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28 january 2010
Kungwini Local Municipality (KLM)
INFORMATION CIRCULAR to all residents/ratepayers in the Kungwini West area of the Kungwini Municipality regarding the settlement agreement reached in the north gauteng high court on 18th December 2009
1. On 2nd June 2008 the Supreme Court of Appeal ruled in favour of the Silver Lakes HOA/Kungwini West Alliance (KWA) relating to the rates increase for the 2004/05 financial year. To this end the Kungwini Local Municipality (KLM) calculated the refund aligned to the court judgment which was credited against the October 2009 respective active municipal accounts.
2. The basis utilised in calculating the credit was the difference between the 2003/04 rates tariff, namely 0,020c in the rand and the increased tariff of R0,054c in the rand, which essentially equates to a difference of R0,034 c in the rand which was credited based on a 11 month billing cycle (the new tariff was only charged as of August 2004).
3. On the 18th December 2009, the KWA and KLM settled on the dispute relating to the rates and taxes charged pertaining to the 2004/05, 2005/06 and 2006/07 financial year. Essentially, the following table is a summary of the terms of settlement in relation to the rates tariff charged over the three financial years:
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Financial Year
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Rates Levied
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Rates to be collected and Recovered based on the settlement
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2004/05
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0,054 cents in the rand
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0,020 cents in the rand
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2005/06
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0,064 cents in the rand
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0,0576 cents in the rand (10% discount)
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2006/07
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0,065 cents in the rand
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0,0585 cents in the rand (10% discount)
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4. As stated in the opening paragraph, the journal relating to the 2004/05 financial year has been credited against the October 2009 respective active municipal accounts. Pertaining to the 2005/06 and 2006/07 financial years credit journals, cognizance needs to be taken of the fact that the journals have been calculated based on the above settlement agreement and that the credits have been passed against the January 2010 respective active accounts.
5. It needs to be noted that the abovementioned journals will only be credited against active municipal accounts. Essentially, any municipal account that is not still currently active (the property has changed ownership between the period 2004/05, 2005/06 or 2006/07) will not benefit from the abovementioned settlement agreement. As a practical example, the property was sold at the beginning of the 2006/07 financial year and the ownership has remained unchanged in this period, the journal credit will only be passed for the 2006/07 financial year. Similarly, should the property have changed ownership after the 2006/07 financial year, no journal credit will be passed against the account. It therefore stands to reason that should no change of ownership have occurred since August 2004, the ratepayer/debtor would automatically qualify for the respective journals for all three financial years.
6. Furthermore, as part of the settlement, it was also agreed between the parties that the Council Resolution dated 9th October 2009 (Item SKA 191/9-10-2009) by which the municipality offered a 30% incentive/discount for settlement of the outstanding account would be extended to Friday, 12th February 2010. Essentially the 30% incentive/discount is offered based on the settlement of the outstanding account.
6.1. As an example, should a debtor/ratepayer owe R1000,00 on the respective municipal account and the ratepayer would like to take full advantage of the 30% incentive, it will be necessary for the immediate payment of R700,00. The R300,00 (30%) incentive will then be discounted against the account.
7. It however needs to be noted that should the ratepayer not be in a position to pay the entire account, a minimum amount of 50% would be required in immediate payment to still partially benefit from the scheme. Again, based on an outstanding account of R1000,00 an immediate down payment would be required of R500,00, after which the 30% incentive would be applied to the R500,00 balance. This would therefore equate to an incentive discount of R150,00 and the balance can be repaid over a period not exceeding 24 months (interest free).
7.1. Should the ratepayer however default on the payment of the current account and monthly installments, the 30% incentive will be reversed back onto the respective municipal account with immediate effect and the arrangement will be cancelled.
8. The payment is made without prejudice to the taxpayer’s rights including correct account billing.
9. Cognisance needs to be taken of the fact that to qualify for the incentive scheme an application form needs to be completed by the respective ratepayers/debtors, either in person at municipal offices or electronically. (See attached form). The suggested electronic process of applying for the 30% incentive would entail the rate payer/debtor mailing the dedicated email address (kwa@kungwinimun.co.za) with the account particulars, on which the account information will be extracted, completed on the application form and mailed back to the debtor for signature and payment. The signed application and proof of payment can then be mailed back for implementation.
10. To facilitate any enquiries in this regard as well as general account enquiries the Finance Department has dedicated 3 land lines for telephonic enquires as well as a dedicated email address as mentioned above. An enquiry team has also been seconded to the Shere Satellite Offices for the period leading up to the Friday, 12th February 2010 deadline to deal with the possible influx of enquiries and applications on a rotational basis.
The contact details to be utilized specifically for the above mentioned are as follows:
Telephone Numbers: (013) 932 6307 / (013) 932 6308 / (012) 809 0628
Email Address: kwa@kungwinimun.co.za
Physical Enquiries: Shere Municipal Office, Struben Street, Shere Agricultural Holdings,
Alternatively
1 Muniforum Building, C/o Mark and Botha Streets, Bronkhorstspruit.
FREQUENTLY ASKED QUESTIONS (FAQ’s)
1. What if the owner does not live in the area?
Mail a request to the dedicated email address (kwa@kungwinimun.co.za) or enquire at (013) 932 6307 / (013) 932 6308 / (012) 809 0628. The form can be electronically sent through. This would therefore have to be dealt with on a one on one basis.
2. Process to follow where the evaluation amount is in dispute?
As mentioned, a dedicated task team has been identified to deal with all enquires/questions. Each enquiry will be dealt with through this task team. Hence emails and enquiries can be dealt with speedily.
3. Is the signed and approved application form necessary?
The completed, signed and approved form is crucial for obvious administrative reasons, the processing of all the journals and also pertaining to the arrangements for down payment. If rate payers calculate the 30% discount on their own and pay over the balance, said 30% discount will not reflect on their account unless the completed application form is checked, approved and signed by the applicable municipal official. Otherwise the municipality will not be aware of the payment.
4. Is agricultural land also included in this scheme? Yes.
5. Will I get a copy of the signed application form? If the rate payer requires a copy it will be made available via return mail or at the municipal offices.
6. What basis/formula was used to calculate a property's Oct 2009 'outstanding amount' and '2004/5 credit' amount: the 2004-8 valuation roll (i.e. stand value); or measurements (size of stand); or anything else?
The basis for calculation is the valuation of the stand which is then charged at the applicable tariff for the financial year. The size of the stand does not impact on the calculation directly, but does have an impact on the valuation.
7. It follows that if you have two identical residential properties in the same geographical area (suburb) in terms of (2004/5) value and size (for eg 1,7 ha each and stand value R290 000) and 0.034 c/R was indeed used for the calculation, would it be correct to assume that both property owners should have received the exact same 'credit' amount of R 9038.33 on their October 2009 municipal account? (R 290 000 x 0.034 = R 9 860 divided by 12 = R 821 x 11 months = R 9038). If not, what other formula were used to calculate either 'outstanding amounts' or 'credit amounts’?
That is correct! Please take note that errors are possible and if brought under the attention of the task team will be investigated and corrected accordingly. Enquiries can be directed to the dedicated telephone numbers or the email address.
8. What c/R rate was used to calculate the '2004/5 credit' of business properties?
Same as that of residential as the tariff was the same.
9. What c/R rate was used to calculate the '2004/5 credit' of pensioners?
Same as that of residential as the tariff was the same.
10. What c/R rate was used to calculate the '2004/5 credit' of religious institutions/ministries and/or churches?
Same as that of residential as the tariff was the same.
11. Which areas exactly in Ward 1, 2, 3 were 'credited' by Kungwini - i.e. to which areas do the 2004/5 SCA judgment apply, according to Kungwini's Account/Revenue division?
All the areas within the wards, as also contained and stipulated in the settlement agreement.
12. Did the Kungwini Municipality take into account any other differentiating realities/factors/account items unique to the various areas within Ward 1,2,3 when the outstanding amounts, credit amounts, etc were calculated?
No.
13. The 30% “partial” discount if only 50% of arrears are paid?
The incentive of 30% will only be applicable in totality (on the total outstanding amount) if the account is settled in full (i.e. 70% paid) as explained in the information circular. If only 50% is received in payment, the 30% incentive would only be applicable to the remaining 50% and on condition that arrangements are made for the balance. Take note of the fact the 50% arrangement for down payment over 24 months is interest free (essentially translating into an interest free loan to be financed by the Municipality). In addition over the past couple of years no interest has been levied against outstanding amounts.
14. Outstanding account queries?
The payment is required immediately to qualify for the incentive. Note however that the payment is made without prejudice to the taxpayer’s rights including correct account billing. The municipality is in agreement that should additional journals be required for whatever reason (meter problems, incorrect valuations etc) the debtor/rate payer needs to receive the necessary credit and this will be done.
15. The rates phasing-in account submissions/queries by agricultural property owners with bona fide agricultural activities?
Although no phasing in of the rates tariffs pertaining to bona fide agricultural properties is currently considered, the municipal financial management is willing to discuss this issue further.
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(Complete and mail to kwa@kungwinimun.co.za / Enquiries: (013) 932 6307 / (013) 932 6308 / (012) 809 0628)
INCENTIVE APPLICATION FORM: RESIDENTIAL/BUSINESSES
APPLICATION FOR 30% INCENTIVE ON ARREARS IN TERMS OF COUNCIL RESOLUTION: ITEM SKA 191/9-10-2009 (Businesses to settle account in full)
ACCOUNT NUMBER: _____________________________________________
ACCOUNT HOLDER: _____________________________________________
ID NUMBER/REG NUMBER: _____________________________________________
POSTAL ADDRESS: _____________________________________________
EMAIL: ___________________________________________________________________
CONTACT NUMBER(S): _____________________________________________
I ,……………………………………the undersigned hereby do application for the incentive offered by the Kungwini Local Municipality (KLM) in terms of Council Resolution: ITEM SKA 191/9-10-2009 and agree to the following. Please choose one of the following payment methods below:
OPTION A: OPTION B:
Current Outstanding Bal R_______________ Current Outstanding Bal R_______________
50% Down Payment R______________ Less 30% Disc Outst Bal R______________
Balance R______________ Remaining Balance Payable R______________
Less 30% Disc on Bal R______________
Final Outstanding Bal R______________
IF RATEPAYER/DEBTOR CHOOSES OPTION A:
1. Do application for a payment arrangement for the balance outstanding on the account to the amount of R_____________ in terms of option A. The payment arrangement will be structured over a period of _______ months of which the monthly instalment equals to R ______________________
2. That cognisance is taken of the fact that should I default on the monthly instalments indicated on the agreement, 30% incentive (discount) will automatically be reversed back (Debited against the current account) and interest will be levied at the prevailing repo rate plus 2%.
3. &nbs
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