An explanation of 2011/2012 Rates & Charges

Council adopted the 2011/2012 Budget on 14 July 2011, including the Rates and Charges for 2011/2012. The following information on the 2011/2012 Rates and Charges is provided to ratepayers to assist them to understand their Rates and Charges.

Subheadings below in bold refer specifically to the current half-year. 

How muh did Rates and Charges Increase by?

How much did Pensioner Rates Rebates increase by?

The effect of the increases on an average urban residential property

When were Rate Notices issued?

Specific Changes to Rates & Charges applicable to the current Rates Notice

Explanation of what was received with Rate Notice

Why was it necessary to increase Rates and Charges?

How do Bundaberg's Rates compare with other major Queensland Councils?

What do Ratepayers receive for their General Rates?

What are the major areas of expenditure planned for 2011/2012?

How are General Rates Calculated?

What are Minimum General Rates and why are they necessary?

How are Services Charges calculated?

What affect does an annual revaluation of properties have on General Rates?

The introduction of Site Value

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1. How much did Rates and Charges increase by?

The increases in Rates and Charges from 2010/2011 to 2011/2012 are as follows:

1.1 General Rates

The average General Rates increase was 4.85% or $51.00 per year but this will vary according to valuation increases and/or amalgamation of General Rating  Categories (explained further in points 13, 14 and 15 below).

1.2 Minimum General Rates

Minimum General Rates increase by 9.85% which is the 4.85% mentioned above plus an additional 5% which Council added to bring ratepayers paying the Minimum closer to the level of the majority of ratepayers who are paying more because their property valuations are higher. Ratepayers who pay higher rates because their properties are more valuable do not receive any more service than people paying the Minimum and therefore a higher Minimum promotes equity amongst ratepayers(explained further in point 11 below).

1.3 Sewerage Charge

Sewerage Service	2011/2012	2010/2011	Increase
Per Pedestal (Residential only charged for 1st pedestal). Vacant land sewerage charge equal to residential charge.	$536.00	$510.00	$26.00

1.4 Waste Collection Charge

Service	2011/2012	2010/2011	Increase/Decrease
Per set of one Weekly Waste and one Fortnightly Recycling Bin Service	$273.00	$260.00	$13.00
Per additional Recycling Bin	$77.00	$130.00	-$53.00

1.5 Water Access Charge

Water Service	2011/2012	2010/2011	Increase
Water Vacant	$352.00	$335.00	$17.00
Water Access 20 MM	$352.00	$335.00	$17.00
Water Access 25 MM	$384.00	$366.00	$18.00
Water Access 32 MM	$415.00	$395.00	$20.00
Water Access 40 MM	$443.00	$422.00	$21.00
Water Access 50 MM	$522.00	$497.00	$25.00
Water Access 80 MM	$701.00	$668.00	$33.00
Water Access 100 M	$1,080.00	$1,029.00	$51.00
Water Access 150MM	$2,001.00	$1,906.00	$95.00
Non-Potable/Restricted Flow Water Vacant /20MM	$281.00	$268.00	$13.00

1.6 Bundaberg City Water Consumption Charge 

Service	2011/2012	2010/2011	Increase
First Step up to 183Kls per half-year	$0.95	$0.87	$0.08
Second Step over 183Kls per half-year	$1.60	$1.50	$0.10

1.7 Ex-Burnett, Isis and Kolan Water Consumption Charge

Service	2011/2012	2010/2011	Increase
First Step up to 183Kls per half-year	$0.95	$0.95	$0.00
Second Step over 183Kls per half-year	$1.60	$1.60	$0.00
Non-potable up to 183Kls per half-year	$0.75	$0.75	$0.00
Non-Potable over 183Kls per half-year	$1.30	$1.30	$0.00

Utility Charges, which includes Water, Sewerage and Waste Collection Charges, increased generally by 5%. 

2. How much did Pensioner Rates Rebates increase by?

Council Pension Rates Rebate increased from $90 to $110 a year (an increase of 22%) and State Pension Rates Rebate increased from $180 to $200 a year (an increase of 11%).

3. The effect of the increases on an average urban residential property

The effect of the increases on an average urban residential property is as follows:

Average Urban Property in Bundaberg Regional Council	2010/2011	2011/2012	$ Increase 10/11 to 11/12	Weekly $ Increase 10/11 to 11/12
Valuation	$105,000	$115,336	$10,336
Rate-in-the-dollar	0.9964	0.9511	-0.0453
General Rate	$1,046.22	$1,096.96	$50.74	$0.98
Waste Collection	$260.00	$273.00	$13.00	$0.25
Sewerage	$510.00	$536.00	$26.00	$0.50
Water Access	$335.00	$352.00	$17.00	$0.33
Fire Levy	$155.60	$162.00	$6.40	$0.12
Total levy before deductions	$2,306.82	$2,419.96	$113.14	$2.18
Less:10% Discount	$104.62	$109.70	$5.07	$0.10
Total levy after discount	$2,202.20	$2,310.26	$108.07	$2.08

4. When were Rate Notices issued?

Council issued Rate Notices for the current half-year, for the period 1 January to 30 June 2012, on Monday 13 February 2012 with payment due on Friday 16 March 2012. Last year the issue date was Monday 14 February with a due date of Friday 25 March 2011. This gave ratepayers an extra week to help them recover from the floods. 

5. Specific Changes to Rates & Charges applicable to the current Rates Notice

The following are changes which occured for the first time with this rates billing. 

5.1 Increase in Bundaberg City's Water Consumption Charges

Bundaberg City's Water Consumption Charges increased for the first time in this financial year, with an increase of 8 cents per kilolitre up to 183 kilolitres used and an increase of 10 cents per kilolitre above 183 kilolitres (please refer to item 1.6 above). The Rate Notice for the current half year refers to Rates and Charges for the period 1 January to 30 June 2012 but Council cannot levy water consumption charges for water used during that period because ratepayers haven't used it yet therefore water consumption charges are billed in arrears and the 2011/2012 tariff applies for the first time for water used from 1 July to 31 December 2011. For more information about water usage and charging, please refer to the Service Charges. 

5.2 New Commercial Waste Collection Charges

On 1 December 2011, the Queensland Government introduced a levy of $35.00 per tonne on commercial waste for disposal to landfill. Any objections or enquiries should be referred to the Department of Environment and Resource Management by phoning 131 304. 

6. Explanation of what was received with Rate Notice

All ratepayers received the following with their Rate Notice:

• A Water Advice Notice. The Queensland Government's Water Supply (Safety and Reliability) Act 2008 requires Councils to provide ratepayers and water consumers with meaningful information about how their water usage compares with other customers and how to better manage their water use.
• A map of the Region's Electoral Districts, to inform ratepayers which electoral district their property is located. View the maps online.

Last half year, ratepayers received a copy of Council's Rates Brochure entitled Information and Schedule of Rates and Chargs for 2011/2012.

7. Why was it necessary to increase rates and charges?

It was necessary to increase rates and charges to provide for sustainability and for responsible, progressive local government to meet the growing needs of our community into the future. Specifically, Council had to increase rates to compensate for the loss of revenue or increased costs due to:

• The devastating floods in December 2010 and January 2011 which placed a strain on Council's resources and resulted in unexpected and increased costs which will continue for many years;
• The State Government's withdrawal of 40% subsidies from Council for water and sewerage capital infrastructure (estimated to result in the loss of $55 Million over the next 10 years);
• The State Government's refusal to repay most of Council's amalgamation costs of $14.7 Million, which contributed to Council's budget deficit;
• Increased costs charged by Council's suppliers, such as an increase in electricity and fuel costs (the CPI for local government is around 7.5% because of the nature of Council's business, which includes such items as infrastructural spending);
• More stringent requirements imposed by the Environmental Protection Agency as a result of amalgamation - increased compliance increases costs;
• Inflation and the need to retain the same real income as last year.

8. How does Bundaberg's rates compare with other major Queensland Councils? 

Bundaberg's rates continue to be one of the lowest in Queensland, and the lowest in regional Queensland, with only the big urban centres in the South-East corner having cheaper rates, (and those centres can rely on large commercial and industrial rating bases to boost their rates revenue). The comparison for 2011/12, is as follows:

Regional Council	Minimum General Rate	Sewerage	Waste Collection	Water Access	Total	Order
Brisbane	$464	$476	$256	$167	$1,363	1
Gold Coast	$736	$680	$221	$199	$1,836	2
Ipswich	$710	$567	$272	$339	$1,888	3
Logan	$788	$570	$244	$298	$1,900	4
Bundaberg	$783	$536	$273	$352	$1,944	5
Cairns	$760	$672	$322	$225	$1,979	6
Gladstone	$757	$632	$255	$367	$2,011	7
Gympie	$924	$544	$256	$327	$2,051	8
Moreton Bay	$768	$744	$237	$346	$2,095	9
Sunshine Coast	$1,188	$570	$270	$232	$2,260	10
Rockhampton	$1,095	$504	$321	$341	$2,261	11
Mackay	$984	$756	$237	$293	$2,270	12
Redlands	$995	$721	$309	$249	$2,274	13
Townsville	$980	$669	$197	$473	$2,319	14
Fraser Coast	$1,008	$619	$368	$407	$2,402	15
Average	$863	$617	$269	$308	$2,057

9. What do ratepayers receive for their General Rates?

Ratepayers receive the following services and facilities for their General Rates. However not all ratepayers receive all of these - ratepayers who choose to live in rural areas may not, but their General Rates are usually lower which compensates for this:

1.       Road Works Construction of New Roads Maintenance of Gravel Roads Sealing of Roads Bridge Construction Mowing Road Reserves Road Drainage Bikeways   2.       Roadside/Street Furniture Bus Shelters Street/Road Side Signage Seats/Benches Rubbish Bins   3.       Street Lighting Maintenance/New Lighting Lighting for safety   4.     Parks and Gardens Maintenance Drainage maintenance Development of New Parks Tree Planting Beautification Barbeques Park Furniture Shelters Playground Equipment 5.     General Drainage

6.     Building Services - Advice/Control 8.     Planning Services - Advice/Control 9.     Environment Program Environmental Monitoring/Licensing Education   10.  Public Order and Safety (Local Laws, Licensing, Compliance and Administration) 11.  Public Health Program Immunisation Clinics Mosquito Control Weed Control Animal Control Stock Pound Vermin Control Community Health Promotion   12.  Community Facilities (Halls etc)   13.  Library & Art Gallery 14.  Airport 15.  Sport and Recreation Facilities 16.  Public Toilets 17. Community Services Programmes

10. What are the major areas of expenditure planned for 2011/2012?

Major initiatives include:

• $20 million on flood damaged roads;
• $2 million on additional works to flood damaged roads;
• $5 million on bitumen resealing and overlays, and gravel re-sheeting;
• $11.6 million for Sewer Plant and reticulation upgrades including $2 million each for Gin Gin, Millbank and Thabeban Sewerage Plant Upgrades;
• $9.8 million for Water Treatment Plant upgrades and Reticulation including $3 million for the implementation of the fluoridation program as required by State Government legislation, and $3.5 million for the construction of a 6 megalitre reservoir at the Hummock;
• $4.7 million for Refuse and Recycling Collections;
• $6.7 million for Operation of Refuse Disposal Facilities/Transfer Stations across the Region;
• $5.3 million for Community Care;
• $3.6 million for Planning and Development;
• $2.7 million for Library Services operations.

11. How are General Rates calculated?

General Rates pay for most of what Council provides, except for Water, Sewerage and Waste Collection, which are separately financed. Ratepayers may be interested in know how Council actually calculates their General Rates. Legally General Rates must be calculated by Council based on the Government Value of each rateable property, which is the value assigned to a property by the State Government Department of Environment and Resource Management.

The amount of General Rates which a particular property is required to pay is calculated by multiplying a property's Government Valuation by a \u2018Rate-in-the-dollar'. The Rate-in-the-dollar is calculated by dividing the total amount of money that Council needs to collect in rates by the total value of all rateable land. For example, if there were only two rateable properties with values of $40,000 and $50,000, and if Council needed to collect say $1,000 in rates to provide them with general services, Council would calculate the rate-in-the-dollar by dividing the total amount it needed to collect ($1,000) by the total valuation of the properties ($90,000). So the rate-in-the-dollar in this example would be $1,000/$90,000 = 0.0112 cents in the dollar. Therefore the amount of General Rates that each property owner would need to pay in this example would be calculated as follows:

$50,000 x 0.0112     = $   560

$40,000 x 0.0112     = $   440

Total income             = $1,000

In simple terms a ratepayer pays 'their share' of the income needed by Council based on the proportion of their property's valuation to the total valuation of all properties.

12. What are Minimum General Rates and why are they necessary? 

The Local Government Act prescribes that General Rates must be calculated by multiplying a property's Government Valuation by a rate-in-the-dollar, however the Act also provides for councils to charge all ratepayers a minimum amount which recognizes that ratepayers have an equal opportunity to enjoy the facilities and services provided by Council which are financed from General Rates. If General Rates were only based on property valuation, ratepayers with relatively low property values would pay much less than those with higher valuations for the same Council services. It is generally accepted that a person's property value bears little relation to their use of Council's facilities and services, therefore the application of a minimum amount is considered to be a fairer outcome.

The effect of applying a Minimum General Rate is illustrated in the following example of two properties with valuations of $120,000 and $40,000. If General Rates were only based on Property Value multiplied by a Rate-in-the-dollar, Property \u2018A' in the following example would pay three times as much General Rates as Property \u2018B' for exactly the same Council services. This is obviously unfair so Council applies a minimum. For example, in 2011/2012 the minimum is $783 per annum for Urban residential properties. Therefore in the following example, even though the owner of the more valuable property would still pay almost double what the owner of the less valuable property would pay when a Minimum is applied, at least the minimum makes the comparison a little fairer than if it would be if it was based solely on valuation.

Property	Property Value	Rate in the dollar	Rates charged
\u2018A'	$120,000	0.009768	$1,172
\u2018B'	$40,000	0.009768	$391
\u2018B'	$40,000	Minimum applied	$783

Currently 9,083 Bundaberg Regional Ratepayers pay a Minimum General Rate out of a total of 41,640 ratepayers, that is 21.8%. Bundaberg Regional Council has one of the lowest Residential Minimum General Rates in Queensland, which is illustrated in the following comparison with other major regional councils, which shows that this Council's 2010/11 Minimum was $710 compared to the average Minimum of $758:

Regional Council	Minimum General Rates 2010/11	Regional Council	Minimum General Rate
Bundaberg	$710	Logan	$599
Brisbane	$456	Mackay	$955
Cairns	$714	Moreton Bay	$660
Fraser Coast	$955	Redlands	$749
Gladstone	$721	Rockhampton	$742
Gold Coast	$711	Sunshine Coast	$912
Gympie	$883	Townsville	$950
Ipswich	$660
Average	$758

13. How are Service Charges calculated? 

Service Charges are levied by Council to recover the cost of providing a specific service, for example for supplying Water, or for the treatment and disposal of Sewerage, or for the collection and disposal of Waste. These services are self-funding and the service charges are calculated by dividing the cost of the service by the number of ratepayers who receive the service. Ratepayers who do not receive the service pay nothing towards financing it.

14. What affect does an annual revaluation of properties have on General Rates? 

The Government Department of Environment and Resource Management revalued all properties in the Bundaberg Region in 2010/2011 and Council is compelled by law to use these new valuations to calculate a ratepayer's general rates. Some ratepayers may assume that because their property's valuation increased their rates will increase by the same amount. This is not the case.  General Rates are based on land valuations and a rate in the dollar, not just on land values, so if Council wants to collect the same amount of rates before and after a revaluation, they just adjust the rate in the dollar down to compensate for the increase in valuation.

However the rate in the dollar applies to a whole rating category and therefore people in that category who have experienced a higher-than-average valuation increase may experience an increase in rates, as the rate in the dollar applies to everyone in the category. The following simple example illustrates the effect of a revaluation on rates where, even though Property B's valuation has increased by 50% after revaluation from $40,000 to $60,000, its General Rates have gone down. The reason for this is that Property A's valuation has increased by 100% and therefore, because Property A's valuation has increased by a greater proportion than Property B's valuation, Property A pays a bigger share of the total income required by Council. A general revaluation provides Council with no more or less total revenue, it just redistributes the total rates between existing ratepayers depending on the relationship between their property's old and new valuations. 

Property	Before Revaluation			After Revaluation
	Value	Rate in $	Rates	Value	Rate in $	Rates
Property \u2018A'	$50,000	0.0112	$560	$100,000	0.00625	$625
Property \u2018B'	$40,000	0.0112	$440	$60,000	0.00625	$375
Totals	$90,000	0.0112	$1,000	$160,000	0.00625	$1,000

15. The introduction of Site Value

The Government Department of Environment and Resource Management introduced 'SITE VALUE' this year for valuing all non-rural properties. This means a change from Unimproved Capital Value (the natural state of the land) to Site Value which is the current state of the land (including cutting and filling of land) before a house or other structures are built on it. This will affect some people significantly where their land has been significantly filled for example, resulting in an increase in their valuation.