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Overview of Bulk Infrastructure Contribution Levy (BICL) in Drakenstein Municipality

The Bulk Infrastructure Contribution Levy (BICL) system in Drakenstein Municipality evolved post-2000 following the amalgamation of Paarl and Wellington. Development contributions for water, sewer, stormwater, roads, and electricity were integrated into municipal tariffs. Criteria for BICL vary based on property market value, with specific fee structures for lower and upper brackets. Notably, GAP housing projects receive a 40% discount on these levies. This document outlines the historical context, current policies, and proposed changes regarding BICL to adapt to new developments and housing needs.

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Overview of Bulk Infrastructure Contribution Levy (BICL) in Drakenstein Municipality

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  1. Drakenstein Municipality Bulk Infrastructure Contribution Levy (BICL’s)

  2. Background information Pre Year 2000: • Wellington Municipality had development contributions for Water & Sewer as part of their tariffs. • Paarl Municipality negotiated with developers for upgrading of infrastructure. Post Year 2000: • Paarl and Wellington amalgamated in late 2000 and adopted the contributions into it’s tariffs. • The new Drakenstein Municipality applied the BICL’s for subdivisions, group housing, private residential flats and any development that may place an additional burden on the system. • The services on which contributions were charged increased to: Water, Sewer, Stormwater, Roads, Electricity. • The criteria for charging the BICL’s were: • Market value of property = R 120 000 (minimum fee/service). • Market value of property = R 240 000 + (maximum fee/service). • Pro rata levy is payable for units between R 120 000 – R 240 000. • Market value of the property is defined as: Residential erven: Market value of the erf Flats/Group housing: Market value of the unit • Year 2010 GAP Housing received 40% discount on there BICL’s payable. • Year 2011 Drakenstein Municipality appointed Vela VKE to re –evaluate our policy inline with other municipalities

  3. Current vs New • Current Policy(Subdivision) • For the subdivision of a residential property of ±1020m² into portion A ( 315m²), portion B (270m²), portion C (225m²) and Remainder (208m²). • Property value of the site is R 564 000.00 • Property value of the portion is R 288 601.04 • Tariff as per 2013/2014 financial year is R 8089.00 vat incl. per service. • Cost per erf is R 8089.00 x 5(services) = R 40 445.00 vat incl. • Total BICL’s is calculated as R 8089 x 5(services) x 3 units= R 121 335.00 vat incl.

  4. Current vs New • Current Policy(Group Housing) • For a new development from agricultural with 1 homestead (4.67ha) to 193 residential units (3.22ha). A GAP housing project which receives 40% discount on BICL’s. • Property value of each portion is R 240 000 + • BICL tariff as per 2013/2014 financial year is R 8089.00 vat incl. • GAP discount is 40%. • Cost per unit is R 8089.00 x 5 x 0.4 = R 16 178.00 vat incl. • BICL’s is calculated as (R 8089 x 5(services) x 40%) x 193 units = R 3 122 354 vat incl

  5. Current vs New • Proposed New Policy • For the subdivision of a residential property of ±1020m² into portion A ( 315m²), portion B (270m²), portion C (225m²) and Remainder (208m²). • Water Module Existing

  6. Current vs New • Water Module New

  7. Current vs New • Summary for subdivision for 3 additional units

  8. Current vs New • For a new development from agricultural with 1 homestead (4.67ha) to 193 residential units (3.22ha). A GAP housing project which receives 40% discount on BICL’s. • Sewer Module Existing

  9. Current vs New • Sewer Module New

  10. Current vs New • Summary for new Group Housing

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