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V the rate administrator

volume 21 no 1 : september 2010

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Continue u the rate administrator - sept 2010 S IRAV www.saira.com.au SA INSTITUTE OF RATE ADMINISTRATORS INC

V in this issue

President’s Message 3 EDITORIAL COMMITTEE: CONTRIBUTORS: Team Profile 4 City of Burnside Rosemary Munslow Joan Murrell 8397 7310 Michael Kelledy On the Couch with Michael 5-6 Bryan Francis Reflection on the International Property Michael Powell Neville Gay 7-8 Conference 8408 1227 Natasha Jones SAIRA Annual Conference 9 Neville Gay Rates Postponements: 10 8391 7207 What about a Service Charge

Proportionate Relief (and the NRM Levy) 11-12 Joan Murrell Pensioner Concessions and DFC 8384 0530 13 Update Daniel Blank Rate Seminar 14 8203 7342 Board of 15

FRONT COVER: City of Burnside Fountain.

DISCLAIMER > Views expressed in the Rate Administrator do not necessarily reflect the opinions of the SA Institute of Rate Administrators Inc. All articles are for information only and contain brief comments that are not intended to be a basis for final decision making. Readers should rely on their own enquiries and/or legal advice in making any decision relating to their individual DESIGN: FotoHijinx 0433 183 111 circumstances.

Continue u the rate administrator - sept 2010 V SA INSTITUTE OF www.saira.com.au S IRA RATE ADMINISTRATORS INC 3 of 15 President’s Message V

As this is my first Presidents message I must start by expressing The LGA Model Rate Notice working party is currently revisiting the best practice rates my sincere thanks to my predecessor Rosemary Munslow. notice and considering some options for alternate formats. This review is still in its early Rosemary’s contribution to SAIRA and its members has been stages and it may take a while to finalise suitable layouts. I am happy to receive any exemplary and it will be “a difficult act to follow”. I am sure suggestions from members for consideration. I speak on behalf of all members in thanking Rosemary for her significant contribution to our Association and her strong The Board of Management has been busy this year with updating the Voters Roll Practice leadership over the past few years and her ongoing support in Manual, developing Enrolment Application Forms and letter templates. I am sure we all the role of Vice President. had some problems working through the new process and am keen for any feedback you may have. We know some areas need further refinement but would love to hear about any So far this year has been one of many challenges for us all. issues or suggestions you may have. Changes to both the Local Government Act and LG Elections Act have impacted as well as having a periodic election year to deal with. It seems like only yesterday we were at In this edition of the Rates Administrator we have introduced a new Q & A section from the annual conference learning as much as we could about the changes. I find it hard to Michael Kelledy. In each edition Michael will briefly answer a few tricky questions believe we are already in September and now in the full throes of the election. submitted by members. Do you have any niggling little questions you have always wanted With Voters Rolls now complete and nominations being accepted it will not be long before to ask? Now is your chance to get them answered. Email your questions to a Board the votes are counted and we will all have new elected members to deal with. Let’s hope Member. our election poses fewer challenges than the recent Federal election outcome. Looking to the future the Training & Development Committee are currently organising As you may be aware Land Services has been undergoing a review process a one day seminar to be held in November and have commenced planning for the 2011 which has resulted in some changes in the structure and processing within the State annual conference. The annual conference will be held in early February and in response Valuation Office. The changes are designed to streamline systems and hopefully result to your feedback we are returning to McCracken at Victor Harbor. I look forward to in improved efficiency. Some councils have expressed concerns over these changes and seeing you all at the Lakes Resort for our November seminar (refer to the advert in this also experienced some valuation issues in the lead up to their rates declaration. We have publication). initiated discussions with the VG in respect to these concerns and are working with them to identify the issues. You may receive a survey or request for information from the VG in Joan Murrell the near future so I ask that you respond promptly to assist us to address any problems President you may have experienced.

t 3 of 15 u the rate administrator - sept 2010 V SA INSTITUTE OF www.saira.com.au S IRA RATE ADMINISTRATORS INC 4 of 15 Team Profile V City of Burnside

The City of Burnside is one of ’s oldest residential areas and consists of 20,400 rateable assessments. Burnside is well known for its tree lined streets, period architecture and plentiful reserves and gardens. The rates department has two full time staff and sit under the Finance Manager.

The Rates Team consists of:

Jasmin Munslow Rates Coordinator I commenced work with the Burnside Council in February 2008 as Trainee Rates Officer. When the rates coordinator, at the time, left in November 2008 I acted in the Coordinator role for 5 months before becoming the successful applicant for the role full time. Prior to working at the City of Burnside I worked in the hospitality industry. Coming into rates was a huge learning curve but one that I have enjoyed.

Megan Coutlakis Rates Officer I started working at the Burnside Council in May 2010, as a Rates Officer. Previously I was working in a bank as a Debt Collector and after 10 years, decided I would like to try something new. I have learned a lot since joining the council, and look forward to learning more. I am also married with 2 children and I am a Burnside resident.

Megan Coutlakis and Jasmin Munslow

t 4 of 15 u the rate administrator - sept 2010 V SA INSTITUTE OF www.saira.com.au S IRA RATE ADMINISTRATORS INC 5 of 15 On the Couch with Michael V Have your Question Answered by our Resident Lawyer

Question: From Mark of Marion “Where a ratepayer is entitled to a senior’s postponement of rates under Section 182A of the Act, does the whole amount postponed immediately attract interest on a compounding SA’s Top Rating monthly basis or is it the case that interest is only charged when the relevant instalment date has passed?” Local Government Team

Answer: Section 182A(5) clarifies that interest accrues on the “amount affected by the postponement” Local Government Team on a compound basis on a monthly application until the amount is paid. This means that Michael Kelledy, Partner Direct 08 8235 3091 a person with the benefit of a postponement under this Section will pay their maximum [email protected] $500 contribution on a quarterly instalment basis, along with all other principal ratepayers. Natasha Jones, Partner However, the amount postponed, effective from the date that the postponement is granted, is Direct 08 8235 3039 [email protected] subject to compound interest on a monthly basis. The prescribed rate of interest for these Level 5, 400 King William St purposes is set out in Section 182A(12) of the Act. Adelaide SA 5000 www.wallmans.com.au Question: From Karen of Tea Tree Gully “When the registered owner of property has died, there has been no grant of Probate and the Governance | Planning & Environment | Property & Infrastructure | Commercial | Regulatory | Litigation | Workplace property has been sold for rate arrears under Section 184 of the Local Government 1999, what occurs to the balance of sale monies when all debts have been discharged?” under the Section 184 sale process then becomes the “owner of the land” it is not the intention of Section 184(11) that person receive the balance of the purchase monies! Answer: Firstly, all amounts due to the Council, the Crown and third parties with a claim on the In these circumstances, it appears that the Council has no option other than to deal with proceeds must be discharged in the order set out at Section 184(11) of the Act. Thereafter, the monies in accordance with Section 184(12) of the Act. That is, where the owner (or when there has been no new owner registered on the Title and there has not been a grant of a person who is the relevant beneficiary from the owner) cannot be found after making Probate the Council is unlikely to be able to identify any “owner” for the purpose of applying reasonable enquiries, the balance of the sale proceeds due to the owner must then be dealt the balance of the proceeds of sale. Clearly whilst the person who has purchased the land with as unclaimed money under the Unclaimed Monies Act 1891.

t 5 of 15 u the rate administrator - sept 2010 V SA INSTITUTE OF www.saira.com.au S IRA RATE ADMINISTRATORS INC 6 of 15 On the Couch with Michael

Have your Question Answered by our Resident Lawyer Continued

Question: From Sharren of Walkerville Question: From Josie of Port Pirie “We have an aged debtor for the clearing of flammable undergrowth. As this is “Over the past decade we have twice undertaken Section 184 sale process in respect of land that is a charge on the property can we transfer this debt to rates?” covered by saltbush and is, in reality, unsaleable. Do we legally need to continue to impose rates upon this land?” Answer: Section 105J(9)(a) of the Fire and Emergency Services Act 2005 provides the Answer: specific answer to this question. Where an amount is recoverable from an This is a situation which is not uncommon for non-metropolitan Councils. As you are aware, owner of land for taking action to ensure compliance with a notice, the Council there is provision at Section 184(10) of the Act which allows the Council to sell the land by private may recover the amount as if it were rates in arrears. treaty for the best price it can reasonably obtain where an auction fails. Otherwise, under Section 185 of the Act, where the Council cannot sell land under Section 184, it may apply to the Minister Section 144(2) of the Local Government Act 1999 otherwise provides a general responsible for the administration of the Crown Lands Act for an Order that the land be transferred answer to this type of question. In summary, where an amount payable to to the Crown. In the absence of the land being transferred to a third party or the Minister the land the Council relates to something undertaken in respect of rateable or other remains rateable and liable to the imposition of rates each year. That is, it is not land which falls property, or where it is payable by a person as the owner or occupier of within Section 147(2) as non-rateable and in my opinion, there are no relevant grounds under rateable or other property, the Council may, after giving at least 14 days written Section 166 by which the rates could, as a matter of discretion, be rebated. notice requiring payment of the amount due, recover that amount as if it were a rate declared on the property at the time of the Notice requiring payment of the My view is that a practicable solution is required and this could be in reliance upon Section amount. The use of Section 144(2) does not cause the amount to be recovered 143(1) of the Local Government Act to write off the debt owed to the Council because there is no to become a charge on the land. Where that amount is otherwise a charge on reasonable prospect of recovering it and / or the costs of recovery are likely to equal or exceed the the land under other legislation that will provide security for the debt whilst the amount to be recovered. Provided the Council maintains 3 years worth of rate arrears it will then Council is taking action to recover the amount as if it were rates in arrears. always have available to it the option to undertake a Section 184 sale process. Any amount over the 3 years arrears should, necessarily, be written off as an unrecoverable debt. One final word of advice is that when debts are brought under Section 144(2) of the Act, be aware of Section 183 of the Act which provides for monies Michael Kelledy received or recovered for rates are applied to the oldest rates debt first. Wallmans Lawyers

If you have any questions that you would like answered, email them to one or our Board Members listed in this magazine.

t 6 of 15 u the rate administrator - sept 2010 V SA INSTITUTE OF www.saira.com.au S IRA RATE ADMINISTRATORS INC 7 of 15 International Property Tax Institute Conference V Reflection on the Conference

A first class question and the only ones who can answer are those that attended, but we are not going to give our reasons.

The theme of the conference was “Reforms in Revenue, Rating, Valuation and Taxation, Australasian an International Experience. Presenters came from near and far. Countries represented were Barbados, Canada, China, Hong Kong, Indonesia, New Zealand, North America, Poland, South Africa, United Kingdom and most states of Australia.

It would be wrong to try to nominate which presenter was better than the others or try and cover all the topics covered. One thing all presenters had in common was an enthusiasm for what they do. Having said that, no one who attended will forget the enthusiasm of Chengri Ding from China.

Here was a man giving an address on “Public and Intergovernmental Relations and the Prospect of Tax Reform in China and everyone present were absolutely rapt. Chengri’s English was at times missing, but his passion was unquestionable.

Over the two and a half days of the conference all aspects of property taxation and valuation, the winners and losers of rating and taxation policies and practices and the interaction (or lack of) between Local and other levels Government were fully dissected, A small number of South Australian rating professionals attended this conference held at hashed, bashed and explored. the Stamford Grand, Glenelg from the 26th April to 28th April 2010. There were comparisons made, during the conference (but probably more during the “Why?” May well be your first question. “Would one give up half their Anzac Day holiday breaks and since), between our rating/taxation/valuation situations in and and then put themselves through a further 2 days of presentations discussing rates and that of other parts of the globe. There are no doubt lessons we can learn, but there are property tax?” also areas where we are well advanced and can teach others.

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Reflection on the Conference Continued

One Board Member summarised the conference outcomes as such: I think it is fair to say that many options for rating are available with varying opinions of the degree of success, I would conclude that there is no perfect system in the world and as a result of the views aired at the conference on the first day nothing would suggest that Local Government in SA should move away from the current system based on property valuation. I would add that the area of valuation needs to be improved in particular the VG’s ability to provide Local Government with more accurate and consistent valuation on which to base rating.

This conference was originally posted as being in Sydney. But because of the assurances, promises and pledges given by SAIRA to the International Property Tax Institute (IPTI), the conference was instead held in Adelaide. At the conclusion of the conference the IPTI delegates summarised their 13th conference as one of, if not their best organised, attended Busy chasing ratepayers? and conducted conference and congratulated Rosemary Munslow, David Hope, Christine Get the Credit Management Nixon, Neil Bray, Philip Western and Coralie Norris for their time and effort in assuring the Support you need. success of the conference.

One thing to shine through from the conference was that no matter where you are, from the Here are 6 reasons to use We offer the most experienced and effective council rates collection services in South Northern tip of to the most Southern outpost of New Zealand, if you are in rates, Australia, including: you are not alone. There is someone out there who loves you and actually understands National Credit 9 Personalized account managers “With over 20 years experience who specialise in Management: rates recoveries.” what you are going through. So don’t give up, give it back (in spade fulls). 9 Live, on-line file access – see EXACTLY how your ratepayers are responding. 9 An on-line Court Judgment Database, enabling councils to check if their ratepayers have a history of unpaid debts, and decide on the next step. 9 Daily upload of payments, with on-line transfer of information and reports. Bryan Francis and Neville Gay 9 Head office in Adelaide, with in-depth local knowledge. 9 Full Quality Certification under AS/NZ ISO 9001:2000.

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t 8 of 15 u the rate administrator - sept 2010 V SA INSTITUTE OF www.saira.com.au S IRA RATE ADMINISTRATORS INC 9 of 15 Treatment of Land to which a Heritage Agreement Applies

Annual Conference

9 to 11 February 2011 McCracken Country Club, Victor Harbor

(2 day conference commencing Wednesday afternoon and concluding lunch time Friday)

t 9 of 15 u the rate administrator - sept 2010 V SA INSTITUTE OF www.saira.com.au S IRA RATE ADMINISTRATORS INC 10 of 15 Rates Postponements: V What about a Service Charge?

Section 155 of the Local Government Act 1999 provides the power for a Council to impose cancellation before taking any action to an annual service charge on both rateable and non-rateable land to which it provides, recover rates. If this occurs the full rate or makes available, a prescribed service. The prescribed services are the treatment or liability will be due accordingly. If there is provision of water, the collection, treatment or disposal (including by recycling) of waste, no intention to take this approach then each and a television transmission (or re-transmission) service, or any other service prescribed instalment not paid, is rates in arrears and is by the Regulations. subject to fines and interest in the same way as any other rates in arrears. Under Section The provisions dealing with postponement of rates (Sections 182 and 182A of the Act) are 182A the Council cannot impose a condition. located within Part 1 of Division 9 of Chapter 10 of the Act. Section 176 is the first section On this basis, instalments due but not paid of Division 9 and provides a specific definition of “rates”, to include a service charge. (i.e. instalments up to the maximum $500 This means that any request for a postponement includes all rates and services charges in payable in that rating year) will be subject to respect of a particular assessment. fines and interest as rates in arrears. There will be no impact upon the postponement However, in terms of an instalment not being paid, the response is different according which will continue to apply. to whether the postponement is under Section 182 or 182A of the Act. Under Section 182 the Council may impose relevant conditions. Such conditions may be granted on Further, given “rates” includes a service condition:- charge under Part 1 of Division 9, Section 184 powers for the sale of land for non-payment • that the ratepayer pay interest on the amount affected by the postponement at a rate of rates has equal application with respect to fixed by the Council (but not exceeding the cash advance debenture rate); the non-payment of service charges (however • determined by the Council. given a service charge can apply to both rateable and non-rateable land, the power of Therefore, if the postponement is not of all of the rates such that certain instalments fall sale can only apply to land that is rateable). due and there is a condition of postponement that the reduced instalments be paid as and when they fall due, where that does not occur, the postponement may be cancelled Natasha Jones in which case the Council must give the ratepayer at least 30 days written notice of the Wallmans Lawyers

t 10 of 15 u the rate administrator - sept 2010 V SA INSTITUTE OF www.saira.com.au S IRA RATE ADMINISTRATORS INC 11 of 15 Proportionate Relief V And the NRM Levy

Councils have available to them the power to grant relief against the imposition of a rate or service charge. The two primary powers in this regard are a rate rebate and a rate remission.

A rate rebate may be of a mandatory nature where it is required to be granted by the legislation under Sections 160-165 inclusive of the Local Government Act 1999. Otherwise, the Council may grant a discretionary rebate of rates (or service charges) where any of the grounds set out at Section 166(1)(a) – (o) inclusive of the Act exist. A common denominator in relation to those mandatory and discretionary rebates is the duty imposed at Section 159(9) of the Act which provides:

“A council cannot grant to a person or body a rebate of general rates under this Division without also granting to the person or body a comparable rebate of any other rates that may also apply under this Part.”

So, the message is simple. Where the Council grants rate relief in the nature of a rate rebate, whether it is a mandatory rebate or a discretionary rebate and it is of general rates, it is also required to provide a proportionate rebate of any other rates that are imposed grants a remission of general rates under Section 182 must also grant to the ratepayer against that land. Conversely, if the Council grants a rebate of a service rate/charge or a a comparable remission of any other rates that apply to that land. It is not necessary to separate rate there is no corresponding obligation to grant a comparable rebate of general include a similar statutory obligation in relation to the postponement of rates for seniors rates. By way of emphasis, it is to be noted that the obligation which arises from Section under Section 182A of the Act because where that Section applies, the effect is to place a 159(9) of the Act requires a comparable rebate of any other service rates and / or separate cap upon all rates payable to ensure that the ratepayer does not pay any more than $500 in rates imposed upon the same land but not service charges against that land. total in any year where that relief is provided.

Relevantly, the same obligation which arises from Section 159(9) of the Act also arises In previous years, concern has been raised by Councils because of the effect of Section under Section 182(7) of the Act in relation to remissions. That is, the Council that 159(9) upon the mandatory separate rate that Councils are required to declare for the

t 11 of 15 u the rate administrator - sept 2010 V SA INSTITUTE OF www.saira.com.au S IRA RATE ADMINISTRATORS INC 12 of 15 Proportionate Relief

And the NRM Levy Continued

The effect of Section 159(9) of the Act has been, therefore, that where the Council had granted a rebate of general rates it was required to provide a comparable proportionate rebate of the NRM levy separate rate. However, Regulation 4B of the Natural Resources Management (Financial Provisions) Regulations 2005 amend the operation of Section 159(9) of the Local Government Act to provide that:

• where the Council grants to a person or body a rebate of general rates under Section 166 of the Act, the Council is not required to grant a comparable rebate of a regional NRM levy to that person or body; and

• where the Council grants to a person or body a rebate of a regional NRM levy under Section 166 of the Act it may do so at a level that is different to a rebate of general rates granted to that person or body.

The current state of affairs is, therefore, that where a Council grants a mandatory rebate of purpose of recouping the NRM levy. In this regard, Section 95(1) of the Natural general rates under Sections 160-165 of the Local Government Act 1999 it is required to grant Resources Management Act 2004 provides: a comparable rebate of the NRM levy separate rate. Where the Council grants a remission of general rates under Section 182 of the Local Government Act it is required to grant a comparable “(1) In order to reimburse themselves for the amounts contributed (or to be remission of the NRM levy separate rate. However, where the Council grants a discretionary rebate contributed) to a regional NRM board under this Division, the constituent of general rates under Section 166 of the Local Government Act 1999 it is not required to grant councils must impose a levy (a regional NRM levy) on rateable land in a comparable rebate of the NRM levy separate rate. Further, the Council may grant a discretionary the region of the board. rebate of the NRM levy separate rate which is different to a rebate of general rates and which has no effect on any other rebate granted by the Council. (2) Except to the extent that the contrary intention appears, Chapter 10 of the Local Government Act 1999 applies to and in relation to a regional NRM Michael Kelledy levy as if it were a separate rate under that Chapter.” Wallmans Lawyers

t 12 of 15 u the rate administrator - sept 2010 V SA INSTITUTE OF www.saira.com.au S IRA RATE ADMINISTRATORS INC 13 of 15 Pensioner Concessions and DFC V Where are we at?

As you all know a small working party has been meeting regularly with the Department of and Communities (DFC) to work through issues in respect to the process of managing and claiming concessions. Some councils are also being used as test sites to develop their new process for future years.

Your SAIRA representatives have been working hard to obtain a good outcome for councils. We want to ensure the transition from one state government department to the other is a smooth process and the new DFC system for receiving data and claiming concessions is both simple and efficient.

At our last meeting we viewed a brief demonstration of the system development to date. This was a very early prototype but it gave us an opportunity to clarify our requirements with the programmer and identify some issues. The meeting was very promising but to date we have yet to see any further system development. We have however been advised that there have been further delays with the project and that the hand over from SA Water to DFC will not be occurring until at least January 2011 as any cut over must be timed to coincide with SA Water quarterly billing cycles.

Our next meeting is currently proposed for 24 September where we will be updated on the development progress for the new system. As they say…”watch this space!!”

SAIRA working party representatives Joan Murrell, Karen Pedley & Neville Gay

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Schedule this date in your diary

The Training & Development Committee on behalf of SAIRA Board of Management will be holding a 1 day seminar on:

Monday 15 November 2010 Lakes Resort, West Lakes 9:30am – 4:00pm

The seminar is free for all members of SAIRA who renew their membership for 2010/2011 or join as a new member by 1 October 2010

Topics of interest for the day include: • Best Practice - Section 187 certificates and Section 7 statements (including a presentation from a representative from the conveyancer’s professional body) • Overview of LG Elections/Voters Roll issues • Debt Collection • Legal update

We will finish the day with a networking session including drinks and nibbles.

A detailed flyer and registration form will be sent out soon to all members.

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S IRAV www.saira.com.au SA INSTITUTE OF RATE ADMINISTRATORS INC

V Board of Management

Joan Murrell Rosemary Munslow Karen Pedley Michael Powell President Vice President Secretary Treasurer Ph: 8384 0530 Ph: 8397 7310 Ph: 8397 7260 Ph: 8408 1227 Email: [email protected] Email: [email protected] Email: [email protected] Email: [email protected]

Ann-Marie Putland Daniel Blank Megan Trezise Neville Gay Board Member Board Member Board Member Board Member Ph: 8408 0446 8203 7342 Ph: 8229 9927 Ph: 8391 7207 Email: [email protected] Email: [email protected] Email: [email protected] Email: [email protected]

Bryan Francis Jasmin Munslow Michael Kelledy Board Member Board Member Board Member Ph: 8555 7000 Ph: 8366 4207 Ph: 8235 3091 Email: [email protected] Email: [email protected] Email: [email protected]

Chris Arthur Mark Gibson Natasha Jones Board Member Board Member Board Member Ph: 8342 8052 Ph: 8375 6617 Ph: 8235 3039 Email: [email protected] Email: [email protected] Email: [email protected]

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