Budget lifted 0.15% to cover Waste to Landfill Levy

Budget lifted 0.15% to cover the Waste to Landfill Levy was the decision last night by Council. A unanimous decision made after much reasoned and considered debate last night.

Deputy Mayor Peter Hughes presented Council with an alternative budget position at our traditional budget meeting.  An alternative to the one we presented you just a couple of months back. His alternate motion was to lift the rate increase from 2.1% to 2.25%. An increase of 0.15%.

We learnt last night the impact of the 40% waste to landfill levy on our budget. The levy would add $ 115,000 to our costs. Lifting the rate will cover around half this.

The Budget lifted 0.15% will raise an extra $ 57,000. With some 26,000 rate payers this means an increase of $ 2.00 for the year to each ratepayer.

With such a small individual contribution we could have considered passing on the whole impact. We chose instead to show some leadership and restrict the impact on you.

Like last year, with the China Sword, we opted to share the impact. We are committing ourselves to finding $ 57,000 of savings over the year.

We would like to think we are showing, yet again, our ability to set responsible and considered budgets. Being financially responsible as I promoting during the last election campaign. This, in the face of a Government promoting otherwise while throwing significant last minute surprises at us.

Even with the extra, the rate increase is 0.65% below what it could have been under the government’s proposed rate capping agenda.

I am proud of this Council.

It is showing itself to be a Council that takes their responsibility seriously. Just seven months in, it is a council that is following in the footsteps of the Unley Councils of recent times.

We are a Council I believe you can rely on to take the responsible decisions. To be fiscally responsible.

A rate rise of 2.1% is set to be approved by the City of Unley

The City of Unley will approve their 2019-20 budget at this month’s formal Council meeting. I expect us to approve a rate rise of 2.1% at this meeting.

A 2.9% increase would have applied under the Government’s proposed rate capping. This demonstrates, with many councils following our example, that councils are responsible and able to manage their financial affairs.

In theory therefore the rates you pay will increase likewise by 2.1%.

Changes in property values, if consistent across a local government area, do not change what council rates you pay. It is therefore incorrect to say an across the board increase in property values means Council makes a killing.

If you have read my last blog post however, you will know that this year changes in property values however will be erratic to say the  least. This means some of us will pay more, some less.

Two factors influence the calculation of the rates you pay. The budget set by Council and the capital value of the property you own, as set by the Valuer General.

The process of assessing rates for an oncoming year commences with Council setting their budget. The valuer general then advises council what they have calculated is the total value of all rate-able properties in the council area.

The budget is then divided by the total property value to strike what we call “the rate in the $”. In my time on Council, this “rate in the $” has gone down each year.

When the value of your property (as valued by the Valuer General) moves at the same rate as the collective or total then your rates will increase by the amount of the budget increase set by council. If the value of your property increases less than the collective, your rates will increase by less than council’s budget increase. Likewise, if it escalates above the collective, then your increase will exceed the council budget increase.

Hopefully you appreciate a rate rise of 2.1%, and the services they provide you.

Valuer General to cause stress to rate payers in Unley

Many City of Unley rate payers will be distressed when they receive their first rates notice for 2019-20.

 

Office of the Valuer-General

Office of the Valuer-General

Not I must say because of anything Council has or has not done. Their grief will be due to changes to the way their properties are valued by the Valuer General.

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While Council looks set to strike a 2.1% increase, the rates you pay may not reflect this. Changes in property values could show a different picture. We could see rates increase or decrease by up to 50% and more.

In other words, changes both ways. Significant changes.

Yes. There will be winners and losers. Some rate payers will be paying more than they traditionally have. Some significantly more.

Others, on the other hand, will be paying less. Some significantly less.

I expect Council will wear the brunt of any anger that may occur. This, even though the Valuer General is accepting the responsibility.

You will be receiving the rates notice from us. You must pay us. Many don’t recognise the value of your property is not set by Council, but by the Valuer General.

Concerned about the significance of the changes, the Valuer General briefed Council last week.

The Valuer General have advised they will be writing to all those property owners whose valuation will increase by 15% or more. There will be many however under this threshold that won’t know until they receive their first rates notice.

This is all (would you believe) due to an attempt to make the valuation of properties fairer. The Valuer General is changing how they calculate the property value. Factors not previously considered will now be used when assessing a property’s value.

These changes will affect mainly commercial properties, not residential properties. I expect therefore that changes in residential property rates thankfully will be minimal.

A fairer system of valuation that will not be seen that way this year.

Externally imposed Rate Capping is Dead

Labor warned us a day ago. They confirmed today that they would join the cross benches and vote the Government’s bill down. Externally imposed rate capping is dead as a result.

 

Rate Capping is DeadSo up go the headlines. Rate capping Dead. No, externally imposed rate capping is dead.

The fact of the matter is, the Government’s Rate Oversight Bill is doomed.  As I have explained before the Government’s bill was not so much about rate capping as it was about an external body setting a cap on council rates.

This is good news for the local government industry. With due respect to ESCOSA, the body earmarked to be the oversee-er, you (the local community) are the best overseer there can be in keeping rates down.

Good news in that the government has never been clear on what how the rates should be capped. We were led to believe by the CPI.

By doing so we were told the average rates would come down $ 500.00 . That claim by Minister Knoll was probably the trigger for the bill’s failure.

If this were true, with 26,000 rate payers, the City of Unley revenue of some $ 40m would reduce by  $ 13m. An extravagant claim by the Government. That Councils are so extravagant they can reduce their rate based revenue by a third. I defy anyone to shave $ 13m of the Unley budget and honestly believe that the Council would survive.

The bill is yet to be voted down in the Parliament however. Until the fat lady sings as it were.

All that aside, it is comforting to hear that the opposition appears to be heeding the call of our Local Government Association’s assessment of how the sector CAN be reformed. The sector can do with reforming. The Government could do well to jump on board and grab the agenda back.

85% of people agree with rate capping according to the Property Council. Who would have thought?

The debate on rate capping continues in the media, with the Property Council again taking the lead.  They conducted a survey showing 85% of people agree with rate capping.

 

Oh Really? Who would have thought that? Honestly. You don’t have to be Mandrake to understand that 85% of people agree with rate capping. Who wouldn’t.

This of course was a limited and a very simplistic a survey however.

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The question they should have asked is who is better placed to cap rates? Councils or a third party, namely ESCOSA.

 

The Bill before Parliament is not about rate capping. It is about shifting responsibility for setting rates from Council to a third party, another Government body.

 

Why not make Councils responsible for rate capping. In other words, it can be legislated. Just as other financial ratios Councils have to comply with are legislated.

Financial ratios such as:-

✔an operating surplus ratio.

✔a net financial liabilities ratio.

✔an asset renewal funding ratio or,

✔other rate related requirements.

Ratios as we are already required to do under sections 5(1), 6 & & of the Local Government (Financial Management) Regulations 2011.

 

The City of Unley voted against the Government’s Bill. This reads as we are against rate capping. Fact is we are not, as demonstrated by over the last 6 years.

We believe that setting your rate first and then cutting your cloth to suit is good policy.

Councils are better placed than a third party to do this. Using ESCOSA or other organisation to provide oversight to determine what the rate should be is on the contrary, bad policy.

It is bad policy because they do not have a relationship with you. They are also not accountable to you.

There is therefore no reason why the regulations could not be altered to achieve the government’s push for rate capping.

 

That is of course assuming their real intention is actually rate capping, not using rate capping as an excuse to control councils.

 

See Saw Margery Daw

See Saw Margery Daw Jacky shall have a new master. Jacky shall earn but a penny a day.

The seesaw is one of the oldest ‘rides’ for children, easily constructed from logs of different sizes. The words of “See Saw Margery Daw” reflect children singing this rhyme to accompany while playing on a see-saw.

This children’s nursery rhyme is being played out currently by our leaders. I refer to the rate capping saga that is being played out before us right now.

See SawAt one end of the see saw we already know is South Australia. At the other end we now find is New South Wales. Amazingly as the South Australian Government seeks to follow the lead of New South Wales and introduce rate capping we see New South Wales potentially going the other way. So. See saw Margery Daw is the game being played.

A year after the NSW Government scrapped its council amalgamations policy, the Committee for Sydney has released a report. Would you believe, a  report that is calling for the capping of council rates to be scrapped.

The report, A New Era for Local Government, calls for the end to ‘rate capping’. IPART (their equivalent of ESCOSA) sets the maximum amount NSW councils can collect in general revenue through an annual peg. It describes the annual rate peg as “a blunt instrument, with little economic rationale behind it, and which hinders local institutions on which much of our civic life depends”.

It is also calling for the establishment of a Council of Metropolitan Mayors to work alongside the Greater Sydney Commission and the introduction of a new fund to pay for local infrastructure.

Catch this, a levy on local rates to support local councils generate a pool of funds to expand and improve open space or maintain civic infrastructure, like roads and libraries or support town centre renewal. In other words, to allow Councils to catch up with their need to upgrade infrastructure.

Externally imposed Rate Capping I believe to be poor policy.

Externally imposed Rate Capping I believe to be poor policy. Poor policy that you will (in time) pay dearly for. I expect that your other representatives will also view it as poor policy. We will need to wait on Monday’s special council meeting to know however.

Balancing the BudgetThe Rate Oversight Bill being considered by Parliament is aimed at shifting oversight on Council rates. From you to another arm of state government.

We are accountable to you. They are not. Do you want a single philosophy (rate capping) decided by a body, not accountable to you, to determine what services are provided you by your local council.

We will consider this at Monday night’s special council meeting. In so doing we will not simply vote yes or no. We will consider and make public our reasons for our decision.

I for one continue to be concerned that the Bill is bad policy. I say this even though I and Unley support the rationale of setting the rate first and cutting your cloth to suit.  Council and its community are surely best placed to provide this oversight.

My primary concerns I have shared with you last night. Some of my other concerns, which I am sure we will discuss on Monday night, I put on record below.

Grant Funding

South Australian Councils receive the lowest per-capita share of state government funding in the country.

I ask, is this State Government ready to put their hands in their pockets to bring us in line with the rest of the country.  We have yet to hear from them on this.

I doubt it. It is more likely there will be a continuation of cost shifting to local government (see next).

Cost Shifting-Overview

As the Government promotes their intention to avoid you paying more than you need to for the services provided by your local government we must all ask what guarantees they are going to provide against cost shifting. Cost shifting is a practice for governments of both persuasions have thrust upon local government.

Mandatory Fees and Charges

Many of our services are subject to a fee for service. An example of cost shifting is services such as Development Assessment. As I indicated in a recent post, rate payers subsidise these services and substantially. This will be even worse since the larger development projects are now being assessed by the State Commission Assessment Panel.

Is this fair?

Will the new government and future governments ensure we can truly get cost recovery for this service? I doubt it. I doubt it very much.

Social Housing

One of the most significant cost shifting is (by default) the transfer of management of social housing to community housing providers. When the previous government did this they also legislated that these providers receive a mandatory 75% rate rebate on council rates.

A reduction in their costs but a reduction in our revenue. The loss of this income has been transferred to you by way of rate increases above CPI.

The current government has made no offer to reverse this.

Not a huge impact on Unley but for some councils prohibitive. Of course, much of the medium density housing is expected to be social housing.

Solid Waste Levy

Rate payers through their councils pay the State Governments solid waste levy. To fate, to the tune of $118m. Very little of this money has been used for the intended purpose which is to improve recycling.

And catch this. The rate has increased 1450% since 2001. 9% this year. Compare that to the amount your council rates have increased.

To date of course, there is no indication from the government that they will peg these astronomical increases or (better yet) remove the levy. Perhaps ESCOSA should be commissioned to set these rate increases rather than the government.

No! What we have learnt from them is they believe we should be able to absorb the increased costs we are to be burdened by due to the recent China refusal to take that same underfinanced recycled material.

Finally

I wonder too about such things as:

  • As intimated above, if the government is serious about ensuring value for money for rates and taxes maybe they should be mandating that ESCOSA, as an independent body, be given the responsibility for capping such things as state government taxes, levies, fees and charges.
  • Should ESCOSA have the power to fine councils for inadvertently breaching the cap, and to name and shame them publicly. Inadvertently. Fined. Shamed. How punitive is that.

All in all then, unless there are arguments that sway my current paradigm, I struggle to see the Government’s proposed legislation as anything other than poor policy. If it is passed then we are going to be severely challenged in complying.

A reminder. The special council meeting will be held in our Civic Centre, commencing at 7.00pm.

Is externally imposed Rate Capping Good Policy or Bad Policy?

Yes or No! Is externally imposed Rate Capping Good Policy or Bad Policy?  That is what I and my elected member colleagues will be considering at Monday night’s upcoming special council meeting.

We will be responding to the LGA’s request to determine if we accept or not the Government’s Rate Capping Bill, the Rates Oversight Amendment Bill.

Is an externally imposed Rate Capping Good Policy or Bad Policy? Readers of this blog site would be well aware of my views on rate capping from previous blog posts. There are many, most recently the one you can find here.

As I noted in my last blog post, on Monday night I will be called upon to vote on whether or not the City of Unley opposes the Government’s Rate Oversight Bill or not. A Bill designed to provide 3rd party oversight into the setting of local government rates.

 

ESCOSA

ESCOSA logo

 

The Bill nominates ESCOSA as that 3rd party. This is the body that has provided oversight into the massive hikes in costs to the community of water and power since around 2000. SA Power prices we all know are the highest in the world. Not sure therefore of the wisdom of this.

So. Is External Rate Capping Good Policy or Bad Policy?

As I have often said Unley understands the value of rate capping. Self imposed rate capping that is. Striking a rate first and then cutting your cloth to suit is a sound financial strategy.

We have been doing this for some 6 years. When we undertake a new project we consult extensively with our community. More than most and definitely more than the legislation covering us requires. At budget time when we are prioritising these projects, we consult again.

I am far from convinced that the State (through ESCOSA) setting a rate cap is in your best interest. On the contrary, if the State were to mandate all Councils follow our lead I would be in support.

They will determine what the rate rise will be for an industry they have no knowledge of. An industry that already has, I believe, strong oversight. Oversight provided by you, by way of public consultation and by way of the ballot box every 4 years. Oversight not available in the power or water industries.

At what cost?

This then is my primary concern. At the very least their Bill will add a cost burden on you through your rates because we will have to pay ESCOSA for their overseeing of us, just as the Power industry and the water industry does. The Government will not be funding them. And, we do not yet know what this cost will be.

To add further salt on the wound, if you & your council believe there is a project worthy of us applying  for a variation we will be asked to either consider not doing something else we currently do for our community or convince them that you understand the implications of doing it. At a cost by the way for them to assess the variation, catch this, of $ 40,000.00. You heard that right. Add $ 40,000.00 on top of whatever the project cost is for them to assess its merit.

How do you feel about this prospect?

Please watch out for further questions and concerns I have on your behalf.

 

Rate Capping passes the Lower House and awaits the Upper House.

Rate Capping passes the Lower House and awaits now reaction of the Upper House. The Local Government Industry in the meantime, is assessing the Bill presented to Parliament by the Government.

 

Rate Oversight Bill

RTe Oversight Bill

The Rate Oversight Bill which presents rate capping and which can be found here seeks to place authority in a (3rd) independent party for setting future rate increases in local government.

The Government is doing this to restore faith, they tell us, in Local Government. That said polls suggest that Local Government is the most trusted of the three levels of Government. That said, is this good policy or not. Is it bad policy.

While it has passed the lower house, where the Government has the numbers, its passage through the upper house does not look all that promising for those keen to have rate capping. Opposing the legislation are Mark Parnell (the Greens) and Frank Pangallo (SA Best). John Darley is leaning towards accepting but is unsure. The Labor Opposition are likewise yet to determine their position, even though it has passed the lower house. In both cases I suggest they are awaiting the response to the Bill from the Local Government Industry.

Is it good policy or not. What is the view of the Local Government Industry and indeed your own local Council, the City of Unley?

We will be considering this on Monday night at a special council meeting, convened to consider this very question. I invite you to come along and hear the debate. The venue for the meeting will be the Unley Civic Centre. It will commence at 7.00pm. The agenda will be available on line from Thursday here.

There are a number of questions in my mind that concern me, particular given the evidence overseas and interstate when rate capping has been introduced. I will reveal these in a subsequent blog post. Watch this space.

 

Unley Community has been a shining example for all Local Government Communities

The City of Unley Community has been a shining example for all Local Government Communities. 117 of our citizens have contributed to our 2018/19 budget. 29 of those attended our public meetings.

Thank you for your contribution.

This follows the example set last year. It is inspiring given in my 1st 3 years as a Councillor we had 1, 2 and then 4 people respectively attend our public meetings.

You have answered my call to stay with us in this climate of rate capping. Rather than rely on the Government to rate cap us you have taken the responsibility to encourage us to include what you want.

Last year your input impacted on the then proposed rate increase of 2.8%. You wanted more and to achieve it we lifted the increase by 0.2% to 3.0%. This was still inside the rate cap we work on which is CPI plus 1%.

At our workshop on Monday night we had some tough decisions to make. Once again you wanted us to include more, and without suggesting cutting anything to accommodate the cost of the initiative you wanted.

Most of you were looking for even more environmental initiatives than we have already included. That said some of you weren’t too aware of what initiatives we had included. Next year we will need to be a lot clearer in detailing this.

A small handful of you wanted a reduction in rates and for us to focus on roads, rates and rubbish.

The budget will be finalised when Council meets formerly on the last Monday of this month. When we meet we will have to consider whether to include some of the extras being requested or not.

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If they are to be included we will need to consider whether to reduce our projected surplus, whether to reduce other services and/or to increase the rate.

Wish us well please in our deliberations.