An explanation of Rates & Charges

Council adopted the 2012/2013 Budget on 24 July 2012, including the Rates and Charges for 2012/2013. The following information on the 2012/2013 Rates and Charges is provided to ratepayers to assist them to understand their Rates and Charges.

Issue Date of Rate Notice

The half-yearly Rate Notices, for the period 1 July to 31 December 2012, will be sent to ratepayers on Monday 20 August and ratepayers should start receiving them on Tuesday 21 August.

When is payment due?

The Due Date for payment, which is stated on the Rate Notice, is Friday 21 September 2012.  This complies with Council's Budget resolution which stipulates that discount will be given if payment is made by the Due Date stated on the Rate Notice which is at least thirty (30) clear days from the Issue Date of the Rate Notice. The issue date and due date are similar to last year when we issued the Notices on 15 August, with the due date on 16 September.

Notes on the Rate Notice

Council has included the following notes on the Rate Notices:

  • A Note informing ratepayers that if they made a payment towards their rates after 2 August (when the rates billing data was run) it will not appear on this Notice. This allays ratepayer's concern that a payment they made in August has not been accounted for on their rate Notice.
  • A Note advising ratepayers who pay by half-yearly direct debit that a deduction of the net amount after discount will automatically be made from their nominated bank account on the due date. This prevents ratepayers being concerned that their direct debit will not be deducted.

Will ratepayers receive anything with their Rate Notice?

Yes, all ratepayers will receive the following with their Rate Notices:

  1. The Rates Brochure entitled 'Information and Schedule of Rates and Charges for 2012/2013'.
  2. A Bpay Flyer explaining the benefits to ratepayers of paying their rates by Bpay.
  3. A Water Advice Notice (see below).

Water Advice Notices

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. To achieve this Councils are required to send each householder a Water Advice Notice.

How much did Rates and Charges increase by?

The following is a summary of the 2012/2013 Rates and Charges for an average property:

Average Urban Property

2012/2013

2011/2012

$ Increase

% Increase

Valuation

$109,885

$110,117

-$232

-0.21%

General Rate

$1,134

$1,090

$44

4.00%

Waste Collection

$283

$273

$10

3.66%

Sewerage

$555

$536

$19

3.55%

Water Access

$365

$352

$13

3.60%

Total

$2,337

$2,251

$86

3.77%

Discount 10% on General Rate

$113

$109

$4

4.00%

Total

$2,224

$2,142

$82

3.77%

Water Consumption Charge:

  • The first 183 kilolitre  per half year increased by 5 cents per kilolitre from 95 cents per kilolitre to $1.00 per kilolitre.
  • Consumption above 183 kilolitre per half year increased by 5 cents per kilolitre from $1.60 per kilolitre to $1.65 per kilolitre.

These water consumption increases will only become effective from 1 January 2013, as water consumption charges are levied in arrears after water meters are read at the end of the reading period.

Further information:

How much did the Pensioner Rates Rebates increase by?

Council's Pension Rates Rebate increased from $110 to $140 a year (an increase of $30 or 27%). The State Government Pension Rates Rebate remained unchanged at $200 a year.

Why was it necessary to increase rates and charges?

In order to provide for sustainability and responsible, progressive local government to meet the growing needs of our community into the future. Council had to increase rates to compensate for the loss of revenue due to:

  • The floods last year which continue to place a strain on Council's resources and which will cause increased costs into the future;
  • The State Government's withdrawal of subsidies from Council for water and sewerage capital infrastructure (estimated to result in the loss of $55 Million over the next 10 years);
  • Increased costs charged by Council's suppliers, such as an increase of electricity and fuel increases.
  • The Cost Price Index (CPI) or inflation for local government is higher than the normal CPI because of Council's intensive infrastructural spending (building material costs increase more than normal household expenditure items);
  • More stringent requirements imposed by the Environmental Protection Agency as a result of amalgamation - compliance increases costs;
  • The need to retain the same real income as last year.

How do Bundaberg's rates and charges compare with other major Queensland councils?

Bundaberg's rates continue to be one of the lowest of the major regional councils in Queensland, and the second lowest in regional Queensland after Gladstone. Only the big urban centres in South-East Queensland, such as Brisbane, Ipswich and Gladstone, have cheaper rates than Bundaberg and those big centres can rely on large commercial and industrial rating bases to boost their rates revenue and subsidise residential rates. It is also significant that our neighbouring councils of Fraser Coast, Rockhampton and Gympie have higher rates than Bundaberg. The comparison for 2012/13 is as follows: 

Comparison of Rates and Charges between major Queensland Councils for 2012/2013

Regional Council

Minimum

General Rate

Sewerage

Waste Collection

Water Access

Separate Rates

Total

Order

Brisbane

$485

$476

$269

$167

$77

$1,474

1

Gladstone

$769

$501

$258

$317

$0

$1,845

2

Ipswich

$760

$567

$297

$339

$39

$2,002

3

Bundaberg

$814

$555

$283

$365

$0

$2,017

4

Cairns

$788

$697

$334

$233

$0

$2,052

5

Gold Coast

$767

$689

$229

$201

$173

$2,059

6

Sunshine Coast

$978

$570

$229

$232

$85

$2,094

7

Redlands

$811

$730

$318

$252

$0

$2,111

8

Moreton Bay

$740

$744

$237

$346

$52

$2,119

9

Logan

$686

$578

$254

$252

$389

$2,159

10

Townsville

$990

$701

$224

$310

$0

$2,225

11

Rockhampton

$1,100

$499

$346

$308

$432

$2,253

12

Gympie

$957

$587

$271

$343

$115

$2,273

13

Mackay

$984

$810

$250

$313

$102

$2,459

14

Fraser Coast

$1,109

$665

$316

$425

$104

$2,619

15

Average

$849

$625

$274

$294

$105

$2,117

 

What do ratepayers receive for their General Rates?

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

7. Planning Services - Advice/Control

8. Environment Program

  • Environmental Monitoring/Licensing
  • Education

9. Public Order and Safety (Local Laws, Licensing, Compliance and Administration)

10. Public Health Program

  • Immunisation Clinics
  • Mosquito Control
  • Weed Control
  • Animal Control
  • Stock Pound
  • Vermin Control
  • Community Health Promotion

11. Community Facilities (Halls etc)

12. Community Services Programmes

  • Community & Major Events
  • Youth & Commnunity Development
13. Sport and Recreation Facilities

14. Libraries & Art Galleries

15. Airport

16. Public Toilets

What are the major areas of expenditure planned for 2012/2013?

The 2012/2013 Budget features a significant capital works program totalling $98 million to fund vital community infrastructure for residents. Project highlights are detailed below:

  • Roads reconstruction, flood repair bitument reseals and asphalt overlays - $38,000,000
  • Stormwater drainage - $3,600,00
  • Footpaths - $770,000
  • Hummock water reservoir (final part of a $4,000,000 project) - $1,600,000
  • Trunk water main - Kalkie water plant to the Hummock - $4,100,000
  • Water Treatment Plants - renewals and upgrades region wide - $890,000
  • Water mains and services replacements - $900,000
  • Library books and associated items - $400,000
  • Sewer trunks mains at Bargara / Coral Cove - $1,500,000
  • Wastewater Treatment Plants, preparation for replacements and upgrades (Gin Gin, Thabeban, Millbank) - $1,850,000
  • Wastewater mains and pump stations upgrades region wide - $900,000
  • Bundaberg Recreation Precinct - $5,900,000
  • Bundaberg Regional Athletics Facility Stage 1 - $3,500,000
  • Prefeasibility planning for Bundaberg Showgrounds Redevelopment - $100,000
  • Childers Streetscape (next stage) - $500,000
  • Parks maintenance - key focus - $8,500,000

New Initiatives:

  • Cedars Roads waste facility - Cell 2 construction - $2,800,000
  • Charity Bin shed, University Drive landfill site - $50,000
  • Bundaberg Regional Art Gallery (BRAG) lighting system upgrade - $58,000
  • Moncrieff Theatre digital projector - $100,000
  • Parks and Gardens - pathway extensions and carpark sealing - $335,000

How are General Rates calculated?

General Rates pay for most of what Council provides, except for the supply of  Water, the treatment and disposal of Sewage and the collection and disposal of Waste, which are separately financed. In terms of the Local Government Act 2009, 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 Natural Resources and Mines. The amount of General Rates which a particular property is required to pay is calculated by multiplying a property's Government Valuation by a ‘Rate-in-the-dollar'. The Rate-in-the-dollar is calculated by dividing the total amount of Rates revenue that Council requires by the total value of all rateable land.

For example, if there were only two rateable properties with values of $90,000 and $100,000, and if Council needed to collect say $2,000 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 ($2,000) by the total valuation of the properties ($190,000). So the rate-in-the-dollar in this example would be $2,000/$190,000 = 0.01053 cents in the dollar.

The amount of General Rates that each property owner would need to pay in this example would be calculated as follows:

Property Value
 Rate-in-the-dollar
  Rates Payable

$100,000 x

 0.01053

=

$1,053

$90,000 x

 0.01053

=

$947

Total Income

 

=

$2,000


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.

What are Minimum General Rates and why are they necessary?

As noted above, 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 a property's 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 ‘A' in the following example would pay three times as much General Rates as Property ‘B' for exactly the same Council services. This is obviously unfair so Council requires each ratepayer to pay a minimum amount of rates. For example, in 2012/2013 the minimum is $814 per annum for Urban residential properties. Therefore in the following example, even though the owner of the more valuable property still pays almost 50% more than the owner of the less valuable property pays when a Minimum is applied, at least the minimum makes the comparison fairer than if it would be if it was based solely on valuation.

Property

Property Value

Rate in the dollar

Rates charged

‘A'

$120,000

0.009909

$1,189

‘B'

$40,000

0.009909

$396

‘B'

$40,000

Minimum applied

$814

Currently 13,496 Bundaberg Regional Ratepayers pay a Minimum General Rate out of a total of 43,568 ratepayers, that is 30.98%. Bundaberg Regional Council has one of the lowest Residential Minimum General Rates in Queensland; $814 in 2012/13, compared to the average Minimum of $849 that is applied by the larger Queensland councils.

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.

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

The Government Department of Natural Resources and Mines revalued all properties in the Bundaberg Region in 2011/2012 and Council is compelled by law to use the new valuations to calculate a ratepayer's general rates. Some ratepayers believe that because their property's valuation has increased their rates will increase by the same amount. This is not the case.  The amount of General Rates which a ratepayer pays is calculated by multiplying their property's Government Valuation by a ‘Rate-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 as illustrated in the example illustrated below. For example, if Council needed to collect $2,000 in rates to provide two properties with general services, Council would calculate the rate-in-the-dollar by dividing the total amount it needed to collect ($2,000) by the total value of the properties ($180,000). So the rate-in-the-dollar in this example would be $2,000/$190,000 = 0.01053 cents in the dollar.

In this example, the Department of Natural Resources and Mines revalued Property ‘A' from $100,000 to $140,000 and Property ‘B' from $90,000 to $110,000, and Council still needs to collect General Rates of $2,000 from them. Therefore Council would calculate the new rate-in-the-dollar after revaluation by dividing the income needed ($2,000) by the new total valuation of $250,000 which would give a new rate-in-the-dollar of 0.00800 ($2,000/$250,000). The important thing is the ‘average' percentage valuation increase, which in this example is 32% ($250,000 - $190,000)/$190,000.

This example illustrates that ratepayers pay rates in proportion to their property's valuation compared to the average valuation for their rating category. Therefore ratepayers in a rating category who have experienced a higher-than-average valuation increase may experience an increase in rates and those who have experienced a below-average valuation increase may experience a decrease in rates. In the following example, Property ‘A's valuation increased by 40% (more than the average of 32%) and its rates went up, whereas Property B's value increased by 22% (less than the average of 32%) so its rates went down. 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 valuation and the average valuation of all properties in their rating category.

Property

Before Revaluation

After Revaluation

Value

Rate in $

Rates

Value

% Increase in Value

Rate in $

Rates

Property ‘A'

$100,000

0.01053

$1,053

$140,000

40%

0.00800

$1,120

Property ‘B'

$90,000

0.01053

$947

$110,000

22%

0.00800

$880

Totals

$190,000

0.01053

$2,000

$250,000

32%

0.00800

$2,000

The current valuation changes which apply to the Bundaberg Region will mostly affect rural ratepayers. The average rural valuation increase is 20.71%, and therefore properties in areas such as Bucca and Maroondan, which have average valuation increases of 39.65% and 38.14% respectively, should experience an increase in their General Rates, if they are not paying the Minimum General Rate. Fortunately a large proportion of rural properties attract minimum rates and are therefore not affected by changes in valuations.

Ratepayers had 60 days, from the time they were advised by the Department of Natural Resources and Mines of their property's new valuation, to object to the Department against their property's new value.

The introduction of Site Value

In 2011/2012 the Department of Natural Resources and Mines introduced 'SITE VALUE' for valuing all non-rural properties. This meant 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 were built on it. Last year, this would have affected some ratepayers significantly if their land was significantly filled for example, but most of those queries have now been resolved. 

What affect will the continued amalgamation of General Rating categories have on rates?

After the  amalgamation of Bundaberg City and Burnett, Isis and Kolan Shires in 2008 to form the Bundaberg Regional Council, the Queensland Government required all amalgamated Councils to combine the rating categories of the former councils over a four year period from 1 July 2008 to 30 June 2012. However Bundaberg Regional Council requested, and the Government agreed, that General Rating Categories 6, 13 and 21 could be amalgamated over seven years due to the significant rates increases involved. This means that most rating categories have already been amalgamated and will recive a 'normal' increase in General Rates each year but General Rating Categories 6, 13 and 21  will also receive an additional increase as a result of the necessity to amalgamate them with General Rating Categories 5, 14 and 2 respectively as illustrated below.

How many ratepayers' rates will go up and by how much?

An analysis of the number of ratepayers who have experienced rates increases or decreases between 2010/11 and 2012/13 is as follows:

 

2010/2011

2011/2012

2012/2013

Number of ratepayers whose rates have decreased

2,152

5.01%

1,049

2.42%

1,851

4.25%

Number of ratepayers whose rates have increased between 0% and 15%

36,708

85.47%

41,730

96.45%

41,305

94.81%

Number of ratepayers whose rates have increased by over 15%

4,086

9.51%

486

1.12%

412

0.95%

Total

42,946

100.00%

43,265

100.00%

43,568

100.00%