021-286-1628 / 011-463-3344 info@venn.co.za

Educational Institution

Rates & Water Charges

Customer: Educational Institution

Contracted Venn to: Investigate all municipal charges

Venn’s Findings

Rates
Venn’s valuators and legal experts conducted a specialised investigation into the Rates Act and the legality of Municipal Rates Bylaws, with emphasis on their application for subsidized housing.

It was found that subsidized student hostels were included under the same category as “hotels” and thus the commercial tariff was applied.

Venn presented a compelling argument to the municipalities concerned and they agreed that this practice was intrinsically unfair and never intended. The bylaw was subsequently changed to permit de-facto hostels to benefit from the cheaper domestic tariff.

Rates
The institution’s buildings are constructed over numerous un-consolidated erven, each receiving a rates account based on an improvement and land valuation. Venn detected that many of the improvement values were duplicated on the various property rates valuations and thus the rates charges were based on double-counting.

Water
The institution was being charged for estimated readings on two meters, both of which were never read due to being in the middle of the road and covered by a large steel structure. Venn’s analysis showed that the water volume charged was impossible given the usage and occupancy levels. A pipe network trace confirmed no cross supply to other consumers and the leak detection survey found no substantive wastage.

Venn liaised with the municipality to remove the steel structure in the road via crane, so that the meters could be inspected and readings taken. It was found that one of the meters was a municipal fire hydrant supply with zero consumption while the other supply meter had been consistently over-estimated. Venn arranged for the municipality to move the supply meters to an accessible location at municipal expense.

Outcome

Rates
The application of the domestic tariff resulted in these institutions achieving a rates charge reduction of R 440 000 per month and a refund of R 2.1 million.

Rates
Venn lodged a rates objection, which was declined. Venn obtained the decision reasons and proved the incorrectness of the municipal valuation methodology to the municipal valuator. Venn appealed and the municipal valuator gave evidence in support of the appeal.

The client received a refund of R 700 000 and the institution’s total rates payable was reduced by R 45 000 per month.

Water
The client received a R 1.4 million refund in water and related sewer charges and achieved an ongoing cost reduction of R 55 000 per month.

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