3. Financial Issues

3.1.  Owners are afraid that the levies will be affordable at first but then, increase consequently to an unaffordable annual rate after that, once everything falls into place and budgeting of various increments has to be done.

At the moment the community has no input into how Rates & Taxes and levies are calculated or spent. It is evident that our levies are not presently being utilised 100% for the benefit of Marloth Park.

With an SRA/CID the community has direct influence in the budgets and utilisation of funds for all the “top-up services” required for Marloth Park, and in addition, can hold the management of the Public Benefit Company accountable.

This is one of the tasks of the Trustees, ensuring delivery on business plans by the management of the PBC which directly means ensuring deliver according to budget. The budget is determined together with owner.

 

3.2.  Do we have the complete financial implications for all property owners? Business plan with estimated costs per property and ceiling on proposed levies etc. if we go ahead with setting up a Trust and PBC?

This information can and will only be determined when we undertake the negotiations with the Municipality. Negotiation can only happen after we have an approval in principle from owners to proceed with setting up a Trust. Once the Trust is in place we can then start discussions regarding the NPC and how this entity will work with the Municipality within an SRA.

Notwithstanding this, as an indication of anticipated cost, we have included numbers in the presentation that we held in Marloth Park in February which we believe would cover the cost of additional expenses. Other expenses are currently covered either in our rates or in our current levies. In this estimate we assumed we would employ an ecologist and town manager with a support team of clerks. These assumptions included;

  1. Employ an ecologist & a town manager, each at approximately R70,000 per month, with
  2. about 12 Clerical Staff, offices etc.
  3. This team would need to operate out of offices – probably a rented house.
  4. Many of the first phase operations such as rangers and gate security are already included within our current rates & levies.
  5. The costs of these were applied to the stands in Marloth in the same manner that Rates are applied using the Municipal Rate valuation of 2014 (applicable at the time)

We have budgeted an estimate additional R7,000,000 for a year and indicated how this addition could be allocated across the Trust Beneficiaries in the presentation (i.e. in the same way rates are apportioned).

On average about (base on 2014 valuations)

R30        a month for a vacant erf

R150      a month for a basic house

R350      a month for an upmarket house

This presentation can be found in the library of documents.

It must also be considered that we’re paying about R90 in levies at the moment over and above our Rates. And currently, owners pay very little attention (and almost no input) as to how these budgets are developed or spent.

Marloth Park’s Trust & PBC will be operated under the very strict legal requirements of a Special Rateable Area. Budgets are determined on an annual basis. Again, this is covered to a reasonable level in the presentation in the library of documents.

Under a Trust and PBC owners will provide input into the future budget and this will then be applied over a three-year period adjusted annually (again as explained in the presentation).

3.3.  The projected monthly levies are thus inaccurate.

Correct – but they were only intended to give an idea of what could be expected under the circumstances.

The final levies will and can only be determined by the management of the Public Benefit Company working together with owners when they decide what they want for Marloth.

They will become clearer as they develop the business and conservation plans and then derive the budgets form this – all explained in the presentation.

In the end, the budget itself is only an estimate as well.

3.4.  We can only make an informed decision if all the information is made available to us and that there are no hidden agendas.

We fully agree with you. We are making every effort to inform owners what underpins the proposal.

3.5.  One of the reasons why we bought property in Marloth Park was due to the fact that there were no levies. We bought into a municipal township, not an estate run by a governing body.

You were either misled or uninformed. We currently pay levies for security and waste collection. Although we have freehold real estate (our actual plot), with the ownership of our plot we have many other assets that underpin the value of this asset. This includes the parkland, Henk Van Rooyen, our ecological environment, our game and Lionspruit. We pay for these assets within our rates (in excess of R100,000 is paid for game rangers as an example). The issue is, we have no management of these assets as we used to (prior to 1994) when we had a Body Corporate Municipality.