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Council Budget Rates And Waste Charge Distribution


This consultation is now closed.
Council is proposing to submit a Rate Variation Application for the 2019-20 financial year.  Further information is provided on this page outlining the issues being considered.

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Council is proposing to submit an application for a rate variation to the Essential Services Commission (ESC).  So, what does this actually mean?  Please watch this short video where our Councillors will briefly explain.

  • What is a rate variation?

    Under State legislation, councils can collect rate income and service charge income.  In 2018-19 Mansfield Shire Council budgeted to collect $10.4 million in rate income, and $3.2 million in waste charge (service charge) income – a total of $13.6 million.

    All of these funds are expended on the various services and infrastructure provided by Council.

    The amount each ratepayer is charged depends on:

    • The type and number of bins you have at your property
    • The type of property you own, its size, and its use (ie Farmland, Commercial, Residential, Rural residential, Vacant)
    • The value of your property in comparison to other properties in the municipality.

    Download a flyer, prepared by the Municipal Association of Victoria (MAV), which explains how rates are calculated and charged or watch this short video that explains rates and the rate cap in more detail.

    Where a council can show that it has a long term funding need, it can apply to the Essential Services Commission (ESC) for a variation to the Ministers rate cap – ie. to increase its rate income.

    The ESC is an independent oversight body.  For more information on the ESC and their role in administering the rate cap visit their website.

  • Why does Council need to apply for a rate cap variation?

    Council budgeted in 2018-19 to receive $13.6 million in rates and service charges from the community, split as follows:

    Rate variation - total income picture

    All rates and charges monies received by Council are used to fund infrastructure and  services to meet the needs and wants of the community.

    In April 2018 the Victorian Ombudsman launched an investigation into waste charges at Wodonga City Council.  The resulting report recommended that councils should ensure waste charges to the community equate to the cost incurred by a council to deliver waste management services.

    Mansfield Shire Council’s waste charge for 2018-19 is $3.2 million.  The cost of the service is $2 million.  As such, there is $1.2 million in waste charge income that Council needs to eliminate from future budgets in order to comply with the Ombudsman recommendation.

    However, all the income received in rates and service charges (including waste charges) is spent on services and infrastructure for the community.  Without $1.2 million, there would have to be significant cuts to the services Council provide to the community.

    The alternative is to increase general rates by $1.2 million.  It’s just moving the amount you pay from one bucket to another and calling it a different name.

    rates $10.4m, waste charge $3.2m
    Current income allocation

    rates $11.6m, waste charge $2.0m
    Proposed income allocation

    There will be no additional income to Council from the Community, but because the rate cap restricts the amount Council can increase its rates by each year, we need to apply to the Essential Services Commission (the oversight body set up by the Victorian Government) to enable the transfer of income from waste to rates.

  • How will Council effect the shift of $1.2 million from waste charges to rates?

    Waste charges are not included in the income that is restricted by the Minister's rate cap.  Therefore to move the waste income over to general rates, a higher cap is required to allow for the boost in income in that bucket.

    Council will need to undertake two key processes:

    1. Apply to the Essential Services Commission for a variation to the rate cap declared by the Minister for Local Government.
    2. Amend the Rating Strategy to effect a fair and equitable distribution of the $1.2 million transferred from waste charges to rates.

    Because waste charges are allocated on a different basis than general rates (ie per bin vs property values), an amendment to the Rating Strategy is required to ensure the $1.2 million is allocated in the most equitable manner as possible, and to effect minimal change in the total rates payable by the average rate payer.

    Remember, Council is not seeking to source more income from the community.  The revenue earned by Council in total will not change by more than the mandated annual cap if the rate variation is successful.  We are just seeking to transfer income from waste charges to rates – just moving the amount you pay from one bucket to another.

  • Revised Rating Strategy

    The rating system determines how Council will raise money from properties within the municipality.  It does not influence the total amount of money to be raised, only the share of revenue contributed by each property.  The rating system comprises the valuation base and actual rating instruments allowed under the Local Government Act 1989 (the Act) that are used to calculate an individual property owner’s liability for rates.

    Rating Strategy 2019-20

    There are two key components that have been revised in the proposed Rating Strategy 2019-20

    1. the differentials, and
    2. the municipal charge.

  • Differential Rates

    Differential rates are a useful tool to address equity issues that may arise from the setting of council rates derived from property valuations.  They allow Council to provide concessions or incentives by altering the cents paid per dollar of Capital Improved Value to different categories of land.

    Council currently has 5 differential categories:

    • Residential
    • Vacant Land
    • Rural Residential
    • Farmland
    • Commercial

    To ensure the redistribution of excess waste income into general rates is equitable, the amendments proposed apply to the percentage differential in each category. 

    Once the revised differential percentages are applied, the impact of the shift of $1.2 million from waste charges to general rates on the total annual rates notice of the average rate payer in each differential category is estimated to be:

    Differential category

    Variance from current rates notice under new proposal after reallocating waste income and altering differentials

    Residential    $2 less per annum
    Vacant Land    $8 more per annum
    Rural Residential   $10 more per annum
    Farmland    $2 less per annum
    Commercial    $6 more per annum

    **note this impact is BEFORE the annual rate increase as per the standard allowable cap is applied, and any change to the municipal charge is made.

  • Municipal Charge

    The municipal charge is a portion of rates that is a fixed, flat fee per property.  It is not based on the value of your property, and all rate payers pay the same amount of municipal charge.

    The total municipal charge currently earned by Council in 2018-19 is 20% of total rates.  That means 20% of total rates is allocated on a flat rate across all properties.  The remaining 80% is allocated according the value of your property in comparison to others in the municipality.

    The proposed Rating Strategy 2019-20 will reduce the municipal charge to a maximum of 10% of total rates.  This means 90% of rates will be allocated based on property values, and 10% will be a flat rate per property.

    The change is recommended to coincide with the expected introduction of the Local Government Bill, which proposes a change to the Local Government Act 1989 (the Act) reducing the maximum allowable municipal charge from 20% to 10%.

    The impact of this change on the average ratepayer in each differential category is estimated to be:

    Differential category

     Estimated variance from change in municipal charge

    Residential  $33 less per annum
    Vacant Land  $84 less per annum
    Rural Residential  $9 more per annum
    Farmland  $143 more per annum
    Commercial  $122 more per annum


  • Who will be impacted by a rate cap variation if it is submitted and approved by the ESC?

    It is important to remember that the total income received from ratepayers will not change as a result of a rate cap variation.  Council is NOT seeking more money from the community.

    What may change is the distribution of the charges amongst ratepayers.  This is because the way waste charges are allocated (size and number of bins) is different to the way general rates are allocated (comparative property value).

    To address this reallocation issue, Councillors have revised the differential system to make the redistribution as even as possible across the various rate categories.

  • What is the financial impact for me?

    The specific financial impact of the proposal on each individual ratepayer cannot be known at this point in time.

    Modelling and financial impact assessments have been performed using the Long Term Financial Plan and the 2018-19 budget data as the source of base financial information.  Actual impacts may vary in 2019-20 as forecasts are revised, rateable property numbers change, property valuations change and cost estimates are refined before the 2019-20 budget is finalised and endorsed by Council.

    It is important for ratepayers to note that financial modelling has been performed using the “average rate assessment” per category, and in some cases the median.  There will be some differences in individual rate assessments that vary from the average property, and some differences will be larger than others.

    Council is required to consider equity among all, and therefore modelling using average impacts is considered the most appropriate.

    The anticipated impact of a successful rate variation application, and a change in the maximum municipal charge is show below for the average rate assessment in each differential category:

    Differential Category Estimated total variance for the average assessment
    Residential  $35 less per annum
    Vacant Land  $76 less per annum
    Rural Residential  $19 more per annum
    Farmland  $141 more per annum
    Commercial  $128 more per annum


  • What will happen if Council is not granted a rate cap variation?

    In response to the Victorian Ombudsman’s findings in relation to waste management charges, Council will remove $1.2 million in annual expenditure from the budget, commencing in 2019-20.

    If Council is not granted a rate cap variation to recoup this same amount of money through general rates, we will have reduced financial capacity to deliver services and infrastructure to the community.

    Estimates of the annual cost of some of the services Council provides are:

    • Mansfield swimming pool - $128,000
    • Mansfield library - $194,000
    • Mansfield Youth Centre (and associated youth programs) - $205,000
    • Home and Community Care - $29,000
    • Financial counselling - $20,000
    • Maintenance and renewal of Council buildings - $500,000
    • Parks and gardens maintenance - $835,000
    • Tourism industry development & promotion - $155,000
    • Events and festivals - $168,000
    • Visitor Information service - $120,000
    • Domestic waste collection and disposal - $2,000,000
    • Community grants program - $20,000
    • School crossing supervision - $40,000
    • Australia Day and other civic ceremonies - $7,000
    • Public toilet cleaning and maintenance - $170,000
    • Maintenance and renewal of council roads - $2,640,000

    A combination of any of the above services, totalling $1.2 million, would need to be cancelled and no longer delivered, to ensure Council is financially sustainable into the future  - that is, to make sure Council does not run out of money in the medium future (5-10 years).

    There are some services that Council is required to provide under legislation.  These include maternal and child health, emergency management, fire management, domestic waste water management and septic permits, municipal building surveyor,  planning & property management, local laws and compliance.

    These services must be delivered by law and therefore cannot be considered as options for service cuts.

Engagement Update

Engagement Update: 

This consultation is now closed.  Thankyou for providing your valued input and engaging with us on this issue.  

Council considered all the submissions received and made a decision at the Ordinary Council Meeting 19 March 2019 to submit an application to the ESC for a rate variation of 11.44% above the rate cap of 2.5%.

The ESC approved Council's application.  Refer to the ESC's website for the full report here.


Key Dates

30 November 2018

Community engagement opens

5 December 2018

Drop-in session #1 @ Family and Childrens Centre (10am- 12pm)

7 December 2018

Drop-in session #2 @ Mansfield Library (1pm- 3pm)

10 December 2018

Drop-in Session #3 @ Mansfield Youth Centre (10am- 12pm)

13 December 2018

Drop-in Session #4 @ Mansfield Library (2pm- 4pm)

13 January 2019

Community engagement closes

19 March 2019

Council decision – whether to endorse an application to the ESC - Ordinary Council Meeting

31 March 2019

Application to the ESC due

17 April 2019

Draft budget 2019-20 released for community engagement 

28 May 2019

Submissions hearing – Draft Budget 2019-20 - Special Council Meeting

25 June 2019

Budget endorsed by Council - Special Council Meeting

Contact Information

Mandy Kynnersley, Finance Manager
Alex Green, CEO
5775 8555
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