Rates to rise by 4.75% after changes to the SCS budget changes.

At its meeting on 26th June, the Surf Coast Shire councilor voted to adopt the budget for 2014/2015 without the controversial Tourist Accommodation Rate category.

We asked the question: -

Is it correct that shire officers are proposing to discontinue the proposed  Tourist Accommodation Rate category resulting in an increase in general rates – now being greater than expected with an increase of 4.75% compared to the 3.72% that was previously forecast? If this is correct, what is the reasoning behind this change?

Council’s Chief Executive Officer – Stephen Wall responded:

Council will consider the Adoption of the Annual Budget 2014-2015 and Declaration of Rates for 2014-2015 as item 1.3 on tonight’s Agenda. It is recommended that the proposed tourist accommodation differential rate be removed from the 2014-2015 Budget. Council received a total of 88 submissions on 2014-2015

Budget, 68 of these expressed concern around the proposed introduction of a tourist accommodation differential rate. This identified that more work needs to be completed by Council before such a differential rating category can be introduced. Ms O’Shanassy is correct that the removal of this rating category will result in an increase in general rates. I encourage Ms O’Shanassy to stay tonight and hear the debate and decision on the Annual Budget 2014-2015 and Declaration of Rates for 2014-2015.

Read our well researched submission to council prepared by our Treasurer, Helen Torley:

                                                                        3228 Residents Association Incorporated

                                                          (Org. No. A0058442K)   

26 May 2014                                                                                      

 Mr Stephen Wall

Chief Executive Officer

Surf Coast Shire Council, PO Box 350,Torquay Vic 3228

 Dear Stephen,


We seek clarification and further consideration of several important aspects of the Surf Coast Shire Draft Budget 2014 – 2015, which will impact on our members and the community.  

 Whilst the Budget is extensive in size, in fact 93 pages long, it lacks detail on WHY decisions have been made and WHY the Shire feels its Budget is reasonable and fair.  In it current format, the Budget is time consuming and daunting for community members to decipher – the Budget is an important document which should be provided in a format that can be easily read and understood by the community.  In future years, we suggest a more succinct summary is provided to explain to ratepayers why the key Budget assumptions have been made, what the main changes are and how the level of rates and Shire performance has been measured to ensure it is in line with “Best Practice”.

 In addition, we raise the following more specific aspects regarding the 2014 – 2015 Budget:

 Introduction of “Tourist Accommodation” rating class  This appears to be a significant change in revenue collection for this sector of our community.  What other Shires use this rating class and  what % do they charge (Pg 53)?  The Shire website currently advises that a Tourism Special Charge is collected from these type of properties to help support Tourism development.  What is the current charge vs proposed Tourist Accommodation Rate?  What is the revenue differential?  Why the need to change? In addition, we feel that the definition of Tourist Accommodation Rate Land (Pg 70) is ambiguous and open to challenge. 

 The Budget estimates reclassification of a large number commercial and residential properties as Tourist Accommodation (702 properties with an average value of $628K each).  How have / will these properties be identified / monitored and will additional resources be required for this purpose? 

 By collection of this new fee on residential based tourist accommodation, will this sector be more heavily promoted, and thereby encouraged?  There are already problems due to the inappropriate mix of tourist accommodation in residential areas (e.g. especially during Schoolies and peak holiday times).

 State Government Guidelines (Section161) state that the use of Tourist Accommodation for differentiation of rates is “inappropriate”.  They advise to “consider with caution”.  Alternatively, they recommend that a special charge may be more appropriate.  It appears that the Shire is going against the State Government guidelines - why?

    Reduction in Commercial / Industrial rate charge

Why is the Commercial / Industrial rate being reduced from 190% to 170%.  Budget states....”to support employment in the Region”.  What is the basis for this statement.  How will an average $326 reduction in rates per commercial rate payer improve employment prospects?

Increase in budgeted borrowings for FYE 15/16 by $3M to $ 18.3M 

The proposed increase in borrowings by $3M, to fund the Torquay North Early Learning Centre, was not foreseen in the Shires previous budgets.  In fact, Annual Report 6/13 (finalised approx 6 months earlier than this Budget), on page 52, forecasts borrowings to reduce to $15.3M by the end of 15/16.  AR 6/13 also states that “Council...is now in a phase of debt reduction.” and also “Council does not propose to increase borrowings to expand the capital works program”. 

Why has the debt strategy changed from a phase of debt reduction to increasing borrowings in such a short time frame?  By reducing Commercial rates (as mentioned above), the Shire is foregoing at least $255K in revenue that could be used to reduce the level of borrowings required.  The community deserves some explanation!


  1. The budget does not provide data on how performance compares to other Shires to ensure level of rates, wages, costs, etc. are appropriate? This is important benchmarking information that should be provided to the public as part of the budget process.  Also, with Employee numbers, there has been a significant, unexplained variation in EFT, from last years Budget (2013 – 2014), which forecast 230 EFT at end of 2013 / 14, compared to the Revised Forecast in this years Budget (2014 – 2015) of 248 EFT as at 2013 / 14.  Why have employee number jumped by 18 EFT or 7.2% over forecast levels?

     Finally, if there is capacity for rate relief now, why is it not extended to all ratepayers, rather than just to Commercial ratepayers?  For this reason alone, the current budget is not “equitable and affordable (Pg 30)” to all ratepayers.


    Whilst we apologise for our Submission questioning much of the Shires Budget, this does not mean that we disagree with all assumptions within the Budget.  What we are saying is that the Budget DOES NOT provide the necessary detail and justification for the assumptions contained within the document.  This is not fair to the community and is not reflective of open and transparent local government.

     Of course,  I am sure that, as a council, you have much more data, benchmark results, etc. to show why budget decisions have been made and to reflect that performance is in line with other well run, efficient Councils.  We welcome hearing about this in response to our submission.


    Helen Torley

    Treasurer 3228RA Inc