The broke Makana Municipality has agreed to credit three top independent schools a total of R3-million in rates after levying them incorrectly for more than five years.
Kingswood College (KC), St Andrew’s College (SAC) and Diocesan School for Girls (DSG) last year took the Grahamstown municipality to court to set aside its rates bylaw and the imposition of rates in terms of it.
They also wanted the Grahamstown High Court to order the cash-strapped municipality to repay them the collective R3-million they say they should never have been levied over the past five years.
However, the municipality yesterday reached a settlement agreement with the schools in terms of which it credited KC R926000, SAC R1.543-million, and DSG R498000 in terms of their rates.
The schools claimed in court papers the municipal rates policy purportedly adopted and enforced by Makana from at least 2008 until now, was in conflict with the rule of law, the constitution and dictates of the Municipal Property Rates Act (MPRA).
The settlement agreement means the court will not have to decide whether or not the rates policy and the municipality’s imposition of rates across the board is invalid.
If it had succeeded, it might have meant that any ratepayer could challenge the property rates they had paid for the past five years.
The schools say in court papers that as schools they were not businesses for profit but should be recognised as public benefit organisations (PBOs) and in terms of the MPRA should be rated accordingly.
In 2010, the national government published a regulation prescribing that the rating of PBOs could never exceed 25% of the rating for residential property.
But instead, the municipality had entirely ignored their PBO status and had illegally and punitively rated them as business properties.
The municipality yesterday also agreed to amend its rates bylaw to bring it in line with national law and rating the three schools as “public benefit organisations” used for education.
The settlement agreement was made an order of court.
Makana in R3m rates deal with top schools
Kingswood College (KC), St Andrew’s College (SAC) and Diocesan School for Girls (DSG) last year took the Grahamstown municipality to court to set aside its rates bylaw and the imposition of rates in terms of it.
They also wanted the Grahamstown High Court to order the cash-strapped municipality to repay them the collective R3-million they say they should never have been levied over the past five years.
However, the municipality yesterday reached a settlement agreement with the schools in terms of which it credited KC R926000, SAC R1.543-million, and DSG R498000 in terms of their rates.
The schools claimed in court papers the municipal rates policy purportedly adopted and enforced by Makana from at least 2008 until now, was in conflict with the rule of law, the constitution and dictates of the Municipal Property Rates Act (MPRA).
The settlement agreement means the court will not have to decide whether or not the rates policy and the municipality’s imposition of rates across the board is invalid.
If it had succeeded, it might have meant that any ratepayer could challenge the property rates they had paid for the past five years.
The schools say in court papers that as schools they were not businesses for profit but should be recognised as public benefit organisations (PBOs) and in terms of the MPRA should be rated accordingly.
In 2010, the national government published a regulation prescribing that the rating of PBOs could never exceed 25% of the rating for residential property.
But instead, the municipality had entirely ignored their PBO status and had illegally and punitively rated them as business properties.
The municipality yesterday also agreed to amend its rates bylaw to bring it in line with national law and rating the three schools as “public benefit organisations” used for education.
The settlement agreement was made an order of court.
Would you like to comment on this article?
Register (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Trending Now
Latest Videos