Approved: LMRID SRA – Decision from Council

We are delighted to announce that the proposed LMRID Special Rating Area was approved by a full sitting of the City Council earlier today.  This represents the last formal hurdle in the establishment process and clears the way for a push towards implementation.

There is a lot of work to do in the next few months, including (among others) the formal establishment of the SRA company and the tender process (and formal service level agreements) for service providers.

We are aware that people are eager to know the final cost that this will represent to their household budgets.  We have requested details from the City about the total valuation of the properties in the LMRID area (as per the 2016 property valuation role) and as soon as we receive this we will be able to calculate the final rate that the SRA will represent.

We will be communicating further details on all these matters as soon as these are available.
Regards
LMRID Committee

2 thoughts on “Approved: LMRID SRA – Decision from Council”

  1. Congratulations, and now for the good hard work on behalf of all who live here :). One query – I was led to believe, and so informed folks that I canvassed to establish the SRA, that the fees to be collected would be based on their current property valuation and not on the 2016 valuation. The initial budget was based on the former values. Please clarify.

    1. The budget is based on the costs that will be incurred in providing the services. This was calculated based on quotes from service providers and gave rise to a certain total annual income required by the company (let’s call this the “total income”). This income was then pro-rated across all of the properties in the LMRID area (based on the 2015 property valuation) to arrive at an indicative “cost per property” which worked out at just under R80 per million rand of property value per month. So, if your property was valued at 2.2 million in the 2015 valuation then your cost would have been 80 x 2.2 = R176 per month. As was explained at all the public meetings and in various correspondence however, this is not exactly what you will pay once the scheme is established. In terms of the various pieces of legislation that enable the formation of an SRA the rate per user each year is based on their current valuation in that year.
      So, given that the total valuation for all of the properties in the 2016 year is higher than the 2015 valuation, we need to calculate the rate for each user in 2016 terms by dividing “total income” (unchanged from before) by the 2016 total valuation (bigger than before) to arrive a new “cost per property” which will be less than R80 per million per month by exactly the same percentage as the total valuation base has gone up by.

      So, the bottom line is that for most people the actual monthly rand value will be the same when calculated using the 2015 or 2016 values as their property has appreciated at exactly the same rate as “the average for the area”. If your 2016 valuation is not “an average” change consistent with the rest of the area then your recalculated rate will be similarly different.

      As indicated in our recent communication, the key number that we need is the revised total valuation for the LMRID area as this will allow us to calculate exactly what the rate will be and everyone will then know exactly where they stand.

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