Chapter 11 - Sedibeng District Municipality

• Engineering Services Contributions:For any land development application
certain engineering service contributions are payable to local government. The
Tow n-planning and Tow nships Ordinance (15 of 1986) makes provision for
these contributions. Distinction is made betw een internal and external
engineering services, and this only applies to the external services. No
contributions for public transport are levied.
• Impact Requirements:These charges are imposed on developers to
compensate for the impact of their projects on the road netw ork. This does
not contribute significantly to road netw ork improvement.
• Planning Gain:Planning gain, also know n as ‘value capture’ or ‘development
gain’, is w here a developer is granted permission for a development subject
only to certain conditions being met. This principle may be applied
successfully to the provision of public transport facilities at, for example, large
shopping centres.
• Municipal Bonds:Municipal bonds are based on the so-called bond insurance
fund by the development Bank of South Africa. This allows municipalities to
raise capital in order to pay for public projects such as roads and other
infrastructure.These bonds must be serviced and it requires dedicated
revenue streams. The relevance of these bonds relate to the fact that projects
can be financed outside the capital budget of council.
• Tax Increment Financing:Tax Increment Financing (TIF) is based upon the
premise that public improvements promote developments in areas
surrounding them, thereby increasing property tax revenues. Projected
increases in property tax revenues are then used to back bonds w ith w hich the
public improvements are financed, or alternatively annual increments of tax
revenue are deposited into a fund dedicated to improvements w ithin the TIF
district.
• Special Benefit Assessment Rates:This approach is based on the premise
that some or all the costs associated w ith public improvement should be borne
by properties w ithin a well-defined area benefiting from the project. This rate
is an additional charge over-and-above the normal property rates and taxes.
• Donor Funding:Donor funding is provided by the donor community for
specific projects or programmes. International agencies or institutions
generally provide donor funding.
• Private Finance Initiatives:This is also described as public-private
partnerships (PPP’s) w ith the emphasis of using private finance to fund
municipal activities or projects. A PPP is defined as a formal relationship
within w hich the public and private sector partners look for a w in-w in solution
tow ards a common goal that w ould be to ensure the delivery of
public/municipal services at an agreed price and length of time w ith each party
benefiting from the transaction in an appropriate manner. At local level PPP’s
are sometimes referred to as municipal service partnerships.
• Commercial Enterprises:This approach implies that certain transport
services or facilities, or parts of those facilities or services, can be operated on
a commercial basis w ith income potential.
• Congestion Pricing:A congestion charge is aimed at discouraging the use of
the road by those w ho are not w illing to pay the charge. The objective is to
discourage road use at some sites and at specific times. These charges can
then be used to provide improved public transport services.
• Road Taxes:Road taxes are taxes that are linked to the municipal rates and
taxes. This implies it is to be paid on a monthly basis by all property owners.
This additional tax is then used to construct road infrastructure.
SDM DITP, 2008 to 2013 215 31 Aug 2010