Rates: what you expect vs reality

Dr Bernard Richards, Knysna:

My issue is the budgetary miscommunication by the Knysna municipality (KM), and Knysna property rates (excluding the effects of property revaluations) increasing at a rate far in excess of CPI, making life very difficult for our retirement community and people living on fixed incomes.

In the preliminary KM budget released in May 2017 the stated policy of Treasury that municipal rates should only be increased in line with CPI was noted. This was confirmed at a recent Ward 9 meeting by the KM CFO.

Annual CPI in June 2015 increased by 4.7%, June 2016 6.3% and June 2017 5%.

In May 2016, KM announced that rates were to increase by 7% in 2016/2017, and in May 2017, that rates in 2017/2018 would increase by 6%.

When KM ratepayers received their accounts in August they were shocked to note that rates had increased by 7.5% 2015/16, 13.3% 2016/17, 9.9% 2017/18.

In 2016/2017 property rates in the Rand were R1/0.0070423 and in 2017/2018 R1/0.0077380, both before the residential rates rebate of 10% – an increase of 9.9%, despite the May announcement that rates would increase by 6%, and despite Treasury policy.

Conclusions:

1. For three years, Knysna rates have increased at a rate far in excess of inflation.

2. M is ignoring Treasury’s stated policy of

increasing rates in line with inflation. 3. KM is misleading ratepayers by making false rates increase statements in May of the last two years.

4. KM is not credible to ratepayers who

provide their funds.

5. KM has a huge debt backlog which will only get worse if rates continue to increase in excess of inflation.

6. Knysna ratepayers cannot and will not

continue to fund excessive rates increases. 7. Knysna will lose its reputation as a

retirement destination for ordinary people. 8. Have KM councillors noted the explosive growth of Stilbaai, where rates are reasonable?

Cape Town municipality has credibility. For the information of KM, every year in May Cape Town also announces their rates increases.

In May 2016, a 6% increase was announced and in May 2017 5%, both in line with inflation. When rates accounts arrived in July the actual increase was exactly as advised, unlike Knysna.

* Ed note: This letter was sent to the Knysna municipality on 23 October, and again on 6 November. No answer has yet been received.