Nearly R1.9 million in public funds splurged on unfinished mayoral mansion

The Lesedi local municipality has confirmed the expenditure of nearly R1.9 million in public funds on improvements to properties designated as a future mayoral residence in Heidelberg. This confirmation comes after questions were raised regarding the valuation of Mayor Mluleki Nkosi’s personal home in the area.

Mayoral Residence Project Details

A total of R1 867 532 was spent on Erf 1812 and Erf 1813 in Bergsig Extension 9. The municipality stated that the expenditure was initially approved by the municipal manager at the time. However, the council later made a resolution to discontinue the project before its completion.

The municipality has not provided details regarding the reasons for halting the project, nor whether any accountability measures were taken following the decision to abandon the development. Municipal Manager S’busiso Dlamini confirmed the council resolution to discontinue building the mayoral house.

Did You Know? The general valuation roll for the municipality was implemented on July 1, 2024, based on a valuation date of July 1, 2023.

Property Valuation Explained

According to Dlamini, the properties were valued according to the International Valuation Standards (IVS) and the South African Council for the Property Valuers Profession (SACPVP) guidelines. The assessment was based on the properties’ status as vacant land parcels, as improvements were not yet completed.

Once construction is finished and an occupation certificate is issued, a supplementary valuation will be conducted to reflect the improved value. Currently, the properties are categorized as “municipal properties” in the general valuation roll 2024-2029, as they are registered in the name of the Lesedi local municipality.

Mayor’s Heidelberg Home Valuation

Concerns have been reported regarding the valuation of Mayor Nkosi’s house in Berg En Dal, Heidelberg Extension 12. The mayor purchased the erf in June 2019 for R640 000, reportedly in cash, and subsequently built a double-storey home. Despite these substantial improvements, the property is currently listed on the municipality’s valuation roll at R800 000.

The property, encompassing 2 065m², now includes a double-storey house, double garages, and an enlarged paved parking area. Its estimated market value is thought to exceed R3.5 million.

Expert Insight: The municipality’s reliance on the valuation date prior to the completion of construction highlights the complexities of property valuation during development. This approach, while adhering to the Municipal Property Rates Act, could result in a significant discrepancy between assessed value and market value once the improvements are finalized.

Valuation Timing and the Rates Act

Dlamini explained that the general valuation roll was compiled and submitted to the municipal manager at least five months before its implementation date, as required by the Municipal Property Rates Act. At the time of compilation, construction was underway but remained in its initial stages, with no completed improvements. The property was valued as vacant land.

The municipality is currently processing the issuance of an occupation certificate for the mayor’s property. Upon issuance, a supplementary valuation will be conducted to reflect the property’s improved state, and its category will be changed from “Vacant Land Residential” to “Residential Properties”.

Frequently Asked Questions

What was the total amount spent on the mayoral residence improvements?

A total of R1 867 532 was spent on improvements to Erf 1812 and Erf 1813 in Bergsig Extension 9.

When was the decision made to halt the construction of the mayoral residence?

The council resolved to discontinue the project before its completion, but the municipality has not explained why.

How is the mayor’s personal property currently valued by the municipality?

Despite substantial improvements, the mayor’s property is listed on the municipality’s valuation roll at R800 000.

As the municipality moves toward issuing an occupation certificate for the mayor’s residence and conducting a supplementary valuation, will these actions lead to a reassessment of the financial implications for both the municipality and local residents?