HORSHAM council was aware of a possible solution to its rates problem 10 months ago, one councillor alleges.
Cr David Grimble said the council was presented in April 2018 with multiple scenarios to balance all rate sectors to the capped increase of 2.25 per cent.
The council’s chief executive Sunil Bhalla said corporate services director Graeme Harrison presented various rating strategies to the council – one of which included a 67 per cent farm differential with a $200 municipal charge.
However, this solution was not implemented into the council’s 2018-19 Budget.
Cr Grimble’s comments came as the council passed a motion at a meeting on Tuesday to call for community feedback on its draft Rating Policy and Strategy for 2019-23.
Horsham council rates rose to the capped increase of 2.25 per cent, on average, in 2018-19. However a breakdown of the rates meant residential rates decreased by 0.6 per cent, while farm rates increased by 11.8 per cent.
The independent Rates Strategy Advisory Committee created a Rating Strategy Review and suggested a further farm rate differential discount of 13 per cent. This would decrease the differential from 80 per cent to 67 per cent of the general rate.
Cr Grimble said Mr Harrison presented the same solution at a briefing in April 2018.
He also said he was frustrated the council spent $75,000 on the report to learn something it already knew.
“I’m frustrated because we were told, for minor reasons, that we wouldn’t be able to do it before the Budget was released – but I believe we could have,” he said yesterday.
“The report we got from the independent committee was damning. It said our current rating strategy wasn’t fair and equitable. Until the council addresses that problem, it won’t be in a position to make it fair.
“The Victorian Farmers Federation made a submission advocating for the 2.25 per cent increase across the board, but the council said it never received a submission.”
The current municipal charge for Horsham is $287 per rate assessment, which generates $3.1 million of revenue. Cr Grimble said reducing the charge to $200 would decrease the total by $900,000.
The independent committee consisted of nine ratepayers and two advisers. It presented its report to council in December.
Other suggestions included a discount for commercial and industrial differentials of five per cent, a flat municipal charge of $200, rebates for pensioners and differential review trigger.
VFF president David Jochinke, of Murra Warra, said VFF members and councillors attended a rates meeting at Kalkee on March 26, 2018.
“We discussed it with councillors and council employees, and presented the strategy that would make the rates burden shared equally,” he said.
“We have made the point that we won’t be accepting any skewing towards the farm sector. The report demonstrates that it was achievable, however the council didn’t choose to adopt that strategy or apply it to the Budget.
“We need to start talking about the burden and what each sector contributes, and where future distribution of the burden should lie. We’re not going to accept any massive rate rises ever again. If this whole thing could have been avoided in the first place, then that is very disappointing.”
The Wimmera Mail-Times sent a number of questions to the council for comment regarding the April 2018 documentation.
The Mail-Times has a copy of the document, date stamped April 10 – which was the date of the council briefing.
Mr Bhalla said the suggested scenario to increase rates by 2.25 per cent across the board was added following the VFF meeting at Kalkee in March.
“Mr Jochinke said that we should be applying the rate cap at the sector level. The rate cap applies to the overall rates collected and not by individual sector,” he said.
“The analysis of scenarios around the differential is something we do each year, particularly following revaluation.”
The Mail-Times also posed the following questions to the council:
1. Did the council know about this suggested alternative rating solution in April? Can you explain how this documentation came about?
2. If this solution would have provided an across the board rate increase of 2.25 per cent, including the farming sector, why wasn't it implemented into the 2018-19 Budget?
3. During the Budget process last year, the council said it was too late to change its rating strategy. In light of the documentation form April 2018, does the council stand by this comment?
4. At what point did the council engage the services of a consultant on this matter? How much did those services cost and where did that money come from?
Mr Bhalla’s responded: “The chain of events and debate in relation to the rates was well documented in the previous reports. The decision to get an independent review of the rates was made by council.
“Cost of the review has already been reported in the report which council considered on Tuesday. Information and modelling of this at a council briefing meeting is for the understanding of councillors and not for broader community purposes.”
He said the Draft Rating Strategy and Policy, once adopted, would be used to set the rates in the dollar for 2019-20.
The Victorian Labor government made a pre-election promise to launch an inquiry into the state’s council rating system if re-elected. It is yet to announce an inquiry.
HORSHAM council's chief executive Sunil Bhalla has clarified comments he made in this story.
Cr David Grimble alleges the council was aware of a possible solution to its rates problem 10 months ago.
Cr Grimble said the council was presented in April 2018 with multiple scenarios to balance all rate sectors to the capped increase of 2.25 per cent.
A previous version of this story referenced Mr Bhalla saying no such scenario was presented at the briefing on April 10. His reference related to a document from the Victorian Farmers Federation.
Mr Bhalla said representatives of the farmers federation did not present a document to the council at the briefing on April 10.
He said corporate services director Graeme Harrison later presented various rating strategies to the council, which included a 67 per cent farm differential with a $200 municipal charge.
"The analysis of scenarios around the differential is something we do each year, particularly following revaluation. This scenario was added following the Kalkee briefing," Mr Bhalla said.
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