City council slashes rates

However, the reduction has resulted in a revenue budget deficit of about $14 million.

Council intends to make up for the deficit by increasing penalties for over usage of water from $1,08 per kilolitre to $2,63 per kilolitre.

It has also resolved to re-introduce a six percent interest on overdue accounts, which was discontinued in November 2009 and increase rentals of council properties.

Although a handful of properties had their rates increased, a majority experienced decreases.

Tariffs in high and low-density areas remained unchanged.

Addressing business people and property owners at the 2012 property rates impact meeting at the Small City Hall yesterday afternoon, the council’s chamber secretary, Mrs Sikhangele Zhou, said the rates were based on the valuation roll of city properties completed last year.

“Changes in the value of land reflect the change in land use since the last valuation roll was done in 1995. More businesses moved out of the Central Business District to the outskirts, resulting in the upgrading of some residential areas in the affected zones to commercial areas. It has to be noted that the valuation roll will not change for the next 10 years. Residents did not come forward to complain about it when it was presented. Council can only vary the rates, based on the valuation roll,” said Mrs Zhou.

She said rates that reflected a rise of up to 1 000 percent in January had been reversed.

Mrs Zhou said property owners in the CBD would get new bills based on the new rates, backdated to February.

Explaining the new structure, the city valuer, Mr Thabani Ncube, said rates on land values and improvements in the CBD were now expected to contribute 37 percent less than their budgeted projections for this year.

“They were supposed to contribute $1 795 732 but after being reduced, we expect to realise only $528 037.

Light service buildings and wholesalers on the edge of the city will contribute $93 061 instead of the budgeted $158 817. Only the income from the industrial sites is expected to increase by about 2,4 percent to $614 140,” said Mr Ncube.

Mr Isaac Matare from the city’s financial services department said tariff rates were reduced from 0,004350 on the value of land to 0,0012049, a decrease of 72,3 percent.

“Under the new system, a block of residential flats owned by one person are charged commercial rates because the person is making money out of them. A block of flats that consists of individual apartments owned by different people are charged residential rates,” said Mr Matare.

He said tariffs on improvements were reduced by 65,6 percent from 0,00114828 per rateable unit to 0,000395.

Responding to questions from businesspeople council’s financial director, Mr Kimpton Ndimande, said projections had shown that council could cover the deficit that arose from decreasing in rates through the proposed interventions.

A property owner appealed to council to improve its lines of communication.

“If council has important announcements like rates meetings and others, it would be better if they simply put the information on our bills because some of us rarely read newspapers or watch television. That is the reason why most meetings are poorly attended,” said the property owner.

Mr Ndimande assured the residents that council would do that in future and also use e-mails and the Short Messages Service (sms) to keep residents abreast of goings-on in the council.

The reduction in rates, increase in the water penalty and rentals on council properties would be with effect from February this year, while interest on overdue accounts would be applied beginning this month.

Council held two meetings yesterday, which targeted residents in and around the city centre.

Today, a meeting with business people in the industrial areas will be held at the Small City Hall, from 9.30am.