Prior to reporting on this item, we urge readers to revisit our table of comparative rate rises for Glen Eira and our neighbouring councils over the past 9 years and then consider the validity of the arguments presented below.

https://gleneira.wordpress.com/2015/04/20/rates-value-for-money/

Item 9.1 – Development Application Fees

Delahunty moved motion to accept with the addition of the clause that if the State Government increases application fees, that Council will ‘pass on the full effects of this saving’ to residents via rate reductions. Lobo seconded.

DELAHUNTY: thought that the report was ‘groundbreaking’ and thanked officers. It reveals the ‘true costs to council’. Said that council is ‘subsidising multi-unit’ developments to the ‘tune of conservatively around one million dollars’ since the government sets the fees and these haven’t increased in the past 6 years whereas council costs have. The Government was voted in by people with the agenda of rate-capping and the government has charged councils to find savings. Glen Eira has found ‘savings’ which will make ‘an incredible difference to rates’. But Council needs ‘help’ from the government to ‘deliver’ the savings. Developers would ‘wear the cost’ and it is tax deductible for them. Wanted councillors to support motion that is asnwering the government’s challenge of finding ‘savings’. Said that it also ‘goes a step further’. Council has ‘set a very responsible budget’ and can ‘deliver what we think’ are the ‘municipality’s needs’ and with the cost savings this money ‘would go back to the ratepayer’.

LOBO: endorsed Delahunty’s comments. Developers are ‘rich’ and he didn’t think that ‘such cost shifting should be done’ even though the government ‘does a lot of cost shifting’. Residents are ‘having a hard time’ in meeting expenses, especially the retired who depend on Centre Link. Passing on the one million ‘would make a difference to them’. Went on to give figures from the report on how the state government supports VCAT to the tune of over $10,000 and council gets only around $4000 ‘for the work done’. This is ‘unfair to make the rich, richer’.

OKOTEL: supported motion ‘except for’ giving the money back to residents. Went through the report and noted – ‘burden’ on ratepayers; lack of increase in fees. Said that Pilling wrote to Minister last year asking for fee increase and received reply that a ‘regulatory’ review needed to be completed first of all.   Magee wrote to the ‘new government’ and ‘hopefully’ they will increase the fees payable. Council needs to continue to put ‘pressure’ on because ratepayers are ‘subsidising’ development. Didn’t support clause that savings be passed on to ratepayers. Claimed that this was ‘an arbitrary way of going about things’ since when rates are set ‘we go through a’ stringent ‘budgetary process’ and they ‘look at what we might spend ratepayers money on’. The money could be ‘put towards’ many other ‘initiatives’ such as open space, and pavilion upgrades. ‘It would not set a good precedent’ for council to say that they would ‘arbitrarily return that amount’. Council should ‘continue to be prudent in how we administer’ the funds.

LIPSHUTZ: also supported motion except for returning money via rate reductions to residents. Said ‘I’m a ratepayer’ and would like lower rates but ‘the reality’ is that rates and taxes are paid ‘so that our city can grow’ and that ‘we can have the services that we all expect’. Claimed that ‘this council is a very low cost council’. They ‘have a business plan’ about how ‘we do things’ and plans are done ‘for the benefit of our residents’. He would ‘hate to see’ a million dollars ‘come back and result in reduced rates’ because this means that ‘we can’t do the things we would like’. Said that Council has a ‘budget’ and this ‘suits what we want to do’ but ‘we can do so many more things’. Claimed that council ‘just lost $885,000 because two people’ opposed the open space levy. ‘Two people stopped that happening’.

SOUNNESS: raised a point of order in that Lipshutz is not speaking about application fees now.

MAGEE: ‘agreed’ with Lipshutz in that ‘I do see the connection’.

LIPSHUTZ: claimed that if ‘we had that money’ they would spend it on open space and if they received the one million they would also spend this on open space and on pavilions and ‘upgrading our facilities’. Didn’t want to see lower rates because ‘we have to take the long term view’ and ‘as councillors we have a responsibility’ to present the ‘budget properly’ and to ‘plan for the city’. ‘I don’t want to give money back’ or ‘put money simply into the bank’. If they had the ‘extra money’ he would ‘like to use that for all the things we would like to do’. Asked if Delahunty and Lobo would accept an amendment which ‘excised’ that particular clause from the motion. Said that the clause makes for ‘great PR, but the reality is I don’t want to see a million dollars simply go west’. He ‘wants us to use that money wisely’. Both Delahunty and Lobo said ‘no’.

 

Lipshutz then moved the amendment to excise this part of the motion. Seconded by Okotel.

Lipshutz said ‘what I said stands’.

OKOTEL: repeated that returning the money to ratepayers would be ‘arbitrary’. Said that council ‘experiences regularly unforseen costs’ for example Defined Benefits and they don’t know ‘how much this might be’ nor ‘when this might come’. Thought that it is ‘important that we stick to the budgetary process’.

DELAHUNTY: agreed with Okotel that ‘we do set a responsible budget’ and that it is an ‘arbitrary move’. Because the budget is ‘responsible’ they ‘account for these costs’ because ‘we bear these costs’ in that the budgets take account of them. Council has argued that ratepayers subsidising developers is ‘unfair’ and in spite of these costs, and in setting the budget ‘we’ve managed to deliver all of the things’ they wanted. If they don’t manage to ‘deliver’ then it is ‘the budgetry process’ which Okotel ‘holds in high regard’ that ‘should bear that up’. ‘This is an unmet cost that is unfair on the ratepayer to bear’. It is a ‘courageous’ councillor who can say that they don’t want the money to go back to ratepayers. This is like saying ‘we know what to do with your money better than you do’. The government was voted in on a policy of rate cutting, ‘we found an extra cost saving’ and that ‘I think you should have that back in your pockets’. Said that the budgetary process isn’t ‘undermined’ because the costs are already budgeted for. If the government raises the fees, then their costs diminish and they don’t ‘need’ the rates that were ‘set out’. And ‘if we need to do more’ then the way this is argued is the ‘budgetary process’. If fees are raised then it’s an ‘unexpected windfall for the council’ and is ‘unfair’ to ratepayers.

PILLING: said that his ‘problem’ with the Delahunty motion is that it is ‘almost acknowledging rate capping as a policy’ and ‘accepting it’. Didn’t think that this was ‘necessary at this stage’ (ie ‘shadow boxing’ with the government’).

HYAMS: liked the report. Went through details again regarding costs for processing applications and the ‘disparity’ in costs for VCAT. Bemoaned responses to mayor’s letter to minister and how long it’s taken for a review of fees. Said he supported amendment and that giving the money ‘holus bolus back to ratepayers’ ‘presumes that previous budgets and rate rises would have been that amount less’. Council sets rate rises ‘in advance’ and then officers and departments put in their submissions and ‘works out what can be fitted in’. Thought that previously they would have ‘gotten a bit less’ and ‘done more with it’. If fees rise then this would be ‘recouping’ not previous losses and what ‘council would have been able to achieve’. Didn’t think that ‘we are doing the right thing by ratepayers’ in simply saying ‘you can have all the money back’ and council will ‘continue to forego’ what could have been done ‘for you’.

LOBO: said that in this situation councillors, as ‘servants of the public’ and with whatever money ‘is in the kitty should go back’ to ‘the master’. Said that pre-election he read somewhere that if ‘your councillor is not standing by you then what is he doing in the council?’. Repeated that money ‘should go back to the masters’, it is a ‘master-slave relationship’ . Said that retired servicemen are ‘suffering’ and that discounts given to pensioners of $260 is ‘negligible and has not increased for almost 8 to 10 years’. ‘To keep (the money) is to be a miser’.

ESAKOFF: said that the ‘rate capping report is a good one’.

DELAHUNTY: raised a point of order questioning whether Esakoff was ‘on the right report’.

ESAKOFF: said she was on the correct item.

MAGEE: ‘I understand where Cr Esakoff, what she is speaking about’ since councillors have ‘mentioned rate capping’ previously.

ESAKOFF: was ‘happy’ with the report and the recommendations. Agreed with Pilling that ‘this assumes a lot’ and is ‘arbitrary and I don’t like that factor’. Said that council subsidises many services and that if they were to ‘start recouping’ all of these then they would be ‘giving everything back to the ratepayers and there would be no rates to be paid’. ‘At this point in time’ council ‘should wait and see’ what its costs are which will ‘vary’ depending on application numbers. Thought that the distributing ‘rate pool’ should be part of the ‘budget process’ and ‘not on one item’.

SOUNNESS: said that in Western Australia going to VCAT costs less than in Victoria. Said that people assume that what council does with money is for the public good. Agreed that there is a budgetary process and that council ‘needs to manage’ its costs and that it ‘would be a very unfair government that suddenly changes its fee structure’ and ends up with a ‘hole in the budget’. If changes are contemplated then it should be done with fair 6 month warning. Thought that the motion would ‘have very little impact on the ground’ and that he was ‘indifferent’ as to support this ‘or not’.

MAGEE: said rates are like taxes to raise money to run the city. If the government raised fees then this would be ‘a lesser amount that we would have to impose on ratepayers’ and this would be ‘reflected through the budgetary process’. This would be reflected in lower rate rises so isn’t ‘something we would have to give back’ since it wasn’t collected ‘in the first place’. Said he was ‘happy’ with the original recommendations.

AMENDMENT PUT: VOTING IN FAVOUR – LIPSHUTZ, OKOTEL, PILLING, ESAKOFF, HYAMS.

VOTING AGAINST: DELAHUNTY, LOBO, SOUNNESS; MAGEE

Amendment successful and became substantive motion. VOTED IN UNANIMOUSLY.

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