Frequently Asked Questions

.The South African constitution requires a local authority to provide all its residents with certain basic services such as water, electricity, sanitation and refuse removal, up to an equitable standard. For communities in a particular area who wish to enjoy a higher than average level of municipal services, an SRA provides them with a potential tool to fund such enhancements.

In the case of Natures Valley, especially because of its location far from a typical urban services infrastructure and it being situated on the coast and bordered by an estuary and a densely forested national park, there are certain unique needs which cannot be met through the provision of a normal set of municipal services, e g the prevention of baboons raiding homes. An SRA would provide the community with an opportunity to manage such needs in a fully funded and controlled manner.

By pooling their resources in an SRA, individual property owners can enjoy the collective benefits of a well-managed area, where aspects of great importance to the community such as the levels of safety and urban and environmental care are substantially improved on a sustainable basis. These ultimately translate into the protection and/or enhancement of property values and the quality of living.

Membership and funding of a ratepayers’ association (RA) is voluntary and it’s role is broad. In Natures Valley the role of the NVRA is to protect a variety of home owners’ interests that are considered important, e. g acting against potentially undesirable property zoning and land use applications and regulations, addressing service delivery and infrastructural issues with the municipality through representation on the local municipal ward committee, and working with SANParks and the Natures Valley Trust to influence important environmental matters of mutual interest.

If you own or co-own property in a demarcated SRA area you are obliged to pay the additional SRA rate which will be detailed on your monthly municipal invoice. All property owners automatically become members of the SRA non-profit company (SRA NPC). The same obligation and eligibility applies to a juristic owner of a property, such as a Trust, Company or Close Corporation.

The SRA NPC manages the business plan that’s been approved by the municipality and which focuses on specific supplementary services. In Natures Valley the focus would be on baboon management, security enhancements and certain environmental improvements.

Unlike a ratepayers’ association an SRA NPC is bound by the strict, extensive requirements of Companies Act, unlike a ratepayers’ association. In addition, an SRAs financial and legal compliance is overseen by the local municipality with particular regard to the terms of its SRA by-law. 

The process to set up an SRA is initiated by an application from a property owner or owners who own property in the proposed SRA area, not by its municipality.

Typically, the process is set in motion by a group of property owners who feel it is important to improve the environment within a defined area. A steering committee is formed and after carrying out a survey among ratepayers it compiles a five-year business plan (comprising a motivation report, an implementation plan and a budget) indicating how the improvements are to be achieved.

This is then presented to the affected community at a public participation meeting (this is set for 19 December 2022 for the Natures Valley property owning community). Thereafter, using Consent Forms, the level of property owners’ support is tested. In terms of the Bitou by-law, before an SRA application can be made, the intended application needs to be supported by at least ‘50 percent plus 1 of the property owners who will be liable for paying the additional rate’.

If such a level of support is achieved, all property owners are notified and the application is published in the media for possible comment or objection. After the steering committee has engaged with any objectors and given a record of such engagements to the municipality, and provided no material changes to the business plan have resulted, the council of the municipality determines if and on what terms the SRA should be implemented.

Before the municipality makes any payment to an SRA Non Profit Company (NPC), the NPC needs to be set up, its board elected by its members, and  all necessary requirements put in place to carry out the SRA business plan and a finance agreement approved with the municipality.

SRA’s are governed by Section 22 of the Municipal Property Rates Act (MPRA), the Municipal Finance Management Act (MFMA), the Companies Act (Non Profit Company – NPC), the SA Constitution and in the case of Natures Valley, the Bitou Municipality’s Special Rating Area By-law of 2022 (approved at the Bitou Council meeting on 28 October 2022 and soon to be gazetted).

An SRA NPC is funded by the additional special rate paid by property owners within the boundary of the SRA. The NPC does not receive any grants or subsidies from the municipality.

The additional rates collected by the municipality will be ring-fenced for the exclusive use of the Natures Valley SRA NPC.

The board of directors of an SRA NPC acts as the management body responsible for implementing the approved plan and can appoint personnel to carry out operational tasks. The directors are elected on an annual basis by members of the SRA NPC per the terms of the NPC’s Memorandum of Incorporation.

The municipality is not involved in the SRA NPC’s day-to-day operations. The mayor does, however, have to appoint a councillor(s) and one other as directors to represent the municipality and attend and participate but not vote at meetings of the management body. It is anticipated that the Local Councillor, Jessica KamKam, and the Natures Valley Superintendent, Marco Barnado, would be appointed. 

It should additionally be noted that the municipality exercises extensive financial oversight and monitors legal compliance.

As the SRA NPC originates from a community initiative and the community funds the business plan via an additional rate, it is naturally important that the NPC’s standards of conduct are, and are seen to be beyond reproach.

Good conduct, including financial integrity, is governed by the requirements of the Companies Act, any conduct standards and policies embodied in the NPC’s Memorandum of Incorporation, and in the policies the NPC may adopt from time to time.

Through the involvement of Bitou representatives in management meetings and the monitoring by its chief financial officer and the finance portfolio committee of legislative compliance, the municipality is tasked with ensuring that governance practices are sound, fair and transparent.

The NPC like any other company exists for as long as is required and can only be dissolved by a Council resolution. This happens when there is a written request by a majority of the owners who are within the designated area and who are responsible for paying the rates. The CFO has to be consulted. Thereafter the NPC may be wound up.

Initially the budget is prepared as part of the business plan the SRA Steering Committee and the applicant submits to the Bitou Chief Financial Officer (CFO) for approval. Thereafter, each year the SRA NPC prepares a budget and implementation plan which has to be approved by the Bitou Council during its annual budget process (which takes into account member input). The budget has to be prepared based on the Council’s financial year which runs from 1 July to 30 June. 

An SRA NPC is governed by the Companies Act (71 of 2008) and manages its own finances and appoints its own auditors. The NPC’s audited financial statements form part of the municipality’s consolidated accounts, which are reviewed by the Auditor-General. In addition, monthly financial reports are submitted to the municipality to ensure that expenditure is incurred according to the budget.

Bitou municipality will require SRA NPC’s to submit to its council within three months of the NPC AGM a chairperson’s report on progress together with audited annual financial statements.

The NPC’s proposed budget for a forthcoming financial year has to be submitted to and reviewed by the municipality’s chief financial officer before being presented at the NPC’s annual general meeting.

The additional monthly rate payment for the NV-SRA will be equal to a tariff of R0.0012 cents times the particular property’s municipal valuation.  A table in the SRA Business Plan gives examples of this calculation.

Yes, payment for the costs of a property owner’s contract with ADT will continue. The SRA NPC will independently fund security enhancements per its business plan once approved. These will be to the benefit of all owners.

Absolutely. In the case of a Natures Valley SRA NPC, every rate paying property owner within the SRA area would automatically become a member of the NPC unless they choose to submit a formal request not to become a member. 

All NPC members will be able to participate at annual general meetings or any special meetings and will be encouraged to input views on the business of the NPC.

Each year members are invited to an AGM at which a full report on the past year is given and discussed. The annual financial statements are also made available to members. In addition, an SRA website provides convenient access to all types of information regarding the NPC’s activities and plans.

The intended Natures Valley SRA NPC will provide updates at least twice a year on progress implementing the business plan. Members will be invited at any time to bring matters to the attention of the NPC and encouraged to suggest ways in which the effectiveness of SRA activities may be improved.

No. The municipality is obligated to sustain existing service levels and to provide basic services as per the Constitution.

The SRA NPC management prepares a budget for each financial year. This is based on the specific needs of the area as set out in the approved business plan. The additional rate to be paid by members is calculated by apportioning the budgeted costs in proportion to the municipal valuation of a property relative to the total valuation of the SRA rated properties. This means the additional rate will vary according to the valuation of a specific property.

The rate is expressed as the number of  cents per Rand of that property’s municipal valuation.  The rate is reviewed each financial year. Vacant and business zoned properties will pay more as the municipality uses a higher multiplier to calculate their rates.

The municipality collects the additional special rates that it receives in the same manner as other property rates and pays the revenue to the SRA NPC after deducting an administrative fee.

The additional rate will appear as a separate item on the monthly municipal account of each property owner liable to pay the SRA additional rate.

Payment is mandatory for all SRA rated properties in the SRA designated area.

However, per any applicable legislation or its own policies, a municipality may consider exempting the following categories of owners/properties:

• Indigent, senior citizens and disabled persons who meet criteria for rates relief;
• Properties registered in the name of and used primarily as a place of worship;
• Council owned properties used predominantly for official municipal business;
• Other properties that qualify for rates relief/exemption as per the municipality ’s rates policy

The municipal property valuation base is a snapshot at a point in time and is used to calculate the additional rate for a given financial year. Valuations may however change within that year due to interim valuations, valuation court rulings, sub-divisions, rezoning or for other technical reasons.

Should the valuation base decrease or increase substantially, the municipality then informs the SRA in order that the additional rate is recalculated.

As with other rate payments, defaulters are subject to the municipality’s credit control and debt collection policies. As such, they can have their water and electricity services suspended or their property clearance certificates withheld.

The answers are intended only as a general guideline for interested parties to familiarise themselves with the nature, purpose, relevance and operation of SRAs in relation to the initiative being taken within the Natures Valley community.

Whilst they are provided in good faith they do not purport to be definitive or all-encompassing. Property owners are referred to the laws, policies, etc available via the Documents section of this website to obtain a fuller understanding of matters or to verify answers. In addition, queries or more detail can be sought directly from the NV SRA steering committee (see Contact Us section).