Letter: What is the logic of farm rates?

Mangete farmer John Hunt, executive member of the Mangete Development Committee and several other planters’ and ratepayers’ organisations, writes an open letter to the municipal manager of Mandeni municipality: Dear Mr Khuzwayo, As you are obviously having, from our experience, great difficulty in making a prompt reply to our last e-mail (July 16) containing six questions concerning your new budget, property tariffs and market valuations we thought that we would make a number of statements on which you could comment.

ONE: In both the Mayor’s Report to Council (March 28) and throughout the budget constant reference is made of keeping tariff increases “closer to the guideline CPI of 5.4% as determined by the Minister of Finance” or the 6% upper boundary of the South African Reserve Bank’s inflation target or National Treasury’s guidelines.

We could use such crude words as rubbish, incorrect, not true but as the first one was included in the Hon. Mayor’s eloquent if rather lengthy Report to Council, and he is our chief local politician, we would prefer to say (in a more parliamentary manner) his statement contained a “terminological inexactitude”.

As not one of the property tariff increases were even close to 6% they ranged at the pre-rebate level of plus 419.9% to minus 25.7% and at the after-rebate level of plus 309.65% to minus 75.7%. We, the unfortunate farmers, are facing a 206.45% increase!

The explanation for the amazing agricultural tariff variations has been attributed to the Municipal Properties Rates Act only allowing a single agricultural category and in consequence the present three tariffs had to be amalgamated into one.

As, it now appears, the municipality has been “overcharging” two of the tariffs, they have come up with one gross increase (ours) of +412.9% and two of -25.7% and -20.5% and then (somehow) it has been decided to give a new 50% rebate to agriculture thus making our increase 206.45% and actually increasing the other reductions to -75.7% and -70.5%.If they had looked more closely at the Government Gazette of August 18, 2014 they would have found that while section 8 did specify a single agricultural property, section (4) (a) does allow a municipality to make a supported application to the minister for the need for sub-categories.

So, all these amazing tariffs and rebates could have been avoided. We can only assume that the minister failed to give his authorisation and we would very much like to see the minister’s reasons. While making this statement it is also worthy of comment that the residential tariff (who receive services) has remained unchanged at 0.0126 (no doubt reflecting that most councillors and municipal employees are living in the residential area) and the new gross agricultural tariff is actually higher at 0.0159 (where no services are provided). Logic?

We also do hope that the approval has been sought and given to increase the tariff payable by Treasury on Public Service Properties now increased by 412.9% with a 25% rebate.

TWO: We note that the budget now sets a rates collection target of 68% i.e. limiting the arrears/defaulter to 32%. The municipality obviously now wishes the farmers and landowners we represent to now join the defaulting 32%. What a shame as both my personal property rates accounts presently show a zero balance.

Let us try and look on the positive side! If you could actually get all ratepayers to pay their new bills you could actually avoid increasing your current consumer debtors from R183 million (less of course the R104 million bad debt provision) and if you maintain the current annual bad debt write off of R10.5 million, do you know the entire debt would be written off in just over 17 years. And then, maybe, you could avoid increasing your rates income by R17 million (like this year) which is going to be a 55% increase.

Keeping on this positive note you might then be able to increase the pay of your lowest paid Director from this year’s budget of R895,004 to say over a million, aim high, let’s go for broke; after all the ratepayers can afford it!

Letter shortened – Editor