What is an SRA?
A Special Rating Area (SRA) refers to a clearly defined geographical area, approved by the City of Cape Town, in which property owners can raise levies to fund ‘top up’ services for that specific area.
What is the regulatory framework governing SRAs?
SRAs are governed by Section 22 of the Municipal Property Rates Act (MPRA), the Municipal Finance Management Act (MFMA), Section 21 of the Companies Act, the SA Constitution, and the Cape Town’s City Improvement District By-law of 2004.
Why establish an SRA?
According to the SA Constitution (Sections 152 & 153), the objective of a local authority is to provide all its residents with certain basic services such as water, electricity, sanitation and refuse removal, etc – up to an equitable standard. For communities who wish to enjoy municipal services of a higher level, an SRA provides them with the option of paying for these additional services, which should be affordable and sustainable.
What types of ‘top-up’ services are provided in a SRA?
Typically, these would be services dealing with issues of ‘crime and grime’ such as additional public safety measures, cleansing services, maintenance of infrastructure, upgrading of the environment, and social services to deal with vagrancy, etc.
What are the benefits for SRA members?
By pooling their resources in an SRA, individual property owners can enjoy the collective benefits of a well managed area, a shared sense of communal pride, safety and social responsibility, and access to joint initiatives such as waste recycling, energy-efficiency programmes, etc. In the end, these all translate into a tangible boost in property values and capital investments.
Are there different types of SRAs?
No, but an SRA can consist of industrial, commercial and residential components, or a combination of all three.
How many SRAs are there in Cape Town?
There are currently 36 SRAs in the City of Cape Town.
How does one establish an SRA?
An SRA is always initiated by a community, and not by the City. It usually starts with ‘champions’ within a community who feel the necessity to upgrade the environment within the boundaries of a certain area. They then compile a business plan indicating how the improvements are to be achieved, and present this to the community at a public meeting. Thereafter property owners are lobbied for their support. A majority of more than 50% has to give written consent to the formation of an SRA.
Once this has been obtained, the steering group has to submit the business plan, motivation report and implementation plan, as an application to the City. The proposal is then advertised in the media to allow affected parties at least 30 days to render any comments or objections. The City then considers the application and the objections.
After the City has approved the application, a board is elected and a Section 21 company is set up with VAT registration, a bank account, Tradeworld accreditation, etc. This must all be in place before the City bills the property owners and pays over the levies to the SRA.