Rating Strategy green paper

Introduction
Council is about to prepare its 2018 Rating Strategy.

The Strategy will apply for the three years from 2018-19 to 2020-21 and will guide how Council shares the rates burden across the entire community. As rates revenue is Council’s major source of revenue and directly impacts property owners and leases of commercial properties, it is crucial the principles which underpin the strategy are based upon the expectations of the community.

As a result, Council is engaging in an extensive consultative process before preparing the strategy.

Aims of this survey
The aims of the survey are:

To advise the community of the issues/themes that should form the guiding principles for the preparation of the 2018 Rating Strategy
To encourage community consideration of these themes; and
To elicit further feedback, and if required, to further develop the guiding principles.

It is felt this will ensure the principles that underpin the 2018 Rating Strategy will, as much as possible, reflect the broad aspirations of the community.

What has occurred so far?

Part of the preparation of the 2018 Rating Strategy was to seek comment from a number of community representative groups from throughout the shire. The aim of this was to identify key themes and issues that were important to the community that could then be taken into consideration in preparation of a draft rating strategy.

Invitations were therefore sent to the following selected groups/organisations inviting them to prepare a submission and present their views to a Briefing Session of Council. It was felt these groups represented the main sectors within the shire (i.e. business, farming and residents). The organisations/groups invited were:-

Group organisation	Representing interests of:
Associated Kiln Driers (AKD)	Industry/significant employer
Apollo Bay Chamber of Commerce & Tourism (ABCC)	Business sector covering Apollo Bay area
Victorian farmers Federation (VFF)	Farming Sector (particularly dairy industry)
Colac Business Inc. (CB Inc.)	Business sector covering Colac area
Colac Otway Ratepayers & Residents Association (CORRA)	Ratepayers and residents shire wide
Otway Forum (OF)	Ratepayers and residents in Otway area

In addition, 31 other community groups/organisations were invited (by emails sent on 24th August 2017) to submit written submissions.

Five of the six selected organisations/groups elected to participate and make submissions to Council.

One community group from the 31 other groups submitted a written submission.

The presentations were scheduled to be delivered at Briefing Sessions of Council on 4th and 18th October 2017. Due to a scheduling delay on 4th October ABCC & OF were rescheduled to the 11th October 2017 and due to an overrun of Council briefing on 18th October, when CORRA , Colac Business Inc. and the VFF were scheduled to appear, representatives of CORRA and Colac Business Inc. elected not to give their presentation and VFF gave an abbreviated presentation.

Colac Business Inc. and CORRA both subsequently emailed details of their submissions to officers rather than be re-scheduled to appear.

Scope of rating strategy
It was acknowledged that a “rating strategy” can be an abstract concept for many and that many may focus on the more basic issues of how much rates are to be raised and/or how rates revenue should be spent etc. Issues such as how much rates are raised and how they are spent are determined as part of Council’s budget process and are not part of the rating strategy.

As the focus of the Rating Strategy is to determine how the total rates burden is to be shared across the community, (rather than how much is raised and how it is spent) the following topics were suggested as in scope for consideration:-

Do the existing rating categories adequately capture all property types?
Should Council have a differential rating structure?
Are the existing differentials between rating categories appropriate and fair?
If assistance is to be given to one rating category, what will be the effect on other rating categories?
Should Council raise a greater/less percentage of its total income from the Municipal Charge than it currently does?
Is the level of pensioner rates concession adequate?
Should capacity to pay be taken into consideration and if so, how is this assessed?
Should Council apply annual rate increases to the limit of the State Government’s rate cap?
If it doesn’t, what are the long term effects?

It should also be borne in mind Council has a number of legislative requirements it must comply with insofar as levying rates and charges is concerned. These requirements are primarily referred to in the:-

·         Local Government Act 1989

·         Valuation of Land Act 1961

·         Ministerial Guidelines for Differential Rating – April 2013

The Survey
The following are the key four area's we are seeking feedback on, please free to provide any views you may have on the specific questions/themes we raise, please note the above scope section to limit your discussion to what is in scope for the rating strategy.

Question Title

* 1. Do we retain differential rating categories?

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* 2. There were differing views expressed, such as:-

That the Farm differential needs to be greater (i.e.: reduced to 55% of the base rate)

The Holiday rental differential should be reviewed (i.e. increased) to encourage property owners to provide full time permanent rental instead of short term holiday rentals (in order to develop the community)

That any change to the Farm rate in dollar should be based on economic analysis that considers their overall taxation situation

That all businesses (Commercial, farm & Holiday rental) should pay the same rate in the dollar

That a separate rating category be created for the coast (i.e. at 80% of the base rate).

Please provide any comments you may have related to the above views expressed?

Question Title

* 3. There are opposing views regarding the Municipal Charge, ranging from increasing it to raising the maximum allowable 20% of revenue to abolishing it all together, please provide any comments you have on this matter.

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* 4. The need for rates to address concerns around fairness and equity was a dominant theme of the feedback we received, the views appear to be that:-

Council should consider a person’s ability to pay

Property owners of similar socio-economic levels should pay the same total amount of rates

Council should use the user pays model more extensively so ratepayers aren’t subsidising services they don’t use

The services provided in an area should be commensurate with rates paid by an area.

Please provide any comments you may have related to the above views expressed?

We sincerely thank you for your time and effort in providing the above feedback and assure you all feedback will be presented to Council for consideration in the process.