Transcription
Wyndham CityVersion 2
Table of Contents1Introduction . 32Application of Legislative Requirements within Wyndham City’s Rating Strategy . 4Valuation Methodology . 4Declaration of General Rates, Service Rates, Service Charges and Municipal Charge . 4Application of Differential Rates . 4Municipal Charge . 5Service Charges. 53Characteristics and Objectives of Wyndham City’s Differentials in 2016/2017. . 6Sanctuary Lakes public works and service rebate (2016/2017) . 74Fire Services Property Levy . 7Introduction of the Fire Services Property Levy . 7Calculation of the Fire Services Property Levy . 7Council-Owned Properties to Pay the Fire Services Property Levy . 85Rates Assistance Package . 8Payment Arrangements and Payment Plans . 8Hardship Consideration . 86Payment Options. 87Factors Impacting on Rating Strategy Direction . 9Attachment 1. . 10Developed Land (2016/2017) . 10Commercial Developed Land (2016/2017) . 11Industrial Developed Land (2016/2017) . 13Residential Development Land (2016/2017) . 14Vacant Residential Land (2016/2017) . 16Vacant Commercial Land (2016/2017) . 17Vacant Industrial Land (2016/2017) . 18Farm Land (2016/2017) . 20Rural Lifestyle Land (2016/2017). 22Rural Vacant Land (2016/2017) . 232Wyndham City – Rating Strategy
Under the Local Government Act 1989, one of the objectives of a Council is to ensure an equitable impositionof rates and charges (Section 3C (2) (f)). The Local Government Act 1989 provides the framework for councilsto develop a rating strategy which is consistent with this objective.This Rating strategy will consider the rating options available to Council under the Local Government Act1989. These options include the following: 3What valuation base is to be used (Section 157)The application of a uniform rate across all properties (Section 160)The application of differential rating across property classes (Section 161)The application of fixed service charges for waste management and municipal administration(Section 162)The application of any special rates and charges (Section 163)Rate Payment Option dates (Section 167)Rebates and Concessions (Section 169)Hardship Relief and deferral of rates and charges (Section 170, 171 & 171A)Wyndham City – Rating Strategy
Under Section 3C of the Local Government Act 1989, a Council must ensure the equitable imposition of ratesand charges. Wyndham City therefore must apply this principle of equity when developing its RatingStrategy.Valuation MethodologySection 157 of the Local Government Act 1989 provides Wyndham City with three options in terms of whichvaluation method it will adopt in determining the distribution of the rating burden across all property classes.These valuation options consist of the following: Site Valuation (SV)Capital Improved Valuation (CIV)Net Annual Value (NAV)In determining which valuation method to adopt, Wyndham City must take into account the legislativerestrictions imposed in using each method.If Wyndham City adopts the Site Valuation or Net Annual Value to determine the distribution of the ratingburden, limitations are placed on the degree of differential rating which can be achieved (Section 161A).In adopting the Capital Improved Valuation method for the distribution of the rating burden, Wyndham Cityneeds to ensure any differential rate will contribute to the equitable and efficient carrying out of its functions(Section 161).Wyndham City Council convened a Rating Strategy Advisory Group (RSAG) in September 2013 to assist in thereview and development of its Rating Strategy. As part of this review, all 3 valuation methodologies werediscussed with the recommendation that Council adopt the CIV method of valuation.This Rating Strategy Advisory Group was also reconvened as part of the 2016 review. The RSAG hasrecommended that the Capital Improved Valuation method be maintained for the 2016/2017 financial year.Declaration of General Rates, Service Rates, Service Charges and Municipal ChargeUnder Section 158 of the Local Government Act 1989, Wyndham City must declare by 30 June each financialyear the following: The amount Council intends to raise by way of general rates, special rates, municipal charges, otherservice charges; andThe methodology adopted in the raising of the general rate:o Uniform rate;o Differential rate; oro Urban farm rate, farm rates or residential use ratesApplication of Differential RatesWyndham City may raise general rates by adopting multiple differential rates if it uses the capital improvedvalue system of valuing land and considers that the differential rates being applied contributes to theequitable and efficient carrying out of its functions. (Section 161)4Wyndham City – Rating Strategy
When a Council declares differential rates for the distribution of the rating burden across properties, theCouncil must also specify the objective as to why it believes the differential rate is consistent with theequitable and efficient carrying out of its functions.Each differential rate must also have: A definition of the types or classes of land which are subject to the rateA statement of the reasons for the use and level of that rateAn identification of the types or classes of land which are subject to the rate in respect of use,geographical location and planning zoning schemesWhen setting a differential rate, councils must also ensure the highest differential rate is no more than 4times the lowest differential rate.In determining their recommendations regarding differential rates for 2016/2017, the Rating StrategyAdvisory Group ensured legislative requirements were addressed and adhered to.Municipal ChargeWyndham City applies a Municipal Charge against all assessments (excluding government land). TheMunicipal Charge is levied under Section 159. The Municipal Charge is a levy to cover some of theadministrative costs of Wyndham City. This Municipal Charge must not exceed, in total, 20% of the sum ofthe total of general rates and the Municipal Charge combined.In the 2015/16 financial year, a municipal charge of 55.65 was applied.The Rating Strategy Advisory Group reviewed the retention of a Municipal Charge for the 2016/17 financialyear. The arguments for and against a municipal charge that were raised by the Rating Strategy AdvisoryGroup in considering this rating tool were:For Everyone shares administrative costs equallyUseful rating tool that can be used in conjunction with Differential rates to adjust the rating burden.Against Regressive tax which impacts on shifting the rating burden to lower valued properties.It was recommended by the Rating Strategy Advisory Group that the municipal charge be maintained for the2016/17 financial year as a rating tool used in conjunction with differentials.Service ChargesWyndham City has utilised service charges for the cost of waste services provided to residential properties.These services include a waste management service charge for the provision of household waste collectionand household recycling.Waste services are not provided to commercial, industrial or vacant land. As a result these properties do notpay for this service.The Rating Strategy Advisory Group reviewed the Waste Management charge and recommended thatCouncil continue to have a separate charge which reflects the cost of the services for the 2016/2017 financialyear.5Wyndham City – Rating Strategy
The Rating Strategy Advisory Group recommended the following structure be maintained for differentials inthe 2016/2017 financial year.Differential2016/2017DifferentialDeveloped land (Residential)Commercial developed landIndustrial developed landResidential development landCommercial vacant landIndustrial vacant landResidential vacant landRural lifestyle landFarm landRural vacant landRecreational landGovernment .0000.5000.500An explanation of each rating differential is provided in Attachment 1 of this document.The differentials have been developed through consultation with the Rating Strategy Advisory Group. Theprimary objective has been to ensure that the rating system is underpinned by principles of equity/fairness,simplicity, efficiency, sustainability, incentive and legislative compliance. Each differential has therefore beenassessed against these principles.The rating system also takes into account the demographics, land types and classes, council plan andstrategies and user benefit when considering the equitable sharing of the rates burden.These underlying principles have assisted in the review of the 2016/2017rating differentials.6Wyndham City – Rating Strategy
Sanctuary Lakes public works and service rebate (2016/2017)The Body Corporate that has been established for the Sanctuary Lakes Estate undertake a range of publicworks and services on behalf of residents of that development.Council has agreed to contribute an amount equal to that which would normally be spent by Council inproviding public works and services within the estate to the standard that Council applies across themunicipality. Payments towards the public works and services will be paid to the ratepayer via an annualrate rebate.The amount of the rate rebate for 2016/17 is 197.40 per rateable property within Sanctuary Lakes.The rebate provided is consistent with the costs that Council would otherwise incur and is cost neutral fromthe viewpoint of Council and other ratepayers.Introduction of the Fire Services Property LevyUp until 30 June 2013 Victoria, fire services provided by the Country Fire Authority (CFA) and theMetropolitan Fire Brigade (MFB) were funded by financial contributions from insurance companies, the StateGovernment and Metropolitan Councils.Services which the CFA and MFB provide consist of the following: Suppression of all types of fires Search and rescue, including road accidents Emergency Medical Response Emergencies on waters in Port Phillip Bay and other river systems Industrial accidents and hazardous material handling and storage incidents Supporting other agencies in emergencies Chemical, biological and radiological emergenciesThe Victorian Bushfires Royal Commission reviewed the structure of funding for the CFA and MFB andrecommended the replacement of the insurance-based Fire Services Levy with a property based levy. Thisrecommendation was introduced by the State Government in the form of the Fire Services Property Levycollected by Local Council’s effective 1 July 2013.Calculation of the Fire Services Property LevyEffective 1 July 2013, under the new Fire Services Property Levy model: Councils collect the levy through rates notices The levy is calculated based on the capital improved value of a property plus a fixed componentbased on property type. All leviable properties will be classified as one of the following property types:o Residentialo Industrialo Commercialo Primary Production7Wyndham City – Rating Strategy
o Public Benefito VacantThe fixed component in 2015/2016 was 104 for residential properties and 210 for non-residentialpropertiesA different rate in the dollar is also applied against the Capital Improved value for MFB and CFAareas. This is in recognition of the different costs associated with funding requirements of the CFAand MFB.In 2016/17, the Fire Services Property Levy will continue to be collected by Local Councils. To date, the newrates have not been provided by the State Revenue Office.Council-Owned Properties to Pay the Fire Services Property LevyUnder Section 20 of the Fire Services Property Levy Act 2012, the majority of Council-owned land is charged afixed fee of 210 (no variable capital improved value fee will apply). This flat fee applies to land such as parksand reserves. Council land which is subject to lease/occupation is however subject to a property typeclassification in line with all other rateable propertiesPayment Arrangements and Payment PlansWyndham City encourages all ratepayers who are experiencing difficulties with paying their rates to contactour Rating Services unit. A Rating Services Officer can assess ratepayers’ circumstances and work with themto come up with a mutually acceptable payment plan.Hardship ConsiderationWyndham City has had a process in place for considering hardship since 1988. Ratepayers facing difficultpersonal or financial circumstances can be considered for hardship relief. If a ratepayer is deemed to beexperiencing hardship, Council will provide the following assistance: Accept a payment plan which might otherwise not be agreed upon Provide an interest waiver for the entire hardship consideration periodThe initial period of hardship consideration is 12 months. This period may be extended when reviewed at theconclusion of the 12 month period.There are two options available under the Local Government Act 1989 for Wyndham City to set paymentdates. A lump sum payment option ( this is a non-mandatory payment option which Wyndham City doesnot offer) Payment by instalments (a mandatory payment option, which Wyndham City uses)Under the paying by instalments option, a ratepayer can elect to make advance payments on theseinstalments at any point.8Wyndham City – Rating Strategy
In developing the Strategic Resource Plan and the 10 year long term financial plan, rates and charges wereidentified as an important source of revenue, In addition, Council has in place a hardship policy (alreadyexplained within this strategy) to assist residents who may be suffering financial hardship due to a range ofpersonal circumstances.As stated earlier in this strategy, Council has considered all aspects of the Ministerial Differential RatingGuidelines in developing its rating strategy. The Rating Strategy Advisory Group and Council have alsocarefully considered the introduction of a Retirement Village differential, for the 2016/17 financial year. Therecommendations from the Rating Strategy Advisory Group did not support the introduction of a separatedifferential for retirement villages and Council’s rating strategy for 2016/17 has been kept consistent withthis recommendation.9Wyndham City – Rating Strategy
Attachment 1.Developed Land (2016/2017)Definition:Developed land is identified as any rateable land which is not: Commercial Developed Land Industrial Developed Land Residential Development Land Farm Land Vacant Residential Land Vacant Commercial Land Vacant Industrial Land Vacant Rural LandObjective:The objective of this rate is to ensure owners of land having the characteristics of Developed Land make anequitable financial contribution to the cost of carrying out Council’s functions.Characteristics:Developed Land is Residential Land on which a building is erected and the site is approved for occupation bythe issue of an occupancy certificate from Council and the site is available or used for residential purposes.The building types included within Developed Residential Land are: Detached houses; Attached houses; Strata title flats; and Strata title apartmentsLand which does not have the characteristics of Commercial Developed Land, Industrial Developed Land,Residential Development Land, Commercial Vacant Land, Industrial Vacant Land, Rural Lifestyle Land, RuralVacant Land or Farm Land will also be identified as Residential Land for differential rating purposes.Impact:The Act requires there to be a residential rate for the purposes of establishing differential rates.Quantum:Quantum is set as 1.0 in accordance with legislation.Rating ainabilityIncentiveLegislative Compliance10Yes – Takes into account capacity to pay and user benefitYes – Transparent and simple to understandYes – Practical and efficient to administerYes – Provides reliable revenuesNo – Does not provide any incentivesYes– Complies with legislation and Ministerial guidelinesWyndham City – Rating Strategy
Use and Level of Differential Rate:The differential rate will be used to fund some of those items of expenditure described in the ProposedBudget.The level of the differential rate is the level which Council considers is necessary to achieve the objectivesspecified above.Geographic Location:Wherever located within the municipal district.Use of Land:Any use permitted under the Wyndham Planning SchemePlanning Scheme Zoning:The zoning applicable to each rateable land within this category, as determined by consulting maps referredto in the relevant Wyndham Planning SchemeTypes of Buildings:All buildings which are now constructed on the land or which are constructed prior to the expiry of 2016/17financial year.Commercial Developed Land (2016/2017)Definition:Commercial Land is identified as land on which a building designed or adapted for occupation is erectedwhich is used for commercial purposes.Objective:The objective of the rate is to encourage commerce and ensure that the owners of the land having thecharacteristics of Commercial Developed Land make an equitable financial contribution to the cost ofcarrying out Council's functions.The Commercial Developed Land differential is higher than the Developed Land Differential for a number ofreasons including; Council's financial commitment to economic development initiatives; Commerce attracts non-residents and consequently additional demands on public infrastructure; Council rates and charges may be claimed as a tax deduction; and Commercial precincts demands on the environment are higher than residential areas.Characteristics:Commercial Developed Land is land on which a building is erected or the site is adapted for occupation andthe site is used for commercial purposes including: Retail shops; Offices; Services businesses, car parks, garden centres, car yards, boat yards, entertainment centres (themeparks), hotel and motels; and Land which has improvements and/or buildings used for commercial purposes.11Wyndham City – Rating Strategy
Impact:The current rating differential is 1.5, or 50% higher than the residential developed rate differential. Thus acommercial developed property currently pays 50% more in rates than a residential developed propertyassuming both have the same valuation.Quantum:A 0.1 differential between commercial and industrial developed land is deemed appropriate given the ‘scale’of industrial activity is generally much higher than commercial. It is recognised that these two rate groupsunderpin the financial and employment aspirations of Wyndham – if they are not strong and successful, itwill be much harder for Wyndham to thrive.Rating ainabilityIncentiveLegislative ComplianceArguable – residential rentals are being subsidised by commercialdifferential, though commercial often has higher capacity to pay and hastaxation benefitsYes – transparent and simple to understandNo – based on equity, the differential is not practical and cost effectiveYes – when compared to other Councils with differentialsNo – one reason is the tax deduction which applies mainly to commercialYes – Complies with legislation and Ministerial guidelinesUse and Level of Differential Rate:The differential rate will be used to fund some of those items of expenditure described in the ProposedBudget.The level of the differential rate is the level which Council considers is necessary to achieve the objectivesspecified above.Geographic Location:Wherever located within the municipal district.Use of Land:Any use permitted under the Wyndham Planning SchemePlanning Scheme Zoning:The zoning applicable to each rateable land within this category, as determined by consulting maps referredto in the relevant Wyndham Planning SchemeTypes of Buildings:All buildings which are now constructed on the land or which are constructed prior to the expiry of 2016/17financial year.12Wyndham City – Rating Strategy
Industrial Developed Land (2016/2017)Definition:Industrial Land is identified as land on which a building designed or adapted for occupation is erected whichis used for industrial purposes.Objective:The objective of the rate is to encourage industry and ensure that the owners of the land having thecharacteristics of Industrial Developed Land make an equitable financial contribution to the cost of carryingout Council's functions.The Industrial Developed Land differential is higher than the Developed Land Differential for a number ofreasons, including; Council's financial commitment to economic development initiatives; Council rates and charges may be claimed as a tax deduction; Industry attracts non-residents and consequently additional demands on public infrastructure; and Industrial demands on the environment are higher than other businessesCharacteristics:Industrial Land is land on which a building is erected or the site is adapted for occupation and is used forindustrial purposes including: Manufacturing industries Quarryingand the land is located in an industrial zone or other area in the Municipality.Impact:This rating differential currently is 1.6, thus 60% higher than the residential developed rate differential. Thusan industrial developed property currently pays 60% more in rates than a residential developed propertyassuming they have the same valuation.Quantum:A 0.1 differential between commercial and industrial is appropriate based on scale and capacity to pay. Thesetwo rate groups underpin the financial and employment aspirations of Wyndham – if they are not strong andsuccessful, it will be much harder for Wyndham to thrive. At the moment, there is evidence that bothcommercial and industrial sectors are finding it harder financially.The multiplier effect of manufacturing supporting 3 jobs in the community for every one directly employed isa strong argument for Wyndham to encourage industry – as a key employment base for a rapidly increasingresidential population.Rating riable – The data does not exist to make a firm assessment.Yes – The rating principle is simple, especially when measured against othertax forms such as personal income tax. For business, processing annual rateswould be considered simple when compared to many other aspects ofbusiness administrationYes – An understanding of Council’s administration process identifies howefficient this currently is.Wyndham City – Rating Strategy
SustainabilityIncentiveLegislative ComplianceYes – The rating process and provision of income to Council is sustainablewithin the current economic climate. Any shift in the makeup of industrialpresence within Wyndham could lead to a need to reassess.Yes – Neighbouring Councils vary with their rates in comparison toWyndham. On balance of this benchmarking, Wyndham would be assessedas competitive.Yes – Complies with legislation and Ministerial guidelinesUse and Level of Differential Rate:The differential rate will be used to fund some of those items of expenditure described in the ProposedBudget.The level of the differential rate is the level which Council considers is necessary to achieve the objectivesspecified above.Geographic Location:Wherever located within the municipal district.Use of Land:Any use permitted under the Wyndham Planning SchemePlanning Scheme Zoning:The zoning applicable to each rateable land within this category, as determined by consulting maps referredto in the relevant Wyndham Planning SchemeTypes of Buildings:All buildings which are now constructed on the land or which are constructed prior to the expiry of 2016/17financial year.Residential Development Land (2016/2017)Definition:Residential Development Land is identified as land located within an urban growth zone where: a planning permit authorising the subdivision of the land has been issued; and no principle place of residence exists on the subdivided land.Objective:The objective of the rate is to encourage development for residential purposes and ensure that the ownersof the land having the characteristics of residential development land make an equitable financialcontribution to the cost of carrying out Council’s functions.The Residential Development Land differential is higher than the Developed Land Differential for a number ofreasons, including; To assist in the management of sustainable growth across metropolitan Melbourne; and Encourage residential subdivisions at a sustainable level ensuring sufficient supply.Characteristics:Land located within an urban growth zone where: a planning permit authorising the subdivision of the land has been issued; and no principal place of residence exists on the subdivided land.14Wyndham City – Rating Strategy
Impact:This rating differential currently is 1.7 multiplier thus 70% higher than residential developed rate differential.Thus a Residential Development property currently pays 70% more in rates than a residential developedproperty assuming they both have the same valuation.Quantum:The 1.7 differential is deemed appropriate as owners of this land are generally large corporations whopurchase this land to derive their profit from the long term capital gain, and control its release to maximiseprice / capital gain. This profit generation is not contributing to the Wyndham community.Rating ainabilityIncentiveLegislative ComplianceYes – The differential meets some of the disadvantages experienced byCouncil due to other authorities having funds tied up in providinginfrastructure needed to progress development.Yes – The rating principle is simple in comparison with other forms of taxesand business administration.Yes - The process does not impact on the efficiency of the current practiceYes - Wyndham has a significant challenge in dealing with residentialdevelopment land. It must balance the cost of development and providingservices and infrastructure. Ratepayers cannot fund further developmentinfrastructure with inadequate contribution from those driving thedevelopment.Yes - the continuing activity of developers securing land in Wyndham wouldconfirm that current practices are competitive.Yes - Complies with legislation and Ministerial guidelinesUse and Level of Differential Rate:The differential rate will be used to fund some of those items of expenditure described in the ProposedBudget.The level of the differential rate is the level which Council considers is necessary to achieve the objectivesspecified above.Geographic Location:Wherever located within the municipal district.Use of Land:Any use permitted under the Wyndham Planning SchemePlanning Scheme Zoning:The zoning applicable to each rateable land within this category, as determined by consulting maps referredto in the relevant Wyndham Planning Scheme15Wyndham City – Rating Strategy
Vacant Residential Land (2016/2017)Definition:Vacant Residential Land is identified as land on which no building designed or adapted for occupation iserected and the land is located within a Residential or Township Zone.Objective:The objective of the rate is
The methodology adopted in the raising of the general rate: o Uniform rate; o Differential rate; or o Urban farm rate, farm rates or residential use rates Application of Differential Rates Wyndham City may raise general rates by adopting multiple differential rates if it uses the capital improved
