Ordinary Meeting of Council
10 May 2017
5.1
Ward:
PROPOSED 2017/18 DIFFERENTIAL RATES AND SPECIFIED AREA RATES
(All Wards)
(Financial Services and Rates)
Disclosure of Interest: Nil
Authorised Officer: (Executive Manager Stakeholder Relations)
KEY ISSUES
•
The adoption of the Annual Budget, and the Corporate Business Plan,
articulates how the City with deliver the next year of the Strategic Community
Plan. This is a requirement of the Local Government Act 1995 (the Act).
•
The Annual Budget process commenced with business planning in July 2016,
with numerous workshops and briefing sessions in order to achieve a balanced
budget. In developing the rating strategy, Council was mindful of the difficult
economic conditions. The City has utilised the current values as at 31 March
2017 to determine the total rates revenue per differential rate type based on
the proposed 3% increase on the 2016/17 rate in the dollar. Based on this
proposed rates revenue, the City has recalculated the rates in dollar utilising
the new values provided by the Valuer General. It is also recommended that
the minimum rates remain the same (0% increase).
•
The Valuer General is currently in the process of finalising a general revaluation
of all properties within the City of Swan (both Gross Rental Values (GRV) and
Unimproved Values (UV)).
•
A key component of financing services and infrastructure is rates. The Act
(s6.36) requires intended differential rates to be advertised, for a minimum of
21 days for public comment prior to their adoption. This report is prepared to
consider both the differential rates and the specified area rates (SAR) to be
advertised for public comment. Although the Act does not require SAR to be
advertised for public comment, it is considered prudent to do so.
It is recommended that Council adopt the rating strategy as outlined in the Report and
give public notice in accordance with s6.36 of the Local Government Act 1995 of the
Differential Rates and the Specified Area Rates proposed for 2017/18.
BACKGROUND
The City’s Strategic Community Plan articulates the vision for the City, with the
Corporate Business Plan describing how that vision will be achieved over the next five
years. The Annual Budget describes how services and infrastructure will be funded for
the next year, with the Strategic Financial Plan setting out the financial plan for the next
ten years.
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Ordinary Meeting of Council
10 May 2017
A major component of any local government funding is property rates and as the City
uses differential rates, the City is required under s6.36 of the Local Government Act
1995 (the Act) to advertise the intended differential rates for public comment, prior to
adopting the differential rates. Public feedback will be considered by Council prior to
adopting the differential rates. The Annual Budget will be considered at the Ordinary
Council Meeting on 5 July 2017. Whilst there is no requirement to advertise Specified
Area Rates (SAR), the City has traditionally done so.
(s6.36) requires local governments to give a minimum notice period of 21 days for the
proposed differential rates and to consider any submissions received. The proposed
differential rate can then be imposed, with or without modifications.
The intent behind adopting differential rates is to take into account the levels of services
provided to different types of properties, to reflect the cost of provision of services to
those categories of properties as well as the need to encourage specific types of
activities within the City.
DETAILS
The City has experienced considerable growth over the past few years, generating
increased demand for the services and infrastructure. In addition, the State Government
has significantly increased charges that the City cannot avoid. This places pressure on
the ability of the City to fund necessary services and infrastructure.
In considering the demands and needs of the community, Council is mindful of the
downturn in the economy and the capacity of ratepayers to pay. In accordance with City
plans, strict fiscal discipline has facilitated a balanced budget.
The City has utilised the current values provided as at 31 March 2017 to determine the
total rates revenue per differential rate type based on the proposed 3% increase on the
2016/17 rate in the dollar. Based on this proposed rates revenue, the City has
recalculated the rates in dollar utilising the new values provided by the Valuer General.
It is also recommended that the minimum rates remain the same (0% increase).
The draft budget for 2017/18 proposes levying general rates of approx. $120.2m
($113.7m in 2016/17) to meet the City’s cash requirements for Operating and Capital. A
further $2.6m will be raised from Specified Area Rates.
Three per cent or approximately $3.6m of General rate revenue will continue to be
allocated to the Asset Replacement Reserve. This will provide additional funds to
upgrade ageing infrastructure within the City.
Determination of rate revenue for 2017/18
Rates modelling is conducted with data extrapolated using values that exist in the rates
database. These models give Council an indicative predetermined total rates revenue
figure based on the valuations at the time of calculation. This does not include the new
revaluations as these are not supplied until later in the financial year by the Valuer
General.
Where no revaluation of properties is applicable in a budget year the percentage change
is applied to the current rate in the dollar. For gross rental value (GRV) properties a
revaluation is undertaken every three years. The methodology to determine the total
rates revenue is the same regardless of whether the revaluations are received or not.
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Ordinary Meeting of Council
10 May 2017
For unimproved value (UV) properties a revaluation is undertaken every year.
The following process applies this financial year for both UV and GRV properties.
Knowing the percentage (%) increase Council intends to apply for 2017/18 (3%), the
current values in the system are used to determine the total rates revenue per
differential rate type. The minimums per differential rate if required would also be
adjusted accordingly depending on the percentage change. The 2017/18 minimums are
proposed to stay the same as 2016/17.
Using current valuations in the system, the differential rates in the dollar for 2016/17 for
each category is increased by 3%. The minimum differential rate of $845 is proposed to
stay the same of $845.
It is to be noted that Council has no control over the values supplied by the Valuer
General. The City has been advised by the Valuer General that the 2017/18 revaluation
is based as at 1 August 2015.
Following the receipt of the new gross rental values (revaluation) the rate in the dollar is
recalculated to derive the same total rates revenue as determined above.
Methodology
Step 1 – 2016/17 rate in dollar x proposed % increase = proposed rate in
dollar
Step 2 - Current Values x proposed rate in dollar = Amount Levied (including
minimum rate)
Step 3 - Amount Levied (as above) divided by the new values (revaluations
as of 1 August 2015) = Proposed rate in dollar (including minimum rate)
As a direct result of individual changes in the valuation of each property, the rates levied
per property will fluctuate each year regardless of the percentage change adopted by
Council.
Gross Rental Values
The City is proposing that the minimum rate remain the same as 2016/17.
The above methodology for gross rental values has been applied as follows:
Step 1 – All differential rates in the dollar to be increased by the proposed 3% increase.
Step 2 – The City has utilised the current values as at 31 March 2017 to determine the
total rates revenue per differential rate type based on the 3% increase on the 2016/17
rate in the dollar.
Step 3 – Based on the proposed rates revenue, the City recalculates a rate in dollar
utilising the new values provided by the Valuer General.
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Ordinary Meeting of Council
10 May 2017
Unimproved Values
At the 29 March 2017 budget briefing session Councillors indicated that they supported
the reduction in the number of categories from five to three. Previous categories of
Rural, Special Area and Landscape have been combined to form “UV General”.
The rate in the dollar for the three previous categories was averaged to create the
proposed rate in the dollar for UV General for 2017/18.
The City is proposing that the minimum rate of $845 remain the same as 2016/17.
The above methodology for unimproved values has been applied as follows:
Step 1 – All differential rates in the dollar to be increased by the proposed 3% increase.
Step 2 – The City has utilised the current values as at 31 March 2017 to determine the
total rates revenue per differential rate type based on a 3% increase on the 2016/17
rate in the dollar.
Step 3 – Based on the proposed rates revenue, the City recalculates a rate in dollar
utilising the new values provided by the Valuer General.
The City expects to receive the complete revaluation files for both GRV and UV in May
2017. As the proposed differential rates in the dollars are based on the values provided
by the Valuer General Office as at 31 March 2017 they may be subject to change to
comply with the proposed percentile increase.
Specified Area Rates
Over the years, a number of SARs have been introduced as Council considers these
properties (a) have or will benefit from, (b) have access or will have access to, (c) have
contributed or will contribute to the need for the specific infrastructure that is provided.
The Act requires only one of these limbs (a, b, c) to be met, however Council consider all
three have been met as each SAR relates to drainage improvements, with one SAR also
including the upgrading of roads to an industrial standard. Each SAR also includes a
contribution from the City.
The Water Corporation does not perform drainage works, or levy a drainage rate, in the
Midland, Guildford, South Guildford, and parts of Woodbridge, Viveash and Hazelmere
Districts (apart from a small number of properties). The City is responsible for
construction and maintenance of drainage infrastructure within this area. Alternative
funding was required to fund these works.
Each SAR requires a further contribution by the City.
It is proposed that the rate in the dollar for each SAR be increased by 3%.
Midland District Drainage
Council introduced Specified Area Rates in 2004/05 as an equitable way of raising part of
the funds. It is proposed that the Specified Area Rate for Midland Drainage District be set
at 0.5709 cents in the dollar, and apply to all GRV rateable properties in the Midland
district.
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Ordinary Meeting of Council
10 May 2017
Hazelmere/Guildford District Drainage
Council introduced Specified Area Rates in 2004/05 as an equitable way of raising part of
the funds. It is proposed that the Specified Area Rate for Hazelmere/Guildford Drainage
District be set at 0.5709 cents in the dollar, and apply to all GRV rateable properties in
the Guildford, South Guildford, Woodbridge and parts of Viveash and Hazelmere Districts
(apart from a small number of properties).
Hazelmere Industrial Area Infrastructure
From 1 July 2015, Council introduced two (2) Specified Area Rates “GRV Hazelmere
Industrial Area Infrastructure” and “UV Hazelmere Industrial Area Infrastructure” based
on the basis of valuation applied to the property, GRV or UV. The City is responsible for
construction and maintenance of the roads and drainage infrastructure within this area.
The total cost to carry out these works over a number of years is estimated at more than
$57 million. Council introduced specified area rates as an equitable way of raising part of
the needed funds. It is proposed that the specified area rates be set at 3.288286 cents
in the dollar for GRV Hazelmere Industrial Area Infrastructure and 0.103650 cents in the
dollar for UV Hazelmere Industrial Area Infrastructure.
Specified area rate
Midland Drainage
Hazelmere/Guildford
Values
Rate in $
Levied
192,179,403
0.5709c
$1,095,397
52,609,307
0.5709c
$300,347
34,285,815
3.288286c
$1,127,416
126,478,000
0.103650c
$131,094
Hazelmere Industrial areaRoads and Drainage
GRV Properties
UV Properties
Total
405,552,525
$2,654,254
Proposed Rating Strategy for 2017/18
•
The rate yield for 2017/18 be based on a 3.0% increase, as per above
methodology tabled in the report.
•
Minimum Rates remain unchanged (0% increase) along with consideration taken
into account that no more than 50% of the number of properties per differential
rate category has the minimum applied.
•
Rate in dollar applied so that the maximum rate in the dollar is no more than
twice the lowest.
•
Interim rating to yield an additional $1m in 2017/18.
•
Ex-gratia rates are estimated to be $3.9m.
•
Provision for write offs will be $10,000.
•
Concessions for Sporting Clubs (75%) and Heritage listed properties (50%) are
proposed (criteria applicable).
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Ordinary Meeting of Council
10 May 2017
•
The Statement of Objects and Reason are detailed in attachment 1.
•
In accordance with section 6.45 of the Local Government Act 1995, a 5% interest
charge to be levied on rates instalments. Interest does not apply to current rates
due by registered Pensioners and Seniors.
•
In accordance with section 6.51 of the Local Government Act 1995, Council will
charge penalty interest at 11% per annum on a daily basis on all overdue rates
and if applicable Specified Area Rates Midland, Hazelmere & Guildford Drainage
Charge, Hazelmere Industrial Area Infrastructure GRV or UV outstanding. Penalty
interest does not apply to current rates due by registered Pensioners and Seniors.
•
Emergency Service Levy as determined by the Department of Fire and Emergency
will be included in the rate assessments.
•
Security levy for Ellenbrook and The Vines will remain unchanged at $100.00 and
$150.00, respectively.
•
Specified area rates for drainage and road infrastructure to be imposed in
2017/18.
•
Separate refuse charges will be levied in 2017/18 please refer to schedule of fees
and charges under waste management.
CONSULTATION
Nil
ATTACHMENTS
Statement of Objects and Reasons
STRATEGIC IMPLICATIONS
The raising of revenue through rates is in accordance with the Local Government Act
1995. The rates in the dollar are to be varied or confirmed by Council at the end of the
period of public comment, after due consideration is given to all responses.
STATUTORY IMPLICATIONS
Local Government Act 1995
Local Government (Financial Management) Regulations 1996
Valuation of Land Act 1978
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Ordinary Meeting of Council
10 May 2017
FINANCIAL IMPLICATIONS
The proposed differential rates, minimum payments, ex-gratia rates, and specified area
rates, together with interim rates due to growth, is expected to yield a total rate revenue
of approximately $122.9m in 2017/18.
VOTING REQUIREMENTS
Simple majority
RECOMMENDATION
That the Council resolves to:
1)
Advertise the following differential rates and minimum rate for the 2017/18
financial year.
Category
Rate in $GRV
Minimum rate
Residential
7.2709c
$845.00
Commercial/Industrial
9.5299c
$1,340.00
City Centre
9.3462c
$1,340.00
14.5417c
$1,620.00
Rate in $UV
Minimum rate
Farmland
0.26507c
$845.00
UV General
0.36614c
$845.00
UV Commercial
0.52590c
$845.00
Heavy Industry
Category
2)
Adopts the Objects and Reasons for each differential rate as shown in
Attachment 1.
3)
Advertise the following Specified Area Rates for 2017/18 financial year:
Area
Rate in $
Midland Drainage
0.5709c
Hazelmere/Guildford Drainage
0.5709c
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Ordinary Meeting of Council
10 May 2017
Hazelmere Industrial Area Infrastructure - Roads and Drainage
GRV properties
3.288286c
UV properties
0.103650c
REVISED OFFICER RECOMMENDATION
That the Council resolves to:
1)
Advertise the following differential rates and minimum rate for the 2017/18
financial year.
Category
Rate in $GRV
Minimum rate
Residential
7.3164c
$845.00
Commercial/Industrial
8.9287c
$1,340.00
City Centre
9.3358c
$1,340.00
14.6327c
$1,620.00
Rate in $UV
Minimum rate
Farmland
0.26507c
$845.00
UV General
0.36930c
$845.00
UV Commercial
0.52590c
$845.00
Heavy Industry
Category
2)
Adopts the Objects and Reasons for each differential rate as shown in
Attachment 1.
3)
Advertise the following Specified Area Rates for 2017/18 financial year:
Area
Rate in $
Midland Drainage
0.5866c
Hazelmere/Guildford Drainage
0.5947c
Page 8
Ordinary Meeting of Council
10 May 2017
Hazelmere Industrial Area Infrastructure - Roads and Drainage
GRV properties
3.323380c
UV properties
0.104385c
MOTION that the Council resolve to:
1)
Advertise the following differential rates and minimum rate for the 2017/18
financial year (based on 1.8% rates increase);
2)
Adopts the Objects and Reasons for each differential rate as shown in Attachment
1;
3)
Advertise the following Specified Area Rates for 2017/18 financial year:
Rate in $
Area
Midland Drainage
0.5709c
Hazelmere/Guildford Drainage
0.5709c
Hazelmere Industrial Area Infrastructure - Roads and Drainage
GRV properties
3.288286c
UV properties
0.103650c
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Ordinary Meeting of Council
10 May 2017
4)
The reason given for changing the recommendation is that 1.8% is a more
appropriate level of rate increase as it is aligned with the local government cost
index.
(Cr Johnson - )
MOTION LAPSED due to the lack of a seconder.
MOTION that Council resolve to adopt the staff recommendation.
(Cr Bailey - Cr Williams)
RESOLVED (13/1) TO:
That the Council resolves to:
1)
Advertise the following differential rates and minimum rate for the 2017/18
financial year.
Category
Rate in $GRV
Minimum rate
Residential
7.3164c
$845.00
Commercial/Industrial
8.9287c
$1,340.00
City Centre
9.3358c
$1,340.00
14.6327c
$1,620.00
Rate in $UV
Minimum rate
Farmland
0.26507c
$845.00
UV General
0.36930c
$845.00
UV Commercial
0.52590c
$845.00
Heavy Industry
Category
2)
Adopts the Objects and Reasons for each differential rate as shown in
Attachment 1.
3)
Advertise the following Specified Area Rates for 2017/18 financial year:
Area
Rate in $
Midland Drainage
0.5866c
Hazelmere/Guildford Drainage
0.5947c
Page 10
Ordinary Meeting of Council
10 May 2017
Hazelmere Industrial Area Infrastructure - Roads and Drainage
GRV properties
3.323380c
UV properties
0.104385c
For: Crs Bailey, Elliott, Haynes, Kovalevs, Lucas, McDonnell, McCullough, McNamara,
Parasiliti, Trease, Wainwright, Williams
Against: Cr Johnson
Page 11
STATEMENT OF RATING OBJECTS AND REASONS FOR THE 2017/18 YEAR
In accordance with section 6.36 of the Local Government Act 1995 and the Council's "Notice of
Intention to Levy Differential Rates and Minimum Payments" the following information details the
objectives and reasons for those proposals.
The following rating principles are proposed in this Statement of Objects and Reasons for the
2017/18 rating year:
• Gross Rental Values apply to the following differential general rate categories; Residential,
Commercial/Industrial, City Centre and Heavy Industry
• Unimproved Values apply to the following differential general rate categories; Farmland, UV
General and UV Commercial
• Properties are rated according to the Town Planning zoning and/or predominant use of the
land with each having a separate calculated rate in the dollar to achieve greater equity
across all sectors
• Gross Rental Values (GRV) are re-valued every 3 years with the 1st July 2017 being
revaluation year
• Unimproved Values (UV) are re-valued annually
• Gross Rental Values and Unimproved Values are determined by the Valuer Generals Office
• The City has utilised the current values provided by the Valuer General Office as at 2 May
2017 to determine the total rates revenue per differential rate type based on the proposed
3% increase on the 2016/17 rate in the dollar. Based on this proposed rates revenue, the
City has recalculated the rate in the dollar utilising the new values provided by the Valuer
General
• The proposed rates model will yield approx. $120.8million in total rate revenue, this figure is
inclusive of ex-gratia rates, interims and write offs
• As in prior years, 3% of the rate revenue will be allocated to Infrastructure Asset
Replacement Reserve
• It is proposed to continue with Specified Area Rates "Midland Drainage District and
Hazelmere/Guildford Drainage District"
• It is proposed to continue with Specified Area Rates "UV - Hazelmere Industrial Roads and
Drainage" and “GRV - Hazelmere Industrial Roads and Drainage"
• Proposed to keep the 2017/18 minimum rates the same as 2016/17
The overall objective of the proposed rates in the 2017/18 Budget is to provide for the net funding
requirements of the City’s expenditure, after taking into account all other forms of revenue.
The formulation of a rating system is about achieving a means by which Council can raise sufficient
revenue to pay for the services it provides. Throughout Australia, the basis of using property
valuations has been found to be the most appropriate means of achieving rating equity; however,
the achievement of a wholly equitable rating system for all properties, in all areas, is a difficult task if
it is based on the property valuations alone. For this reason there is refinement options made
available, such as differential rating, which the City of Swan has elected to use.
The Valuer General’s Office (a state government agency) values all rateable land within Western
Australia and those values are forwarded to each Local Government. Two basis of valuations are
applied for the calculation of rates - Gross Rental Value (GRV) land used for non-rural purposes; and
Unimproved Value (UV) land used for rural purposes.
The Local Government Act 1995 sets out the basis on which differential general rates may be based
as follows:
Section 6.32 (1) of the Local Government Act 1995 states:
(1) When adopting the annual budget, a local government –
a. in order to make up the budget deficiency, is to impose a general rate on rateable land
within its district, which rate may be imposed either –
i. uniformly; or
ii. differentially
DIFFERENTIAL RATES
6.33. Differential general rates
(1) A local government may impose differential general rates according to any, or a combination, of
the following characteristics –
a. the purpose for which the land is zoned, whether or not under a local planning scheme in
force under the Planning and Development Act 2005;
b. a purpose for which the land is held or used as determined by the local government;
c. whether or not the land is vacant land; or
d. any other characteristic or combination of characteristics prescribed.
(2) Regulations may –
a. specify the characteristics under subsection (1) which a local government is to use; or
b. limit the characteristics under subsection (1) which a local government is permitted to
use.
(3) In imposing a differential general rate a local government is not to, without the approval of the
Minister, impose a differential general rate which is more than twice the lowest differential general
rate imposed by it.
(4) If during a financial year, the characteristics of any land which form the basis for the imposition of
a differential general rate have changed, the local government is not to, on account of that change,
amend the assessment of rates payable on that land in respect of that financial year but this
subsection does not apply in any case where section 6.40(1) (a) applies.
(5) A differential general rate that a local government purported to impose under this Act before the
Local Government Amendment Act 2009 section 39(1) (a) came into operation is to be taken to have
been as valid as if the amendment made by that paragraph had been made before the purported
imposition of that rate.
6.35. Minimum payment
(1) Subject to this section, a local government may impose on any rateable land in its district a
minimum payment which is greater than the general rate which would otherwise be payable on that
land.
(2) A minimum payment is to be a general minimum but, subject to subsection (3), a lesser minimum
may be imposed in respect of any portion of the district.
(3) In applying subsection (2) the local government is to ensure the general minimum is imposed on
not less than –
a. 50 per cent of the total number of separately rated properties in the district; or
b. 50 per cent of the number of properties in each category referred to in subsection (6), on
which a minimum payment is imposed.
(4) A minimum payment is not to be imposed on more than the prescribed percentage of a. the number of separately rated properties in the district; Or
b. the number of properties in each category referred to in subsection (6), unless the general
minimum does not exceed the prescribed amount.
(5) If a local government imposes a differential general rate on any land on the basis that the land is
vacant land it may, with the approval of the Minister, impose a minimum payment in a manner that
does not comply with subsections (2), (3) and (4) for that land.
(6) For the purposes of this section a minimum payment is to be applied separately, in accordance
with the principles set forth in subsections (2), (3) and (4) in respect of each of the following
categories —
a. to land rated on gross rental value;
b. to land rated on unimproved value; and
c. to each differential rating category where a differential general rate is imposed.
2017/18 Budget Proposal
The following are the proposed Differential general rates and minimum payments and Specified Area
Rates for the City of Swan for the 2017/18 financial year, to be effective from 1 July 2017.
GRV Differential Rates
Residential
Commercial/Industrial
City Centre
Heavy Industry
Rate in dollar ($)
0.073164
0.089287
0.093358
0.146327
Minimum Payment
$845
$1,340
$1,340
$1,620
UV Differential Rates
Farmland
UV General
UV Commercial
Rate in dollar ($)
0.0026507
0.0036930
0.0052590
Minimum Payment
$845
$845
$845
The above rate model including Ex-Gratia rates, Interims and write offs will yield approx. $120.8m in
rates revenue.
Specified Area Rates
Rate in dollar ($)
Midland Drainage District
0.005866
Hazelmere/Guildford Drainage District
0.005947
GRV Hazelmere Industrial Area Infrastructure 0.03323380
UV Hazelmere Industrial Area Infrastructure
0.00104385
Gross Rental Valuation (GRV)
The City has adopted differential rates in its Gross Rental Valuation area for Residential,
Commercial/Industrial, Storage Units, City Centre and Heavy Industry properties utilising valuations
supplied by the Valuer General.
Properties are rated according to the Town Planning Scheme or predominant use of the land.
The rates in the dollar are based on the general valuation as supplied by the Valuer General in
respect of gross rental values (GRV) effective 1st July 2017. It is to be noted from the Valuer General
that the GRV is based on a date of valuation being 1 August 2015 and that not all revaluations have
been received by the City.
The Valuer General is required to maintain valuations of all rateable land in Western Australia for
rating and taxing purposes. These values are assessed every three years by the Valuer General with
2017 the next revaluation year. Every property is valued as a date set by the Valuer General and this
is referred to as the Date of Valuation. Rating valuations are therefore assessed at a snapshot in time
reflecting the property market for the local area at the same time. This ensures consistency and
fairness in the allocation of rates.
The GRV's have been re-valued for 2017 by the Valuer General.
As the GRV has been reassessed, valuations may differ between the 2016/17 and 2017/18 financial
year. The next revaluation after 2017/18 for GRV will not occur until the 2020/21 financial year (3
years). GRV means the gross annual rental that the land might reasonably be expected to realise if
let on a tenancy from year to year upon condition that the landlord was liable for all rates, taxes and
other charges thereon and the insurance and other outgoings necessary to maintain the value of the
land.
The General Valuation Summary for City of Swan (GRV) 2017 is as follows:
Date of Valuation: 1 July 2017
Category
Residential
Commercial/Indust
rial
City Centre
Heavy Industry
TOTALS
# of
Assessments
49,782
3,389
Rateable
Values
907,703,493
317,255,947
2016/17 rate in
dollar
0.067751
0.082835
2017/18 rate in
dollar
0.073164
0.089287
344
46
53,538
57,727,378
38,097,023
1,320,783,841
0.083209
0.126337
0.093358
0.146327
Proposed to keep the above categories in the following ascending order:
1. Residential
2. Commercial/Industrial
3. City Centre
4. Heavy Industry
The City has utilised the current values as at 2 May 2017 to determine the total rates revenue per
differential rate type based on the proposed 3% increase on the 2016/17 rate in the dollar. Based on
this proposed rates revenue, the City has recalculated the rate in the dollar utilising the new values
provided by the Valuer General. Dependant on the valuations supplied, some ratepayers will be
subject to more than the proposed increase in rates whilst some will be subject to less than the
proposed increase in rates. The minimum differential rates for 2017/18 are proposed to stay the
same as 2016/17.
GRV
Residential
The Residential differential rate category relates to land where the predominant purpose for which
the land is held or used is residential.
The object of the proposed rate in the dollar of $0.073164 is to ensure that the proportion of total
rate revenue derived from Residential properties remains essentially consistent with previous years
and also includes the ongoing maintenance and service provision of the City's assets and services
primarily used by residential ratepayers. The City has utilised the current values provided by the
Valuer General Office as at 2 May 2017 to determine the total rates revenue per differential rate
type based on the proposed 3% increase on the 2016/17 rate in the dollar. Based on this proposed
rates revenue, the City has recalculated the rate in the dollar utilising the new values provided by
the Valuer General. Dependant on the valuations supplied, some ratepayers will be subject to more
than the proposed increase in rates whilst some will be subject to less than the proposed increase in
rates. Currently valuations from 2016/17 compared to 2017/18 decreased by approx. 4.3%. The
minimum differential rate for 2017/18 is proposed to stay the same, being $845.
Proposed Rate in dollar:
Minimum Rate:
Number of rateable assessments 2016/17:
Number of rateable assessments 2017/18:
Average rates per assessment 2016/17:
Average rates per assessment 2017/18:
$0.073164
$845
47,805
49,782
$1,290
$1,353
Commercial/Industrial
The Commercial/Industrial differential rate category relates to:
a)
Commercial relates to land where the predominant purpose for which the land is held or
used is commercial, including in that term the activities of buying and selling of goods and
services in retail businesses, wholesale buying and selling, financial establishments, and a
wide variety of services that can be broadly classified as 'business', but where no other more
specific use or zone category (such as 'Industrial', or 'City Centre') applies.
b)
Industrial relates to land zoned for the purpose of Industrial use or development under the
City of Swan LPS 17. In this context, the term relates to any of the Industrial zones in the City
of Swan zoning Local Planning Scheme, other than the Extractive Industry zone. Land within
one of the Industrial zones in the Local Planning Scheme may more appropriately fall into
another definition or category which more specifically or appropriately applies, or where the
City determines that another definition or category should apply to the characterisation of
the subject land. To facilitate the making of a distinction between uses in other rate
categories and use for industry, the definition of industrial premises relied on by the City
(but not applied to the Industrial differential general rate which depends on zoning) is as
follows:
'Industrial premises are premises used for the manufacture, dismantling, processing,
assembly, treating, testing, servicing, maintenance or repairing of goods, products, articles,
materials, or substances, and in appropriate cases the following activities or uses associated
with industry as described above, may be included (i)
(ii)
(iii)
(iv)
The storage of goods;
The work of administration or accounting;
The selling of goods by wholesale or retail; or
The provision of amenities for employees, where any such activity or use is
incidental to an industry as defined above, carried out on the same land.
The object of the proposed rate in the dollar of $0.089287 is to ensure that the proportion of total
rate revenue derived from Commercial/Industrial properties remains essentially consistent with
previous years. This also includes the ongoing maintenance and service provision of the City's assets
and services primarily used in a commercial or industrial environment, recognising the higher
demand generated through commercial/industrial activity. The City has utilised the current values
provided by the Valuer General Office as at 2 May 2017 to determine the total rates revenue per
differential rate type based on the proposed 3% increase on the 2016/17 rate in the dollar. Based on
this proposed rates revenue, the City has recalculated the rate in the dollar utilising the new values
provided by the Valuer General. Dependant on the valuations supplied some ratepayers will be
subject to more than the proposed increase in rates whilst some will be subject to less than the
proposed increase on rates. Currently valuations from 2016/17 compared to 2017/18 decreased by
approx. 4.3%. The minimum differential rate for 2017/18 is proposed to stay the same being, $1,340.
Proposed Rate in dollar:
Minimum Rate:
Number of rateable assessments 2016/17:
Number of rateable assessments 2017/18:
Average rates per assessment 2016/17:
Average rates per assessment 2017/18:
$0.089287
$1,340
3,340
3,389
$8,050
$8,380
City Centre
The City Centre differential rate category relates to land zoned Central City Area. The object of the
proposed rate in the dollar of 0.093358 is to ensure that the proportion of total rate revenue derived
from City Centre properties remains essentially consistent with previous years. This also includes the
investment by the City in revitalising the Town Centre and the additional operational expenses
associated with the ongoing level of service provided. The City has utilised the current values
provided by the Valuer General Office as at 2 May 2017 to determine the total rates revenue per
differential rate type based on the proposed 3% increase on the 2016/17 rate in the dollar. Based on
this proposed rates revenue, the City has recalculated the rate in the dollar utilising the new values
provided by the Valuer General. Dependant on the valuations supplied some ratepayers will be
subject to more than the proposed increase in rates whilst some will be subject to less than the
proposed increase on rates. Currently valuations from 2016/17 compared to 2017/18 decreased by
approx. 8%. The minimum differential rate for 2017/18 is proposed to stay the same, being $1,340.
Proposed Rate in dollar:
Minimum Rate:
Number of rateable assessments 2016/17:
Number of rateable assessments 2017/18:
Average rates per assessment 2016/17:
Average rates per assessment 2017/18:
$0.093358
$1,340
312
344
$16,585
$15,747
Heavy Industry
The Heavy Industry differential rate category relates to:
a)
Transport Depot and Heavy Haulage - Transport Depot, or Transport Depot and Heavy
Haulage, or Transport Depot and Heavy Haulage Vehicle Centre relates to land (including
buildings) held or used for the predominant purpose of garaging, parking or storage of road
transport or heavy haulage vehicles used or intended to be used for carrying goods,
materials or persons for hire, rent or reward, or for any consideration; or used for the
transfer of goods, materials or persons from one such motor vehicle to another such motor
vehicle and including the maintenance, building and repair of such vehicles. Without
limiting the generality of the foregoing, this differential general rate characteristic relates to
land including buildings held or used for the parking or garaging of commercial vehicles, and
land including buildings held or used for the maintenance and refueling of any vehicles
referred to above, and the storage of goods brought to the premises by those vehicles.
b)
Noxious Industry - relates to land where animal tissue (whether waste tissue or otherwise) is
rendered into stable, value-added materials. Rendering in this context can refer to any
processing of animal by-products into more useful materials, or more narrowly to the
rendering of whole animal fatty tissue and purified fats like lard or tallow.
c)
Extractive Industry - relates to land held or used for the predominant purpose of an
extractive industry, as involving the excavation or extraction of soil, limestone, rock, gravel,
shale, sand or clay, or other materials of a like kind, and which activity does not amount to
mining operations under the Mining Act 1978 (WA).
Or at the option of the Council: Land zoned under the City of Swan LPS 17 for the purpose of
Extractive Industry.
d)
Brickworks or Concrete Plants relates to the following:
i) Brickworks: Land held or used for the predominant purpose of a brickworks
which, without restriction, may include one or more kilns, drying sheds, or buildings
for manufacturing bricks, and may include a quarry for clay extraction if located on
the same site as the manufacturing activity.
ii) Concrete plant: Land held or used for the predominant purpose of a concrete
plant, which may also be known as a concrete batching plant, and may comprise a
plant, operation or equipment that combines various ingredients to produce
concrete. A concrete plant can have a variety of parts and accessories, including but
not limited to mixers, cement batchers, aggregate batchers, conveyors, radial
stackers, aggregate bins, cement bins, heaters, chillers, cement silos, batch plant
controls, and dust collectors (to minimise environmental pollution).
More of the City's resources are allocated to Heavy Industry's compared to Commercial/Industrial
properties. The object of the proposed rate in the dollar of 0.146327 is to ensure that the proportion
of total rate revenue derived from Heavy Industry properties remains essentially consistent with
previous years. This also includes the ongoing maintenance and service provision of the City's assets
and services primarily used in a Heavy Industry environment, recognising the much higher demand
generated through Heavy Industry activity. The City has utilised the current values provided by the
Valuer General Office as at 2 May 2017 to determine the total rates revenue per differential rate
type based on the proposed 3% increase on the 2016/17 rate in the dollar. Based on this proposed
rates revenue, the City has recalculated the rate in the dollar utilising the new values provided by
the Valuer General. Dependant on the valuations supplied some ratepayers will be subject to more
than the proposed increase in rates whilst some will be subject to less than the proposed increase
on rates. Currently valuations from 2016/17 compared to 2017/18 decreased by approx. 18%. The
minimum differential rate for 2017/18 is proposed to stay the same, being $1,620.
Proposed Rate in dollar:
Minimum Rate:
Number of rateable assessments 2016/17:
Number of rateable assessments 2017/18:
Average rates per assessment 2016/17:
Average rates per assessment 2017/18:
$0.146327
$1,620
50
46
$114,721
$121187
Unimproved Valuation (UV)
The City in 2016/17 adopted differential rates in its Unimproved Valuation area for Farmland,
Landscape, Rural, Special Area and UV Commercial properties utilising valuations supplied by the
Valuer General.
It is proposed for the 2017/18 financial year the City adopt the following differential rates Farmland,
UV General (previously known as Landscape, Rural and Special Area) and UV Commercial.
Unimproved values are determined annually by the Valuer General with a valuation roll provided to
local governments.
The City has utilised the current values provided by the Valuer General Office as at 2 May 2017 to
determine the total rates revenue per differential rate type based on the proposed 3% increase on
the 2016/17 rate in the dollar. Based on this proposed rates revenue, the City has recalculated the
rate in the dollar utilising the new values provided by the Valuer General. Dependant on the
valuations supplied some ratepayers will be subject to more than the proposed increase in rates
whilst some will be subject to less than the proposed increase on rates. Currently valuations from
2016/17 compared to 2017/18 decreased by approx. 3.65%. The minimum differential rates for
2017/18 are proposed to stay the same as in 2016/17
Unimproved values are based on the site value of the land.
Category
Farmland
UV General
UV
Commercial
TOTALS
# of
Assessments
503
3,515
43
Rateable Values
4,070
2,611,261,696
462,400,000
2,083,171,000
65,690,696
2016/17 rate in
dollar
0.0025220
N/A
0.0050439
2017/18 rate in
dollar
0.0026507
0.0036930
0.0052590
Proposed to have the above categories in the following ascending order:
1. Farmland
2. UV General
3. UV Commercial
UV
Farmland
The Farmland differential rate category applies to a combination of lands held or used for purposes
consistent with Urban Farmland and Swan Valley Farmland. The Farmland category attracts the
lowest differential rate and therefore forms the base rate of all other unimproved value rate
categories.
a)
Urban Farmland - applies to all properties carrying on farming activities in line with
the City's Policy on Farmland Concessions, where the properties are located outside
the Swan Valley, and is not intended to apply to the Landscape category.
b)
Swan Valley Farmland - applies to land used for viticulture and other farming and
horticultural activities in line with the City's Policy on Farmland Concessions which
contribute to the unique rural character of the Swan Valley, and add value to the
local government district of the City. It is intended that this differential rate will
foster and encourage farming and horticultural activities in the Swan Valley, and it is
considered that the significance of the Swan Valley to the City and to the Perth
Metropolitan region justifies the imposition of the lowest differential rate.
The object of the proposed rate in the dollar of $0.0026507 is to ensure that the proportion of total
rate revenue derived from Farmland properties remains essentially consistent with previous years.
The farmland rate is the standard against which the rate in the dollar for other UV properties is
measured. The City has utilised the current values provided by the Valuer General Office as at 2 May
2017 to determine the total rates revenue per differential rate type based on the proposed 3%
increase on the 2016/17 rate in the dollar. Based on this proposed rates revenue, the City has
recalculated the rate in the dollar utilising the new values provided by the Valuer General.
Dependant on the valuations supplied some ratepayers will be subject to more than the proposed
increase in rates whilst some will be subject to less than the proposed increase on rates. Currently
valuations from 2016/17 compared to 2017/18 decreased by approx. 2.2%. The minimum
differential rate for 2017/18 is proposed to stay the same being, $845.
Proposed Rate in dollar:
Minimum Rate:
Number of rateable assessments 2016/17:
Number of rateable assessments 2017/18:
Average rates per assessment 2016/17:
Average rates per assessment 2017/18:
$0.0026507
$845
513
503
$2,319
$2,440
UV General
The UV General differential rate category relates to all Unimproved Valued properties that do not
fall in the differential rate category of “UV Commercial” or “Farmland”.
The rate in dollar is based on the average of the previous 2016/17 differential rates “Landscape,
Rural and Special Area”. The three (3) rates in the dollar as an average equated to $0.0034433. The
proposed rate in the dollar for 2017/18 is $0.0036930. The City has utilised the current values
provided by the Valuer General Office as at 2 May 2017 to determine the total rates revenue per
differential rate type based on the proposed 3% increase on the 2016/17 rate in the dollar. Based on
this proposed rates revenue, the City has recalculated the rate in the dollar utilising the new values
provided by the Valuer General. Dependant on the valuations supplied some ratepayers will be
subject to more than the proposed increase in rates whilst some will be subject to less than the
proposed increase on rates. Currently valuations from 2016/17 compared to 2017/18 decreased by
approx. 4%. The minimum differential rate for 2017/18 is proposed to stay the same being, $845.
Proposed Rate in dollar:
Minimum Rate:
$0.0036930
$845
Number of rateable assessments 2016/17:
Number of rateable assessments 2017/18:
Average rates per assessment 2016/17:
Average rates per assessment 2017/18:
N/A
3,515
$N/A
$2,194
UV Commercial
The UV Commercial differential rate category relates to:
a)
Vineyards with Commercial - relates to a number of properties which can be
described as 'vineyards with commercial' which exist throughout the Swan Valley
and provide a significant attraction for visitors, and are considered to add significant
appeal to the area. Appeal arises by the operation of cellar sales, and other activities
such as eating facilities, retail facilities and areas such as art galleries. Such
properties are considered to play a very important role in attracting tourism to the
area, and therefore have significance to the district of the City and the Perth
Metropolitan region generally.
b)
Large Scale Vineyards - Applies to two properties which produce a relatively small
amount of grapes on the property itself compared with the total volume of grapes
processed on the property. In addition to a large scale production including bottling
facilities, each property has a wine tasting area, eating facilities, areas set aside for
outside entertainment functions, and other areas for events such as meetings and
social activities. Retail shopping facilities also exist for tourists which consist of
vineyard products and local and other products.
c)
Quarries - refers to an industry which involves the extraction, quarrying or removal
of sand, gravel, clay, hard rock, stone or similar materials from the land, and may
include the treatment and storage of those materials, or the manufacture or
products from those materials on, or adjacent to, the land from which the materials
are extracted, but does not include Industry - Mining. The definition of the
'Extractive Industry' within GRV differential categories is acknowledged to have the
potential to overlap this Quarries definition, and the distinction depends upon
whether a GRV or UV valuation is applied to the subject land.
d)
Mining Tenements - relates to land held or used to commercially extract minerals
from the land and in this context the term 'minerals' refers to substances the
extraction or mining of which is covered by the Mining Act 1978 (WA).
UV Commercial properties have the highest Unimproved Value rate in the dollar as they place
additional demand on Council and require greater administration in relation to compliance and
complaints.
The object of the proposed rate in the dollar of $0.0052590 is to ensure that the proportion of total
rate revenue derived from UV Commercial properties remains essentially consistent with previous
years. The City has utilised the current values provided by the Valuer General Office as at 2 May
2017 to determine the total rates revenue per differential rate type based on the proposed 3%
increase on the 2016/17 rate in the dollar. Based on this proposed rates revenue, the City has
recalculated the rate in the dollar utilising the new values provided by the Valuer General.
Dependant on the valuations supplied some ratepayers will be subject to more than the proposed
increase in rates whilst some will be subject to less than the proposed increase on rates. Currently
valuations from 2016/17 compared to 2017/18 decreased by approx. 1.2%. The minimum
differential rate for 2017/18 is proposed to stay the same being, $845.
Proposed Rate in dollar:
Minimum Rate:
Number of rateable assessments 2016/17:
Number of rateable assessments 2016/17:
Average rates per assessment 2016/17:
Average rates per assessment 2017/18:
$0.0052590
$845
33
43
$10,164
$8,312
The City of Swan has also provided for 3% of the total rate revenue to be allocated to the
Infrastructure Asset Replacement Reserve. Total Rate Revenue for 2017/18 is $120.8million
(excluding Specified Area Rates).
Minimum Rates
The City imposes a uniform general minimum for all rate categories under the Unimproved Value.
For Gross Rental Values the Residential category forms the basis of minimum rates with Heavy
Industry having the highest minimum. It is also recognition that every property receives some
minimum level of benefit of works and services provided. The higher minimum is applied to Heavy
Industry to ensure that the rate burden is distributed equitably between all property owners.
Submissions
Submissions from any elector or ratepayer with respect to the proposed rates should be forwarded
to the City of Swan by 4.00pm on Tuesday 6th June 2017. Submissions should be addressed to:
City of Swan
Kym Leahy
PO Box 196
Midland WA 6936
And clearly marked "Submissions regarding 2017/18 Differential Rates”
M Foley
CEO