The expenses of DBKL proper may only be recovered from KLites
IT needs to be remembered that the city of Kuala Lumpur (KL) comes under the charge of Dewan Bandaraya Kuala Lumpur (DBKL), a local government body. Its rates are for providing local government services, which are enjoyed almost exclusively by the people of KL. This is the basis anyway for the rates of local government bodies.
The Federal Territories (FT) Ministry, on the other hand, is responsible for Putrajaya, Labuan and also KL. Although there is a geographical overlap in the case of KL, there is none in the case of services.
The FT Ministry, responsible for the nation’s capital and other territories, is funded by Parliament. Its expenses are provided for in the annual national budget.
In other words, the expenses of DBKL proper may only be recovered from KLites. In justifying the recent increase in assessment rates, the FT Minister said some of the expenses incurred are not only for KLites, for example, the highways. This means that irrelevant expenses have also been taken into account.
This principle is observed by the Constitution in the formula for making capitation grants with respect to roads - federal and state - with the latter said to be those that join places within the state only, and therefore, are enjoyed more by the people of that state than those from outside. Such a distinction is to be made in the case of purely local government services and those to be provided by the state government and by the federal government.
The DBKL budget needs to be re-examined in light of this principle, ie, the failure to observe this distinction. It is grounds for challenging the budget in Judicial Review proceedings in the Courts of Law.
What is the rate of the hike?
There seems to be some contradiction as to the actual rate of increase in the assessment rate.
FT Minister Datuk Seri Tengku Adnan Tengku Mansor said “that residential property owners will not be paying more than an additional 10% over what they have been paying. Commercial property owners, on the other hand, will not be paying more than an additional 35% over their current fee when the rates are implemented on Jan 1, (2014)”.
This was published on Dec 20 by a local daily, in response to DBKL fixing a 4% assessment rate for residential property and 10% for commercial property, down from the current 6% and 12%, respectively.
Deciding on the matter
before the hearing?
The FT Minister seems to have decided on the rates well ahead of the hearing of the Objection Notices. If he goes ahead with this, then he is clearly treating the statutorily-given right to object as a mere proforma exercise. The hearing with regards to the objection of the hike is, therefore, of no effect.
This is a point for the hearing in the Judicial Review proceedings.
The FT Minister also said “as of Dec 17, 2013 (the last day for the lodgment of the Notice of Objections), DBKL has received 153,187 objections and the council will begin to filter the objections ... We may also gather residents from one particular area and hear their objections, in a town hall sort of a meeting”.
“The panel set up to hear the objections of rate payers will begin on Jan 6, 2014 and will go on until March 31. It hopes to settle the hearings in three (3) weeks, instead of three (3) months,” he is reported to have said.
It is utterly irregular, not in conformity with the law, and highly impossible to conduct a town hall meeting to accomplish the task of “hearing” each and every one’s objection and to understand their grounds for contention. The legislation clearly envisages an individual’s objection to be heard singly. Bunching them according to areas to be dealt in a mass-meeting manner is not efficacious.
The Objection Notices require careful, detailed examination and every case has its own characteristic and merit. In some cases, privacy is needed.
Their respective contentions need not be revealed to others or they may cause embarrassment. For example, the contention of the disabled.
DBKL cannot, by a stroke of the pen, decide on such matters. Gatherings of 5,000 rate payers are not conducive; claims to have listened to all are palpably improbable. Will there be registration? Will each one of the 5,000 be heard? Does listening to a few rate payers tantamount to ‘having heard’ 5,000?
The legislation is clear: Local Government Act, 1976 (Act 171) Section 142. Objections.
(1) Any person aggrieved on any of the following grounds:
(a) that any holding for which he is rateable is valued beyond its rateable value;
(b) that any holding valued is not rateable;
(c) that any person who, or any holding which, ought to be included in the Valuation List is omitted therefrom;
(d) that any holding is valued below its rateable value; or
(e) that any holding or holdings which have been jointly or separately valued ought to be valued otherwise, may make an objection in writing to the local authority at any time not less than 14 days before the time fixed for the revision of the Valuation List.
(2) All objections shall be enquired into and the persons making them shall at such enquiry be allowed an opportunity of being heard either in person or by an authorised agent.
Three weeks vs three months
With 153,187 objection letters, more than 30% of property holdings (500,000) have lodged their objections officially. DBKL had stated that it was in the midst of setting up eight panel groups to hear objections. If DBKL can hear 30 cases daily, it can accomplish 240 cases (8 x 30). In a five-day week, it will achieve a target of 1,200 cases (240 x 5).
In a month with four weeks, DBKL will have heard 4,800 cases (4 x 1200). This is not even taking into consideration public holidays and off days. With 153,187 objections, it will probably take 32 months, or more than 2.5 years. Why should rate payers who are going to suffer the brunt of the assessment hike wish to hasten and facilitate the task of the panels?
Wouldn’t it be intelligent to delay the process so that the issue of the hikes could be prolonged, perhaps, until the next General Election?
What happens to those who did not submit objections?
There should be no double standards as to those who did not object, as this would create disharmony among the community. Many are ignorant and naïve. Most are uneducated and there are those who are unaware of their legal rights and entitlements.
If the Government wishes to obtain more money from the people because its expenses are mounting, then it has a reciprocal duty to reduce wastage and leakages.
The DBKL Budget 2014 showed that RM440.99mil will be allocated for emoluments for the 10,391 staff with an allocation of RM59.41mil for overtime allowance.
That is quite a hefty figure to maintain. Most private sectors have their workload automated, and thus, less staff. Similarly, DBKL could undertake the exercise to offload the ‘extras’.
Chang Kim Loong is the honorary secretary-general of the National House Buyers Association (HBA): www.hba.org.my.