Media Release :

”The Power Of City Improvement Districts To Bolster Municipal Service Delivery”

South Africa’s first City Improvement District (CID) was established in Johannesburg’s central business district in the early nineties. Since then, the model has been helping to bridge the gap between basic municipal service delivery and the expectations of business and property owners, residents and communities around the country. The Institute of Municipal Engineering of Southern Africa says that CIDs are more important than ever today, with municipalities around South Africa facing resource and capacity constraints.

Despite some challenges and setbacks in the legislation and funding of CIDs, including disparities across different South African provinces, IMESA asserts that CIDs are a powerful tool for the revitalisation of business and residential areas. As evidenced in towns like Worcester, all municipalities, regardless of their size or grading, can benefit from the model and IMESA urges them to establish CIDs where possible, to learn from successful collaborations, share knowledge, processes and best practices.

A CID is essentially a public-private partnership between the municipality and private stakeholders like property owners, businesses or residents. These public sector role players agree to raise additional funds through levies to pay for services and improvements in a specified area. These are generally either above and beyond the mandate of the municipality or are needs that can be fast-tracked by the CID.

Jeanine du Preez, IMESA’s operations director of Marketing and Communications, says that the 55 CIDs operating successfully in the City of Cape Town (CoCT), along with numerous Memoranda of Agreement (MoAs) across the municipal area, show what partnerships like these can achieve. As a district head for Urban Mobility, Roads Infrastructure Management in the city, she sees the impact first hand. “These agreements cover not only industrial and commercial precincts, but also a significant number of residential neighbourhoods. Many of these CIDs are highly active and maintain strong working relationships and partnerships with the various Line Departments in the CoCT. Our approach is to support the rapid and efficient implementation of interventions wherever possible, guiding CIDs through the standard approval framework without compromising on workmanship, safety standards, or compliance with City policies and procedures. We want to see these areas flourish,” Du Preez states.

She notes that a number of CIDs actively participate in pothole repairs to help fast‑track routine maintenance within their areas. Safety and security initiatives are also key focus areas, particularly in residential environments. “Where a proposed intervention falls outside the direct mandate of the relevant Line Department, but is nonetheless supported, we make use of a Permissions Agreement. These agreements typically apply to items such as fencing, where the proposal aligns with City guidelines but the asset remains the property of the CID or organisation entering into the MOA. Under these arrangements, the CID retains full responsibility for the ongoing maintenance of such infrastructure.”

While the arrangement may sound onerous for capacity constrained engineering teams, Du Preez says that once a sound working relationship has been established and the CID/MOA partners fully understand the requirements for undertaking an intervention, the ongoing obligations on the City’s engineers are minimal. “While we still conduct a technical assessment for each application, this does not create duplication. If the CID did not submit the request, it would have originated from another source and would require the same level of review.

“In practice, we have found that CID‑driven interventions – such as pothole repairs, minor sidewalk reinstatements, repainting of road markings and general beautification of verges and medians – have meaningfully supported the City’s service delivery objectives. These efforts have contributed to a reduction in service notifications and have visibly uplifted the overall condition and appearance of the areas.”

Du Preez explains that each CID agreement outlines legal aspects, roles and responsibilities between the CID and the City’s Line Department. It also specifies the types of interventions supported, subject to a standard approval process and technical assessment. “The key success factor has been building strong partnerships with CIDs and assisting them in fast-tracking processes to demonstrate City support and alignment with the principles outlined in the City’s CID By-law. This stipulates that CIDs must enhance and supplement the municipal services contemplated under Section 8 of the Systems Act.”

Du Preez notes that these agreements do not transfer the Line Department’s responsibilities to the CID. “Routine City maintenance and programmes continue as normal. CID interventions are only approved if warranted and supported. Approval is not automatic.”

She explains that CIDs can fast-track their priorities and implement interventions outside the Line Department’s mandate. “For example, we allow CIDs to install fencing for security purposes (to City standards) via an additional Permissions Agreement. In such cases, the asset remains the property of the CID, and they are responsible for its maintenance. This approach is widely used as safety and security are high priorities for communities.”

Since an MOA is signed once and remains in effect until terminated under its conditions, operations between the City and the CID are streamlined.

The differences in the legislation applied and the funding model of CIDs in the City of Cape Town versus metros like Johannesburg, Ekurhuleni and Tshwane does pose challenges, IMESA concedes. In Cape Town, the municipality collects the extra rates for a CID. A 2015 Supreme Court of Appeal ruling in Randburg, Gauteng, found that mandatory levies like these which were being imposed under older provincial CID legislation could not be legally enforced. This effectively rendered the contributions voluntary unless formalised under updated by-laws or municipal policy. In response, Johannesburg adopted a draft Special Rating Areas By-law to provide clearer legal foundations for levy collection. This draft framework is still under consideration by other metros. In the meantime, the financial security and sustainability of some CIDs is uncertain as they must rely heavily on consensus and voluntary compliance. This is difficult when economic pressures are high or when property owners resist additional costs.

Despite these variations and challenges, however, CIDs across South Africa share common achievements that are worth highlighting, according to IMESA. Du Preez expands: “CIDS show that close collaboration between communities and municipalities works – improving public spaces, boosting property values, attracting investment and reducing crime. Where we have CIDS actively improving urban environments, investment follows. Job creation and social programmes are part of the CID value chain.”

IMESA says that knowledge sharing between metros can amplify the service delivery benefits offered by CIDs. “The successes in Cape Town’s mandatory CID levy model – particularly in planning, enforcement, budgeting, governance and accountability – offer a template that other towns and cities can adapt within their legislative frameworks. By fostering formal networks and collaborative platforms – such as inter-municipal forums, engineering institute knowledge exchanges and shared training programmes – metros can accelerate learning about CID establishment, community engagement processes and performance monitoring,” Du Preez concludes.