Friday, June 24, 2011

LETTER TO LCC – Submission to the General Manager, Mayor & Aldermen

Tasmanian Ratepayers’ Association Inc.
P.O. Box 2039,
NEWNHAM TAS 7248


The General Manager,
Mr. R. Dobrzynski,
Launceston City Council
P.O. Box 396
LAUNCESTON TAS 7250

Dear Mr. Dobrzynski,
Re : Budget Submission - 2012, Launceston City Council

The Tasmanian Ratepayers Association again congratulates you as General Manager on implementing what the Association has formally called for, for some years, the invitation to Launceston residents to contribute to the debate on the development of the 2011-12 Annual Budget and striking of the rate.

The insistence that ratepayers make written submissions, however, places a burden on the very few that have the time and skill to write a submission. While an attempt at some community consultation on the matter of rates is welcome, the consultation is effectively too little, too late. The lack of unanimity from Aldermen as to if there should have been any consultation at all, reveals the consultation at that level, as a half-hearted attempt. The absence of a number of aldermen from the briefing sessions is also telling.

The „briefing sessions‟ held on 15 and 16 June were poorly promoted and poorly attended. This reflects very badly on LCC‟s ability to meaningfully engage with the community. Clearly, few ratepayers are able or willing to attend such briefing session on a cold winter's evening at the Town Hall. More information ought to have been disseminated beforehand, so ratepayers could
better understand why they should attend a session. Whilst council has provided a means for submissions to be made via the internet, many residents simply do not have this technology available to them.

A quarterly glossy 8-page newsletter Your Launceston news, posted to all Launceston households just days before the briefing sessions were scheduled, represents an expensive but lost opportunity, as it could have contained much of the information withheld until the briefing sessions. Remarkably this newsletter didn't even announce that briefing sessions would be conducted, or even allude to the process of consultation. It is not acceptable to argue that at the time of printing the details had not been agreed or were even known, because that will only draw attention to the fact that the promise to undertake this consultation was made in December 2010, and there had been many months since then to properly make arrangements. The printing deadline did manage however, to allow a front page article on the meaning and effect of Tasmanian Ratepayers Association Incorporated municipal revaluation, even though the new valuation notices were only just released and were being received in Launceston letterboxes in virtually thensame postal delivery.

For something as important as rates, the consultation should have started 12 months ago, after the last rate decision. This consultation MUST BE GENUINE, be real and persuasive. Last minute calls by aldermen to consider alternative methods for levying themrate, were just that, poorly thought out last minute calls. Promises by aldermen to present modelling based on a land valuation method, have failed to materialise in the public arena, and whilst done, you say is only for internal use by officers.

When the State Government appointed a steering committee to report to it on a Review of Government Valuation and Local Government Rating in 2010, the Association met firstly with several members of State Cabinet in Launcestonn and then especially with the Minister for Local Government, Hon. Bryan Green, prior to making a considered submission on the Access Economics report commissioned by the steering committee.

In our submission, we were pleased to congratulate the government on authorising this comprehensive report, which carries our Association's broad support. Whilst supporting the general thrust of the report, we argued for 50% of municipal charges to be made up of fixed charges for services. State Parliament has since amended legislation to allow councils to in fact raise the fixed general charge to that level, effective immediately. There is no doubt that ratepayers and the community generally who contribute to rates through leases and rentals, expect local government to be a basic service provider, and that those services ought to be charged where possible on a system that reflects the user-pays principle. Particularly, residential households should not be penalised with a charging system that reflects a 'wealth tax' for the cost of basic services.

Residential properties on AAV at 4% minimum of capital value rule after 2004 revaluation, were very badly affected by rate increases, and will continue to suffer these high cost penalties until the present systems are changed and returned to a rating cost akin to pre-2004 levels. These rate levels are not sustainable for such ratepayers, and whilst local government argue for its own income sustainability level, it is our very strongly-held view, that there is inadequate consideration given to ratepayer sustainability, and the ability to pay principle. It is not a question of a rate being struck on the basis of a ratepayer's wealth, as it is the income level of a ratepayer that enables payment to be made. Taxation by the Commonwealth Government is an
income tax, not a wealth tax .

We have observed with quite some interest, what you have stated openly at the public briefing sessions about municipal rating being a taxation system skewed at the ratepayers who are wealthy. Local government bodies in Tasmania do not have the power or authority to tax. Only State and Commonwealth Governments have the constitutional authority to tax. We are advised that:

"The first and most fundamental thing one needs to know about the Constitution, is that governments can only do what the Constitution permits. A breach of the Constitution- through an attempt to wield powers that it does not grant or to exceed the limits of those that it does - cannot stand such an attempt is unconstitutional'. It is unlawful. Those who hold power in Australia - parliaments, governments, public officers, courts - can only use power as the Constitution permits."

This view is not one that our Association can even begin to assess within our meagre means, but we would be most interested to hear from Council as to what lawful powers it has to tax ratepayers in Launceston. Council must demonstrate more restraint with its budgets, so as to reduce rating requirements and to properly manage activities and budgets in a responsible manner to remain within budget provisions and to fully complete all works for which the budget was approved in the first place. Budget savings must be returned to reserves and offset interest expenses and to minimise subsequent rate charges.

In this particular year when governments are restraining expenditure, Launceston would be better advised to actually reduce its budget by 4% and pass this relief onto ratepayers.

Activities of Local Government must be restricted to more appropriate local government activities and not become to the benefit of a greater region, unless citizens from the region but outside the rateable area also contribute. If this cannot be by agreement with the neighbouring rating authority, then it must be on a user-pays system. Local Government must not continue along a course of becoming 'mini-government'.

Clearly the present use of AAV to assess municipal rates is inequitable and broadly unpopular, and must be abandoned. That is what the findings of the ACCESS Economics report commissioned by the State Government's Steering Committee essentially found and recommended to Parliament. Whilst the impact of a land only based valuation system has not been fully modelled against AAV in the Launceston rating system context, it would appear from
the investigation undertaken and presented by Access Economics, that this would be a fairer system for the second 50% of municipal charges to be directed to ratepayers. Our Association believes that if an increase in the General Charge were to be applied this year with the balance of the General Rate struck as a value based calculation, a satisfactory and equitable rating system for 2011-12 would exist.

Particulars of the TRA Inc Submission
Whilst we have read the Budget Objectives in 'dot' point form presented to the 'briefing sessions', it is difficult to understand the true thinking of Launceston City Council staff and aldermen in framing this budget. The PSE is document created by accountants and fails to give any indication of the thoughts and decision-making behind the budget.

What are the opinions of aldermen on budget items, what is the thinking behind these decisions? To the ratepayers, seeing the PSE on the last few days before the budget is set, there is little evidence of the scrutiny that should be applied to these decisions, scrutiny that should have involved substantial public consultation.

The budget is a business as usual document, a 4% increase which will have severe negative impacts on some and pleasant impacts on many more that will see their rates decrease in real terms or increase by less than 4%. This 'business as usual' approach neglects to take into account the economic situation faced by all Tasmanians and Launceston ratepayers in particular.

Launceston businesses will testify they are facing some of the hardest trading conditions they have faced for a long time. We have seen the decimation of the forest industry to less than 20% of what it was just a few years ago; a lot of those jobs and businesses were based in Launceston. Even a casual conversation with retailers in Launceston CBD will reveal that their revenues are severely squeezed and if they have been able to retain their revenues from last year the profit margins have been severely impacted. Launceston City Council competes with existing business by competing with gyms and is adding further pressure to that small business sector in Launceston which after all is part of the majority of economic activity in Launceston.

In Launceston alone there will be hundreds of public servants made redundant in the coming year. It is possible to write much more about this, but the facts are all well understood by most people in the community. Yet the best that LCC can do is increase rates by 4% average and guarantee that some ratepayers will 'only' have to pay a 20% increase in rates, while others get decreases.

The budget's solution to the bleeding at Launceston Aquatic is to increase expenditure by $355,00 to achieve additional revenue of $255,00, if the revenue is achieved, the only certainly is that the expenditure will be at least as much as forecast and most likely more.

Has council considered deferring expenditure, cutting costs, shedding 'services' or changing the nature of 'services', restructuring operations, finding alternative means of funding activities. These are the kind of decisions that families and businesses in Launceston are making every day, there would be very few if any that can afford to continue with business as usual and assume 4% increase in revenue.

It is consultation at this level that LCC needs to engage the community in. There are many areas of expenditure or 'services' for which there is little evidence the community understands their cost and indeed, wants or needs them.

Community Consultation
For the lay person, the Proposed Statutory Estimates (PSE) document is difficult to understand. There has been no attempt at simplifying and contextualising the message and making it more easily understood. For example most people understand the concept of wages and salaries, yet these words do not appear anywhere in the PSE instead such expenditure is presumably under “operations”.

Other information is difficult to understand and put into context. For example the table on page 6 is headed in bold text Proposed Operating Budget yet above in plain text it says the budget contains some initiatives, there is a series of budget items and numbers, no total is given, the total is just under $3 million.

What is the meaning of this? – in fact it is of very little substance and its only meaning is that LCC is trying to tell the reader that some of its expenditure may be things that appeal to the reader (or in an earlier draft – the aldermen), but if obfuscates the facts. The total operating budget is $83.5m, less $18.2m depreciation and less $5.7m that is passed through to Tas Fire Service leaves $71m, the table only explains 4% of this expenditure. Where does the rest of the money go? The hapless reader has to do a lot more accounting training and trawling to begin to understand.

Page 7 contains a similar type of table that explains less than $12 million of expenditure in a capital works budget of $44.2 million.

Wealth tax or rates?
Many ratepayers would contend that rates should be charge for the operation of council services and that this charge should be such that all citizens, irrespective of income would be happy to pay it. This is not the case in Launceston.

Over the years council staff have repeatedly referred to rates as a wealth tax, which by now it undoubtedly is, but it is only so because staff have set out to develop and administer a „wealth tax‟. Other councils in Tasmania have over the same time developed very different much more equitable and fair rating systems.

What has not been made clear to ratepayers is if this view of rates being a wealth tax is a view that is endorsed by the Aldermen. In a community with as low incomes as Launceston, the wealth tax is reaching unsustainable levels. The data is not readily available, but this submission contends that LCC is collecting ever higher revenues from a small number of residential ratepayers while the remaining residential ratepayers get minimal increases and indeed, decreases in their rates.

The emphasis on % changes in rates instead of net dollar changes in rates only reveals part of the reality being faced by ratepayers.

Request for information:
The Tasmanian Ratepayers Association requests:
  1. A frequency count of properties, by AAV in $300 increments of AAV. Broken down into residential and commercial.
  2. The same frequency breakdown above with the dollar contribution to total rate revenue. Broken down into residential and commercial
  3. The frequency count for the bands breakdown as per the chart in the
LCC presentation pack – Changes in rates Pre Max - with the bands expressed in $ terms in $100 increments, not percentages.

Recommendation:
That each alderman unequivocally state if they agree that rates are a wealth tax and that they agree with the direction given by the council to its staff to administer a wealth tax.

Rates and expenditure
The reason rates are reaching unsustainable levels is expenditure above the level the community can reasonably support. While Launceston families are making do with less over the last few years, LCC has continued spending on luxuries and unessential projects, some of which have not met the revenue projections of council staff and aldermen. Thus the PSE states
“It can be seen with recent facility development (Aquatic Centre, Museum, the additional recurrent costs to operate these facilities is challenging the level of income available to finance other areas of Council Aurora Stadium) services”

This is an understatement as it conveniently ignores the failure of LCC staff and aldermen to properly scrutinise the projected budgets for the Aquaticn Centre - which were sold to the community as achievable and many in the community disputed - only to be attacked by LCC.

If staff and aldermen had done their job, the aquatic centre would have been designed to meet the limited market for such service and the limited discretionary spending budget in Launceston. It would not have been as grandiose a building as what was built, and it would have cost less to heat, but it would not cost the community as much as it is costing today.Instead, we have an inefficient and expensive white elephant and the gross inequity of people who cannot afford to heat their homes paying rates so that a few can swim in tropical conditions.

LCC should do what all other Launceston families have to do when costs rise, they make do with less. LCC should in a first instance get rid of initiatives that are „nice to have‟ and stick to what is essential. It could begin by cutting relatively minor expenditure that benefits only very narrow interest group such as tourism, events sponsorship, Northern Tasmania Development, Tiger bus. Cutting these would have a minor effect on total expenditure but would generally be well received in the community as at least an attempt to curtail expenditure.

Another approach would be to levy a rate on those who benefit - tourism operators to fund tourism expenditure, for example. It is equitable and the precedent has been set with City Prom, that those who benefit pay for these„services‟. It is with some concern to read in the press where Launceston City Council is casting its interest even further afield geographically, and becoming a party in the debate for funding Symons Plains race meetings, located in the Northern Midlands Municipality. Should there be any contemplation of ratepayer funds being used to promote, support or guarantee motor racing events, then a direct levy as has been done with Cityprom but towards tourism operators and the like who stand to benefit, is the only palatable course open.

Likewise it would be much more equitable that those that choose to use Launceston Aquatic pay the real cost of using the service, much as those to play golf pay the full cost of club fees, or those to play darts pay the full cost of their activity.

While the average rate in Launceston will not change by more than 4% from last year, the average is meaningless. It is lowest and highest residential rates where the distortion in contribution is greatest. The result is that there are a large number of properties that will pay less this year and a much smaller number of properties that pay several orders of magnitude more than the average.

The disparity between the lowest residential rate and the highest residential rate does not account for the disparity in income between these two extremes. It is after all from income that rates are paid, not „wealth‟. The large shift in the rate came about after the last revaluation. At this time many properties increased their rates by more than 100%, meaning that many properties decreased their payments.

The shift came about from an artifice that dictates that AAV can be more than 4% of the value of a property, but not less. While there can be an argument that those with a greater capacity to pay should do so, the current system is placing too large a burden on too small a section of the community. This burden does not compare well with other Australian cities.

For example in Launceston a home with a capital value of $975,000 is deemed to have an AAV of $39,000 and would pay a general rate of $2,828 , plus fixed charge of $120 and a fire levy of $718.

Compare the above with a home with capital value of $1,625,00 in the city of Boroondara in Melbourne that pays rates of $2,410. The Boroondara home is effectively paying about half the rate of the Launceston home.

Incomes in this part of Boroondara are substantially above the highest income in any Census Collection District (CCD) in Launceston. The easiest way to achieve greater equity in rates using the current AAV method would be by the introduction of a meaningful threshold for thenGeneral Charge, together with a revised General rate. Lifting the General Charge to a meaningful amount that reflects the minimum value of Council services to ratepayers would be good policy, $120 per property is clearly not a fair estimate of the minimum value of LCC services to any property in the municipality. If it means a rate increase for some ratepayers, it will place a greater onus on LCC to reduce expenditure to more closely match the ratepayers‟ capacity to pay.

Recommendation:
  1. That LCC set the minimum general charge at $550 and the minimum fire levy at $150.
  2. That the maximum general rate paid by any one residential property b capped at no more than 4 times the minimum residential rate paid by any one residential property.
Transparency on where ratepayers funds are spent.
A greater degree of transparency on where ratepayers funds are spent would ensure a much greater engagement with the community. An easy and effective way to achieve this would be a more detailed rates notice that gave a breakdown of the contribution by the individual ratepayer to meaningfulnbudget items. This would be very easy to do with the technology available today and would have no appreciable additional cost to produce. In the information age, there is no need to continue to issue a rates notice using the same format as was used 30 years ago.

Recommendation:
  1. That the burden of supporting the Aquatic Centre and Aurora Stadium be equally shared by all ratepayers and that this item be individually itemised in rates notices.
  2. That the burden of supporting Inveresk, Carr Villa Cemetery be supported from the general rate but the ratepayer contribution to this item be individually itemised in rates notices.
  3. That the burden of supporting the QVMAG be supported by the general rate but the ratepayer contribution to this item be individually itemised in rates notices.
  4. That the ratepayer contribution to major works be funded from the general rate but the ratepayer contribution to this item be individually itemised in rates notices.
  5. That the burden of supporting the Launceston Travel and Visitor Centre be supported by special rate on tourism industry operators.
Comments on the Budget
Waste Management
Why isn't the $6.01 million for the waste management coming from the waste management service charge and other Waste Management fees? Page 8 clearly states that the Waste Centre is the only facility that does not require some funding from rates to operate. If this is true, the $6.01 million should not be coming from rates. If the operation runs at a profit, why aren't retained profits used to carry out the development. The marginal increase in waste management charges does not provide an adequate return on the investment.

The major works program slide in the presentation pack shows Waste Management needing additional $6 million in 2016 and $3 million in 2021. The minor rise in the waste management charge does not cover this expenditure.

York Park
AFL is a multi-million dollar business that makes substantial profits, but somehow in Launceston after all the years it has been operating, does not even manage to pay for the use of the stadium. The continued underwriting of losses at York Park from rates is usually justified by the alleged multiplier effects on businesses from AFL games. If there is such a benefit, let the losses be underwritten by a special rate on tourism businesses that allegedly benefit, not on residential ratepayers.

Tiger Bus

The Tiger Bus would seem to cost $280,000. There is no information to allow the community to understand if this represents value for money. Does LCC have statistics on the number of people that have used the bus in the last year, what is the effective cost per person per trip? The principal user of the service should be LCC itself by relocating 95% of its staff parking to Inveresk. The remaining 5% of staff that have a regular need to use vehicles at short notice during the day could use the existing staff carpark in Cimitiere/Cameron Streets, with the remainder of the space used to generate more parking revenue.

Launceston Aquatic
Launceston Aquatic is forecast to increase revenue by $255,000 yet increase operations expenditure by $355,000. This is a terrible outcome, most businesses operating in the real world will aim to increase revenue while maintaining costs or raising them by less than expenditure. In this instance, ratepayers would be better off if revenue did not increase and the expenditure not incurred.

Properties that do not pay rates
There are a number of properties that do not pay rates and should do so if they are to be considered as equals in the community. The first are the retirement villages that were exempted from rates last year in a cynical political move to pander to an easily identifiable and local group. The exemption to this group of retirees discriminates against all other ratepayers and other retirees living in their own homes. With Launceston's ageing population, this issue will only become worse and the decision to charge a fair rate for these currently exempt facilities should be made starting this year.

The University of Tasmania is another entity that does not pay any rates. A conservative estimate of capital value of the AMC and Utas campus alone would be in the order of $160 million, probably over $200 million, the lower estimate equates to $6.4 million in AAV and more than $450,000 in foregone general rate. The fire levy alone on this AAV would be in excess of $100,000, more than the additional fire levy revenue required this year.

Does the fire brigade not have to attend fires at UTAS?
Do Launceston ratepayers get a student fees exemption from UTAS?

It may well be that UTAS is exempted from rates by legislation, but if it is to be a full member of the community, it can choose to pay rates, or the legislation can be changed.

There are LCC owned properties that are used for commercial purposes where it is not clear that the rates are paid or in fact that commercial rents are paid. These commercial operations compete unfairly with legitimate businesses that pay rates and commercial rents. The proposed establishment of a commercial gym at Launceston Aquatic in direct competition with other gyms should not be allowed as presently proposed. It represents unfair competition in a well serviced market that is currently under considerable stress.

Combined Drainage Area
LCC could easily demonstrate greater transparency by separately charging a storm water rate, as done in Hobart. If LCC is not longer providing a service to those ratepayers within the combined drainage area, LCC should cease to charge those residents for this service.

The rebate from LCC would then allow those ratepayers to pay Ben Lomond Water for the service. Or conversely, LCC could collect this on Ben Lomond's behalf for a fee.

It was a basic platform by our Association from the time the government first proposed separate water and sewerage authorities, that stormwater be included within the new authority's jurisdiction. There can, in the future be no meaningful water conservation and recycling of water, unless the whole of the utility and resource is controlled by a single statutory authority.

Dame Marjorie Parker Creche - Air Conditioning
The budget has $60,000 of expenditure on air conditioning at this child care centre, is this necessary or is another 'nice to have', and if it is necessary, what is the payback on this investment, will the rent be increased, if so, by how much.

Childcare is already well supported by Federal Government schemes, there is no equity in providing additional subsidies to children at one child care centre over all the other centres in Launceston. The other child care centres pay rates and commercial rents, does this centre do this?

Trees
The PSE document has mention of a tree maintenance program on page 6 – $740,000, what is this for?, then on page 7 mentions street tree planting - $190,000, Page 38 mentions $60,000 for tree strategy implementation. The greening our city fact sheet refers to the two smaller sums but not to the maintenance program.

State Fire Levy

Again this year, the State Government has sought an increase in the fire levy from the municipality. Our Association does not accept that Launceston is compelled to charge the levy to ratepayers using the AAV system. Other councils use a different method and achieve a lower more equitable charge across their ratepayer base. It is ludicrous that residences in adjoining
municipalities pay less per tenement than Launceston but enjoy at least equality in fire protection services.

Conclusion
In conclusion, we remind Council, both officers and aldermen, that Many residents of Launceston are finding it tough to stretch their incomes to provide for the necessities of life. Impending cost increases for fuel and other energy utilities, along with constant increases in municipal rates, are causing significant hardship across the spectrum in the Launceston community, not just the traditionally-recognised social welfare recipients.

When the family budget cannot stretch enough, research shows that people often go without food (especially expensive fresh fruit and vegetables, electricity for periods of time, adequate heating, new clothing, insurance, social contact, entertainment, transport, holidays, medical and dental care, and stop taking prescribed medications). Low income households spend proportionally more of their income on the basics. Income, commonly does not necessarily relate to wealth held in residential assets. Nothing undermines social inclusion more than financial hardship.

We hope that this submission is given very careful consideration, and that when aldermen eventually congregate to make a decision of striking the Launceston rate, that they fully acquit the promises made to ratepayers and detail completely their individual reasoning and justifications for what they will determine.

Yours faithfully,
Lionel J. Morrell

President
Tasmanian Ratepayers Association Inc.

Copy to Mayor and Aldermen.

Saturday, June 11, 2011

Absurdity of AAV for calculating Municipal Rates URGENT COMMUNICATION – Correspondence thread with an Alderman

From: TAS RATEPAYERS
Sent: Thursday, 9 June 2011 12:41 PM
To: Alderman Soward

Thank you for your initial reply. We look forward to receiving your considered reply soon.

When you say a 20% limit is effective, for whom is it such? Certainly not for the ratepayer upon whom you are imposing a 20% increase in rates for no additional service.
For every ratepayer that will pay in excess of 4% increase in rates, there is a ratepayer who pays less than 4%, no more than previously paid, and even less than previously paid. How is that effective?
If you mean it is more effective for Council, then yes, Council will hope that at 20% , it will receive a politically acceptable level of complaint and criticism. Those ratepayers will still be paying 16% more than any other ratepayer.

We are pleased to learn that you are spending time consulting with the community. We are, however, disappointed that you, particularly as a former President, have not found a single time to attend a Ratepayers Association meeting since the day you were elected. We appreciate that busy aldermen do find it difficult to find the time to do everything, but to not find a single evening after all these months, is disappointing.

We fully appreciate that the public are only going to be given the Statutory Budget figures, however that is certainly a step in the right direction for a change, and doesn’t prevent YOU from providing the detail. You have the detail, in fact a completely detailed budget, and there is nothing to prevent you from presenting whatever extra detail is necessary.

Please don’t criticise ratepayers, even pensioner ratepayers for not understanding the budget due to a lack of detail that you provide to them. Ratepayers are sometimes even more capable and qualified than Aldermen to understand the numbers in fact, and when I look around the Council Table, there are still a number of Aldermen who do not have the qualifications to sit on what is really the Board of the LARGEST BUSINESS IN LAUNCESTON.

Yes we also look forward to a large room full of ratepayers eager with questions, satisfied by detailed information you will provide, and able and willing to make constructive and practical suggestions on how Launceston’s budget may be restrained. This year you are taking ratepayers on a rollercoaster ride into deficit. Is that, under the present economic hardship, responsible ?

Regards, Tasmanian Ratepayers Association Inc.
_________________________
From: Aldman Soward
Sent: Thursday, 9 June 2011 11:07 AM
To: TAS RATEPAYERS

thanks for your prompt reply.. I will give you a more detailed answer a little later as I'm about to head out to an appointment.

Just wanted to clear up a couple of points.. 20 percent was selected as it appeared on the modelling provided to be the most effective- that is my view and others are free to disagree.

The other point I would like to clarify was my opposition to the public budget process- my entire remarks as recorded on our website at the council meeting would reveal why I voted the way I did and Alison who you ccd in on this email can verify what I said- in essence I said that I totally support public consultation and that it happens each and every day- I speak with loads of people who suggest things we can do as a council, programs that need support or trimming or making more efficient, parks that need developing, different things that need council support etc.

The reason I opposed it was NOT on the basis of secrecy or anything sinister but the simple premise that I believe a budget needs to be seen in its entirety- it is pointless to hold a meeting where people come along and say " We should increase the parks budget by $500,000 a year so our city is neater and tidier and our parks are better' or " We should have a nil rate increase" or " we shouldn't put any funding into Aurora Stadium " [ all things people have by the way brought to me as ideas and passed on] . These suggestions are made and submissions can be made BUT [and this is the but] the same people do not indicate how things would be funded or what services they would cut to make their submission happen. At the council meeting I spoke of my time as a director of MyState Financial where at our community consultation/ AGM people would come along and say they wanted higher deposit rates for their money and lower home loans- a position I'm sure you can see would make the institution go bankrupt in a day if we were offering 7 percent deposit rates and 4 percent home loans at that time.

When I spoke at the meeting on Monday and seconded the motion it was not done to be populist and in my remarks once again I recorded as Alison could attest I said I had reservations and that budgets had to be seen in their entirety- I have had pensioners for instance contact me last year about how many free entry's they got into the tip and wanted more- a fair point for many with gardens etc- I asked them how we would fund it and they either didn't know or suggested we take money out of the tiger bus or we dint have footy in Launceston- their view and opinion- fair enough- but not really showing an understanding of a whole budget approach.

I also said on Monday that I hope we fill large rooms with both sessions where people come along- my concern is that given we have a process that's ongoing where people contact their aldermen about certain programs or roadworks or projects of merit that need to be funded or trimmed that we wont get large numbers of people engaged at these sessions.I also hope that people who do attend and make creative suggestions understand and suggest ways they can be funded- as I said its easy to come to a meeting and suggest an idea like I outlined above but not be able to fund it or indicate how it would work..which is as I'm sure you would agree pointless- It is my view that consultation takes place each and every day and I regularly take ideas to council for support.

kind regards

Alderman Rob Soward
Launceston City Council
www.robsoward.com.au

"We swear by the Southern Cross to stand truly by each other and fight to defend our rights and liberties"
_________________________
From: TAS RATEPAYERS
To: Alderman Soward
Date: Thu, 9 Jun 2011 10:25:56 +1000

You seem to miss several fundamental points.
1. There is no present impediment to Launceston City Council using the land valuations for rating purposes.
2. There is no pre-requisite for using the AAV Valuation system for rating purposes.
3. There is no reason why Launceston City Council can’t increase the General Charge (and significantly say as much as 50% of the rate income for the city), so as to thereby reduce the General Rate component.
4. The proposed 20% cap on residential rate increases is purely an arbitrary figure. Why not 10% or 5% or even 4% across the board based on last year’s rate? That would create the least harm to ratepayers.
5. State Parliament has already debated the Georgetown/Brighton model just a few weeks back in May. I am surprised you and the other Launceston Aldermen are not kept informed on this. Shaun McElwaine’s opinion is JUST THAT, a legal opinion, not a judgement. Do you really believe that the Attorney General would continue to permit Georgetown, Brighton and to a lesser extent, Devonport, to continue to rate their ratepayers on a basis that has no legal standing ? There appears to be no impediment for Launceston to follow that existing model.

Regarding progress on this since you and other Aldermen have been elected, we find your excuses to be unacceptable and quite frankly pathetic. You have had plenty of time to make changes and achieve progress. You had plenty of time to properly research the issue before you made those promises to your electorate in the first place. All of what you continue to say to us now was already in circulation beforehand. You know all of this because you are also a Past President of the Ratepayers Association.

Attending a seminar is hardly the kind of action you promised.

Please don’t blame the legislators. They are finally acting on this because they are sick of recalcitrant councillors refusing to act within their present legislative framework. Read what they have been saying starting with the former Minister, Jim Cox.

Your direct comments on the points above would be appreciated.

As to you encouragement for attendance at the upcoming discussions concerning Launceston Rates and Budget, I find it remarkable that you OPPOSED this activity (apparently, in spite of this being a request of the Ratepayers Association during your term as President) but then, you SECONDED the motion when you realised it would pass, and undoubtedly would be popular politics.

In conclusion, let me assure you that waiting another year is not acceptable and will be too late for many people who are being crushed by unaffordable increases in the cost of living. If you do not know that fact, or are glibly unaware of its existence, then I would be pleased to assist with your education on that topic too.

Regards, Tasmanian Ratepayers Association.

_________________________

From: Aldman Soward
Sent: Thursday, 9 June 2011 9:49 AM
To: TAS RATEPAYERS

thank you for your email.. Is Leo Foley a guy who ran for parliament? His name sounds familiar.

I ran for election at the 2009 election promising rating reform. I am still committed to that promise. I seem to recall a large number of candidates promising to do the same at that election including most who were elected..

I do not disagree with the comments you have made around AAV and like you and many others I do not think it is the best system to generate rates.I have said that for a long while and am still of that belief.

To further increase my knowledge from our previous emails where we have discussed this I have attended a recent rating seminar conducted as part of the ongoing process. The seminar was very informative and there were a number of councils represented.The session was run by some people doing the review and people from LGAT and people from Local govt division DPAC.It explored the rating tools and the immediate changes to legislation to give councils more freedom in setting its rates.We were told that the legislative reforms would take place [ they hoped in early July] and that the review would be complete later in the year. I asked some public questions around this time frame as attendees at the meeting could attest to- the meeting was attended by Deputy Mayor Nott and myself and Alderman Dean was an apology.There may have been other apologies I was not aware of.I would think that if the legislative tools were passed in early July then it would be something council would explore for the 2012/13 process- clearly we need to set the rate before the legislation is presented.

There is also a school of thought that the models used by Devonport, George Town and Brighton are heavily flawed as we have discussed before- I have given the name of their lawyers- Curtis/ Abetz to our officers to seek clarification- as you know previous advice we have had from Shaun McElwaine has always said that the three schemes used by those councils are not valid.. Some of my aldermanic colleagues still hold Mr McElwaines advice as the absolute answer to this- from what I'm told this opinion was sought after the time the other councils went down their way of the different method and certainly before I came onto council.Id think[ and Im no layer] that it may be worth revisiting this advice in the context of the legislative changes ahead.

Im sure you understand the process of reforming an entrenched system is a long one and one that has to my mind been made more convoluted by the delays of the state legislators in this process.
Please be assured and reassure your members that my view on the AAV System not being the best way to calculate rates has not changed and I am committed to reforming the system for a fairer more just system

I also think that the measure of placing a 20 percent cap in place is not a bad thing- Im sorry to hear you do not think it is effective. I personally believe it is a good measure to try and minimise the huge increases in line with revalutions.I have attended several sessions where a range of projections were made around different options and I believe this one is a fair one in the short term as a way of minimising the huge increases as a result of valuations. In my humble view it is a short term measure.. Id like to think we can use the recommendations when the report is completed later this year combined with the newly legislated rating tools and work towards a better system.

thanks for your email and I look forward to seeign you at the upcoming budget sessions

kind regards, Alderman Rob Soward
www.robsoward.com.au

"We swear by the Southern Cross to stand truly by each other and fight to defend our rights and liberties"

______________________________

From: TAS RATEPAYERS
Sent: Thursday, 9 June 2011 12:41 PM
To: Mayor & Alderman
Cc: GM

Mayor and Aldermen,
Launceston City Council.
The Tasmanian Ratepayers Association Inc is indebted to Leo Foley for preparing this interesting piece. Launceston City Council is NOT obliged to use the AAV system in establishing its rates. The legislation clearly allows Launceston to select another of the alternative methods. It has long been recognized at Local and State Government levels that AAV should be abandoned as it is unjust and bears an inequitable basis for rating.
The State Government PROMISED Tasmanians that this system would be abandoned by LEGISLATION but this milestone has not yet been reached and the latest promise is by about November this year. This is extremely disappointing, given the hardship created the last time Launceston was previously revalued and now to be again repeated with the new valuation notices distributed a week or so ago.
Launceston could CHOOSE to use the Land Valuation figure to levy its rate, so why not ACT NOW ??
Launceston could also CHOOSE to limit or cap its rates for residential properties, so why not ACT NOW ??
Since 2006, there have been replacement Aldermen elected to Launceston City Council, all promising REFORM ON RATING, so why hasn’t this occurred ?
In 2011, there will be another election.
PLEASE, PLEASE now consider a different rating system. Don’t repeat the old system. Capping increases at 20% IS AN EXTRAORDINARY INSULT to ratepayers, as clearly that means many many ratepayers will pay less, pay no more, or pay less than the 4% increase expected across the board.
We look forward to receiving individual responses from each and every Alderman.

Yours sincerely,
Lionel Morrell
President
Tasmanian Ratepayers Association Inc.

Absurdity of Rating Improvements (AAV)
We descend from a long history of destructive property taxes!
Windows were taxed in the UK, so people boarded up their windows, making them ill!
France had its chimney tax, so people boarded them up too, smoking residents to death.
In the UK Midlands, a capital improvements tax led to the de-roofing of buildings. Absurd? Of course; but – should we laugh at our forebears? Are we any wiser?
Under Assessed Annual Value (AAV), anyone who erects a dwelling is penalized ! Then, the homeowner is penalized again whenever they improve their property. Add a room – up go the rates! Establish paths—up go the rates! Build a garage – up go the rates! AAV not only taxes chimneys and windows, it taxes the whole house!
Property value consists of two separate parts:
1. the land value itself; and
2. the value of the buildings and other improvements made by the owner. •
The AAV system fails to distinguish between the value of these separate parts. Rates are levied on the property as a whole – on land and all improvements.
Land gets its value from the efforts of the whole community, not any one individual. Under a principled system of rating, property owners would pay in proportion to the value given to their sites by the community (ie on land value), not according to the value of their own improvements.
Some of the inefficient consequences of AAV are:
AAV penalizes the industrious homeowner, thus discouraging improvements. Those who renovate find that they must pay higher rates for their efforts.
AAV is arbitrary and unjust. The system bears little relationship to services rendered by the local authority.
Under AAV, rates are borne disproportionately on developed properties, compared to vacant land. It costs nearly as much to maintain a road past a vacant property as it does to maintain that road past an improved one.
AAV encourages the holding of land for speculative purposes. There is a lesser levy payable for holding land idle, than for using it.
AAV rating is inequitable. Owners who build on their land are liable for a higher proportion of the income of the municipality than the owners of underdeveloped land, although the services offered to each by the council are identical.
AAV has no moral basis. Not only does it fail to distinguish between land and improvements, AAV is a nominal figure only. It is the rent which a property might return to the owner. Since most homeowners do not rent out their house, it has no true basis.
Land differs from every other form of property. It is nature’s free gift to all of us.
When a person builds a house, the house is their private property because they built it. It does not belong to the community, and the community has no right to the house or its value.
Do we, as a society, need more houses?
Yes! We need to house our young families. So, don’t penalize people for building them! Infill development should not be penalized by higher rates, but encouraged by the need to derive income from sites in order to cover the rates thereon.
When ratepayers know that the council will charge them rates only on the value of their sites and not on the value of their homes or other improvements, they respond by becoming improvement-minded. The building and construction industries are stimulated, and a higher level of activity is maintained.
The Local Government Act 1993, gives the option of using one of three rating systems to Tasmanian councils: S 90 (3) A general rate is to be based on one of the following categories of values of land: (a) the land value of the land; (b) the capital value of the land; (c) the assessed annual value of the land (including improvements). In Tasmania, all municipal councils opt to levy rates on the AAV method. By comparison, all municipal councils in NSW and Queensland levy rates on the ‘Land Value’ method. Most ratepayer polls around Australia have found a majority favour the ‘Land Value’ method.
Why should ratepayers be faced with the worst system? Insist on your rates being based on land values only!
Posted in Economics, Local government, Rates
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Is ‘User-Pays’ fair? »


Thursday, March 31, 2011

Henry Steet Letter # 2 – 29 March 2011


29th March 2011,
The General Manager
Mr R. Dobrzynski
City of Launceston
Town Hall
St John Street
LAUNCESTON TAS 7250

Dear Mr Dobrzynski,
Your ref. DA042/2010, Development Encroachment on Future Road on Land at 66-84 Henry Street Launceston.
Thank you for your letter dated 17th March 2011, in reference to our letter of 16th March. Our investigations have revealed that contrary to what you say in your letter, the development application for a residence was advertised just once in September 2010. This advertisement was for the construction of a building (single dwelling) in the Scenic Protection Area.

Neither the advertisement nor the drawings and other information that was placed on display in the Service Centre alerted the public to the existence of, or any potential conflict with Council's Zoning Plan, denoting the course of a future road through this land. Council has the clear duty to ensure that adequate information is available when assessing new proposals in order to take account of any adverse impacts. It is our contention that Council has failed to meet its responsibility to the community in this regard.

Because there were no submissions made to council by the public, this application was not placed on the Council Meeting Agenda, and the determination apparently made under delegation by Council's officers, was not reported to a Council Meeting, or made public in any way.

Accordingly, the inference that may be gained by the second paragraph of your letter, that this approved development came about through a proper and open publicly-advertised procedure, cannot be deduced.

Council's zoning plan established a very clear responsibility and duty for council, both its officers and councillors alike, to uphold the provisions of the Planning Scheme under the LUPA Act, and among the many requirements provided for in the planning scheme, to make provisions which relate to the use, development, protection or conservation of land within the municipal district of the Launceston City Council.

Launceston City Council has a very clear and unambiguous responsibility to have full and proper regard to the Planning Scheme Purpose, the Planning Scheme Goals, the Planning Scheme Objectives and Principles, and in particular, the principle 4.18.1 (f) Protect future road corridors from inappropriate use or development.

Council has many detailed responsibilities to undertake when deliberating on an application, including a number of policies, strategic plans and objectives at local and state levels, quite apart
from the circumstances of the case and the public interest.

Council is directed to 31.10(2) of the planning scheme which denotes the reasons why new buildings are to be set back from alongside future roads. In this instance we enquire as to what setback criteria council prescribed for this development.

There is nothing evident from our investigation, that Council sought input from the Road Authority in relation to this application. The Launceston Planning Scheme 1996 makes specific provisions in relation to future roads.

46 FUTURE ROAD
46.1 Purpose
To enable the protection of future road corridors from inappropriate use or development which because of its nature, capital improvement life expectancy would tend to prejudice the provision, or significantly increase the land acquisition cost of the road at a later date. 46.2 Requirements to be met Unless the use or development is prohibited by any other zone a discretionary permit is required to use or develop land in the Future Road zone. 46.3 Application of Provisions This Clause applies to a 200m wide corridor of land, 100m either side of the centre-line of the Future Road alignment.

46.4 Guidelines for permit
(1) Before deciding on an application Council must consider in addition to the matters in Clause 6 : (a) nature, capital improvement and life expectancy of the proposal; (b) when the land is likely to be acquired for the future road; and (c) location of the proposal on the land in relation to the proposed alignment of the future road and if it would prejudice the provision or significantly increase the land acquisition cost of the road at a later date.
(2) An application must be referred to the Department of Transport and
Works, and Council must not approve the application without the consent, conditional or otherwise, of that Department.
46.5 Conditions or restrictions
In order that the provision of the road at a later date is not prejudiced or its land acquisition cost significantly increased, a discretionary permit may be subject to a condition or restriction that: (1) The use cease, and any buildings or improvements be removed to the satisfaction of Council without claim for compensation, after a specified period of not less than five years from the issue of the permit; (2) Different construction materials or methods are used than those indicated in the application; and (3) Any proposed buildings, improvements or the like be located on a different part of the land.

It is our assessment of these planning scheme provisions that council
has :
• failed to protect this future road corridor from inappropriate use and development, which because of its nature as a private residence, its capital value and life expectancy of at least 40 years, will prejudice the provision for a future road and significantly increase the land acquisition cost because of this development, at a later date;

• failed to advertise this development as being a discretionary use in the Future Road zone;

• failed to protect a corridor of land 200m wide (i.e. 100m either side of the centre line of a future road alignment), and prescribe the necessary setback for the development from this alignment;

• neglected to give any consideration, in addition to the matters in Clause 6 of the scheme, the nature of a private residential development, the capital improvement and life expectancy of the proposal, when the land is likely to be acquired for the future road, and whether the location of the proposed private residence in relation to the proposed alignment of the future road and if it would prejudice or significantly increase the land acquisition cost of the road at a later date;

• neglected to refer the application to the Department of Transport and Works, and furthermore apparently approved the application without the consent, conditional or otherwise of that Department.

• In spite of the failures and neglect to comply with the provisions of the planning scheme, never-the-less Council failed to adopt alternative approval provisions and conditions to allow the
development without prejudice to the provision of the road at a later date or increase significantly its land acquisition cost by subjecting a discretionary permit to any conditions or restrictions that would require that the use cease, and any buildings or improvements be removed without claim for compensation, after a minimum specified period of five years from the issue of the permit; that the construction employ materials or methods than those proposed that would better insulate and protect the private residence from the detrimental environmental effects of an adjoining future road; and require that the proposed building be located on a different part of the land not affected by or encroaching on the course of a future road location.

Your explanation that council relies on advice from its personnel in its Department of Infrastructure Services is not a sufficient or valid reason for the inappropriate action apparently taken by Council's officers in issuing a permit for this development. The observation cited, that this future road alignment was not proceeding because Council had apparently deferred making a decision on proceeding with the road plan at some date in 2007, is nonsensical. The suggested fact that no decision was made (either to proceed or not to proceed) with the development of the road, means that the provision of the planning scheme survives, it has not been amended or annulled, and must for all of the reasons and references referred to in this correspondence, be
upheld, protected and enforced.

Accordingly, we call upon council to direct that the construction of the building on the subject land 66-84 Henry Street Launceston, cease.

Should council not concur with any part of the argument or interpretation contained within this letter, then we ask that you advise us of such views in detail, at as a matter of urgent importance.

Yours faithfully,

Lionel J. Morrell
President
Tasmanian Ratepayers Association Inc.
Tel. 03 6331 6144
Copy to Mayor and Aldermen

Reply
From: Robert Dobrzynski
Sent: Thursday, 31 March 2011 8:30 AM
To: Lionel Morrell
Cc: Mayor; Records

Subject: RE: Development encroachment near Henry Street Launceston

Dear Lionel,

I acknowledge receipt of your correspondence. A copy will be forwarded to the Mayor and Aldermen. I have asked the Director of Development Services Peter Button to respond to the specific matters you have raised. Thank you.



Henry Steet Letter # 1 – 16 March 2011

16 March 2011,
The General Manger
Mr R. Dobrzynski
City of Launceston
Town Hall
St John Street
LAUNCESTON TAS 7250

Dear Mr Dobrzynski,
Our Association hos written to you and your pre-decessor and other responsible officers of Council regarding the need for heavy transport routes and road links in Launceston.

The Launceston Planning Scheme denotes zonings for future roods. Presently, there is a new residence being constructed on previously vacant land on Henry Street, immediately adjacent to the Bell Bay Railway Line and in the course of Council's zoned future road that would bypass the city on the eastern side.

We find this matter to be extremely distressing, because we have been attempting mature dialogue with you and your council on the need for the reservation of land for roods, for a considerable period.

Could you please respond with on explanation on how this construction hos been allowed to occur and what action council intends to take, as a matter of urgent importance.

Yours faithfully,

Lionell Morell
President
Tasmanian Ratepayers Association lnc.
Tel 03 63316 144