- The business plan for the ID is supported by the majority of property owners in the ID. Owners in the ID are willing to pay additional rates on their property to fund additional municipal services in order to improve/upgrade the ID area. The additional or top up rate is paid over to the ID and is used only in the area controlled by the ID.
The purpose of an ID is to:
- Enhance and supplement municipal services
- Facilitate investment
- Facilitate a co-operative approach between the city council and the private sector
- Halt degeneration and facilitate the upliftment of distressed business and mixed-use areas
- Promote economic growth and sustainable development.
The ID serves to:
- Create a mechanism for property owners/tenants to participate in sustainable development
- Recognise the unique needs and challenges facing different commercial and mixed-use precincts
- Facilitate the recognition of defined geographic districts in order to enhance/supplement the provision of municipal services.
IDs improve and upgrade areas by:Combating crime – making the area safe for its community and visitors
- Combating grime – making the area clean
- Initiating environmental improvements – making all aspects of the area greener
- Accepting social responsibility – dealing with the homeless, HIV/AIDS vagrants, prostitution, adopting a charily as a project, among others.
Typical ID services are provided to:Enhance public safety and security
- Supplement cleansing services
- Create environmental awareness
- Expand social/community involvement
- Provide urban management
- Create joint ventures with city councils/NGOs (non-government organisations)/PBOs (public benefit organisation)/SAPS (South African Police Services), among others.
The typical benefits of an ID are:
- Focused management of the area
- Pride in communal achievements
- Social responsibility
- Environmental awareness (recycling, greening, energy efficiency, conservation)
- Low vacancy rates
- New capital investments
- Marketing/promoting of the ID
- An increase in property values
- All contribute to the ID’s budget.
The advantages of an ID are:
- Control over own money, to be spent per the approved ID business plan
- Appointment of own service providers
- Everybody contributes (extensive financial modelling to ensure affordability)
- Contributions are capped
- Weighted votes and capping
- Set own standards/service levels
- Pooling of resources – CoCT (City of Cape Town)/NGOs/IDs, among others
- CoCT support (political representation and officials)
- Sub-council ward allocations
- No debt management
- No administrative fee payable to the City
- Public money – monitored by CoCT
- CoCT collects additional rates and pays over on budget to ensure sustainability.
The disadvantages of an ID are:
- Financial impact on individual property owners
- Possible political interference
- If approved by council, then mandatory for all (democratic process).
The establishment principles for an ID are:An arrears profile is created
- Services are specific to the needs of the area (gauged by the perception survey)
- Majority support for the ID determines its creation (for commercial areas 51% of owners’ support is required; for residential areas 61% of owners’ support is required)
- On creation of the ID, participation is mandatory
- One property gets one vote to establish the ID
- A Not for Profit Company (NPC) will be the management structure
- A property’s municipal valuation determines the member’s portion of the ID’s additional rates in the ID budget
- ID additional rates are collected by the City
- Additional rates are spent in ID only per the approved business plan and budget.
The establishment process entails:Approximately two years to establish
- Has a five-year term (application must be made to renew the term)
- Has stringent application of rules to protect the Council, community and steering committee against potential litigation
- Ensures the credibility of the model
- A unique application for each area, driven by property owners
- Facilitation by CoCT, who:
- guides/advises on the process
- ensures legal compliance.
The role of the City of Cape Town entails:Post establishment
- Extending the ID’s boundaries
- Renewing the ID’s term
- Ensuring legislative compliance (refer to ‘Legal framework’, below)
- Preparing annual reports and the implementation plan
- Preparing expenditure reports (actual vs budget)
- Reviewing annual budgets
- Preparing annual financial statements
- Preparing a mid-year performance report
ancial reporting and responsibilities)