However, the Committee Report on the Bill would address the reality of rural life where some properties are neither registered nor valued. The Department pointed out that if the land has been surveyed, there must be some description of the area of locality and information regarding ownership and address. Most township properties have been surveyed but have never been valued. The record shows the type of property but does not capture recent developments thereon. Such property owners would not be penalised for developing their properties without permission.

The evening session was not minuted by PMG nor recorded by Parliament. The Committee completed working through this working draft of the Bill in order to check the amendments.

MINUTES
Deliberations on the Municipal Property Rates Bill
Chapter 6 Valuation Rolls
Clause 41: Contents of valuation rolls
The Chair asked why the information sought at 41(2) should be limited to "to the extent....determinable".

Adv. Grove replied most properties have been surveyed and correspond to 41(2)(a) but that where that has not been done the Department will act on information that can be reasonably determined.

Rev. Goosen (ANC) wanted to know whether these processes cover rural areas.

The Chair said there was no particular reason why rural areas should be excluded from this important process. The Report to Parliament would, nonetheless, address the issue of properties that have not been registered especially in the outlying rural areas. The level of registration in these areas is very low.

Mr Sithole (ANC) noted that indeed most rural areas have not benefited from proper valuation or where such has been done it was not properly executed. These are vast areas and include most Townships. There is a need to find a way to verify the roll in this regard. In fact some improvements in rural areas have never been approved.

Mr Lyle (ANC) was doubtful that the Department fully comprehended the reality of rural life. Huge pieces of land that are suitable for agricultural activities lie idle. Most inhabitants in these areas are cut off from the rest of the country and no efficient postal system exists.

Ms Jackie Manche acknowledged the fact that there are some rural areas that lack postal services. There may as well be some properties in these areas that have not been surveyed in which case the surveyor-general would not levy rates. Once a parcel of land has been surveyed there must be some description of the area of locality and information regarding ownership and address. The market value of the property depends on many factors that include locality and land use. Most Township properties have been surveyed but have never been valued. The record shows the type of property but does not capture recent developments thereon. Property owners would not be penalised for developing their properties without permission.

The Chair said he was not convinced about the necessity of the postal address at 41(a). He suggested that the issue should be flagged for the present.

Adv. Grove noted that a physical address should suffice for this purpose.

The Chair asked what form of address would be required of a partnership.

Mr Vaz said partnerships are registered differently and that in their case the relevant correspondence would be delivered to the partnership since partners are in law jointly liable.

The Chair called for some explanatory notes on the issue of address in order to supply clarity to the many questions that keep popping up in this regard.

Mr Vaz undertook to make provision for explanatory notes to give more clarity to this.

Rev. Goosen said that the entire clause does not seem to flow in a logical order. It could do with some realignment.

Adv. Grove agreed and undertook to rearrange the clause.

The Chair noted that SALGA wanted the entire clause deleted because it is not seen to be relevant. They argue that the postal address of the owner must be in the debtors' ledger of the municipality. He said that this proposal is weak. SALGA should motivate its position to convince the Committee to fiddle with the clause as it stands.

Adv. Grove noted the Committee's concerns around the valuation address. It would indeed be onerous to require one to update one's address register every now and then. He proposed that the offending sub-clause should be deleted all together.

The Chair ruled that the issue should be flagged for the present.

Clause 42: Public Notice of Valuation rolls
The Chair questioned the way 42(1) had been phrased and asked if there is a better way to phrase it.

Adv. Grove said the paragraph would be rephrased so as to start with the reference to the municipality.

The Chair suggested that "the media" should be added to widen the choice of information outlets at 42(1)(a). Adv. Grove agreed to incorporate this proposal.

Mr Mbongeni (ANC) said that with such wide latitude the Department would prefer print to radio since the former is much cheaper.

The Chair was satisfied that this was the best way to communicate the notice and capture all details regarding the valuation exercise in terms of 42(1)(b).

The Chair wanted to know what Section 115 of the Systems Act in 42(1)(c) is all about.

Adv. Grove explained that Section 115 makes reference to the different ways for disseminating information to the public.

The Chair noted that the provision on website at 42(2) was an excellent idea and commended the Department for that important insight.

Clause 43: Inspection of, and objection to, valuation rolls
Rev. Goosen referred to 43(1)(aA) and questioned the need for an extract from the roll.

The Chair replied that an extract may be required where one wants to compare one's valuation to that of the neighbouring property or where one intends to sell one's property. Ms Manche added that an extract might be necessary where one has not received the valuation report via the mail.

The Chair asked the Department to give an example of 'matters' that would form the basis of an objection as envisaged in 43(1)(b).

Adv. Grove replied that these matters are enumerated in 43(2)-(6) and include matters that appear on, or are omitted from the roll.

The Chair wanted to know why objections must be lodged with the municipal manager only and not with any other official of the council.

Adv. Grove explained that the municipal manager is entitled to delegate responsibility to any officer. The power to delegate is specifically provided for in the Municipal Systems Act.

Mr Mbongeni queried why the power to delegate should be located in the Municipal Systems Act when the definition of a "municipal manager" is in the Bill.

Adv. Grove replied it is possible to make provision for delegation in the Bill but that this would amount to a repetition of what is already in the Systems Act.

Mr Sithole was worried that the municipal manager would be overloaded with all manner of objections and the practical reality of compiling such objections would be problematic.

The Chair suggested an amendment to provide for delegation "in terms of the Municipal Systems Act". The drafting team should appropriately locate this provision in the Bill.

The Chair asked for an illustration of the procedure and situations for lodging claims to the council.

Adv. Grove replied that in terms of the valuation one could lodge an objection where one feels that the valuation report does not accurately reflect the market value of the property.

Mr Sithole asked if there is another way claims could be lodged - other than through objections.

The Chair said that objections are necessary in this specific area. It is a technical area. One could not figure out some other way other than through objections.

Mr Mbongeni wondered whether it is possible, especially in smaller municipalities, for the municipal manager to lodge an objection to a valuation report.

Mr. Vaz replied that the municipal manager facilitates the preparation of the valuation report and that therefore s/he cannot object to the very same report. The municipal manager could however advise the council to object if s/he thinks that there is something untoward about the report.

Rev. Goosen said he could not understand why the council would lodge an objection to a valuation report it has commissioned. The Chair agreed.

Adv. Grove said in practice the council rarely objects to the valuation report. The municipal manager does not wish to be seen to be interfering with the work of the municipal valuer.

Ms Manche said professionals prepare the valuation report and the council has no reason to interfere. The municipal manager would, however, take responsibility to protect the integrity of the valuation roll.

Adv. Grove suggested the addition of a sub-clause to create an obligation for the municipal manager to inform the council should s/he notice something objectionable in the valuation report.

Clause 44: Processing of objections
The Chair sought clarity on what procedure was envisaged at 44(a).

Adv. Grove explained that the procedure in this case is the normal fair and transparent administrative processes.

Mr Manyike (DPLG Director: Municipal Finance) said that the clause does not purport to be exhaustive on what these procedural matters should entail.

Mr Kgarimetsa (ANC) said that the procedure referred to should be spelled out in the clause to avoid doubt.

Ms Manche explained that the Minister would prescribe the procedural requirements in the regulation should this be found to be necessary.

The Chair offered that what the clause provides is the general principle of the framework. The details would be covered in the regulations. He added that SALGA proposes that this exercise should be undertaken within the financial year.

Mr. Vaz noted that SALGA's concerns have been covered by the addition of the term "promptly"

Mr Sithole queried how one would be in a position to measure facts and wondered what criteria the Department intends to apply at 44(b).

Ms Manche clarified that the clause seeks to discourage frivolous objections by insisting on facts.

Mr Sithole made the point that the issue is that of attitudes in which case it would be problematic to weigh the facts. What yardstick would one use in this case?

The Chair agreed with Mr Sithole's observation but noted that the problem was that of legal interpretation.

Adv. Grove offered to add "including information and submissions by the objector" to supply more clarity to the clause.

The Chair asked why clause 45 had been moved.

Mr Vaz said the Committee had requested that the clause be moved next to 48A, which is similar to 45.

Clause 46: Compulsory review of decisions of municipal valuer
The Chair proposed the addition of "promptly" at 46(1)(b).

Adv. Grove disagreed with the proposal and added that "promptly or before end of year" is irrelevant since the process could overlap the financial year.

The Chair asked why 46(2) is necessary at all.

Mr Vaz said people had been asking what 'a review' means and that the sub-clause is an effort to supply clarity to the provision.

Adv. Grove explained there is a similar provision to 46(3) which provides that the municipal manager must execute this task and the chairperson of the appeal board must ensure that this is done.

Clause 47: Notification of outcome of objections and furnishing of reasons
Mr Sithole raised the political question that in some communal land people might, in the absence of the owner, decide to lodge objections. How would one test the legitimacy of such a complaint?

The Chair asked whether it would not be more practical to confine the right to lodge objections to the owner of the property. An objection should be limited to the one aggrieved by the valuation report only. He wanted to know whether councils are currently swamped with a flurry of objections.

Ms Manche replied in the affirmative. The Rates Association in particular carries the bulk of objections.

Adv. Grove said another reason for the objection mechanisms is to forestall a situation where there is a flood of court cases. This is a possibility where there is no forum to ventilate such cases of disaffection. For the most part, the owner of the property lodges about 99% of objections.

The Chair questioned why reference has been made to the municipality at 47(2).

Mr Vaz said that it should in instead refer to the municipal manager.

The Chair questioned the rationale for levying a fee on objections.

Mr Vaz replied that a fee payment is meant to discourage the lodgement of frivolous claims, which would unnecessarily escalate administrative costs.

Rev. Goosen had concerns about 47(3).

Mr Vaz explained that between the time of receiving an application and when a decision is taken on it, a maximum period of 30 days would have lapsed. The reasons for the determination go directly to the applicant.

Adv. Grove said it is necessary to address the application to the council since the council would need to collect the fee.

The Monitor left at 5.30pm when the meeting adjourned for a short break. The meeting resumed and deliberated until 10.30pm.