2020/2021 Rates Setting

A message from the Mayor

Rates setting for 2020/21 is happening under a very challenging set of circumstances.

The impacts of COVID-19 have hit our local businesses hard and many people in our community are dealing with hardship as a result of the dramatic economic downturn. The City of Vincent’s financial position has also been impacted, with a forecast drop in revenue of $10milllion in 2020/21.

We must also implement the triennial Gross Rental Valuations (GRV) revaluation, undertaken by the Valuer General on behalf of the State Government. We asked that this be put on hold to allow for a simple rates freeze for all individual ratepayers. But we accept that the revaluation is going ahead and are seeking to deal with this as effectively as possible.

Despite the challenges, we remain committed to a zero increase in total rates revenue and a zero increase in fees and charges. And we remain one of the lowest rating Councils in the metropolitan area.

New hardship provisions and payment options are also being introduced to help.

This includes Rates Smoothing – payment of rates in fortnightly or monthly payments – for all ratepayers as well as zero interest on outstanding rates and some financial assistance for those in greatest need.

We will continue to keep you updated as we develop the 2020/21 budget.

Best wishes,

Emma Cole, Vincent Mayor

Notice of Intention to Levy Differential Rates 2020/2021

In accordance with Section 6.36 of the Local Government Act 1995, the City of Vincent hereby gives notice of its intention to impose differential rates for each rating category in the 2020/21 rating year. Please refer to the following table for details:

The Statement of Objects and Reasons for the Proposed Differential Rates & Minimum Payments is available to view here.

2020/21 Budget development context

The City of Vincent is currently developing the 2020/21 annual budget with the following commitments:

• Zero increase in total rates yield and a zero increase in the minimum rate
• Zero increase in fees and charges
• Any rates growth (from new dwellings) in 2019/20 will go towards hardship support
• New ‘rates smoothing’ fortnightly payments and hardship measures.

As a result of COVID-19 restrictions the City has forecast that City revenue will drop by approximately $10 million in the 2020/2021 year, primarily due to the following decisions and assumptions:

• Beatty Park revenue at 50%
• Parking revenue at 50%
• Implementation of the Mandatory Code of Conduct for Commercial tenancies and
• Ministerial Order to reduce interest rate charges.

The 2020/21 budget is planned to be adopted in July and changing conditions will be tightly monitored through quarterly budget reviews.

GRV revaluation impact

Additional volatility and complexity has arisen as a result of the Valuer General’s triennial revaluation of land (‘GRV revaluation’). The revaluation is based on property valuations and sales data as of 1 August 2018 and is effective from 1 July 2020.

The Local Government sector, including the City of Vincent, unsuccessfully appealed to the State Government and Local Government Minister to defer the GRV revaluation process this year so as to minimise this volatility.

The Valuer General’s Office has provided the revaluation data, with the following table demonstrating the total variance of the GRV for each rateable category:

Table 1: Impact Analysis of total GRV values for the City of Vincent, 2019/2020 to 2020/2021

Whilst individual properties may have fluctuated in value, at an overall category level, it can be seen that:

• Residential developed properties have on average lost 15.75% in gross rental value
• Vacant residential land value has increased by 4.06%, although it should be noted the valuation methodology is different to developed land, with the GRV being a calculation of the capital value multiplied by 3% and
• Non-residential properties (Other - Commercial and industrial) have on average lost between 3.53% and 5.32% in gross rental value.

What does this mean for residential ratepayers?

Whilst the City of Vincent’s income from rates will not increase, the amount that some individual ratepayers contribute will change. This is a direct result of the GRV revaluation.

The proposed rates strategy would result in one third of residents’ rates being reduced; one third staying the same; and one third increasing. For those receiving an increase, a portion will be as a result of home improvement, such as an extension or new swimming pool.

Whilst the City of Vincent’s preference would be that no individual ratepayer receive an increase, this has been impossible to achieve due to the GRV revaluation. Hardship provisions will be available for residents in need of assistance.

What does this mean for commercial ratepayers?

The proposed rates strategy recognises the significant impact of COVID-19 on local businesses, with many experiencing closure and/or restricted operations and downturn in trade and revenue.

As a result of these significant economic impacts, the rate in the dollar has been stabilised for commercial ratepayers, with no increase in rates compared to those levied in 2019/20.

What assistance will be available for ratepayers experiencing hardship?

Acknowledging the high potential for financial hardship arising from the COVID-19 crisis, the City has revised and strengthened its financial hardship measures.

These measures will include:

• Bill Smoothing – for the first time, all City of Vincent ratepayers can choose to pay their rates in fortnightly or monthly instalments, via direct debit
• Flexible Payment Arrangements – payment arrangements to include extending payment deadlines and repayments plans customised to the circumstances of the ratepayer
• Deferment – ratepayers may request to defer the payment of rates for up to 6 months
• Waiver of penalty interest and charges on payment arrangements – ratepayers entering into a payment arrangement will have interest and fees waived and
• Suspension of debt recovery – debt recovery will cease once a payment arrangement is in place.

How does Vincent compare on rates?

The City of Vincent remains one of the lowest rating Councils in the metropolitan area. In 2019/20, Vincent had the fifth lowest minimum rate and fourth lowest average rate in comparison to 29 metropolitan Councils.

We welcome your feedback

Ratepayers and electors are invited to comment on the proposed differential rates and minimum payments until 5pm Friday, 17 July 2020.

Comments can be submitted via feedback form below. Alternatively, comments can be submitted in writing and addressed to the Chief Executive Officer, City of Vincent, PO Box 82 Leederville WA 6902.

Any enquires can be made to Ronel de Lange, Senior Rates Officer, on (08) 9273 6525 or mail@vincent.wa.gov.au

For frequently asked questions, visit the City of Vincent website here.