HEADING 2014/15 Statement of

Proposed Rates for General Rates, Minimum Rates and

Specified Area Rates

Table of Contents

Page No.

1. INTRODUCTION 2

2. VALUATIONS – GROSS RENTAL VALUATIONS (GRV) 2

3. RATING CATEGORIES 3

4. MINIMUM RATES 3

5. SPECIFIED AREA RATES 4

6. PROPOSED GENERAL RATES – 2014/15 4

Minimum Rates 4

Summary of Proposed General Rate and Minimum Rate for 2014/15 4

7. RATES CONCESSIONS 5

Storage Units 5

TPS Heritage Rates 5

8. ENQUIRIES 5

9. SUBMISSIONS 5

10. ADVERTISEMENT OF PROPOSED GENERAL RATES, MINIMUM RATES AND SPECIFIED AREA RATES FOR THE 2014/15 FINANCIAL YEAR 6

11. APPENDIX 1 7

Specified Area Rate Pelican Point – Grand Canals 8

Specified Area Rate Stirling Street Streetscape 10

2

1. Introduction

Raising rates is the primary source of revenue for Councils throughout Australia. The purpose of levying rates is to meet Councils proposed budget requirements each year in a manner that is deemed to be fair and equitable to ratepayers.

Property valuations are used as the basis for calculation of rates not only in Australia but in many overseas countries as well.

Rates are levied on rateable properties in accordance with the Local Government Act 1995. The objective of the proposed rates and charges in the 2014/15 Budget is to provide for the net funding requirements (i.e. after taking into account all other forms of revenue) for Council’s services, activities, financing costs and capital works.

In setting rates for the 2014/15 rating year, the City of Bunbury is guided by its:

Strategic Community Plan;

Corporate Business Plan; and

Long Term Financial Plan. 2014/15 is the first year that the levying of rates will be on a single rate in dollar for all properties. This is a change from the four differential rates model each with a different rate in dollar. This is further discussed in the document.

2. Valuations – Gross Rental Valuations (GRV)

The Western Australian Local Government Act 1995 allows the Minister to determine the appropriate form of valuations for rating purposes.

The Minister has determined that the Gross Rental Value (GRV) is the appropriate value to use in determining Local Government rates. The Gross Rental Value is the annual rental that a building might be expected to receive in a year to year tenancy. The Gross Rental Value for vacant land is based upon a percentage of the capital value of the land.

Landgate Valuation Services determines the GRV for all properties within the City every three years. The last revaluation was effective from 1 July 2011 and the next valuation will be effective from 1 July 2014 for the 2014/15 rates billing.

As a result of this revaluation, the overall Gross Rental Value of properties within the City of Bunbury have increased by 15.8%. This is further broken down into the following categories:

Property GRV increase

Residential 21.2%

Commercial 9.1%

Industrial 13.0%

Vacant Land 4.7%

In a revaluation year, movements in property Gross Rental Valuations may result in greater or lower than average rate increases for individual properties.

Interim valuations are issued for properties where changes have occurred such as subdivisions or strata title of property, building construction/demolition, additions and/or property rezoning. In such instances Council must amend the rates for the properties concerned and issue amended rate notices.

3

3. Rating Categories

In February 2014, the City of Bunbury prepared a discussion paper “A Review of our Basis of Rating”. This report was adopted by Council and advertised for public comment. The purpose of this report was to review the current rating structure used by the City and identifying improvements that could be made. Contained within the report were various rate modelling options, which included reducing the number of differentials, maintain the current differential rating structure and having no differentials.

Following the closing of public submission, Council considered these submissions and various rate modelling options and has resolved to change its rating system from four differential rates categories to a single rate in the dollar and minimum rate. This will result in the average residential rate increasing by 4.0% and non-residential rates increasing by 10.5%.

A breakdown of rate increases for residential properties by suburb and for non-residential properties is outlined below:

Residential Properties:

Residential Avg. GRV increase

2014/15 Avg. Rates

$Avg. Increase

% Avg. Increase

Bunbury 17.6% $1,379 $21 2.5%

Carey Park 23.0% $1,239 $69 6.0%

College Grove 23.7% $1,396 $82 6.3%

East Bunbury 20.0% $1,244 $42 3.9%

Glen Iris 21.1% $1,361 $63 5.0%

Pelican Point 4.5% $1,538 ($150) (8.6%)

South Bunbury 22.9% $1,308 $76 6.6%

Usher 20.0% $1,279 $40 3.4%

Withers 22.5% $1,188 $44 3.4%

All Residential 20.3% $1,302 $51 4.0%

Non Residential Properties:

Avg. GRV increase Avg. Rate Increase

Industrial 12.8% 27.8%

Mixed Business 13.7% 21.5%

City Centre 8.2% (9.1%)

Non Residential Vacant Land (9.0%) (2.7%)

All Non Residential 10.6% 10.5%

4. Minimum Rates

The setting of minimum rates within rating categories is an important method of ensuring that all properties contribute an equitable rate amount.

Category Minimum Rate

Assessments on Minimum

% on Minimum

General $1,000 2,026 7.9%

The Local Government Act 1995 allows a local government to levy a minimum rate, subject to not more than 50% of the properties in a rate category being on this minimum.

4

5. Specified Area Rates

Section 6.37(1) of the Local Government Act states:

(1) A local government may impose a specified area rate on rateable land within a portion of its district for the purpose of meeting the cost of the provision by it of a specific work, service or facility if the local government considers that the ratepayers or residents within that area —

(a) have benefited or will benefit from;

(b) have access to or will have access to; or

(c) have contributed or will contribute to the need for,

that work, service or facility. The City of Bunbury currently levies two specified area rates:

Pelican Point Grand Canals;

Stirling Street Streetscaping;

Note: 2014/15 is the final year for the Stirling Street Streetscaping as the loan raised to fund this project will be fully repaid.

6. Proposed General Rates – 2014/15

As advertised in the Bunbury Mail on Wednesday 25 June 2014, the following proposed rates are included in the draft budget and are now being considered for the 2014/15 financial year.

General Rating Category includes all rateable land within the City of Bunbury.

A rate in the dollar of 8.1047 cents will be applied on the current Gross Rental Values for the 2014/15 financial year.

Minimum Rates

The Minimum Rate of $1,000 will apply to all properties for 2014/15.

The object and reason for the minimum rate is to ensure that all property owners are levied an equitable amount for services provided.

Summary of Proposed General Rate and Minimum Rate for 2014/15

Category Minimum Rate

Rate in $ (Cents)

Minimum Rates

Calculated Rates

Total Rates

General $,1000 8.1047 $2,026,000 $30,374,351 $32,400,351

5

7. Rates Concessions

Storage Units

To recognise the nature, purpose and size of storage units compared to other properties a concession of $440 per strata titled storage unit, totalling $45,760 will be granted to strata titled storage units. This concession is to be applied to 104 storage units. Strata titled storage units, after the above concession is applied, will pay $560 in rates for 2014/15 which is 56% of the minimum rate ($1,000) applied to all other properties. The City of Bunbury Town Planning Scheme defines “Storage Unit” in the following terms “premises used for the storage of goods, equipment, plant or materials”. Further to this definition, the following criteria must be met:

Strata titled;

Zoned “Industrial” under City of Bunbury Town Planning Scheme;

Have no ablutions (waste water system) connected;

Maximum area of 75m2

TPS Heritage Rates

The City of Bunbury contains a significant collection of heritage assets having cultural heritage significance. To acknowledge and encourage conservation works of these properties a concession of 30% (up to a maximum of $1,000) on the general rates payable will be provided to eligible properties for a period of five years where works relating to the conservation of the cultural heritage significance of the property has been undertaken in accordance with the City’s Local Planning Policy - Rate Concession for Heritage Places. The estimated total amount of TPS Heritage Rate concessions is $5,681.

8. Enquiries

Any enquiries in respect of information contained in this document should be made to Leonie Barwick, Team Leader Corporate Revenue either by telephone on (08) 9792 7240 or in person at the City of Bunbury Customer Service Centre, 4 Stephen Street, Bunbury.

9. Submissions

Submissions concerning the proposed Differential General Rates, Minimum Rates and Specified Area Rates for the 2014/15 financial year may be made by a ratepayer or elector by no later than the close of business on 17 July 2014, and addressed to the Chief Executive Officer, City of Bunbury, PO Box 21 Bunbury WA 6231.

6

10. Advertisement of Proposed General Rates, Minimum Rates and Specified Area Rates for the 2014/15 Financial Year

The City of Bunbury advises that, it intends to adopt the following general rate, minimum rate and specified area rates for the 2014/15 financial year.

General Rates & Minimum Rates:

Property Minimum Rate $ Rate in the Dollar (Cents)

General

$1,000 8.1047

This will increase rates on residential properties on average by 4.0% and non-residential properties on average by 10.5%. Individual properties may be greater or less than this average due to the update of each property’s Gross Rental Valuation by Landgate effective from 1 July 2014 which is used to calculate the amount of rates levied. Specified Area Rates:

Category Rate in the Dollar (Cents)

Pelican Point Grand Canals 1.241 Stirling Street Streetscaping 0.0623

Further information relating to the above rates is detailed in the City’s 2014/15 Statement of Proposed Rates and is available from the City’s Customer Service Centre, 4 Stephen Street, Bunbury, during normal office hours, or may be downloaded from the City’s website at www.bunbury.wa.gov.au.

Submissions must be lodged no later than close of business on Thursday 17 July 2014.

Submissions may be made by a ratepayer or elector in respect to the proposed rates for 2014/15 financial year to the Chief Executive Officer, City of Bunbury, PO Box 21, Bunbury WA 6231.

(Advertised: Bunbury Mail – 25 June 2014 – City Focus Column)

7

11. Appendix 1

Other rates and charges additional to General Rates advertised under Section 6.36(3) of the Local Government Act 1995, in the Bunbury Mail on 25 June 2014, are advised for information as follows:

Item 1: Pelican Point Grand Canals Specified Area Rate (and map)

Item 2: Stirling Street Streetscape Specified Area Rate (and map)

8

Item 1

Specified Area Rate Pelican Point – Grand Canals

What is the purpose of the rate?

The purpose of the rate is to raise funds over a given period of time to allow for the periodic dredging, clearing and maintenance of the canal waterways.

How much is the rate yield?

These rates will raise approximately $39,577 for the 2014/15 financial year.

How is the rate calculated?

A rate of 1.241 cents in the dollar will apply on the Gross Rental Values for all properties located in the Grand Canals Specified Area. (Refer to the attached map.)

Will the rate change?

The need for the Specified Area Rate is considered by Council each year to determine that the specific works will benefit the ratepayers within the Pelican Point Grand Canals Area; that they will have access to these works; and will need to contribute to these works.

The cost at present is only indicative and is heavily dependent on the amount of sand build-up that is in a direct relationship to river flows. Direct costs are anticipated to be in the order of $300,000 per dredging which could be required every 5-7 years. The estimated Canal Management Reserves at the 30 June 2014 will be $355,072.

How was the cost calculated?

Costs for maintenance and repair work are based on estimates obtained from companies who will be contracted to perform the necessary work on the canals.

Has this approach been used elsewhere?

Canal developments have now occurred in a number of Council’s around Australia. Many Councils use such standard options as specified area rates to ensure that the ongoing costs of repairs and maintenance are met.

9

Item 1a Pelican Point – Grand Canals – Specified Area Map

10

Item 2

Specified Area Rate Stirling Street Streetscape

What is the purpose of the rate?

This rate is to raise funds to meet part loan repayments for the redevelopment and rejuvenation of the streetscape of Stirling Street between Spencer Street and Turner Street, including the traffic management improvements and pedestrian access.

How much is the rate?

A fixed interest 10 year term loan was raised in 2005 for $247,500 towards the cost of the works with 50% being repaid by way of this specified area rate. The rate will raise approximately $15,532 being 50% of the loan repayments for the 2014/15 financial year.

Subject to amendments to valuations within the specified area the rate in the dollar will be adjusted from time to time to meet the fixed annual expenditure over the term of the loan.

Note: 2014/15 is the final year for the Stirling Street Streetscaping as the loan raised to fund this project will be fully repaid.

How is the rate calculated?

A rate of 0.0623 cents in the dollar will apply on the Gross Rental Values for all properties located in the Stirling Street Streetscape Specified Area. (Refer to the attached map.)

Has this approach been used elsewhere?

A number of Councils have adopted this approach for the funding of various types of specific projects within their suburbs.

11

Item 2a Stirling Street Streetscape Specified Area Map