S IRAV - Revenue Professionals SA

the rate administrator - aug 2009

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SA INSTITUTE OFRATE ADMINISTRATORS INC

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volume 20 no 1 : august 2009the rate administrator

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http://www.saira.com.au

mailto:[email protected]


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President’s Message 3

Rate Arrears & Recovery Costs 4-6

In Summary: Local Government (Miscellaneous) Amendment Bill 2009

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SAIRA 1 Day Seminar 9

SAIRA Conference Report - McCracken Country Club Victor Harbor

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NSW Revenue Professional Society Annual Conference

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Windy Wellington - New Zealand Rating Practitioners Seminar

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Board Members 15

in this issueV

DESIGN: fotohijinx 0433 183 111

DISCLAIMER > Views expressed in the Rate Administrator do not necessarily reflect the opinions of the SA Institute of Rate Administrators Inc. All articles are for information only and contain brief comments that are not intended to be a basis for final decision making. Readers should rely on their own enquiries and/or legal advice in making any decision relating to their individual circumstances.

EDITORIAL COMMITTEE:

Chris Mcnamara 8203 7372

Kylie Sunners8375 6617

Bryan Francis8555 7000

Dot Temby8539 1111

Lee Denton840 68513

CONTRIBUTORS:

Rosemary Munslow Michael KelledyNatasha JonesChris McNamaraKaren Pedley

FRONT COVER: Wellington Harbour, New Zealand - taken at the New Zealand Rating Practitioners Seminar.



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President’s MessageV

Once again another financial year is over. They seem to come around so quick these days. Most Rate Administrators would be in the midst of issuing rate notices and preparing for the onslaught of ratepayer enquiries.

Over the past four months I have been in discussions with the Valuer General from New South Wales, Philip Western, on a proposed two day International Property Taxation Institute (IPTI) Conference to be held in Australia. It has been decided that

this conference will be held in Adelaide on the 21 – 23 April 2010 at the Stamford Grand Glenelg. David Hope and myself have been meeting with Philip and Neil Bray to consider a suitable venue and conference content. I encourage you all to consider attending this conference, as it will be an excellent opportunity to hear speakers from countries such as South Africa, UK, Canada and New Zealand on how they use property valuations to generate rate income. The IPTI has not held a conference in Australasia so this is a landmark for South Australia that Adelaide has been chosen as the hosting state. While a program hasn’t been developed the suggested topic matter will certainly be of interest to Rate Administrators in Local Government. Visit www.ipti.org where you can view information on the IPTI. Stay tuned for more information over the next couple of months.

As mentioned at the conference in Victor Harbor a small working party has been meeting regularly with the Department of Families and Communities to work through issues identified in respect to the process of managing and claiming concessions for the coming year. At this stage Councils will receive the files the same way that has been occurring in the past. A small number of Councils have been selected as test sites to work through the process for future years but in the main we are trying to maintain a smooth process of receiving data and claiming concessions.

I would like to share with you how other professional bodies see our Association. From time to time I am told how professional, well organised and acknowledged for the great conferences and documents that we produce. I applaud this to not only the board of management but to all members, so thank you all.

I wish all SAIRA members the best of luck over the coming months with your rates declarations and the start of another year in the life of a Rate Administrator.

Rosemary Munslow - President





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Rate Arrears & Recovery CostsV

As readers of the Rate Administrator will be aware a number of articles in previous editions have identified that the recovery of costs incurred in pursuing rate arrears are not as easily recoverable as many rate administrators may consider to be the case.

In summary, those previous articles have identified that recovery costs (whether they be the costs of the debt collector or associated legal fees) may only be recovered as follows –

costs awarded to, or recoverable by, a council in any court •proceedings;

costs incurred by a council in proceeding under Section 184 of the Act either before the sale or •auction paid by the ratepayer or after the sale from the proceeds of sale;

by agreement with the ratepayer.•

In all other circumstances the Council does not have the statutory power to recover any costs incurred by it in pursuing rate arrears. As harsh and inequitable as this may appear in at least some instances, the simple fact is that without a source of power the Council is left without any entitlement to recover such costs.

A recent case in the Supreme Court of South Australia (Koutlakis v City of West Torrens [2009]) has reinforced some of the previously articulated principles in relation to this issue of cost recovery. The facts of the case are that a dispute arose between the ratepayers and the Council in 2000 because of a disagreement concerning a minor amount. In subsequent years the ratepayers failed to pay more instalments of rates which became due. Ultimately, on 26 June 2006 the Council sent a notice to the ratepayers in accordance with the requirements of Section 184 of the Act. When the matter was subsequently transferred from the debt collectors to the debt collectors’ lawyers in August 2006, a further notice under Section 184 was issued by the lawyers to the ratepayers. Both notices purported to include an amount for legal fees/legal costs as part of the total amount (of rates, fines and interest) owed to the Council. The ratepayers identified that the second notice served in August 2006 was $1,650 more than the earlier notice which, they submitted, was due to the accumulation of legal fees and collection fees.

As part of its judgment the Court identified that the only relevant references to a council being able to recover its costs are those set out at Sections 183 and 184 of the Act respectively. Section 183 provides, amongst other things, that where a council receives or recovers an amount in respect of





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Rate Arrears & Recovery CostsV

rates, the amount will be applied …. firstly – in payment of any costs awarded to, or recoverable by, the council in any court proceedings undertaken by the council for the recovery of the rates …. . Section 184 provides, amongst other things, that

if the total amount outstanding (i.e. of rates, fines and •interest) is paid in full within one month of the service of a Section 184(2) notice the council cannot proceed to sell the land;

if, before the date of the sale/auction, the outstanding amount •(i.e. rate arrears, fines and interest) and the cost incurred by the council in proceeding under Section 184 are paid to the council, the auction cannot proceed; and

where the council has sold the land whether by auction or, •subsequently, by private contract, any monies received by the council in respect of the sale of the land will be applied … firstly – in paying the costs of the sale and any other costs incurred in proceeding under Section 184 ….

The parties to the Supreme Court appeal agreed that the Council had the power to recover its costs where those costs were voluntarily paid by the ratepayer before the auction and otherwise where a sale has actually occurred. The question which arose was whether the Council had a right of action to recover its costs outside of these two circumstances.

The Court concluded, amongst other things, that the phrase “rates presently outstanding” as it appears in Section 184(2) and the term “outstanding amount” as it appears at Section 184(5) of the Act, refer to the total liability which is to be set out in the notice being rate arrears, fines and interest and no more. That is, the legislation does not permit the inclusion of costs as part of the total liability to which a Section 184 notice may relate. The inclusion of costs in the Section 184 process is adequately catered for at a later stage of that process as evidenced by Section 184(9) and (11) of the Act.

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Rate Arrears & Recovery CostsContinued

As you will note, the above analysis of the approach taken by the Supreme Court reinforces the advice which has been provided over a lengthy period of time that without a statutory basis which empowers the council to recover any costs associated with rate arrears, the Council is not in a position to legally compel a ratepayer to reimburse the council the debt recovery costs it has incurred. Therefore, costs recovery now has some additional guidance from the Supreme Court which reinforces that costs may only be recovered:

voluntarily, by payment by the ratepayer pursuant to Section 184(9) of the Act, •

compulsorily by the Council after a sale has been effected under Section 184 by operation of Section 184(11) •of the Act,

by virtue of an order of the Court or other right of recovery in actual court proceedings, or•

voluntarily from the ratepayer either of their own volition or pursuant to an agreement struck with the Council.•

For ratepayers who feel aggrieved that recovery costs, being those costs paid to debt collectors and/or lawyers, the simple answer is, at the moment, the statutory framework provides only for reimbursement as set out above. It must, therefore, be assumed, that the fines and interest which are applied to arrears of rates are to be deemed, as a matter of public policy, to be adequate recompense to the council in its pursuit of rate arrears.

Any rate administrator who believes that this is an unfair financial impost upon the balance of the ratepayer base should give consideration as to whether it is appropriate for SAIRA and/or individual councils to petition the Local Government Association of South Australia for a change to the Act to allow all costs incurred by a council in its pursuit of a recalcitrant ratepayer to be recoverable from that ratepayer in all circumstances.

Michael KelledyPartner, Wallmans Lawyers

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In Summary: VLocal Government (Miscellaneous) Amendment Bill 2009

The Local Government (Miscellaneous) Amendment Bill 2009 proposes four main amendments to the rating provisions of the Local Government Act 1999.

The sections of the Act that are proposed to be amended, include:

Section 152 – general rates;•

Section 155 – service rates and service charges;•

Section 158 – minimum rates and special adjustments for specified values; and •

Section 161 – rebate of rates – community services.•

1. Limitation Upon Fixed Charges: Section 152 of the Act addresses fixed charges. This section does not prevent a Council from levying a fixed charge against land that is separately occupied. Section 158(2) of the Act prevents a minimum amount from being imposed in certain circumstances, however, there is no comparable restriction on the use of a fixed charge. Section 10 of the Bill proposes to prohibit the imposition of a fixed charge against each supported accommodation unit, each independent living unit within a group or complex, each site in a caravan park, and each site in a residential park under the Residential Parks Act 2007.

2. Amendments to Minimum Amounts: Under Section 158(2) of the Act there exists restrictions on a minimum amount being imposed against land that constitutes less than the whole of a single allotment, each supported accommodation unit or independent living unit within a group or complex of units, where two or more pieces

of contiguous rateable land are owned by the same owner and occupied by the same occupier, and the restriction that the Council may not apply a minimum amount so as to affect or alter the rates that would apply to more than 35% of the total number of properties in the area subject to the separate assessment of rates. The amendments propose two additional restrictions, being the prohibition of imposing a minimum amount against each site in a caravan park and each site in a residential park under the Residential Parks Act 2007. This will mean the limitations on fixed charges and minimum amounts will now be mirrored.

Section 12(2) of the Bill also proposes that a Council cannot impose a minimum amount in respect of general rates or separate rates if the Council has included a fixed charge as a component of that rate.

Service Rates and Service Charges:3. Currently, Section 155(6) specifies the accounting requirement when there is the creation of a reserve fund for “future works”. Subsection (7) imposes a responsibility to credit any excess in the reserve fund against future liabilities or to refund it to the person who paid the relevant amount. It is considered that this approach is outdated and inconsistent with accrual accounting standards. It is proposed that Section 155(6) and (7) be deleted and substituted with a provision that provides for any “surplus” amount to be applied to improving or replacing Council assets for the purpose of the relevant prescribed service. However, if the prescribed service is, or is to be, discontinued any excess funds (incurred in connection with that service) may be applied for another purpose if that purpose is specifically identified in the Council’s annual business plan as being the purpose for which the funds will be applied.





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In Summary: Local Government (Miscellaneous) Amendment Bill 2009 Continued

Rebate Provisions:4. The first proposed amendment is to remove the requirement that both service delivery and administration is to be fulfilled before the grant of a mandatory rebate of at least 75% can be granted to a community service organisation. Section 161 of the Act will be clarified and made consistent with the intention that the rebate is to be applied to land that is “predominantly used for service delivery or administration (or both) by a community service organisation”.

The second proposal seeks to expand the narrow definition of “supported accommodation” contained in Section 4 of the Act. The proposed change will see the current definition expanded to include any housing association registered under the South Australian Co-operative and Community Housing Act 1991. That is, for an association to be eligible for the 75% rebate under Section 161 in this regard it will:

be required to meet the usual criteria at sub-sections (1) and (3); and•

if it is • not registered under the South Australia Co-operative and Community Housing Act to be able to demonstrate that support is provided to live an independent life; or

if it is registered under the • South Australian Co-operative and Community Housing Act, that is sufficient for eligibility.

In this regard, the Office for Community Housing has a list of the registered co-operatives on its website.

At present, this Bill remains in draft and has not yet been tabled in Parliament.

Natasha JonesPartnerWallmans Lawyers





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Treatment of Land to which a Heritage Agreement Applies

1 Day SeminarMonday 2 November 2009

Lakes Resort, West Lakes

9:00am – 3:30pm

3:30pm Networking/Happy Hour

Book your calendar now!

This seminar will cater for all levels of experience, so don’t miss out on this opportunity to update your knowledge and to network with those who may be facing similar rate administration challenges.

Topics of interest will include:

Amendments to Elections Act (legal and practical)Representation ReviewAdoption of valuations and rates (legal)Legal Update

Registration form and flyer will be available on the SAIRA website shortly – watch your emails for notification





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SAIRA Conference Report – McCracken Country Club Victor Harbor

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18 February 2009 saw the start of the annual SAIRA conference at the picturesque McCracken Country Club at Victor Harbor. The conference commenced with a session on Marina Berth rating, facilitated by Michael Kelledy and Natasha Jones from Wallmans Lawyers. The session was well patronised by our members and a BBQ Dinner followed.

The following morning the remainder of the rating community arrived at Victor Harbor, soaking up the beautiful early morning sunshine. The day commenced with a delicious breakfast, conference registrations and the President’s welcome from Rosemary. David Hitchcock from the LGA provided an interesting update on events pertaining to not only the rating community but Local Government in general. The morning provided a great opportunity to meet colleagues from other Councils, and share experiences and learn about issues facing their councils, thus providing a broader perspective on the variety that comes with rating.

The next presentations were on the rating review conducted by the City of Playford, and the issues they faced and processes which had to be adhered to in achieving their outcomes, and a legal update by Wallmans Lawyers. The post lunch session saw Lindy McAdam from the Department of Families and Communities address proposed reforms to the concessions function and its potential impacts for Local Government, with lively debate ensuing between the speaker and audience, prior to sessions on the Mentor/mentee program, the SAIRA website and User Groups, and the 2009 AGM.

Happy hour followed, which proved to be an excellent social opportunity to meet other Rate Administrators and learn more about them and their Councils. A peculiar scientific phenomenon manifested both this session and the conference dinner that followed – to my astonishment it seemed that when any glass containing an alcoholic beverage in the room

got to about 20% full, it mysteriously replenished itself to suddenly once again become a full glass……….

The conference dinner followed in the Country Club, and many rate administrators entered the spirit of the evening (themed as a 70’s and 80’s party) by dressing in theme – a collection of hippies and 80’s hypercolour and fleurescent clothing was on display for the evening. The party gained momentum as the evening progressed, with a great time being had by all.

The conference reconvened on the Friday morning, and for some reason the sunshine didn’t seem quite as enticing as it had the previous morning – I suspect it had something to do with the peculiar scientific phenomenon referred to earlier in this article. After a rather subdued breakfast, everyone headed back to the conference centre for the morning sessions.





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SAIRA Conference Report Continued

The day commenced with a motivational speech by former Australian Test Cricketer Wayne Phillips. Rosemary showed her passion for sport with her rousing introduction of Phillips, who played 27 Test matches and 48 One Day Internationals for Australia between 1982 and 1987, making the third highest score ever by an Australian Cricketer on debut for Australia when he belted 159 against Pakistan at the WACA ground on 11 and 12 November 1983 (for the sports fanatics out there he fell 3 runs short of the 162 made by Kepler Wessels a year earlier and 6 runs short of Charles Bannerman’s 165 in the first Test Match ever played between Australia and England in 1877). This session was a personal highlight for me, as Wayne Phillips had been my boyhood sporting hero (like me, he was a left handed wicket keeper and opening batsman, but unlike me, he was actually good at it) and so it was great to hear the humorous anecdotes from his playing and coaching days that he shared, as well as to hear the views of a former professional sportsman on the direction that his sport was heading.

A presentation on a rating review by Yankalilla Council and a series of workshops followed, dealing with issues such as debt collection, rebates, and separate rates being discussed interactively, followed by lunch and an open forum prior to the conference closing.

Thanks to Rosemary Munslow, Karen Pedley, Megan Trezise and all those involved in the planning and execution of what proved to be a fantastic conference which was thoroughly enjoyed by all in attendance. See you in 2010!!

Chris McNamaraAdelaide City Council





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NSW Revenue Professional Society Annual Conference

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I was fortunate to be selected to travel to Bathurst for the NSW Revenue Professional Society Annual Conference. It was a great opportunity to meet with our peers and colleagues from NSW, to exchange information with each other and learn about each other’s processes and legislation.

The basic premise for rating in NSW is that a rate in the dollar is multiplied by the unimproved site value (land value) of each property, and a rates notice is sent in July. As with SA, customers have the option of paying in quarterly instalments, and similar rules regarding debt collection apply also.

Some differences between our Rating Practices exist; in several regional areas the Council is responsible for not only traditional Council rating, but also water and sewer rating, meter reading and water use billing. Whilst several Councils have efficient Credit Management and Debt Collection processes in place, Councils cannot sell a property for non-payment of rates until 5 years elapse. In NSW Customers can be incentivised through percentage discounts for early payment of rates, and Councils may declare “special” rates to fund particular projects in a Council area, such as environmental and climate change initiatives. The conference also contained a strong focus on the soft skills required to lead and manage people, containing sessions on Coaching Skills and Customer Service.

The guest speaker was legendary Australian Rugby League player and coach, Wayne Bennett. As well as currently coaching St George in the NRL, he has previously coached both Australia and the Brisbane Bronco’s – the person seated next to me assured me that he is basically Rugby’s equivalent of Malcolm Blight. His speech was not in the traditional model of a motivational speaker, rather he challenged his audience to examine themselves

and the impact of their actions on their team. His approach was honest, direct and simple, and underlined why he has achieved such great success in his career. He finished with a comment that I will never forget – “You haven’t failed when you’ve made a mistake – you only fail when you make excuses”. The spellbound audience didn’t even mind that he went 20 minutes into the allocated lunchbreak! To his credit, Wayne Bennett also made himself available to chat with people and answer questions one on one during the lunch break.

As well as meeting some great people, and learning a lot about the challenges and issues facing our fellow Rating Professionals, the conference helped me to realise a boyhood dream (My wife would argue my boyhood hasn’t ended yet) - the opportunity to visit the Mecca of Australian Motor Racing – the famed Mt Panorama Racetrack. I was fortunate enough to be taken for a lap of the fabled course, and gained a real appreciation of the incredible skill of the V8 Supercar Drivers and their predecessors. Around the S’s we travelled at 25 km/h, and felt as though we needed to slow down due to sharpness of the bends, the narrow road and the 3 foot concrete walls abutting the track – incredible to think that Racing Drivers travel through these bends in excess of 100 km/h!!!!! The conference functions were held at the National Motor Racing Museum, and at the Pit Straight entertainment complex. A fellow rev-head on my table at the dinner summed the place up perfectly:

“I’m pretty sure heaven’s going to be a combination of this, the SCG and a really big fishing boat”………

Chris McNamara Adelaide City Council





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Windy WellingtonV

I was fortunate enough to be able to step in for our president at the last minute and attend the New Zealand Rating Practitioners Seminar in Wellington on March 16th and 17th 2009.

It was an excellent opportunity to learn more about how overseas council rating methods compare with ours. It also reinforced how unique our role as a rate administrator is.

It would be safe to say that New Zealand have some very similar issues and although some of their processes are quite different at the end of the day they are dealing with ratepayers and something dear to them and that is their hard earned money.

Although their association is in its infantcy, they have a history of already established network systems in place within their rating practitioners. They hold a couple of seminars throughout the year that have a very high attendance. All the delegates seemed very committed to their roles and very supportive of each other.

There were about 80 attendees from that came from 87 Local Government Councils. There council structure is somewhat different to SA and they have 12 Regional Councils, 16 City Councils and 57 District Councils. The Regional Councils deal with Sustainable regional well-being which includes some of the following, Managing the effects of using freshwater, land, air and coastal waters. Managing rivers, mitigating soil erosion and flood control. Regional emergency management and civil defence preparedness. Regional land transport planning and contracting passenger services. Harbour navigation and safety, oil spills and other marine pollution.Local councils deal with Sustainable district well-being including, The provision of local infrastructure, including water, sewerage, stormwater, roads. Environmental safety and

New Zealand Rating Practitioners Seminar

health, district emergency management and civil defence preparedness, building control, public health inspections and other environmental health matters. Controlling the effects of land use (including hazardous substances, natural hazards and indigenous biodiversity), noise, and the effects of activities on the surface of lakes and rivers. The seminar was opened by Hon John Carter, Associate Minister of Local Government. He has had a long local government background and seemed to have a good relationship with local government.





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Windy WellingtonNew Zealand Rating Practitioners Seminar

The sessions for the seminar included presentations on The Rating Qualification which could be compared with the Local Government Rates Administration certificates. There was a lengthy session on Maori Land Rating as this is the topical issue that New Zealand Rating Practitioners are dealing with at the moment. They are trying to establish some consistency across councils not unlike our marina berths.

A total of 9 workshops were held over the 2 days and this was an excellent way to share ideas and information. The workshops covered topics such as there LTFP, valuation issues, rate collection and rate invoices to name a few.

As far as rate arrears go in New Zealand, well they have that under control as they have the option to go to the mortgagee once a year and obtain payment for the previous 12 months arrears and the banks pay it. Obviously this keeps the debt to a minimum and they don’t need to resort to sale of land except for those ratepayers with no mortgage.

It would seem that their Legislation might not be as involved as ours but I did hear on a lot of occassions that it is interpretation of the act that can cause some problems, which is a familiar problem here in SA. New Zealand are yet to set up some strong relationships with legal prefessionals so we are extremely lucky here in SA to have those relationships as they are invaluable.

My presentation was about SAIRA and Rating in SA. They were very impressed with our association and how much we have achieved. They were very interested in our website particularly the forum. Also of interest to them was the Recruitment and Retention Guide.

Well New Zealand is definitely on the top of my holiday list now. They turned on some beautiful weather, not even a breath of wind. Even though I was unable to spend any extra time there I have made some Kiwi friends and look forward to going back to spend some time having a look around their very pretty country.

Karen PedleyTea Tree Gully



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Rosemary Munslow Joan MurrellPresident Vice PresidentPh: 8397 7310 Ph: 8384 0530Email: [email protected] Email: [email protected]

Chris McNamara Karen PedleyTreasurer SecretaryPh: 8203 7372 Ph: 8397 7260Email: [email protected] Email: [email protected]

Natasha Jones Michael KelledyBoard Member Board MemberPh: 8232 0926 Ph: 8235 3091Email: [email protected] Email: [email protected]

Lee Denton Megan Trezise Board Member Board MemberPh: 8406 8513 Ph: 8229 9927Email: [email protected] Email: [email protected]

Kylie Sunners Chris ArthurBoard Member Board MemberPh: 8375 6617 Ph: 8342 8052Email: [email protected] Email: [email protected]

Bryan Francis Neville Gay Board Member Board Member Ph: 8555 7000 Ph: 8391 7207Email: [email protected] Email: [email protected]

Ann-Marie Putland Beverly HallettBoard Member Board MemberPh: 8408 0446 Ph: 8256 0158Email: [email protected] Email: [email protected]

Dot TembyBoard MemberPh: 8539 1111Email: [email protected]

Board of ManagementV








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