A City Improvement District (CID) also known as a Special Rating Area (SRA) 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.
Lower gardens improvement district
Frequently Asked Questions
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The terms SRA (Special Rating Area) and CID (City Improvement District) are interchangeable. SRA is used in legislation and policies, whereas CID is used in operational terms.
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CIDs 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 the City of Cape Town’s Special Rating Area By-law of 2012.
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According to the SA Constitution (Sections 152 and 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.
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Typically, these would be services dealing with Urban Management issues like additional public safety measures, cleansing services, maintenance of infrastructure, upgrading of the environment, and social services.
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No. The City is obligated to sustain existing service levels and to provide basic services as per the Constitution. Each CID will engage with the various service departments regarding the level of services to be provided by the municipality. This enables the CID to decide on the ‘top-up’ services required.
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By combining 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, parks and recreational facility upgrades. In the end, these all translate into a tangible boost in property values and capital investments.
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No, but a CID can consist of industrial, commercial and residential components, or a combination of all three.
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There are currently over 50 established CIDs in the greater City of Cape Town. A number of communities are currently applying for establishment, and many others have expressed interest in establishing a CID.
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A CID is always initiated by a community, and not by the City.
It usually starts with ‘champions’ within a community who feel the necessity to improve the environment within a defined area. The first step is to survey the community through an urban management survey, from this they must compile a five-year business plan (including the motivation report, the implementation 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 the City. The application is then advertised in the media and property owners are also notified to allow them at least 60 days to render any comments or objections. The City then considers the application with the objections at a full sitting of Council.
After the City has approved the application, a Non Profit Company (NPC) 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. This must all be in place before the City makes any payment to the CID. -
A CID is a Non-Profit Company (NPC) managed by a board elected by its members, and operated by a management team appointed by the board. Property owners must sign up for NPC membership to allow them to participate in the CID`s affairs. The City is not involved in their day-to-day operations, but merely exercises financial oversight and legal compliance.
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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 Chairperson's report and AFS to the relevant Subcouncil, within two months of their AGM, for noting.
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A CID is funded from the additional rates paid by property owners within the boundary of the CID. It does not receive any grants or subsidies from the City, but does have the powers to raise additional income.
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The CID management confirms the properties within the boundaries of the CID, which is then linked by the City to the municipal valuations according to the most recent general valuation roll.
The CID management annually prepares an overall budget for the year. This is based on the specific needs of the area as set out in the approved Business Plan. Individual contributions are then calculated by dividing up the budget total according to the municipal valuations of each property, proportional to the total valuation of the CID.
The CID Policy allows for a differentiation in tariffs for the different types of properties – be it residential, commercial or industrial.
This tariff is then expressed as a % value in the Rand (as an example 0.012688 for non-residential, and 0.006344 for residential) and is applicable over a financial year, which starts on 1 July. The CID budget and proposed tariff have to be approved by the City, and advertised for comments and objections as part of the City’s budget process prior to implementation on 1 July.
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The City collects the additional rates on behalf of the CID. It does not go to the City, although they share an invoice to save on collection costs. The additional rate appears as a separate item (improvement district) on the monthly municipal account of each property owner liable to pay the CID additional rates within the CID.
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The City pays the CID a monthly amount equivalent to one-twelfth of its approved budget less 3% as a provision for bad debts. The provision for bad debts is kept in a ring-fenced account for the CID. At the end of the financial year the City reconciles the billing with the CID budget, and any under or over billing is offset against the accumulated bad debt account. This account is subsequently compared with the arrears as at the end of the financial year. When the latter is less than the accumulated bad debts, 75% of the difference is paid to the CID as per the Finance Agreement concluded between the City and the CID.
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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. However, there are exceptions in terms of relief.
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The following categories of owners / properties will be 100% exempted as per the SRA Policy:
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Indigent, Senior Citizens and Disabled Persons who meet the criteria for rates relief
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Properties registered in the name of and used primarily as a place of worship
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Council owned properties used predominantly for official municipal business
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Other properties who qualify for rates relief / exemption as per the City’s Rates Policy
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The CID sets its own budget according to input from its members as per the approved five-year Business Plan. The City does not get involved in this process. Each year, the CID board has to submit a detailed budget to the City by 31 January. The proposed budget may not deviate materially from the approved business plan. If there is a material deviation, an application in terms of Section 11 of the SRA By-Law is required. The City evaluates the proposed budget for affordability and sustainability.
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The valuation base is a snapshot at a point in time (end February) and is used to calculate the additional rate (Rand-in-the-Rand) for the following financial year. However, municipal valuations can change within a financial year due to interim valuations, Valuation Court rulings, sub-divisions, rezoning or other technical adjustments. Should the valuation base decrease or increase substantially, the City must inform the CID in order to recalculate the CID’s additional rate.
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No, it is ring-fenced to be reinvested back exclusively into the CID defined precinct.
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Defaulters are subject to the City’s credit control and debt collection policies. As such, they can have their water and electricity services suspended or their clearance certificates withheld.
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Absolutely! Every property owner within the CID should apply in writing to the CID Board for membership of the NPC. Only then are they able to participate in CID affairs and vote at the AGM.
City of Cape Town
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The City of Cape Town's most recent budget has dedicated more than 70% (74% is the figure quoted by Executive Mayor Geordin Hill-Lewis) of its overall budget to its poorest suburbs and communities. While we appreciate these efforts to assist the most vulnerable members of society and create a more sustainable community, it also means that communities like Lower Gardens face widening gaps in the delivery of essential services.
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The Lower Gardens CID precinct was proposed by the steering committee after consultation with the City of Cape Town, taking into account their recommendations to use major roads and the current CCID precinct as borders.
Below outlines the Lower Gardens Improvement District precinct, with the light orange colour representing the areas that fall within Ward 115 and the blue colour representing the areas that fall within Ward 77.
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Yes, anyone in the community can participate and give input into CID plans, but only registered Non Profit Company (NPC) members may vote on CID matters.
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The law provides a comprehensive framework for the establishment of a CID that, amongst other things, mandates a public participation process to determine the amount of the levy. In essence, the amount of the levy will be determined by the level of services that property owners and residents expect the proposed CID to provide. The steering committee will put together a business plan to provide the services the community expects it to provide based on the urban management survey and this budget will be covered by the increase in rates.
The legislation allows for a wide range on the amount of the additional levy. The provisional amount will be included in the first draft of the Business Plan and may be revised as part of the public participation process.
The steering committee is aiming that the levy for Lower Gardens falls within the 10% to 15% range (e.g. R100 to R150 per R1 million property valuation), but this will be ultimately decided by the property owners based on their input and approval of the CID business plan. -
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Residential Properties: R125 per a month, per R1 million property valuation on the City of Cape Town municipal valuation roll. e.g. R2 million municipal property value, pay R250 per a month.
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Non-residential Properties: R265 (including VAT) per a month, per R1 million property valuation on the City of Cape Town municipal valuation roll. e.g. R2 million municipal property value, pays R530 per a month.
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Non-residential properties owned by VAT registered entities can claim back VAT on CID levy.
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Standard practice is for CID levy to be passed onto tenants due to positive impact on public spaces surrounding your property.
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To request the CID levy for your property, please contact info@lowergardenscid.co.za.
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The City offers a rebate scheme in cases of financial hardship. Qualifying individuals will be rebated 100% of the CID levy.
We encourage all property owners to complete the urban management survey, and give their input on any financial concerns they may have around the additional levy amount. -
The additional rates levy is mandatory on all business properties that fall within the area of the CID, as well as all residential properties. While the percentage increase will be the same for both, business premises normally pay municipal rates at a higher percentage than residential premises so to that extent, businesses will be contributing more.
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100% of the levy is ring-fenced and allocated to the CID. Every month the City will pay over 97% of the amount theoretically owing, regardless of what is collected. At the end of every financial year, a reconciliation for bad debts is done, whereafter the 3% retained every month will be paid over after deduction of actual non-payments.
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All CIDs have the same governance structure, comprising a non-profit company with a board of directors (all of whom must be property owners in good standing with the City) that is responsible for the management of the CID.
Professional management is employed to manage the day-to-day affairs of the Lower Gardens CID. The business plan process will decide whether or not to employ additional employees and/or subcontractors in order to carry out the functions and services of the Lower Gardens CID, in accordance with the business plan and the budget contained therein. -
In accordance with disclosures provided, no member of the Board in any way currently derives nor in future expects or hopes to derive any financial or other benefit from the CID operational budget or the funds raised for the application process.
CID management and operations will either be employed or outsourced to suitably qualified professional service providers. The expected cost thereof is in process of being determined and will be set out clearly in the mandated business plan and budgets that will be presented to the community at the first mandated public meeting. -
Public Safety Budget (59% of annual budget):
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Dedicated CID Security Manager: Accessible and accountable 24/7/365.
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CCTV and Radio control room (24/7/365): Linking new CID and existing CCTV networks, apartment block security, armed response, and CID public safety officers.
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29 net new AI smart detection cameras: Phase 1 of business plan roll out. Existing public space CCTV monitoring costs to be absorbed by CID, where permission granted.
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2 patrol vehicles (24/7/365): Patrolling precinct in two security sectors.
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13 public safety officers (split between day and night shift - 24/7/365): On foot, bicycle and patrol vehicles.
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Dedicated City of Cape Town Law Enforcement Officer (Monday to Friday - 10/5/365): With the power to arrest, enforce by laws (including legal breaking down of illegal structures).
Social and Economic Development Budget (7% of annual budget):
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Dedicated social worker: Fully qualified, accessible and accountable 10/5/365.
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Social support team: One qualified Peer Support Specialist and two Peer Outreach Workers.
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Community based treatment outreach programme: Providing work readiness training, substance rehabilitation, psychosocial services, skills development and job placements.
Maintenance and cleaning (6% of annual budget):
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8 person cleaning team: Split in two teams of 4 with team leaders.
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Operating Monday to Friday: 10/5/365.
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Existing Gardens Watch cleaning team: Incorporated into the CID cleaning team.
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Recruitment: From local NGO programmes focused on ‘hand up’ employment opportunities.
Environmental Development (6% of annual budget):
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3 Park caretakers: Deployed to each of the three parks (Jutland Park, Maynard Park and Tuin Plein). Trained in horticultural care but also as security guards for each park.
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Jutland Park: Comprehensive cleaning, grass and sports facility maintenance will be undertaken by the Park Caretaker. Longer term plan to add an outdoor training area (in close proximity to Virgin Active), and dog play and walking areas.
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Maynard Park: Will receive regular grass cutting, planting, and beautification efforts, as well as upgraded children's play gym.
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Tuin Plein: Will house the office facilities for the CID in the current top parking area. Tuin Plein children’s play park will house a community garden, upgraded children's play gym, wheelchair access (for surrounding retirement homes) and managed recycling facilities for the community.
CID Management (7% of annual budget):
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Limited board: Receive no payment, have 4 portfolios, 1 Chair, 1 Vice Chair.
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Full time CID Manager: Accessible and accountable 24/7/365.
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Full time marketing, operations, administrator assistant: 10/5/365.
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CID Offices: Located at Tuin Plein in a shipping container.
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4 contracted lead service providers: Dedicated service managers, performance clauses, and annual reviews, with transparent RFP process.
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Appointed independent accountant and auditors: Annual accounts, AGM, Quarterly Review meetings open to property owners or their confirmed proxies.
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Additional Budget: 7% operational costs, 5% capital expenditure, 1% marketing, 3% bad debt provision.
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Full voting rights: Every property owner has the right to be a member of CID, and vote on all major financial and operational items.
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A balance needs to be struck between affordability and delivering perceptible change, which will informed the budget number. The priorities identified by the community in the urban management survey indicated which elements the budget process needed to focused on.
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A firm of professional auditors is employed for this purpose, selected in accordance with good governance principles. Monthly management accounts are also be produced, and annual financial statements will be presented at the AGM.
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The business plan is broken up into four main areas, with each having distinct metrics that are reported on monthly with the aim of showing longitudinal improvement month on month.
The below are the metrics that are tracked.
Safety and Security: Monthly reported crime statistics (Please note that SAPS does not share crime statistics, so the CID actively engages the community to not only ensure all crimes are reported, but also documented and recorded by the CID for metrics tracking and community reporting).
Cleaning and Maintenance: Monthly number of rubbish bags collected (over and above weekly refuse collection); Monthly CoCT maintenance service requests; Monthly CoCT maintenance service resolutions.
Parks and Recreation: Monthly trees planted (parks and sidewalk) greening; Monthly Compost bags created; Monthly parks maintenance numbers.
Social Services: Monthly number of illegal homeless structures; Monthly number of individuals leaving the street and entering CoCT and NGO endorsed programmes.
The elected NPC directors together with the CoCT will provide monthly oversight in accordance with the CoCT CID regulations. -
Yes, it would require the CID members to vote on it and would be a defined process to follow, outlined by the City of Cape Town.
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No. This question is likely stemming from the fact that we have to submit a 5 year budget as part of the business plan. If the community votes to support a CID, there is no minimum term, although we hope it will last for many years provided it continues to meet the needs of the Lower Gardens community.
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A Not for Profit company (NPC) has been established and residents have elected the directors of the NPC. The NPC is responsible for overseeing the implementation of the 5-year business plan/budget. Each year the NPC board has to submit a detailed budget to the City by 31 January as the budget is subject to approval by Council during the City’s annual budget process.
The proposed budget may not deviate materially from the approved business plan. The NPC is governed by the Companies Act and needs to be audited so these regulatory checks and balances exist in addition to the oversight of the City and regulation governing its processes. -
The City regulates how a CID receives its income. There are processes by which a CID can apply to both the City and Province to address specific issues that require annual capital investment. e.g. licence plate recognition cameras.
The Lower Gardens CID intends to champion community involvement through the creation of various stakeholder groups including business, religious and academic institution forums. Where relevant, the Lower Gardens CID will be asking for both financial and support in kind from these forums to support community programmes that align with the proposed CID business plan.
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The Lower Gardens CID does not replace alarm systems, or private home armed response but it will provide supplementary safety and security services.
As part of the business plan, the Lower Gardens CID plans to help reduce existing safety and security costs by negotiating suburb wide rates with the existing service providers in the precinct. As well as linking up their services with the safety and security services of the CID, thus providing a better and more cost effective solution for the community. -
If you require further information, please feel free to email the CID Manager on cidmanager@lowergardenscid.co.za.
Lower Gardens
LOWER GARDENS IMPROVEMENT DISTRICT