Chairman – Jonty de la Porte –

DirectorCleaning – John Ackermann –

DirectorUrban Management – Peter Mann ‐

DirectorFinance – Jedd Williams –

DirectorPublic Safety -Tony Pronk –

DirectorMarketing – Camilla Keating –

The role of the City of Cape Town entails:  Post establishment

  • Compliance
    • 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

 The roles of members and CoCT are:

 Members –

  • Implementing the business plan
  • Constituting the Not for Profit Company (NPC) membership
  • Annual approval of implementation plan and budget
  • AGM (AFS, directors, annual reports, etc.)
  • Ongoing communication
  • Guiding the establishment process
  • Preparing the finance agreement
  • Establishing service departments
  • Compliance
  • Political representation
  • Oversight

CoCT –

  • Billing
  • Receipting
  • Debt management
  • Account enquiries/queries

The realities include:

  • Steering committee work, including the perception survey prior to pursuing ID, is done at risk, i.e. with no guarantee that the ID will be formed
  • Majority support does not mean automatic approval
  • High arrears profile could mean no ID
  • No funding from CoCT
  • No flat rate – contributions based on valuations
  • Municipal top-up services only
  • Can divide the community
  • Can be dissolved at any time
  • Could be objections
  • Stringent establishment timelines.

Role of ID Boards

  • Implementing the business plan
  • Compliance with the Companies Act, i.e. Memorandum of Incorporation (MOI), which includes the following –
    • Board meetings
    • AGM
    • Keeping minutes of meetings
    • Appointing directors
    • Appointing auditors
    • Producing audited annual financial statements (AFS)
    • Chairman’s report/annual report
  • Complying with the supply chain management (SCM) policy, which includes –
    • Registering vendors
    • Appointing service providers
    • Annually renewing the tax clearance certificate.
  • Complying with ID requirements, such as –
    • VAT and tax registration
  • Complying with the ID by-law and ID policy, including –
    • Financial reporting
    • Annual budgets with implementation plans
    • Term renewal applications
    • Interacting with appointed politicians or the ID board members
    • Interacting with Council’s service departments
    • Submitting the annual report and audited AFS to the Subcouncil
    • Providing input to the IDP (Integrated Development Plan) and Council budgets
  • Allocating portfolios to directors.

The role of service departments includes:

  • Reviewing the business plan of the pending ID regarding its feasibility and alignment with SDBIPs (Service Delivery and Budget Implementation Plans)/IDP
  • Reviewing the business plan of the ID
  • Interacting with the ID in respect of services (cooperation, co-ordination, and synchronisation).

Role of Finance 

  • Inter-services Liaison Department
    • Establishment process
      • Compliance of ID with ID by-law, ID policy, relevant legislation (MFMA, MSA, MPRA, and Companies Act) and finance agreement
      • Financial modelling to determine c/r and ensure affordability and sustainability
      • Financial reporting between ID and City
    • Oversight and mentoring function
      • Annual review and alignment of ID by-law and ID policy with legislation and best practice
      • Ongoing purification of data (property and other)
      • Interact with Revenue in respect of billing and debt management
      • Process monthly payments of IDs
      • Obtain AFS from each ID
      • Financial reporting between ID and City
      • Reports to Finance Portfolio Committee, Mayco and Council
    • Treasury
      • Consolidation of ID’s AFS with City’s AFS
    • Ongoing
      • Budgets
        • Include bottom-line ID budgets in the City’s budget
        • Revenue
        • Billing, receipting/collection
        • Debt management in respect of ID arrears
        • Apply exemption criteria for relief
      • Valuations
        • Ongoing valuation roll purification
      • Expenditure
        • Physical payments
      • Supply chain management
        • Vendor management

Role of Finance Sub councils

  • Nomination of political representatives
  •  Noting ID annual reports and AFS
  • Ad hoc interventions with IDs
  • Be familiar with content of business plans for interventions with IDs

Role of Politicians

  • Appointed by executive mayor
  • Attend, participate, but do not vote at ID board meetings
  • Are familiar with content of business plan of ID
  • Interact regarding matters of mutual concern
  • Facilitate pooling of resources for maximum benefit to community
  • Guide ID regarding functions to be aligned with IDP
  • Facilitate service delivery from City where lacking or unacceptable
  • Inform ID of City’s vision and bigger picture approach, as IDs are localized
  • Serve as a link with Subcouncil and City to maximise efficiency
  • Refrain from involvement with daily administration and operational matters (legal opinion)
  • Guard against council abdicating responsibilities

Role of Audit

  • Internal audit
    • Conduct ad hoc random audits iro:
      • Establishment process and compliance
      • AFS disclosures
      • Reporting
      • Financial agreement compliance
    • Auditor-General
      • Conducts annual audits
      • AFS disclosures
      • Performance iro BP (implementation plan)
      • Consolidation of ID AFS with CoCT AFS

Constitution – Section 152 – Objectives of Local GovernmentThe objectivessof local government  are –

    • To provide democratic and accountable government for local
    • To ensure the provision of services to communities in a sustainable
    • To promote social and economic
    • To encourage the involvement of communities and community organisations in the matters of local
  1. A municipality must strive, within its financial and administrative capacity to achieve the objects set out in subsection (1).

Legal Framework 

  • ID by-law
      • MPRA (Section 22 – guides establishment)
      • MFMA (fiscal governance)
      • MSA (ability to determine cent-in-the rand and collect)
      • Constitution (Schedules 4 & 5 – municipal functions)
      • Comp Act (governance and accountability)
        • MOI (meeting protocols, operational structure)
      • ID policy
        • Establishment criteria
        • Institutional arrangements
        • Establishment principles
        • Business plan content
        • Dissolution
        • Financial control (fiscal governance)
      • Rates policy (relief)
      • Credit control and debt collection policy (billing, arrears)
      • Finance agreement (financial reporting and responsibilities)
  • 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

  • Compliance
    • 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)

Done: A group of property owners in the area determine the need for an improvement district (ID) or special ratings areas (SRA) in the area. The property owners form a steering committee and approach the City of Cape Town (Coct) to start the process of forming an ID.

Done: The boundaries of the proposed ID are determined. The City conducts a “rates arrears profile” to ensure that the area is sufficiently up to date with the payment of property rates.

Done: The steering committee starts the process of conducting a survey or needs analysis of property owners to assess the perceived needs of the area.  In other words, what the property owners feel is most important and require attention. These are usually broken down into four main categories:

  •  Safety and security (crime).
  •  Cleanliness (grime).
  •  The state of the public spaces in the area and the built environment (roads, pavements, open spaces, street lights etc.)
  •  Social environment – homelessness and vagrancy.

Done: A 5 year budget and a business plan based on the outcome of the survey is then drawn up by the steering committee and approved by the Coct when  they complete  a process of financial modelling to make certain that the proposed budget is feasible.

Done: The 5 year budget and business plan must then be presented to the property owners in the area at  least two public meetings.  Adverts must be placed in newspapers to make property owners aware of the public meetings.

Done:  Submit application for an SRA.

Done: Host second public meeting.

Done: Objection period.

Done: Obtain approval from CoCT.

Done: MMID offically established – July 2017.

Done: MMID Operations Manager appointed – 10 July 2017

Done:  As of 1 September 2017, Star Rapid Response and Vizual Property Care have been appointed as the Public Safety Service Provider and the Cleaning service provider.

Coming up:  A Special General Meeting (SGM) of the members of the Montague Gardens Marconi Beam NPC will be held on the 6th of December 2017 at 10 am at the Milnerton Library.