Farmers owning land within the Mpofana Municipality in the KwaZulu-Natal Midlands have finally negotiated a compromise on their excessive property rates, proving that such disputes can be resolved by following official channels. General manager of the Mooi River Farmers’ Association Tony le Roux was pleased to send out the following letter to his association’s members.
Following months of negotiation regarding the rates issue as it affects farmers, we’ve come to an agreement with the Mpofana Municipality that is acceptable to your farmers’ association committee members. We trust you’ll agree the settlement terms are satisfactory.
The background
Agricultural property owners were not rated in the past. This changed from June 2008 when we were rated by the Mpofana Municipality under the new Act. Our rate for the first and current financial year was set at a 1% nominal with a no-service rebate of 30% thereof, an effective rate of 0,7%. Thus, a property worth R5 million would pay R35 000/year in 12 monthly payments. As first-time ratepayers we were entitled to a further rebate of 75% in the first year, 50% in year two and 25% in year three.
The effective rate of 0,7% was felt to be too high, both in terms of affordability and when compared to other municipalities. We declared a dispute with the Mpofana Municipality and urged our members to pay their rates into a trust fund. We engaged attorneys to advise us and joined the National Taxpayers Union.
The negotiations
We had many meetings with our attorneys, municipal management and certain councillors. In the past few weeks, we’ve had Ian Oatram, a Mooi River Farmers’ Association member with experience in dealing with the municipality, as an intermediary. This helped bring the parties together to reach agreement. We’d like to thank Ian for his substantial contribution. These meetings eventually became a negotiating forum for the rates to be charged for year two, starting from June 2009. We accepted that the rate for year one would stand for various reasons, especially as we were enjoying the 75% first-time ratepayers rebate.
The agreement
Rates for the current year, year one, would stand as they have been charged.
The rates for year two, which starts June 2009, would be charged as follows: the nominal rate would be 0,55% and the no-service rebate applicable to all farmers would be 55%. The effective rate is therefore 0,2475%. We are also due the first-time ratepayers’ rebate for year two of a further 50%.
The no-service rebate of 55% is calculated according to the national government (Department of Provincial and Local Government) guidelines and not a random figure. This is very significant as it creates a precedent for us as ratepayers and for the municipality, meaning this rebate is likelier to match other municipalities’ and is less possible to be manipulated. All ratepayers are entitled to apply for further rebates for social services provided on farms such as schools, sports fields and clinics. The municipality is legally bound to give due consideration to each application. We suggest you submit such applications through the farmers’ association, so we are aware of it and can give it our attention.
The money paid into the trust account will be remitted to the municipality forthwith as a lump sum, together with a list of the amount remitted per individual ratepayer account number. Each ratepayer will also receive an e-mail showing the payment made on their behalf to the municipality. The interest earned in the trust account will be used to repay the trust and legal expenses incurred by the Mooi River Farmers’ Association. Any remaining interest will be distributed to all those who paid into the account, on an equitable basis. Kamberg Farmers’ Association members have kindly decided en masse to donate any of their remaining interest to the Mooi River Farmers’ Association. From now on we will pay rates directly to the municipality as our trust account will be reconciled and wound up.
The future
Our dispute with the municipality was regarding the quantum of the rate we were being charged. This has now been settled. During our negotiations with the municipality we’ve developed a working relationship we intend to foster. They need help and we intend to keep the lines of communication open and assist where we can. – Lloyd Philips Contact Tony le Roux on (033) 263 1401 or e-mail [email protected]. |fw
