Council moves to next phase of rates changes

The Rural Residential subcategory will likely be eliminated as Snowy Valleys Council works to harmonise rates between the former Tumut and Tumbarumba Shires.

A proposed rating structure for the entire Local Government Area has been endorsed by the Snowy Valleys Council, setting the stage for property owners to be able to calculate whether their rates will rise or fall.

The council will provide an online tool where property owners can input their address and examine the changes, but overall the proposed rating structure will be closer to the former Tumbarumba Shire Council structure than the former Tumut Shire Council rates.

Public feedback on the proposal will be sought through October and November, with those comments to be brought back to the council in February 2021. A final rating structure is expected to be endorsed that month, taking effect in the June 2021 budget.

The biggest changes will be felt by those currently in the Rural Residential subcategory, with the RR classification set to be eliminated.

CFO Susanne Andres explained that according to state law, more than half of the RR properties in the former Tumbarumba Shire and nearly half in the former Tumut Shire were out of compliance.

“Our consultant recommends to actually abolish the RR subcategory… The main concern is really that we have a large number of non compliant properties and a very, very small difference between [Rural Residential and Residential] under the harmonised rating structure,” she said.

Ms Andres said that non-compliant properties would automatically be moved to the Residential category under the new rating structure, while some properties with small farming operations would have to be reviewed on a case-by-case basis to determine if they fit the Farmland category. 

In the SVC’s options summary which was published in August, the council predicted that eliminating the RR subcategory would result in “a consistent increase of around 20 per cent for all RR ratepayers in Tumbarumba” while properties in Tumut (excluding the non-compliant ones) would see mixed outcomes, with properties valued at $60,000-$135,000 facing increased rates, but properties above or below that bracket would see some savings.

“RR is generally the one category that is impacted the most, unfortunately,” said Ms Andres.

Another major change will be felt by three “Rural Clubs” in Tumbarumba, which were previously granted their own special rate. Ms Andres said the better approach is to support clubs through a donations policy rather than through the ratings structure.

Councillor Julia Ham confirmed that the clubs would still be supported by the council through Memorandums of Understand.

While the proposed rating structure has been endorsed by the council, Mayor James Hayes made it clear that this isn’t the final decision on the rates harmonisation, it’s just another step in the process and will face further public review.

“Once it’s been accepted by the council, there will be a tool available on the website for people to put their information in and see what the differences will be in their rates,” he said.

Councillor Cate Cross thanked the community for their input in the “really really challenging process that we have not undertaken lightly.”

The proposed rating structure is closer to the former Tumbarumba Shire than the former Tumut Shire, but several comments were received by telephone from members of the public aimed at protecting the former Tumba rates and protesting any changes.

Those comments included:

“Demerge.”

“Was Tumbarumba doing better financially before the merger than Tumut?”

“Tumbarumba rates are high enough and we get nothing from SVC – my nature strip was increased in size when I got new kerb and gutter.”

“You get better value for less rates on the coast.”

“Increasing rates any amount is not fair.”

“People in old Tumbarumba Shire will pay more and they don’t deserve it.”

“How does this fit with the merger when it said it wouldn’t increase costs.”

“Will the survey be skewed due to higher population base in Tumut where the impact is not as much?”

“People in Tumbarumba will pay more after harmonisation and that isn’t fair.”

Out of the 25 comments which were over the phone, a handful were clarifying questions about what terms like ‘ad valorem’ mean and how the figures are calculated and the remaining comments were largely in opposition to the changing rates for RR or farming properties.

Fifty-nine submissions were received online, but the council said the low numbers meant “it is not possible to draw statistically significant conclusions about the views of the community”. In general, the key question which was asked by community members was “which option will result in the lowest rates for me?”

Rating recommendations
Residential
50% base rate (base rate and ad valorem under S497(b) NSW Local Government Act 1993)
Farmland
10% base rate (base rate and ad valorem under S497(b) NSW Local Government Act 1993)
Business
10% re-distribution of total rates to other categories, 10% base rate (base rate and ad valorem under S497(b) NSW Local Government Act 1993)
Rural Residential
Eliminate subcategory (all properties revert to ordinary residential)
Inundated Lands
Eliminate subcategory (all properties revert to ordinary business)
Rural Clubs
Eliminate subcategory (all properties revert to ordinary business) and consider offsetting impacts via other Council policies, for example donations


Rural Residential Definition
According to the Local Government Act, RR land is defined to mean land that:
is the site of a dwelling and is not less than 2 hectares and not more than 40 hectares in area; and
is either:
not zoned or otherwise designated for use under an environmental
planning instrument; or
zoned or otherwise designated for use under such an instrument for non-urban purposes; and
does not have a significant and substantial commercial purpose or character.

Farmland Definition
Per the Local Government Act, in order for land to be categorised as farmland, it must demonstrate that its dominant use is for farming (that is, the business or industry of grazing, animal feedlots, dairying, pig-farming, poultry farming, viticulture, orcharding, bee-keeping, horticulture, vegetable growing, the growing of crops of any kind, forestry or aquaculture within the meaning of the Fisheries Management Act 1994, or any combination of those businesses or industries) which:
has a significant and substantial commercial purpose or character, and
is engaged in for the purpose of profit on a continuous or repetitive basis (whether or not a profit is actually made).