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.

Providing Local Leadership: Ensuring Financial Responsibility.

Ensuring financial responsibility is one of the major obligations of an elected member of Council. Without financial responsibility there is no limit to what a Council could charge its ratepayers for the services they provide.

 

Ensuring Financial ResponsibilityCouncils have an obligation to provide services to their community. Many of these are mandated by the Local Government Act. Many are the result of Council responding to community needs over time.

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They have however a responsibility too, to keep expenditure on these services to a level our community can afford.

Whatever the impetus behind the provision of a service they do come at a cost. Every time Councillors make a decision at a Council meeting it invariably means the commitment of dollars ($). Quite frequently it also means adding to the long-term cost of running the Council.

Initiatives like changing footpaths from bitumen paved to paved with concrete pavers not only come at a one time cost. They also add to the long term budget. Such an exercise adds to the budget for (in this case) in excess of 20 years just to make it happen.

It adds permanently to the maintenance budget as well. Maintaining concrete/brick pavers come at a cost well in excess of bitumen. Why?

Pavers last longer than bitumen. They are not flexible however and easily create trip hazards we would not see with bitumen. A decision by Council decades ago has impacted on all of us. The cost to you and I of this decision is significant.

The current council has been very conscious of this impact.

We have been very discerning about the decisions we make as a result. Those members who continue (I hope I am one) will take this same responsibility going forward.

We have in my opinion kept rate rises to an absolute minimum. As I have blogged before, we have been imposing a rate cap on ourselves for the last 6 years or so. We have delayed therefore projects and not included initiatives requested by our community because of it.

It is my intention to continue providing local leadership by ensuring financial responsibility with my contribution in all the decisions we make.

That said, we also do not need any external oversight, other than from you.

Authorised & printed by Don Palmer. 19 Kelvin Avenue, Clarence Park.

Providing Local Leadership: A glimpse into the future

For all we have achieved together, as I noted in my last blog we have much still to achieve into the near future.

Providing Local Leadership and Working For YouFor a glimpse into the future read on as I summarise what I see as the challenges going forward. Challenges which requires proving local leadership. The following summarises what lies ahead of the Clarence Park Ward. Watch for future blogs over the next couple of weeks for more detail.

Goodwood Oval Precinct Redevelopment.

Since Jayne Stinson secured a $2.0m grant from the previous government before the last State election much has happened. Much is still left however to do at Goodwood Oval however. I will release a series of blog posts in the next couple of weeks addressing each.

Millswood Croquet Club

 As the club marches toward its centenary it desperately needs a new clubroom. A future blog will review this in more detail.

Managing Higher Density

Watch for a future blog as I explain the need for continued vigilance to ensure any changes to our development plan are respectful of the amenity will all currently enjoy.

Local Economic Prosperity

Business and economic development for an area is a shared responsibility. Council should take the lead.

I am looking for Council to consider all of its businesses, including the forgotten majority. The home based businesses.

Ensuring Financial Responsibility

Rate Capping as one of a number of financial measures in setting our budget, and therefore the rate, ensures financial responsibility. Setting the rate first and cutting our cloth to suit.

This must be done by Council with you providing the oversight, not a State Government external body.

Communication with Council

Those of you that have issue with communication from Council would be well aware of my intention to see this improve. Look out for my strategy to achieve this.

I will always that said be ready to represent you and advocate for you when needed, to help you work your way through the bureaucracy.

Trees

Always a topical and emotional topic are trees. Providing Local Leadership to ensure the correct balance will the subject of a future blog.

Council matters outside Clarence Park Ward and outside City of Unley.

Believe it or not but there is life outside our boundary. I will explore some of these shortly.

Then there is need for providing local leadership input into State and Federal issues that impact directly on Clarence Park Ward.

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For more detail in each of these areas, and others, watch for my blogs on each. I will share each blog on Facebook.

Written & authorised by Don Palmer. 19 Kelvin Avenue, Clarence Park.

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.

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.

LGA Rate Capping Stance Prompts Call for LGA to be Dumped.

Everyone knows the State Government wish to impose rate capping on Local Government. We also know that the Local Government Association (LGA) has consistently opposed this.

Now some elected members are nervous of retribution by the State Government because of the LGA campaign.

Many are calling for the LGA to withdraw its campaign. Some for the sacking of the LGA. Others, including from within Unley, are calling for their Council to cancel their membership.

Hang on guys. We do not yet know what the Government is proposing or what form rate capping will take. We do not even know whether it will be approved by Parliament. When we do know then we will be able to direct the LGA to lobby on our behalf.

The question of LGA membership or the future of the LGA I addressed this morning in my LGA Lunatic Asylum blog post.

The question of rate capping remains however whatever happens in the LGA arena.

In my opinion, and from what I believe should be an Unley point of view, I still do not see a need for a State induced rate capping. I have written several blog posts covering this.

Let us recognize that Unley DOES have rate cappingRate Capping.

For the last six years we have set our rate first and adjusted our budget to suit. The cap we have set is CPI plus 1%.

During this time our rates have increased 25% compared to an average 41% in the rest of the industry.

This year we expect to be well inside this, maybe CPI plus 0.3%

.If other Councils were doing this then I venture to suggest the Government would not be threatening to impose an external cap.

Would it not be great if most Councils followed Unley’s lead? We would not be having any arguments now. Not rate capping. Not cancelling membership of the LGA etc.

New Initiatives form the basis of the rate increase proposed by the City of Unley for 2018/19.

New Initiatives form the basis of the rate increase proposed by the City of Unley for 2018/19.

As I indicated in my blog post of 22 April, Council is seeking your feedback on this year’s draft annual business plan and budget. A budget of new initiatives at around CPI to achieve.

Council’s budget reflects what I believe to be a more than appropriate approach. One that balances what I believe our community is seeking for us to add to our services with a rate increase that only all but matches CPI.

As seen by the table below our proposed increase is only marginally above CPI. The increase focuses pretty much only on new initiatives. Savings made in the last few years has meant we have kept our operating budget (those ongoing regular activities) at almost the current year’s figures.

The result is the rate increase we are proposing covers only new initiatives.

Initial Proposed Rate Increase 2.5%
ADD for impact of China Waste refusal 0.3%
TOTAL proposed rate increase 2.8%
CPI (annual to March 2017) 2.3%
Proposed New Initiatives 3.0%
(from table below) $ 1,241,500

In my blog post of 24 April, I highlighted the major initiatives, all of which are funded by loans. We have taken advantage of the low interest environment to fund works we had planned on doing later. These projects are shown in that blog post of 24 April.

The new initiatives that are the basis of this year’s rate rise are listed below.

New Initiatives

New Initiatives

 

Here’s are the questions for you.

Are you keen to see these projects undertaken. If not which ones. If you are but you don’t like the cost impact on your personal budget which of our normal activities would you like to see removed or scaled down.

Let us know by one of the many ways I indicated in my 22 April Blog Post.

 

The Future of Local Government-Local Government in Crisis

Local Government in Crisis was the topic of a summit I attended recently on behalf of the City of Unley in Melbourne.

 

As testimony that local government (worldwide) is in crisis the leaders of the summit sited the election of Donald Trump and Brexit. To build on this a key note speaker spoke of the crisis being faced by the City of London.

 

Curious examples I would have thought. An outsider being elected to the post known as the leader of the free world. A sovereign country leaving the European Union. The London Council, more like a State Parliament here.

Local Government in Crisis

Truthfully Governments, we all know, are in something of a crisis worldwide as evidenced by the examples given above. Does this drill down to local governments is the question to be answered?

 

Councils over in New South Wales it could be argued are in crisis. Theirs’s however is not one of people being disillusioned with them. It is under the pressure of forced amalgamations being imposed by the State Government. The people there indeed are actually fighting their State Government in support of the current Local Government model.

 

And back here in Adelaide the LGA has conducted a survey which has indicated that local government is the most trusted level of government in this state. A far cry from what I was hearing in Melbourne.

 

Local Government to lead the way, not Local Government in Crisis

 

Backed by these last two observations what I do agree coming out of the Summit is that Local Government “can” lead the way to correcting the disillusionment in Government that the Trump, Brexit factor shows exists. So far from the catch cry being local government being in crisis it should be local government to lead the way in healing public government relations.

 

In other words, I agree with the manifesto that came out of the Summit. A manifesto that rests on a belief that the state of the nation and the health of our society depend on community-driven action in the neighbourhood, not just decisions made in parliaments or boardrooms.

 

Put another way, the crisis facing governments worldwide can only be addressed by a localist approach. And that my friends is the strength of Councils similar in size to the City of Unley.

 

 

Proud of our Community’s contribution to determining our next budget.

Before this year I have not seen much interest from our community in setting our yearly budget. This year I can honestly say I am proud of our Community’s contribution to determining our next budget.

So why am I proud of our Community’s contribution to determining our next budget?

Previously we have seen only between one and four members of the public turn up to our information sessions. This year we had in excess of 25. Numerous requests and observations were received on our have your say site, or by email or letter. This has followed on from the keen interest our community showed recently in the Unley Central DPA.

We have always had good community consultation on all manner of things. For some reason we have not on the budget itself. As a result, I believed this to mean our Community were telling us that they have already had their say on the various projects. More to the point they were happy to leave it to us to determine the priorities.

With the Sword of Damocles of the State Liberals rate capping promise for the next election sitting over our heads our community did not focus on this. Their attention was focused in lieu on the priorities of programs in the draft.

A significant portion of the observations we received focused on:

  1. Our being too much a “happy city” focused on events.
  2. There being too much focus on what they see as favouring the Sturt Footy Club.
  3. A concern over the first two possibly contributing to a reduction in spending on environmental issues.

Whilst I am proud of our Community’s contribution to determining our next budget we are yet to see what impact it has. I believe we will see Council make some meaningful adjustments in response to our Community.

State Government 2016-17 budget in black courtesy of Local Gov.

It has been just short of a week since the State Government 2016-17 budget was handed down. This was amid wide acclaim for bringing in a surplus that has previously escaped them. Thanks that is to councils and rate payers.

While the Treasurer trumps his State Government 2016-17 budget surplus of some $ 250 million many in the community are bemoaning council rate increases.

The facts are the State is doing well but mainly on the back of imposts and charges being collected via property taxes. Much of this is collected by Council.

Yes! As the Opposition promote rate capping because Councils can’t be trusted the state government, although ruling out a land tax, are using council rates as a stealth alternative.

Unprecedented increases in the Solid Waste Levy will see around $35 million per annum paid by councils by 2019/2020. This is despite the state government refusing to release $90 million of previously collected Waste Levy funding. More than a third of this was contributed by councils and rate payers. Councils have contributed $110 million to the Waste Levy over the past ten years and will contribute another $122 million to state government coffers over the next 4 years.

The state government is taking more and more property taxation – local government’s traditional and only tax base. The attached graph illustrates that the State is now raising 56% of property taxes to local government’s 44%. As I have noted in recent blog posts on rate capping less than 4% of tax nationally is collected by Councils. Adding to this state and federal budget decisions are squeezing council budgets from every direction and forcing ratepayers to pay more in rates.

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State Government 2016-17 budget

Curiously the rebate offered by the Government last year in lieu of the rebate deducted from council rates previously, is offered to help you (if you qualify) with a subsidy to help pay such things as your water and other utility rates, but NOT council.

Manufacturing Rate Capping

In the background of the Liberal Party rate capping threat we see councils announcing low rate increases this year. The City of Adelaide leading the way with a nil increase in rates. Is the industry now guilty of manufacturing rate capping.

Unley too is looking at a low increase, possibly 2.2% which is still in excess of CPI.

downloadThe scribes have challenged Adelaide’s proposed nil increase in the wake of also proposing a significant increase in loan funding. From a distance I question whether they are doing the right thing or playing politics.

Unley too, from within, have been similarly challenged.

Are these and other councils it must be asked, at the stroke of a key on their keyboard, using loan funding to avoid excessive rate increases.

I hope not because this adds weight to the Liberals argument. I hope not because it may show how councils will work their budgets in the wake of the potential of rate capping under a liberal government.

Some may believe this to be the case and certainly at least one of my colleagues views it this way. Such is the case at Unley that we will be looking at two possible scenarios this coming Monday when we vote on this years coming rate rise.

We had long been looking, after much work shopping and wrangling over what should be included in our budget and what should not, at an increase of 2.2%. We are now being asked by some within to consider 2.7% and reducing loan funding. One of us may likely vote against both because he relives we should be raising the rate by I believe 5% or more rather than faking with loan funding.

The debate on the night will be interesting and you might find the Unley Civic Centre the place to be for some enlightenment and/or entertainment. The question to be answered on the night will be the Unley Council’s interpretation of the nexus between rates and loan funding, which of course must be funded out of the rates.

 

Rate Capping by ESCOSA or Rates determined by Elected Members

 Does the Liberal State Opposition believe Councils are incapable of running a tight budget?

 

Budget balancing

Following on from my previous blog posts on rate capping I ask the question whether the Libs believe that Councils are spending the rates they collect from you frivolously or not. Do they believe they are incapable of keeping rates at an appropriate level.

Keeping rates as low as possible is absolutely a goal to strive for.

I honestly believe that with the Sword of Damocles by way of elections  forever hanging over the heads of elected members they are only too conscious of having such a focus. Indeed does this not make them the most suitable candidates for keeping a lid on rate increases.

If the ratepayers are not happy with the rate rises or believe they are not being corrected directed toward services they want they will soon vote an elected member out. This they cannot do that with the members of ESCOSA should they oversee council budgets and rate rises.

Elected members must on the other hand be forever conscious of maintaining the infrastructure of the Council region and for maintaining the services the community has come to expect from them. They must be prepared to show leadership and ensure these services are not only maintained but improved.

They likewise need to be aware of or predict what services the community does not currently have that they might benefit from. And what of those the community will in the future expect.

Such projects/services will always be the subject of community consultation. Many projects included in a budget will already have been out to the public for consultation and the elected members therefore quite aware of the communities position in respect of them. Others like the one mentioned in my last blog will be included in the budget and then get consulted on. Some of these projects may not happen and any budget allocation covering this allocated elsewhere or used to reduce debt.

 

To Cap Council Rates or not-that is the question.

As I sit down tonight and over the weekend to deliberate on the agenda of a special council meeting set for next Wednesday night that is the question I ponder. Whether there is a justification for an outside body to cap Council rates or not.

This meeting has been called outside our normal schedule of council meetings because it is that time of year again. The time when we start to consider our draft annual business plan and budget.

Goyder - Steven GriffithsThe time when media attention is focused on rate increases and curiously not annual business plans. It has come early this year with the private members bill by the Hon. Steven Griffiths on rate capping tabled in State Parliament.

We heard from politicians, from experts and the public itself.  There may be a reasonable argument for rate capping and it is appropriate that we have a discussion about it. Is the debate I ask focusing on the real issue though?

I suggest it is not so much rate increases and whether they are too great or not but the manner in which they (but more importantly) the annual business plan they represent are endorsed. The LGA have argued against a body such as ESCOSA overseeing rate increases and that the current realm of public consultation is better.

I am not convinced using ESCOSA is an economically viable approach to ensuring rates are kept in balance. Why? This adds yet another layer of bureaucracy that has to be paid for, probably via the rates. It will likely increase the cost to council too because now they will have to prepare an annual presentation to ESCOSA as well as the public. That is of course unless the bill seeks to exclude the public from the process.

Unlike assessing rate increases for power or water ESCOSA would have to assess each council’s program noting there are vast differences between councils, how they are run and the programs they provide for their own communities. To treat all councils otherwise with a generic rate increase would not recognise these differences. It may be well more than some councils need but place others in financial hardship, particularly over the long term.

Equally I question the LGA claim however that our communities are consulted. This can on the surface be challenged. In the 5 years I have been present to watch our own community consultation I have seen no more than 5 people attend the public forum we provide to allow the public to contribute. On one occasion there was only one. This is hardly public consultation and difficult I would suggest to defend.

Having said that a large portion of our annual budget will have been set by decisions made by council in the months and meetings and indeed years gone by. Many of the projects being included in the current budget will have had large public consultation prior to being endorsed for implementation and prior to them being considered in a budgetary process. So arguably there has been prior consultation albeit on a project per project basis and not with consideration of how do we pay for it or which do we give priority to.

When an annual plan is put to the public whether to one or hundreds or thousands my experience is that there is no choice, no opportunity to prioritise. This should be given some thought by the local government industry. Provide choice with evidence of how much each initiative or project affects the rates and we would then have a considered input from the public from which councillors can then make decisions rather than them have sole prerogative on the priorities.