Special Rate Variation- Frequently Asked Questions

SRV

 

Sutherland Shire Council’s rates model hasn’t changed in decades. Council has now reviewed this model and is proposing a fairer way forward for our community.

Council’s services are available for the whole community to utilise and enjoy, and as a community everyone needs to share the costs fairly.

Council’s current rate structure is based upon land value only, not the market value (land and dwelling). A minimum rate is applicable for units and apartments, and this is currently set at $602. For the majority of units and apartments in the Sutherland Shire, this amount is significantly less than houses of comparable market value.

We want to hear what you think about the proposed new model.

Provide your feedback.

Under the provisions of the Local Government Act 1993 (NSW), a special variation allows a council to increase its general income above the rate peg. Special variations can be for one or several years, and can be temporary or permanently retained in the rates base.

Each year, councils wishing to apply for a special variation make a formal request to the Independent Pricing and Regulatory Tribunal (IPART) in February. The applications are assessed against criteria listed in the Office of Local Government’s Guidelines.

The criteria include demonstrating the need for the variation through key legislated planning documents, including the Community Strategic Plan, Long Term Financial Plan and Resourcing Strategy, ensuring community awareness of the need and extent of the proposed increase in rates, and consideration of the impact on ratepayers as well as the community’s capacity and willingness to pay. In addition, councils must meet criteria related to productivity improvements.

The Independent Pricing and Regulatory Tribunal is the main independent pricing regulator in NSW. IPART sets prices for water, electricity, gas and transport businesses. They set the rate peg for local councils.

The rate peg is the maximum percentage amount by which a council may increase its general income for the year. For most councils, general income consists entirely of rates income. The rate peg does not apply to stormwater, waste collection, water and sewerage charges.

IPART has set the rate peg for 2019/20 at 2.7%.

Councils have no say in how the rate peg is set. The rate peg is set by IPART and is based upon the Local Government Cost Index (LGCI).

The LGCI measures price changes over the previous year for the goods and labour an average council will use.

Council’s Long Term Financial Plan has identified a gap between current projected funding for operation, maintenance and renewal of our assets, and what is needed to ensure they are maintained to an acceptable level into the future in line with the service expectations of our community.

Sutherland Shire Council’s rates model has not changed in decades. In considering how to address the financial challenges in continuing to maintain assets and provide services, Council has now reviewed the rates model and is proposing a fairer way forward for our community.

Council’s current rate structure is based upon land value only, not the market value (land and dwelling). A minimum rate is applicable for units and apartments, and this is currently set at $602.30 for the majority of units and apartments in the Sutherland Shire, this amount is significantly less than houses of comparable market value.

The proposal being considered is to raise the minimum to $900, to create a fairer distribution. The additional income generated will be used to continue to maintain and deliver assets and services into the future.

Under the proposed model, the minimum rate would increase to $900. Any residential unit/apartment owner currently paying less than this amount will be impacted.

There are currently 20,531 residential unit/apartment owners paying the current minimum rate of $602.30 – which represents 25% of total rate paying households in the Sutherland Shire.

Under the proposed new model, 33% of total rate paying households will pay the new minimum.

Owners of detached dwellings, or units that already pay more than $900 will only experience a rate increase by the rate peg amount set by IPART of 2.7%.

Rate pegging determined by IPART limits the amount by which councils can increase their general income for the year.  IPART announced the 2019/2020 rate peg limit at 2.7%.   A special rate variation allows councils to increase their general income above the rate peg. 

Council is proposing to apply for a special rate variation to increase its general income by 8.8% in 2019/2020 (inclusive of the rate peg of 2.7%).  This increase in general income is to be fully funded by an increase in the minimum rates. 

Properties above the minimum rate will have an increase equal to the rate peg of 2.7%, which mostly applies to houses.

It is important to note that the rate increase will not affect utility charges including waste and stormwater charges that are calculated and levied separately.    

If the new proposal is approved by IPART, it would be expected that rates will rise from the first rates notice in June 2019. This is subject to Council adopting any recommendation received from IPART. 

New unit developments do provide an increase in income to Council which has been included in Council's Long Term Financial Plan.  However, new dwellings put increased pressure on our community assets - our roads, parks, playgrounds and facilities such as libraries and leisure centres  – and as a result, the cost to Council of maintaining these assets also increases.

Further, as many units only pay the minimum rate, the increase in income does not fully address the ongoing asset maintenance backlog, which is projected to increase to $176 million by 2027/28.

Council manages and maintains local infrastructure assets worth over $2.7 billion that helps shape the quality of life enjoyed by our community. Council’s assets are available to the whole community to utilise and enjoy, and the income from rates enable us to deliver and maintain these assets which include roads, footpaths, libraries, stormwater and waterways, parks, bushland, sportsgrounds, playgrounds and more.

Over time, the range of assets and services Council provides to meet the needs of our community has changed and grown. Our assets include roads and footpaths, parks, sporting fields, libraries, stormwater management and much more.

Our Long Term Financial Plan shows we are facing a financial challenge in considering how we maintain our assets and the level of service our community expects in years to come.

Council has been undertaking a continual replacement and upgrade program to meet the needs of our community but many assets are already due for renewal and there is a $42M renewal backlog[1] that will only continue to grow if not funded adequately.


[1] The renewal backlog from the 30 June 2018 Financial Statements was $42 mil or 2.13%.

Council is looking at options to help reduce the impact on pensioners and others experiencing hardship. Pensioners are eligible for rebates on their rates.   Most pensioners need to be holders of the Pension Concession Card to be eligible for the rebate. Council will also continue to offer the payment deferral option to all pensioners.

The Special Rate Variation would generate an additional $7.255 million per year in rates income.  The rates increase will help to fund the infrastructure backlog and services to meet the needs of the community and ensure that Council is financially sustainable in the long term.

In addition to the proposed change to the minimum rate, Council must also consider a range of financial strategies to ensure its long term financial sustainability. This may include decisions around the prioritisation of assets and services, efficiency improvements, user fees and charges or asset consolidation.

Council will continue to consult with the community to explore the community’s desired service levels and infrastructure needs, reflective of income available.

Council has been consulting with the community over the past 2 years to understand which of our assets and services are most valued and the community’s expectations on service standards.

IPART requires further consultation to occur before applying for a Special Rate Variation (SRV), with the application due on 11 February 2019.

Community consultation relating to a possible SRV and rate increase is taking place over an 8 week period from December 2018 until January 2019. All households and ratepayers will be informed of the proposed SRV through a letterbox drop and ratepayers notice, and there are a variety of ways for the community to have their say on the proposal.

IPART sets the timeframes and detailed requirements for Special Rate Variation (SRV) applications, including ensuring the community is aware of the proposal and can provide feedback.

Key dates in the process are:

30 November 2018

Council notify IPART if considering an SRV application for 2019/20

December 2018 – January 2019

Community consultation undertaken around proposal

First week February 2019

Council meet to consider feedback and determine whether to apply to IPART for an SRV

11 February 2019

SRV application due

Under the provisions of the Local Government Act 1993 (NSW), a special rate variation allows a council to increase its general income above the rate peg. Each year, councils wishing to apply for a special variation must make a formal request to the Independent Pricing and Regulatory Tribunal (IPART). The applications are assessed by IPART against criteria listed in the Office of Local Government’s Guidelines.

Special variations can be for one or several years, and can be temporary or permanently retained in the rates base. Special Variations can be made to increase minimum rates only.

Full details on the Special Rate Application process and guidelines can be found at: www.ipart.nsw.gov.au

 

The minimum rate is currently set at $602 per annum, which is applicable for units, apartments, and some villas, town houses and duplex. If you take a look at your rates notice you will be able to see if you are currently paying the minimum.

(See highlighted red box in the image below)

Anyone currently paying under the new proposed minimum would see their rates increase to $900 per annum. For example, someone currently paying $800 would also be increased to the new minimum of $900. If a property, whether it be a unit, town house or villa, is already paying more than the $900 then they will only experience a rate increase equal to the rate peg amount set by IPART of 2.7%.

If you would like further clarification on the impact of the special rate variation on your rates, please give us a call on (02) 9710 0585 and we will be able to provide you with an answer for your specific circumstances.

 

Rates notice that highlights the line item that says @min rate

Online

Community feedback can be provided until 5pm, 4 February 2019.

You can make a submission or ask a question online

Have your say here!

 

In Writing

You can also make a submission in writing, and address it to

The General Manager

Sutherland Shire Council,

Locked Bag 17, Sutherland NSW 1499

 

Drop-in Sessions

Join us at one of our Drop-in Sessions.

 
Monday 17 December 2018
12pm-2pm
   
 Sutherland Library
30-36 Belmont Street, Sutherland.
 
Tuesday 18 December 2018
10am-12pn
 
 Menai Library
Menai Marketplace, Allison Crescent, Menai.
Friday 11 January 2019

12pm - 2pm

 Engadine Library

116E Caldarra Avenue, Engadine

Saturday 12 January 2019

11am -1pm

Cronulla Library

Cronulla Central, Croydon Street, Cronulla

 Saturday 12 January 2019

10am -12pm

 Southgate Shopping Centre, Port Hacking Road, Sylvania.

 Tuesday 15 January 2019

12pm-2pm

Menai Library

Menai Marketplace, Allison Crescent, Menai.

Thursday 17 January 2019

5pm - 7pm

Cronulla Library 

Cronulla Central, Croydon Street, Cronulla,

 Friday 18 January 2019

12pm - 2pm

Miranda Library

31 Wandella Rd, Miranda. 

 Saturday 19 January 2019

11am - 1pm

 Sutherland Library
30-36 Belmont Street, Sutherland.
Saturday 19 January 2019 10am-12pm
 

Caringbah Library

376-378 Port Hacking Road, Caringbah

Thursday 24 January 2019

5pm - 7pm  

 

Southgate Shopping Centre, Port Hacking Road, Sylvania.

   

 

Contact your Councillors

Contact your Councillors

Location

Address: ,

More information

Policies and documents

Rates Recovery and Hardship Policy

Forms

Pensioner Rate Concession Application Pensioner Deferment of Rates Application Hardship Rate Relief Application How your Rates are Calculated Rates Statutory Declaration General

Enquiries

Enquiries can be directed to Rates Hotline on 9710 0585 or ssc@ssc.nsw.gov.au

Pensioner Rates Concession Pensioner Deferrment of Rates Hardship Rate Relief

Did this page help you?

We monitor feedback and will respond to your comments if you include your email address.



Please type the characters you see in the picture below

Please type the code in the box above