1. 1 Presented by Cathy Motsisi Chief Financial Officer Presentation of the Devolution of Property Rates and Taxes Grant to Provinces as at 30 June 2010

2. 2 Responsibilities of the National Department The national Department of Public Works will oversee the transfer of the function, provide support and training as needed to the Provincial Departments of Public Works Monitor performance of Provinces Support the Department of Rural Development and Land Reform in vesting of relevant properties in the Provinces' name Transfer payments to Provincial Departments of Public Works Monitor and evaluate the transfer of function into the relevant Provinces Submit quarterly performance reports to National Treasury Submit the allocation criteria, 2010 MTEF allocations and the final conditional grant framework that relate to this grant to National Treasury.

3. 3 Responsibilities of the Provincial Department of Public Works As part of the report required in terms of sec 71 of the MFMA and sec 40(4)(c) of the PFMA report to the relevant –Report to the relevant Provincial Treasury, the National Treasury and National Public Works spending and financial performance of the grant –Submit quarterly reports within 30 days after the end of the quarter, including non-financial performance reports to NDPW and National Treasury –The receiving officer must, within two months after the end of the financial year, and where relevant the municipal financial year, evaluate its performance in respect of the grant and submit such evaluation to the transferring national officer.

4. 4 Devolution of Property Rates – 30 June 2010 ProvinceAllocation R’000 Amount transferred R’000 Amount Paid to Municipalities (As at 30 June 2010) R’000 Amount spent by Prov. % Eastern Cape147 46720 0001 0260.7% Free State154 15892 49483 50854.2% Gauteng191 38120 000-0% KwaZulu Natal259 891181 29459 32522.8% Limpopo15 1540-0% Mpumalanga44 37414 790-0% Northern Cape29 69818 698-0% North West72 71825 000-0% Western Cape181 35190 6755 6853.1% Total1 096 192463 581149 54413%

5. 5 MinMEC Action plan

6. 6 ROAP MAP TO PROPERTY RATES PAYMENT SOLUTION Problem StatementSolutionsResponsibleTime frame Properties that were never paid for by NDPW Properties that were not billed before by Municipalities Property Rates Act Conduct an audit of all properties to enable informed projections Reconcile with Municipalities valuation rolls Waiver interest charges in line with the project plan of reconciling the properties and sourcing additional funds PDPW – GIAMA Task Team to oversee the implementation 10 x 10 Nov 2010

7. 7 ROAP MAP TO PROPERTY RATES PAYMENT SOLUTION CONT. Problem StatementSolutionsResponsibl e Time frame Complexity of billing and payment systems. Investigate options for rating of schools and health facilities as essential services SALGA, COGTA,N DPW,PDP W Nov 2010 Split billing – consider separation of Property Rates & Municipal Services. Eg WC Mar 2011 Awareness and engagements with Municipalities – Mar 2011 Identify low capacity Municipalities and provide a plan of action Sept 2010

8. 8 ROAP MAP TO PROPERTY RATES PAYMENT SOLUTION CONT. Problem StatementSolutionsRespon sible Time frame Complexity of billing and payment systems. Establish a forum with representatives from key Metros and 3 large cities – Unpack key challenges –Agree on Protocols – Mediation on disagreements SALGA, NDPW, PDPW, NT Mar 2011 Inadequate BudgetsIncorporate a formula in the property rates budget calculations that will take into account the infrastructure and maintenance budget Provide preliminary projections by October and final by Dec 2010 Draft invitation letters for the 10x10 KZN to be given a special attention) NT, NDPW, RDLR Mar 2011

9. 9 Summary of 10x10 Intervention Additional budget for undertaking the property audits Lobby additional funding for the short fall Waiver/write off all interests due until the challenges experienced both the Municipalities and DPW have been resolved. Extent the period for objection to valuations for state properties to 90 months instead of the prescribed 30 days. Retrospective billing to be limited to 3 years

10. 10 I Thank You