Transcript Document
Municipal Valuation and Rating
VALUATION
ROLL
eThekwini Municipality
DEVELOPMENT
Keith Matthias
5th National Annual Local
Government Conference
LOCAL GOVERNMENT FINANCING
AND DEVELOPMENT IN SOUTH
AFRICA
A. BACKGROUND
White Paper on Local Government
Recognised that rates are a major
revenue source
However there was a need for a simpler,
uniform rating system
That there were variations of rating
approach
Needed to provide relief to the very poor
Accommodate local circumstances
South African Rating legislation
at that time
Property tax foundation under
Provincial Ordinances
Diversity of valuation approach
Land
Land & Buildings
Market value and replacement cost
Site and improvements as separate
objects
eThekwini Municipality
Applicable Legislation
Local Authorities Ordinance No 25 of
1974
Durban Extended Powers Ordinance
18 of 1976
Valuation Methodology in terms
of Ordinance
Land – market value as if vacant
Buildings – replacement cost less
depreciation
B. STRATEGIC VISION
Single valuation roll based on market
value, to be achieved by : Consolidation of former Operational
Entities
Data Audit and Cleanup
Software Development
Implementation of Municipal Property
Rates Act
Consolidation of former Operational
Entities
Business Drivers for common platform and
effective date:
Merging of local authorities to create
eThekwini Municipality
Disparate valuation rolls
Different effective dates of valuation
Incorporation of previously unrated areas
Consolidation of former Operational
Entities
VLR – RTS – CONS Project was established
with following objectives:
Create a consolidated valuation roll
Create a consolidated rates ledger
Perform rates budgeting from a
consolidated base.
Data Cleanup Project
Implemented three – way check between
Deeds Office, Survey and consolidated
Valuation Roll
Resolved gaps, missing entries, etc.
Generated R15 million in surplus revenue
Started work on sectional title register
Created a solid base for the implementation of
the Municipal Property Rates Act (MPRA)
Software Development
Consolidation of former OE’s provided catalyst to
interrogate IT systems
Package versus bespoke development?
Decided to develop Value Assist with built in
workflow
Streamlined and automated business processes
Product developed locally at the Smart Xchange
L@W
IRCAM
Laywers
Access Web
Interim Rates
Calculation Module
WinDeed
Deeds
Office Transfers
AMS
Appeals Management
System
RCM
Value Assist
Property
Change
Rates Calculation
Module
COINS
Billing System
Value Assist User Interface
C. IMPLEMENTATION OF MUNICIPAL
PROPERTY RATES ACT
Broad program includes:
Pilot Study
General Valuation Project
Value Assist Rewrite
Business Process Re - engineering project
Pilot Study and Outcomes
OBJECTIVES:
Assess the city’s readiness to implement the
MPRA
Data audit – identify gaps and new data
requirements
Recommend valuation methodologies
Define IT requirements
Broad impact scenarios
GENERAL VALUATION (GV2008)
PROJECT
Project Planning
Key Dates/ Property Universe
Data Collection
Valuation Process
Financial Management
Communications
IT Systems
PROJECT PLANNING AND
PREPARATION
Appointment of eThekwini Project Team
Preparation of tender document
Adjudication of tender
Award of Contract
KEY DATES
Date of Valuation: 1 July 2007
Handover of Valuation Roll: 02 January
2008
Implementation Date: 01 July 2008
PROPERTY UNIVERSE
Dwellings: 321 000
Sectional title units: 100 000
Vacant land parcels: 60 000
Non residential: 14 000
VALUATION METHODOLOGY
Single Residential: CAMA
Sectional Title: CAMA
Vacant Land: CAMA
Non Residential: Individual valuation
A SIMPLE CAMA MODEL
Estimated
Market
Value
=
Location
Building
Land
Estimated_Market_Value = Location * [Building + Land]
EMV = Location multiplier * [Bldg_Rate * Building_Size
+ Land_Rate * Land_Size]
DATA COLLECTION
Detailed QA Methodology
Total Living Area
QA Process Implementation
TOTAL LIVING AREA (TLA)
Existing data vs measuring from scratch
Digitised building footprints
Verify against plans and records
Create separate payment stream
VALUATION GUIDELINES
Inclusion/ exclusion rules
Agriculture
PSI
Valuation practice directives
RESIDENTIAL VALUATION
CHECK
Reasonableness Check
Sales
For sale
NON RESIDENTIAL VALUATION
SYSTEMS
Data collection forms
Software system
Market report
COMMUNICATIONS
Branded campaign run by the City:
Presentation to councillors
Regular features in Ezasegagasini and
local newspapers
Attachments to utility bills
English and Zulu video
Radio interviews
Presentations to various bodies
IT SYSTEMS
DCF Manager data collection software
Digital Pen technology
GIS route mapping
SPSS Interfaced with Value Assist
Business analysis for Value Assist
version 3.0
VALUE ASSIST REWRITE (V3.0)
Separate project to the GV, will include:
Automated valuation models
Multiple approaches to valuation
Exemption and Appeals management
modules
New workflow procedures
Phasing in of Rates
D. BUDGETS, RATING
POLICY & ROLLS
Budget
Needs
Valuation
Roll
Policy
RATING POLICY
The guide to how the required monies
are raised from the Valuation Roll
Choice of treating all property types
or property owners equally – single
rates randage, or
Differentiating between property
types and owners
KEY ELEMENTS OF RATING
POLICY
Properties are valued “in use”
Property categories:
Residential
Agriculture
Vacant land
Industrial
Business & Commercial
PSI
State Trust
KEY ELEMENTS OF RATING
POLICY
Owner categories: Residential
Pensioners
Disability grantees / medically
boarded
Child Headed Households
Sporting bodies
Public benefit organisations
QUESTIONS