Ratepayers ask municipality for moratorium on 'reckless tariff hikes'

GEORGE NEWS - The George Ratepayers Association (GRPA) has approached the ruling coalition in George to request a moratorium "on all and any plans for reckless tariff hikes till at least 30 April 2023".

This step is being taken by the GRPA following a sharp hike in property values on the 2023 valuation roll and the municipality refusing the GRPA's request for an extension of the objection period for ratepayers.

GRPA chairman Juan Barnard on 31 March announced its request for a moratorium on the association's WhatsApp group. He said the GRPA has already assisted numerous members personally through their "finance boffins" to object to the valuations. This increased the numbers of objections exponentially.

In his budget speech last week, Mayor Leon van Wyk said the new municipal valuation roll is a reflection of the higher property values, but will allow for a corresponding reduction of 28,8% in the rate in the rand on residential properties. "The rebate on valuations will be increased from R150 000 to R230 000 on all residential properties which will be of particular benefit to lower valued properties."

'Average real rate increase is 49,39%'
The GRPA finance team calculated that an average real increase of 49,39% in residential property rates can be expected. This is calculated on a rate in the rand of 0,0058455. According to local business advisor Dr Dennis Farrell, the rate was dropped from R0,008219 due to pressure from the GRPA.

Homeowners can calculate their expected new annual property tax by multiplying the property value as per the 2023 valuation roll by 0,0058455 (after subtracting the R230 000 rebate granted for residential properties).

Farrell extracted actual property sales trends for George as published by Property 24 and said this information demonstrates that the average property market values on the new valuation roll compared with the actual market sales, is overstated by 53,86%. "GRPA has strong objections against this big disparity," said Farrell.

Farrell said consumers are struggling financially with sharp increases in living costs, high rates of unemployment, and low levels in economic growth. The municipality should demonstrate a real effort in curtailing expenditure.

Municipality compensating losses with property rates increase
According to the draft budget tabled to Council last week, the public's reaction to the ever-increasing tariff hikes in electricity charges has resulted in a decline in revenue from electricity sales as many residents are choosing alternative energy sources. The municipality must therefore reduce its reliance on electricity as its main source of revenue "and must focus on the rates revenue".

Van Wyk in his budget speech said the decline in electricity sales has largely contributed to a budgeted deficit of R160m for the year ending June 2023. This is over 25% of the available revenue and is "a significant amount that needs to be plugged".

"Future budgets will be structured to eliminate the current shortfall by curtailing expenditure growth to 3% where possible, while also seeking a higher contribution from property rates to cover the expenditure funded by total rates."