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
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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:
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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
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Project Planning
Key Dates/ Property Universe
Data Collection
Valuation Process
Financial Management
Communications
IT Systems
PROJECT PLANNING AND
PREPARATION
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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
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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:
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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