Budget benefits community
I WRITE to discuss Horsham Rural City Council’s 2018-19 Budget.
The process doesn’t start off with a blank sheet of paper.
The Budget is a practical empowering of the aspirations and directions contained in the Council Plan.
The Council Plan, is the road map which guides the priorities of our Local Government.
The Budget is the implementation commitment that makes things happen.
In recent weeks the commentary and debate has left the Budget and focused on the Rating Strategy, who pays how much, among the different sectors of our community.
That’s what we are, a community. A group of people living in commune.
We all contribute in some way and we all benefit in a variety of ways.
Some benefits we enjoy are experienced by choice, for example when we visit the swimming pool or library,
Some benefits are experienced with expectation, for example, street lighting and rubbish collection.
Then some benefits are experienced through necessity, for example meals on wheels and maternal child health services for our children or grandchildren.
I would like to highlight, important expenditure in the 2018/19 Budget.
- $365,539 in Community Grants will be distributed throughout our community
- $1.007 Million Dollars will be spent on Footpaths and Cycling Paths
- $1.905 Million Dollars will be spent on Rural Roads Reconstruction
- $1.09 Million Dollars will be spent on Waste Management
As well as the exciting works on our outdoor Swimming Pool, re-stumping and floor repairs in the Town Hall and more improvements to the Central Business District to improve the experience for visitors and locals.
There is so much more and so many of these projects are employing local suppliers, contractors and businesses families within our community.
Finally, the council will be undertaking and extensive and thorough Review of its Rating Strategy in time for next year’s Budget.
This will be an opportunity for all rate paying sectors to help design a new strategy.
In the words of Voltaire, translated by a trusted friend a few years ago, “In the search for perfection, don’t overlook what is good”.
I believe this Budget as a good fit for our community.
Horsham Rural City Council councillor
Council Budgets are a complex issue
ALL Councils across Victoria have the same requirements in the Local Government Act to put our rate strategy and budget out for community consultation and comment.
This was done and we received eight submissions, two of which were from farmers challenging our rate differential for the farming community.
We never received a submission from the Victorian Farmers Federation.
Other than the 2.25 per cent increase determined by the State Government, rates levels are also determined by the value of your property. If the value of your property goes up, so do your rates.
The valuations are done by an independent valuer appointed by State Government.
Rates system is literately a wealth tax.
Council understands the burden placed on the farming businesses when their farm valuations have jumped significantly in one year because of their property valuations.
However, to be asked to significantly change our rating system and budget after the consultation process has been completed is just not possible or appropriate.
Cr Grimble’s motion was seeking wholesale changes to the way we fundamentally calculate our rates and our budget.
He was seeking to have a 2.25 per cent rate increase over every section of our community.
This would mean developing a rate differential for each other sector of the community, residential, commercial and industrial. This has never been done before.
His motion also reduced the budget by $400,000, again a fundamental change to our budget.
If we approved this fundamental shift in the rate strategy and the budget, it would have set a precedent and this would undermine the principle of rates calculated on valuations, which is the foundation of the rate system.
The farming community, get a tax exception for their rates on their farm and their house, residential ratepayers do not.
With such a significant change being proposed by Cr Grimble, our CEO Mr Bhalla sought legal advice and was advised that to change the rate strategy and the budget at such short notice without having the time to going back to the community for their comment, would be breaching the Act and could land Council in the Supreme Court.
Council has committed to do a full rate review prior to the next budget and assess the implications of any shift in our rating strategy will have on each sector of our community.
This is a complex issue and we understand the passionate feelings this issue generates.
However, under the Act, Council must comply with the principles of natural justice and at all times look at the impact a change to one sector will have on the other.
It is a legislated requirement for good reason and it is our duty and our responsibility to govern for all.
Horsham Rural City Council mayor
Empathy to a broken system
Right across the state, farmers are pleading with councils to show empathy to a system that is broken, unfair and completely unsustainable.
The intent and spirit of the state government is ultimately to cap council’s expenditure to a modest 2.25 per cent. The budget process and rating system may seem complex, the reality is, it is not.
It is simple, easy to explain and easy to understand. I was alarmed, yet not surprised when at the most recent Kalkee assembly of farmers, a comment was made about the lack of knowledge from the decision makers on how the budget and rating system works.
My motion defeated by the casting vote of the Mayor was simple, easy to explain and understand.
Reduce the size of the pie by $400,000, distribute the pie equally by 2.25 per cent on average and empower the administrators of the HRCC to action the mechanics of this resolution including legal advice in compliance of the act if necessary.
The primary objective of a council is to endeavor to achieve the best outcomes for the local community having regard to the long term and accumulative effects of decisions.
In seeking to achieve its primary objective, a council must have regard to the following facilitating objectives.
(a) To promote the social, economic and environmental viability and sustainability of the municipal district.
(f) To ensure the equitable imposition of rates and charges.
A council must -
136 (2a) Manage financial risks faced by the council prudently, having regard to economic circumstances.
(b) Pursue spending and rating policies that are consistent with a reasonable degree of stability in the level of the rates burden.
(c) Ensure that decisions are made and actions are taken having regard to their financial effects on future generations.
My motion would have:
Decreased the farm rate revenue required.
Decreased the commercial rate revenue required.
Decreased the industrial rate revenue required.
And increased the residential rate revenue on average approximately $30- per assessment.
An average 2.25 per cent across each land class.
The stark reality on individual circumstances would have seen many residential properties still decrease and farming assessments still increase significantly based on capital improved value.
“I applaud any council across the state that has the conviction and empathy to address a broken, unsustainable system.”
To consider fairness and challenge the poor process of late valuation notification and the consequences to its community.
I thank Victorian Farmers Federation president David Jochinke for his advocacy and first raising the 2.25 per cent position with HRCC in March of this year.
I know Mr Jochinke is giving local government the leadership push to change the way local government is funded.To empower a high level of understanding and ultimately championing policy change from the state and federal governments.
“This is not a community at war with one another. This is about providing services to the community required by the community at the lowest cost to meet our need more sustainably.“
On basic fundamental principles of fairness, unintentional poor process and the consequences of not fully understanding the ramifications of our decision making, I can only draw this conclusion:
“I do not support our budget and rating strategy.”
“In closing I will pursue opportunities to empower the administrators by resolution of the Council to submit a revised budget prior to the rate notices delivered to you by September.”
Horsham Rural City Council councillor
Government ‘Fair Go’ Rates system
ON Monday June 25, Horsham Rural City Council considered the rates issue and resolved not to make any changes to its proposed budget – leaving the farming sector with an unmanageable rate burden that they had just become aware of.
Two motions to resolve this issue were put to your Council:
1. Cr Grimble - 2.25 per cent cap proposal on each sector. This proposal spread the government’s intended 2.25 per cent rate cap fairly across the board, noting that within each sector property values will cause variations.
2. Cr Robinson – 0.00 per cent cap proposal on the entire budget. Remove some modest items from the Council’s shopping list that were not required by the community or never going to be actioned anyway. This option was put following the rejection of the first.
Both options are supported by Sections 3C and 136 of the Local Government Act (requirement for equitable imposition of rates and charges and stability in the rate burden).
Both options address the critical burden thrust upon farmers at very short notice and in the midst of the long days and nights of cropping.
Both options were rejected by your Council.
Our surrounding Shires have been proactive. I commend Northern Grampians for supporting rate equity across their community. They implemented the same process that Cr Grimble put to our council – very doable.
I do not support mayor Pam Clarke’s comments to councillors and a ratepayer (dated 21/6/2018) that we are legislatively constrained from taking proactive action.
I did not support the council budget and I will not support any budget that unfairly, unlawfully and unnecessarily disadvantages any sector of our community. It would only take one of our proposed mining ventures to commence operations and we could suddenly find that it is one or more other rate sectors that are wearing a greater share of the rate burden.
There is nothing fair in Horsham Rural City Council doing nothing to look after its ratepayers.
Horsham Rural City Council councillor