Berri Barmera Council
Rating Review
Basis of Rating
Council derives the majority of its income by rating property owners within its
council area, based on the capital value of their properties.
Each year Council is faced with balancing its service levels, the needs and
expectations of the community and setting appropriate rate levels to adequately
resource the needs expressed by the community. In setting its rates for each
financial year, Council gives primary consideration to the following:

Strategic directions

Budget considerations

The current economic climate and

The likely impact on the community.
Why Conduct a Rating Review?
A number of concerns have been raised by the community regarding a perceived
inequity surrounding the differential rating system currently used by Council.
Outdated philosophies inherited from previous councils.
Constant comparison with other councils.
The need to ensure our rating system remained fair and practical.
Principles Guiding Council
A rate review is not a discussion of the level of rate revenue required to be raised,
but rather a scrutiny of how the methodology is used to raise rates.
Council is very mindful of its need to be equitable, fair and responsible in raising
rates.



Equitable in that those who have higher valued properties will be
expected to pay more than those with lesser valued properties
Fair in that ratepayers suffering undue financial hardship may receive
rebates, remissions or postponements of rates payable as their
circumstances require.
Responsible in that sufficient revenue is raised to ensure the assets
and community services are maintained and debt is kept within
affordable levels so as not to negatively impact on future ratepayers.
Differential Rating
The Local Government Act 1999 allows councils to differentiate rates based on the
use of the land, the locality of the land or both the use and locality of the land.
The past method of rating has included the use of land use AND locality as the
differential basis but has recently been modified to a differential basis of land use
ONLY.
Minimum Rate or Fixed Charge
Council currently apply a minimum rate. The Local Government Act 1999 stipulates
that minimum rate can only be applied to 35% of all rateable properties within the
Council district.
A minimum rate applies to properties where the calculated rate (property value x the
rate in the dollar) is less than the minimum. An example using our current minimum
rate and residential rate in the dollar:
Property
Value
$95,000
Rate in the
dollar
.5929
Property
Value
$95,000
Calculated
Rate
$563.25
Minimum
Rate
$601.00
Total Rates
$601.00
Rate in the
dollar
(say)
.4500
Calculated
Rate
Fixed
Charge
Total Rates
$427.50
$300.00
$727.50
Considered Options
Three options have been considered being:
1.
2 (a)
Other concerns that were raised:



A fixed charge has a different distributive effect on ratepayers to that of a minimum
rate. A fixed charge is imposed against all rateable properties to provide a
proportion of the total revenue, with an additional property based charge being
imposed to ensure adequate rate revenue is raised by Council to provide services.
The Local Government Act 1999 imposes that rate revenue raised by a fixed charge
cannot exceed 50% of the total revenue raised from general rates.
An example using the same property detail as above:
2 (b)
3.
Retain status quo (minimum + land use)
Minimum + land use differentials but aligning commercial
and industrial properties.
OR
Minimum + land use differentials with all differentials to be
the same for all land use categories.
Fixed charge + land use differentials.
Council Proposes
The preferred rating option is 2(a) above because:

The model is revenue neutral

The majority of properties will NOT be adversely affected i.e. no
winners and no losers.

the average rate for commercial properties will increase by 7%
whereas,

the 90 industrial properties will receive a decrease to average rates.
To avoid large fluctuations for commercial and industrial properties methods such
as rate capping and/or rebating can be used.
Consultation
A more detailed document has been prepared providing further explanation of
Council’s rating system with in depth detail and analysis. This can be found on
Council’s website at www.berribarmera.sa.gov.au or copies can be obtained from
each of Council’s offices.
Comments and submissions are welcome and we encourage you to have your say
by either of the following methods:
1.
2.
3.
4.
Written submission to Council – make representation to Council by
sending in a formal, written submission by 26th August, 2014.
Log your submission on line at www.berribarmera.sa.gov.au and follow
the prompts.
Attend a public workshop on 20th August, 2014 at 5.30pm in the Berri
Council Chambers.
You must register your attendance by telephoning the Berri Barmera
Council office on 85821922 by close of business 13th August, 2014.
Meet with Berri Barmera Council staff by making an appointment –
telephone 85821922.
What happens from here?
Your feedback will be received as part of a report to Council for consideration
regarding changes to be introduced in the 2015/2016 financial year.