City Improvement District

The CITY IMPROVEMENT DISTRICTS ACT will be implemented once the approval of the TSHWANE Metro has been obtained. This will enforce at least 80% participation, allowing the residents to vote at the annual general meetings for increased security or a reduction in the fees, as the participation levels increase.

The CID will allow for a lot more than just security initiatives, e.g. members may make decisions on sidewalks, lighting of streets, etc. A representative of the Tshwane Metro will also attend board meetings.

What is a City Improvement District?

A City Improvement District (CID) is a defined geographic area within which property owners agree to pay for supplementary and complimentary services set to enhance the physical and social environment of the area. In Gauteng, CID applications to local authorities are considered in terms of the Gauteng City Improvement District Act No. 12 0f 1997, which was approved by the Gauteng provincial legislature on 9 December 1997. In some other provinces CID’s are established in terms of local authority by-laws.

The CID is:

  • A management tool to enhance property values;
  • A system of co-operation and cost-sharing among private sector interests;
  • A way of sustaining funds applied to all benefiting properties and based on a mandatory assessment of those businesses;
  • Authorised by national, provincial or city law;
  • Defines the roles and responsibilities of both the CID and local government;
  • Managed through a Section 21 company and directed through a board of elected business and property representatives from the area.

Who pays for additional services in the City Improvement District?

Once a CID legislated, the cost of providing additional services is borne by the commercial property owners through the payment of a CID levy. The levy is mandatory and is based on the municipal land value of the individual stands. Unlike rates, funds contributed by the property owners may only be spent in the area in which they are collected.

Formation and operation of City Improvement Districts

  • The geographic boundaries of the CID have to be established.
  • All property owners and major tenants within a defined area are identified and exposed to the proposed intervention.
  • A referendum is held and pre-determined majority must be achieved in order to legally establish a CID.
  • Whilst the application to the local authority to establish the CID may be made by 25% of property owners, final approval will not be considered unless more than 50% of relevant property owners are in agreement.
  • Once a district is authorised, 100% of property owners within the CID have to contribute financially.
  • Once legally constituted the improvement district authorizes the council to levy an additional tax on CID members.
  • If the individual CID Board approves it, the management company may be appointed as an agent of council to collect the monthly levy on behalf of council.
  • Each district has its own board of directors elected from the contributors and they effectively control the district within the terms of the original CID business plan.
  • The board appoints a specialist urban management company to manage the day-to-day operations within the district.
  • The services to be provided by the CID reflect the actual needs of the area.
  • An agreement as to the level to which the local authority will be providing services out of the normal rates base has to be negotiated.
  • The CID is established for an initial period of three years but its life can continue indefinitely unless members move for material changes to the original business plan.

What are the benefits of establishing a CID?

The CID approach is holistic: – All issues that may be negatively impacting on the area are investigated and dealt with on an integrated basis.

Enhancement of the environment and strengthening investor confidence: – Enhancing the safety, cleanliness and economic vitality of different, retail and commercial nodes strengthens the competitiveness in the region.

The CID supports investment by business: – The perception of crime, grime and general environmental disorder in most urban areas has a negative impact on staff, willingness of customers to visit the area and thus business growth and development.

A CID creates a positive identity for the area: -The CID provides a new positive identity from which to launch a concerted effort to maintain and enhance the asset base thus attracting continued investment and development.

The CID offers private sector management and accountability: – Once the CID is set up, a management body is then established in the form of section 21 company. This company appoints a manager through which the CID is managed. Annual activities and budgets are developed by the CID management company who provides a full set of monthly management accounts which are overseen by the board. This ensures that the CID is directly accountable to those in the business community who pay the levy.

The effectiveness of the CID is constantly measurable: – By mounting regular opinion surveys, which are compared to the result of an initial perception survey of the area, the board and all stakeholders are able to measure the success of the CID.

CIDs monitor any new major developments or interventions that impact the area: – As the custodian of the area the CID is aware and comments on new developments in the area. CIDs have effective working relationships with appropriate bodies or associations.

The CID is able to put forward ideas for change to council: – Due to its close relationship with council, the CID is able to petition for new initiatives which will further improve the area. This can include things like traffic surveys.