WELLINGTON Shire Council claims its current rating system is the fairest method to spread the burden across ratepayers.
As required by the state government, council has released its 2021-24 revenue and rating plan.
The plan shows council’s rating structure, and provides justification for how revenue is raised to provide more than 110 services and facilities.
Rates make up about 58 per cent of council’s annual income — with 16 per cent coming from operating grants, 15 per cent capital grants, eight per cent fees and charges, two per cent from community group and developer contributions, and one per cent from other income such as interest from investments and sale of assets.
Council aims to strike the best balance between raising revenue through a general rate based on property values and service charges.
Councillor Carolyn Crossley said rates was council’s most significant source of revenue.
“We rely on the rate base for bulk of the funds to provide the services for our community,” she said.
“Wellington Shire has recommended to use the capital improved value, as we have done in the past and is the most commonly-adopted system across Victoria.
“It’s believed to be the fairest way to the share the burden of the rates across the shire.
“It also gives us the ability to have a differential rating system.
“We have one differential that we provide for our farming community … where they pay 80 per cent of the (general) rate, which is also in line with the majority of rural and regional councils in Victoria.”
Despite a differential rate applied on farm land, members of the shire’s farming community have again raised concerns about steep increases in their rate bill, with the Victorian Farmers Federation proposing the further use of differential rates across other land uses.
Council has three options for the valuation base it uses.
Capital improved value (CIV) looks at the value of land and improvement on that land; site value (SV) only takes in the value of the land, while net annual value (NAV) is the rental valuation based on CIV.
CIV more closely reflects a landowner’s capacity to pay, and is more accurate as valuations are more frequent.
However, CIV may not necessarily reflect the income level of the owner.
Under SV, there would be a significant shift in the rate burden from the industrial and commercial sector to the farming and residential sectors.
With the NAV, rental estimates may not represent actual market value.
Council does not utilise a flat rate municipal charge as part of its rating strategy.
Property valuations are conducted by the state Valuer-General’s office, independent of council.
Owners have two months to appeal a valuation upon receiving a notice.