What is a CID
A Special Rating Area (SRA), also known as a Community/City Improvement District (CID), refers to a clearly defined geographical area, in which property owners contribute additional rates to fund 'top up' services for that specific area as per the approved Business Plan.
Why establish a CID?
According to the SA Constitution (Sections 152 & 153), the objective of a local authority is to provide all its residents with certain basic services such as water, electricity, sanitation and refuse removal, etc – up to an equitable standard. For communities who wish to enjoy municipal services of a higher level, a CID provides them with the option of paying for these additional services, which should be affordable and sustainable.
​How is a CID established?
A CID is always initiated by a community, and not by the City of Cape Town (CCT). It usually starts with 'champions' within a community who feel the necessity to improve the environment within a defined area. They compile a five-year business plan (and a budget indicating how the improvements are to be achieved, and present this to the community at a public meeting. Thereafter property owners are lobbied for their support where a majority (more than 50% in an area classified as commercial and more than 60% for an area classified as residential) has to give written consent to the formation of a CID. Once this has been obtained, the steering group has to submit an application to CCT. Assuming CCT has approved the application, a NPC (Non Profit Company) is set up and a board is elected. The NPC has to register for VAT, open a bank account and be registered as a vendor with the City, etc. This must all be in place before the City makes any payment to the CID.
What are the benefits for CID members?
By pooling their resources in a CID, individual property owners can enjoy the collective benefits of a well-managed area, a shared sense of communal pride, safety and social responsibility, and access to joint initiatives such as waste recycling, energy-efficiency programs, etc.
Is the payment of the additional rates mandatory for all properties?
Yes. Once the City has approved a CID, the participation of all property owners liable to pay the CID additional rates, within the boundaries of the CID, is mandatory. The only exception being homeowners who meet the criteria for rates relief.
Who monitors the finances?
A CID is governed by the Companies Act (71 of 2008) and manages its own finances and appoints its own auditors. The audited financial statements form part of the City's consolidated accounts, which are reviewed by the Auditor-General. In addition, monthly financial reports are submitted to the City to monitor and to ensure that expenditure is incurred according to the budget. All CIDs have to submit the Chairman's report and AFS (Audited Financial Statements) to the relevant Subcouncil, within two months of their AGM, for noting.
How are the CID additional rates collected?
CCT collects the additional rates on behalf of the CID. The additional rate appears as a separate item on the monthly municipal account of each property owner. CCT then remits the additional rates back to the CID on a monthly basis.
What happens if people refuse to pay?
Those who do not pay will be deemed in default by the City with respect to their entire rates account.
How do property owners who are not board members have a say in the CID?
Every property owner within the CID should apply in writing to the CID Board for membership of the NPC. Then they have the right to vote on CID matters.