Welcome to Monash Ratepayers Inc.

Quick Intro: MRI is a network advocacy organisation – we grow and use networks to do our advocacy work. We stand for (a) assuring good governance in Council affairs; (b) advocating for affordable rates and best value municipal services; (c) building capacity for our Monash community.

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Budget Games Anyone?

Hiding Your MoneyWe just completed reviewing the budget. Nothing new has changed. Transparency and accountability issues are still  Monash Council’s budget planning and decision making integrity weaknesses.

Budget GamesNot surprising, Council is putting large amounts of unrestricted cash away (like $32 million in next year’s budget and $39 million in 2018/19) for long term capital projects that have not been approved yet. It is common community knowledge  that the Glen Waverley Community Hub development (which many people believe is the very reason the 3 aged care facilities were sold) is the key driver of this large unrestricted cash reserve, which grows every year for the next 4 years. The community can expect another premeditated and biased decision making process to be played out as part of tokenistic community engagement to get this project approved and officiated its funding, now hiding through Unrestricted Cash & Working Capital Reserves.

Another thing we have taken note is the rush to spend all unused budgets, especially Councillors’ total discretionary funds. As the 2014/15 year is closing soon, it is important that Council spends any surplus cash as much as possible, to justify asking for more rates rise. Hence it is no wonder why the Mayor personally authorised the $37+K  free lunch for Greek Easter Free Lunchand now a Councillor suggesting to give $10K foreign aid/charity.Giving Money Away  In the May Council Meeting Agenda item 7.1 (page 1), Council officers are recommending close to $10,000 to be given away, which is a high amount compared to past practices.  It certainly appears there is money left over in the budget, especially Councillors’ discretionary budget total  and they know they must spend it all before 2014/16 closes, which explains their generous giving of money away without best value justification, hence compliance to LG Act.

In the last month’s Council meeting Cr Geoff Lake, speaking in suppCr Lake let the cat out of bagort of the budget noted that paying out the Council debt early was possible because of the sale of the residential aged care facilities. Ops the cat just slipped out of the bag. This contradicts with the official reason Council said, which was the operating the aged care facilities were financially unsustainable.

Another thing, we also discover, unrestricted cash constitutes between 19.62% to 21.7% of total revenue annually over the next 4 years, which means Monash Council has not just the capacity to cap rates, but to actually reduce rates, even during the last 2 years. So have ratepayers being lied to when the Mayor claims the 2015/16 budget draft provides a fairer rating system and gives ratepayers the lowest rates in Victoria? And if that is not enough to influence public opinion, try Cr Lake wanting to sweeten pensioners with a $50 rates discount, which works out to 96 cents a week or 14 cents a day, depending how dumb one assumes pensioners to be. Once again it is about our patronizing and groupthink Councillors doing for its community, not with its community.

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“Shaddap your face” bullying in Monash Council Meeting

Monash Council is never short of bullies, when it comes to addressing leadership behaviour. The last Council Meeting was certainly the place to witness firsthand tState Electionhe personal attacks fuelled by Cr Lake against Cr Davies. This incident is not the first, however the most intense when Mayor Klisaris reinforced support for Cr Lake by reprimanding Cr Davies and others who dare refute Cr Lake’s viewpoints in decision debates. Even Cr Pontikis, the most community centred Councillor, was asked to “behave”. It was all “shaddap you face”, Joe Dolce style,  to Cr Davies the whole night when he tried to present his views over several decision items. It got to the point the Mayor was asked to vacate his chairing role because he did not comply with meeting protocols, only to return to that role, because the Deputy Mayor was apprehensive to take over and proposed the motion to return the Mayor to continue chairing the meeting.

Behaviour issues concerning biased and undemocratic decision making also raised its ugly head. Cr Lake also blatantly stated that he strongly believe that Councillors should decide planning matters purely based on compliance to Monash Planning Scheme and not addressing the concerns or interests of the community affected by planning decisions. The proposed Monash Housing Strategy puts a blanket all approach in rezoning most of Monash suburbs to be general residential zone. If Cr Lake has its way, this would mean neighbourhoods classified as general residential zones would have to allow opportunistic developers to put as many units or high density dwellings in single land lots because they can show compliance to Monash Planning Scheme. When other Councillors refute his belief, they were quickly reprimanded as behaving inappropriately.

He went further to propose amending a supporting letter to the Andrews Government regarding the Clayton Railway cross and station development. His amendment motion plagiarised “good news” words from the State Government’s media release, while also disrespectfully criticized the previous Government, who are opposition to his political party. Other Councillors have to revise his amendment motion to be more diplomatic in tone, resulting in a decision that is politically driven first before community interests. Cr Lake’s blatant, inappropriate and egoistic behaviour continues to reveal that he has pre-made a decision a week earlier, which  supported Cr Drieberg’s motion to ask MAV advocate to the State Government to continue funding the School Focused Youth Service. This is not unbiased and natural justice based decision making conduct.

Tuesday Council meeting demonstrated the worst conduct performance of this Monash. Public attendees witness first hand a strong groupthink domination and the fostering of continuing bullying and autocratic leadership culture that discourages good governance conduct, transparency , democratic participation and unbiasedness in Council’s decision making. The “shaddap you face” song sums up the vibes of Tues Council Meeting on 31 March 2015.

Monash Ratepayers have lodged a formal complaint and the CEO is addressing the matter.

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MAV Poor Probity Standards and the Impact on Monash Council

A key and ongoing function of MRI advocacy work is checking oversight of good governance practice in all matters affecting Monash Council. During the last 18 months, MRI was approached by the public over concerns about the probity standard and integrity of the MAV/Ironbark procurement arrangement. We check the integrity of the information collected and compiled the evidence based report which we shared with a number of high authorities, including the Victoria Auditor General Office. We left the matter to their responsibility to deal with the matter and finally there is some results:MAV Poor Probity Standards

(On-Source: Herald Sun, 3 Mar 2015)

Finally, we have a positive outcome from our good governance oversight work, the VAGO report that highlights the need for major systematic improvements in the Local Government Victoria department and the LG Body Corporate, MAV.

The report highlighted that :

VAGO Report on LGV and MAVOne of the preferred suppliers in the MAV/Ironbark deal, Artcraft Urban Group (AUG) was sued for IP copyright infringement last year (Federal Court of Australia, 2014). In the September 2014 Council meeting, Councillors knew of the court case hearing but the majority votes were to support procuring through MAV/Ironbark. Cr Lake did not declare that he is a paid Board member of the MAV, represents MAV in its superanuation business as advisor to Vision Super and that his partner works for MAV (this information is public information anyway). He cast his vote to procure through MAV/Ironbank.

In the January 2015 Council meeting, in item 5.2 (Council Representation on Organisations/Committees) Cr Zographos questioned why there were no report about Council’s representative on the MAV. Cr Lake behaved personally defensive about the question asked and the discussion continued as another typical misconduct episode of “debating about the person” rather the matter on hand.

The community needs to understand what exactly is  the value add of Council’s MAV membership, which there is no accountability KPIs of benefits received at all. Cr Lake defensive response to not support public reporting Council’s representation on the MAV is not good enough for this community.  His demonstration of a lacking probity culture reflects exactly some of the MAV integrity and accountability issues that the VAGO identified.  It is time, the community expects public reports of KPI measures of MAV membership and a formal declaration of Cr Lake’s and other Councillors’ involvement in MAV and VLGA and other similar agencies.

 We hope some of our Councillors will pursue questioning the value of MAV membership, review all procurement arrangements with MAV to attest their value add benefits, if any; and ensure Cr Lake is excluded from any future MAV decision making matters due to his personal and official conflicts of interest  associated with MAV.

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More news in:

The full VAGO report is in http://www.audit.vic.gov.au/reports_and_publications/latest_reports/2014-15/20150226-support-for-local-gov.aspx

MAV’s response to that report – http://www.mav.asn.au/News/Pages/vago-performance-audit-report-26feb15.aspx

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Ongoing Poor Euvena Car-parking decisions

GW Car Parking PlanEuneva Ave car park was built using subscription money provided by Glen Waverley traders when they purchase their business licences. Reality sucks because customers of these subscribing businesses don’t park there because it’s in the wrong place for them.  The lead decision makers, Cr Lake and Klisaris, just can’t accept this reality, for reasons we don’t know or they are really lousy part-time car-park planning consultants.

In June 2013, the local papers reported that Monash Council is looking to traders and council staff to fill hundreds of vacant spaces at the $17.3 million white elephant Euneva car park, while shoppers and commuters battle for parking spaces in Kingsway and Bogong Ave (Waverley Leader, 6 June 2013)

In Aug 2014, the Euvena car park was less than 30% capacity and the Council decided to increase two levels of 176 car-parks to increase parking to five hours, while the parking limit for the remaining 177 spaces continued to be 3 hours. Cr Lake advocate against renting out of car parking spaces while acknowledging feedback from a community satisfaction survey revealed a need for more flexible parking in Glen Waverley (Waverley Leader, 13 Aug 2014)

Even more curious is that the recent 15 storey tower for Village Walk was granted an exemption from the required number of visitor spaces because, in part at least, there was spare capacity in the “nearby Euneva Avenue multi-storey car park”. Hmm, wonder what is the covet decision criterion?

In Feb 2015, Julia Rabar from Waverley leader reported the decisions made by Council to increase car parking hours in 2014 continues to fail attracting patrons. Patronage has declined further. The news article claimed “Cr Klisaris has also rejected a suggestion from the Glen Waverley Traders Association to scrap parking restrictions for the time being, saying the council was legally required to ensure customers had access to short-term parking…. Cr Klisaris said he would not bring forward a review scheduled for September.”

The Mayor said “We’re continuing to monitor usage and looking for ways to improve it, such as installing new signage,” and indicated that “two illuminated signs with a blue “P” would be installed to advertise the car park, with the cost to ratepayers yet to be determined.”

Glen Waverley Traders Association president Christo Christophidis supported current parking restrictions should be scrapped in the short term even if it meant commuters parking there (Waverley Leader, 19 Feb 2015)

No wonder car parking is in such a disarray, as it is last two years Cr Lake and Klisaris are directing Council officer experts how car-parks should be utilised. Why is this the case. It all links to the intending sale of central car-park that is anticipated just before or after the 2016 council election.

Is political self interest at play again in this Laklisaris city of ours?

Look at the facts:

  1. Euvena Car Park picture from Waverley Leader, 6 June 2013

    On 23 January (during school holiday season), the car park was just 27.5% used

  2. In May 2014, it was 29% being used and in December 2013, capacity was 28%.

Why are Councillors refusing to maximise returns from assets utilisation?

Do they not know they are breaching best value principles in their 2013, 2014 and perhaps 2015 decision making over Glen Waverley car-parking affairs and therefore not making decisions in the best interest of the community?

Dont Quit Your Day Job YetOne hopes these key decision making Councillors don’t give up their other day jobs, they do make terrible being car-park planning consultants.

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Lacking Good Governance in Monash Leadership

PK Misconduct

Related Article: http://www.heraldsun.com.au/leader/east/monash-mayor-paul-klisaris-cops-backlash-over-vote-labor-appeal-at-citizenship-ceremony/story-fngnvlxu-1227197046847

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Skeletons & haunting from the past – the greatest CIV con

Greed is GoodAn article was found on the Internet that confirmed that it were Cr Klisaris and Lake who strongly advocate to bring CIV valuation of rates and the question remains unanswered today did the Monash City Councillors in 2009 work for the ratepayers of Monash, or for someone else? Yes that means Cr Klisaris, Lake, Dimopoulos, Jieh-Yung, Drieberg and Perri who are still Councillors in 2015.

Skyrocketing rates, especially in highly sought areas and certain cohort’s push for high density developments in the Glen Waverley and Oakleigh Activity Centers and the Monash Housing Strategy are starting to make sense and answers this long standing question. Residents are certainly being fixed – ie they are gradually being forced out from their homes because of high rates, most appropriately to avail land, especially in highly sought areas, such as Glen Waverley, to developers and investors.

The truth behind the push for CIV was revealed by the Land Values Research Group in 2009, making much more sense today in 2015, with the rest of plans of appropriate convenience emerging left right and center. After all, critical decision making milestones must be made before the 2016 Local Government election………..

 

Land Values Research Group: Economics as if location mattersreporting on Friday, July 31, 2009 (Original source from http://blog.lvrg.org.au/2009/07/attention-monash-ratepayers-how-to.html):

Attention Monash ratepayers: How to calculate your bill under CIV

Gavin R. Putland congratulates the Waverley Leader and Oakleigh Monash Leader for cutting to the chase instead of burying the news — and finishes with a mea culpa.

Question: Monash City Council is proposing to change the rating system to “CIV” or “CIV with differentials”. For each system, how can I calculate what my rates bill would be this year (2009/10) if that system were in force?

Answer: Get out your rates notice for 2009/10 and look for the “Capital-Improved Value” (CIV) of your property. Multiply that value by 0.001771 (i.e. 0.1771%), and you get your rates bill for “simple” CIV (no differentials). How’s it compare with what you’re paying now? Under “CIV with differentials”, the factor by which you multiply the CIV depends on what sort of property you have. If it’s a residential property, e.g. your home, you multiply by 0.001605 (i.e. 0.1605%). If it’s a commercial or industrial property, you multiply by 0.002657 (i.e. 0.2657%). Notice that home owners pay more, and businesses pay less, under “simple” CIV than under CIV with differentials. Your local Leader newspaper (July 28, 2009, p.5) has some real-life examples.

Question: So commerce and industry will be campaigning fiercely to ensure that if the system is changed, it is changed to “simple” CIV. But how keen is the Council to change the system at all?

Answer: Mayor Paul Klisaris, in his re-election acceptance speech last December, said that he wanted to change to CIV. He was supported by former Mayor and current President of the Australian Local Government Association, Cr Geoff Lake. The Ordinary Meeting of Council on January 27 passed a motion saying in part:

It is recommended that Council:

  • Conducts a review of Council’s Rating Strategy to enable any agreed changes to the Rating System to occur in the 2010/11 financial year;
  • Notes the engagement of MacroPlan Australia Pty Ltd to assist in the conduct of the review…

The first point means that any change to CIV will take effect in a revaluation year, so that when some ratepayers complain about unexpectedly high bills, the Council will be able to blame changes in property values rather than the introduction of CIV. On the second point, note that MacroPlan Australia conducted the last Monash rating review, which reported as recently as 2004, and which — lo and behold — recommended CIV; but on that occasion the recommendation was defeated in the Council chamber. In support of the new review, the Council has published a brochure containing four numerical examples of how ratepayers would be affected by CIV, and suggesting that SV is overly generous to business owners and apartment owners at the expense of typical home owners. If you bear with me, I’ll explain why that brochure is highly misleading and tendentious.

Question: You mean the fix is in?

Answer: Yes.

Where the figures come from

Rates in Monash are presently levied on the Site Value (“SV”), which is the value of the ground and associated airspace, including any attached rights to build on that ground or into that airspace, but excluding actual buildings. The Capital-Improved Value (“CIV”) is the value of the whole property including buildings. If you’re a typical home owner, the SV is the value of your land alone, while the CIV is the value of your land plus your house.

According to the Declaration of Rates & Charges for 2009/10, the Council decided to levy a rate of 0.2828% (or 0.2828 “cents in the dollar”) on the SV. As the total assessed SV of all rateable property was $25,183,553,500, this would yield a total revenue of $71,219,089 from general rates.

According to the same document, the total assessed CIV of all rateable property was $40,165,851,500. Dividing the revenue by the total CIV, we find that the rate required to collect the same revenue under “simple” CIV rating is 0.001773, i.e. 0.1773%. The brochure gives 0.1771%.

Under “CIV with differentials”, the rate on commercial/industrial property is 150% of what it would be under “simple” CIV. So the very small discrepancy in the “simple” CIV rate has flow-on effects. But, taking 150% of the “simple” CIV rate given in the brochure, and rounding to four significant figures, we get 0.2657%, as in the brochure.

Multiplying this rate by the total CIV of commercial/industrial property gives the revenue from that class of property, which when subtracted from the total revenue gives the revenue to be raised from residential property, which when divided by the total CIV of residential property yields the required rate on residential property.

Unfortunately we can’t do that exercise, because the Declaration of Rates & Charges doesn’t break down the total CIV into residential and commercial/industrial components. But we can work backwards to discover the breakdown that has been used in the brochure. The residential rate for “CIV with differentials”, according to the brochure, is 0.1605%. Let the residential and commercial/industrial components of the total CIV be CIVR and CIVC, respectively. Then the total CIV is

CIVR + CIVC

and the total revenue from general rates is

0.001605×CIVR + 0.002657×CIVC .

Solving the two equations in the two unknowns, we get

CIVR = $33,746,747,279
CIVC =  $6,419,104,221

(give or take a few million dollars in each case).

For comparison, note that the 2008 Municipal Valuation gives the following aggregate values for rateable property in Monash:

                             SV ($)          CIV ($)

Residential             22,119,990,500   33,535,154,500
Commercial/industrial    3,055,716,000    6,180,305,500
                        --------------   --------------
Total                   25,175,706,500   39,715,460,000 .

My calculated CIVR and CIVC, and the SV for 2009/10, are slightly higher than the corresponding figures from the 2008 general valuation. This can be explained by supplementary valuations due to (e.g.) planning approvals and construction (the latter of which increases CIVs but not SVs).

Why the brochure is bunk

(a) Rubbery figures

The very small discrepancies in the CIV rates may furnish a convenient excuse to describe the CIV rates in the brochure as “estimates only”, although in fact there is no reason for the CIV rates (“Options 2 & 3”) to be any less accurate than the SV rate; both can be based on the valuations actually used in the 2009/10 budget. To make matters worse, the statement that

* Rate in dollar figures for Option 2 & 3 are estimates only

is immediately followed by

NB. Actual rates will change for 2010/11 due to the biannual revaluation of properties

— perhaps giving the impression that only Options 2 & 3 are subject to change under the new valuations, whereas in fact the SV rate (Option 1) is also subject to change.

But the real damage is done when the brochure offers a numerical example showing how CIV would affect the rates bills for a modest 3-bedroom house, a big new 4-bedroom house, a medical clinic, and a unit in a 4-storey block of 12 units. The four buildings are said to be built on four “identical” 800 sq.m. lots “in a street”. Crucially, the four lots are said to have the same site value. But therein lies the deception, because the value of a site depends on the permissions attached to it:

  • While either of the two houses could be built on an ordinary residential lot as a matter of course, the construction of a 12-unit complex requires permission. That permission attaches to the site and increase the site value, hence the rates payable under SV, even before anything is built. But the example expects us to believe that for a CIV of $250,000 per unit, the site value is only $29,500 per unit!
  • Likewise, one needs some sort of permission to build a clinic, and the permission adds to the site value. But the brochure makes no allowance for this.

The result is to understate the SVs for the clinic and the block of units, hence to understate their bills under SV rating. In reality, under SV rating, permission to build apartment blocks or business premises on certain sites would increase the shares of total revenue paid by the owners of those sites, hence reduce the shares paid by other site owners, including typical home owners.

By the way, the digitally-modified pictures that illustrate the four cases don’t show four lots in the same street. They show four different buildings on the same lot. That compounds the deception by making it seem obvious that the site value stays the same, when the truth is that changing the permissions attached to the same lot changes its site value.

(b) A selective view of “capacity to pay”

In the four-part example in the brochure, the only valid comparison is between the two houses: under CIV rating, if a modest house and an opulent house stand on similar-sized lots in the same street, the more opulent house pays more; but under SV rates they pay the same. That is the only justification for the subsequent bald statement that “Site Value does not reflect the property owner’s capacity to pay rates.” This conclusion is not validly supported by the medical clinic or the 12-unit complex, because the site values assumed in those cases are absurd. It also conveniently ignores the following facts:

  • Richer ratepayers tend to live in more expensive locations, which have more expensive sites but not necessarily more expensive buildings, so that their wealth is better targeted by SV than by CIV.
  • Because of these locational choices, richer ratepayers tend to have higher ratios of site values to building values than poorer ratepayers, and hence to pay a greater share of the burden under SV than under CIV.
  • More expensive buildings tend to be newer, and newer buildings tend to be more heavily encumbered with mortgages that offset the owners’ capacity to pay.
  • The biggest winners under CIV are those who have the highest ratios of site values to building values. These includes speculators and “land bankers” who own multiple vacant lots and therefore have high capacity to pay.

Very conveniently, the example in the brochure doesn’t include a vacant lot. If it did, on the same valuations, the owner of a vacant lot would pay the same as the owner of the 3-bedroom house under SV, but under CIV would pay 29% less. Under “simple” CIV, on the “rates in the dollar” given in the brochure, the owner of any vacant lot (of any value) would pay 37% less than under SV. And under “CIV with differentials”, the owner of a vacant residential lot would pay 43% less than under SV, while even the owner of a vacant commercial or industrial lot (“bombsite”) would pay 6% less than under SV.

The offending brochure is summarized in the article “Rates hotline ready to take your calls!” on p.3 of the July 21 edition of the Monash Bulletin. This article contains the same misleading four-part example as the brochure, but is worse for its brevity. At least the brochure eventually states the assumed rates in the dollar so that you can apply them to your current valuation — although delaying this information until after the fictitious example is a textbook case of burying the news (when the brochure is printed on two sides and folded, the critical information comes just before the end, as in the web version). The Monash Bulletin article doesn’t merely bury the news, but omits it altogether.

In contrast, the article “Rates shake-up” in the Waverley Leader and Oakleigh Monash Leader (July 28, 2009, p.5) puts the news at the top of the page, and follows up with factual examples instead of impossible fictitious examples.

Who is pushing for CIV?

If values of buildings are added to the local tax base while keeping total revenue constant, the surest outcome is that owners of vacant land will gain at the expense of everyone else, including home owners. The discrimination against home owners could be countered by a “differential” system with a higher rate on vacant land. But in fact the only differential being proposed in Monash would distinguish between residential properties and commercial/industrial properties, not between vacant land and built-up land. With or without the proposed differential, owners of vacant land would get a tax cut at the expense of building owners.

When CIV rating is in place, anyone who adds value to a building, e.g. by renovating or extending, or by replacing a single dwelling by a duplex or “sixpack”, is penalized with a higher rates bill. And when there is no differential on vacant land, anyone who builds on vacant land is penalized. If these disincentives are created in Monash, the growth in the supply of accommodation in Monash will be retarded, and the demand for housing on the urban fringe, by default, will be accelerated. The beneficiaries of that “default” demand will be land bankers whose holdings are outside Monash.

Thus the issue boils down to this: Do the Monash City Councillors work for the ratepayers of Monash, or for someone else?

Retraction

The original version of this article, posted on July 28, used total values from the 2008 Municipal Valuation instead of the 2009/10 Declaration of Rates & Charges. Although there was no new general valuation before the 2009/10 budget, the totals were increased by supplementary valuations. Consequently my calculated CIV rates were too high, by margins between 1.2 and 1.4 percent (not to be confused with percentage points!). This was unfair in the sense that it made the Council’s preferred options look slightly worse than they are. It was also too kind in the sense that bigger discrepancies might look like a more respectable excuse to describe the CIV rates in the brochure as “estimates only”. As supplementary valuations can affect both SVs and CIVs, the use of the term “estimates” only for CIV rates suggests that the reason for the discrepancies is something more nebulous than supplementary valuations. This may help to explain why I overlooked the likely role of supplementary valuations and preferred my own calculations to those in the brochure. And of course the brochure did not help its credibility by pretending that the four lots in the example would retain the same SV.

But, be it kind or unkind, and be it forced or unforced, a 1.4% error is still a 1.4% error, and I’m sorry.

I thank the Monash City Council representative who first brought the changed total values to my attention.

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Why are some ratepayers paying ridiculously higher and higher rates

In 2009, a wise ratepayer was ignored by Councillors who voted for the CIV approach in valuing your rates:

Original Source: http://blog.lvrg.org.au/2009/01/case-for-civ-rates-decoded.html

Logo Land Values Research Group: Economics as if location matters

Wednesday, January 28, 2009:

The case for CIV Rates — decoded!

 Why is the Monash City Council rushing inexorably towards Capital-Improved-Value rating? In this open letter to the incoming Councillors, dated December 17, Gavin R. Putland explains it far too clearly.

Dear Councillors,

The case for changing Monash City Council’s rating system from Site Value (SV) to Capital-Improved Value (CIV) is based on the following premises:

  1. The home owners who have received the biggest windfall gains in the values of their homes are the ones most in need of a tax cut.
  2. A home owner whose Rates bill increases by a few percent of the increase in the rental value is more deserving of relief than a renter whose rent bill increases by 100% of the increase in the rental value.
  3. The match between the Rates bill and “capacity to pay” is to be assessed solely by comparing adjacent properties — not by comparing working-class suburbs with elite suburbs, or heavily mortgaged homes with homes that are owned outright, or ordinary home owners with speculators owning numerous vacant lots.
  4. New job opportunities are not welcome in Monash.
  5. People who find jobs in Monash shouldn’t be able to afford to live there. Neither should your kids or your aging parents.
  6. Property owners should be penalized for using the right, and rewarded for wasting the right, to build higher-density housing.
  7. Ratepayers need the threat of Big Brother snooping around inside their houses to keep them compliant.

Let me explain the above principles in greater detail, so that you can better appreciate their wisdom.

1. The home owners who have received the biggest windfall gains in the values of their homes are the ones most in need of a tax cut.

As Cr Klisaris recently put it, “The current system produces financial distress amongst the losers” — the “losers” being those whose Rates bills have risen the most, because the values of their properties have risen the most. Their “financial distress” is a Rates bill that claws back a minuscule fraction of the latest unearned increase in their net worth — it’s terrible! Never mind that the market value of a site already accounts for tax implications, so that the rise in the Rates bill due to the rise in the site value still leaves the owner better off than if the site value had not risen. Such windfalls, however large, do not count; only reductions in windfalls count.

A “losing” home owner would be better off under CIV because, in the augmented rating base, the increasing site value would be diluted by the nearly constant value of the building(s).

Of course there are other ways to reduce these “losses”. For example, under the waiver power conferred by s.171 of the Local Government Act, the Council could make a local law whereby if the real increase in the Rates bill for an owner-occupied residential site exceeds a certain percentage, the excess will simply be waived. This is a more complete solution than CIV, which has no built-in limit on increases in individual bills. But we mustn’t let superior alternative solutions get in the way of a good predetermined agenda.

2. A home owner whose Rates bill increases by a few percent of the increase in the rental value is more deserving of relief than a renter whose rent bill increases by 100% of the increase in the rental value.

At a rental yield of 5% per annum, Monash’s rate of 0.2668% of the site value represents less than 6% of the site rental value. Hence, when a site value increases, the ratepayer typically incurs a Rates increase of less than 6% of the increase in the site rental value — less again if the total required revenue increases by a lower percentage than total site values. But a renter, by definition, can be slugged 100% of the increase in the site rental value when the lease is next renewed.

As already noted, CIV would moderate the Rates increases for those whose homes increase most in value. And by penalizing construction, it would exacerbate the shortage of rental accommodation, leaving renters worse off. That’s as it should be.

3. The match between the Rates bill and “capacity to pay” is to be assessed solely by comparing adjacent properties — not by comparing working-class suburbs with elite suburbs, or heavily mortgaged homes with homes that are owned outright, or ordinary home owners with speculators owning numerous vacant lots.

Under CIV rating, if an opulent house and a tumbledown shack stand on adjacent lots, the owner of the opulent house will pay more. That’s what counts.

Of course richer ratepayers tend to live in more expensive locations, which have more expensive sites but not necessarily more expensive buildings and are therefore better captured by SV than by CIV. But that doesn’t count.

In consequence of these locational choices, richer ratepayers tend to have higher ratios of site values to building values than poorer ratepayers, and hence to pay a greater share of the burden under SV than under CIV. That doesn’t count either.

More expensive buildings tend to be newer, and newer buildings tend to be more heavily encumbered with mortgages that offset the owners’ capacity to pay. That doesn’t count either.

The biggest winners under CIV are those who have the highest ratios of site values to building values. That means “land bankers” who own multiple vacant lots and therefore have high capacity to pay. So that doesn’t count either.

4. New job opportunities are not welcome in Monash.

Employers need commercial/industrial accommodation. Under CIV rating, property owners who add to the supply of such accommodation will inevitably add to their CIVs and therefore be hit with higher Rates bills. That should deter them from helping to create jobs. The deterrent will be even stronger if, as proposed, CIV is accompanied by differential rating that hits commercial/industrial property harder than residential property. Who needs jobs when Australia is following the rest of the world into recession?

Of course, the lack of growth in job opportunities will eventually make Monash a less desirable place to live, and this of itself will tend to curtail the growth in residential property values, to the detriment of residential ratepayers. But that doesn’t count — just as it doesn’t count that the people whose Rates bills increase most after each Municipal Valuation are the ones who get the biggest windfall gains in property values.

One possible fly in the ointment is that under differential rating, in order to avoid the impression of doing favours to land bankers, a vacant lot might be taxed more heavily than a lot with a house on it. But this won’t necessarily happen, especially in a built-up municipality like Monash. And if it happens, property owners who replace single houses with more capacious housing will still be penalized for competing with the land banks.

Of course most of these land banks are beyond the urban fringe and therefore outside Monash, which probably means that those who stand to gain most from the pro-CIV putsch neither live in Monash nor pay Rates in Monash. While this raises disturbing questions about the propriety of whoever is driving the process, it is a comforting precedent for the undersigned, who is also an outsider but does not share the land bankers’ pecuniary interest.

5. People who find jobs in Monash shouldn’t be able to afford to live there. Neither should your kids or your aging parents.

It’s bad enough if jobs are created in Monash, but even worse if the people who fill those jobs can afford to live nearby. Under CIV rating, property owners who add to the supply of homes to rent or buy, making it too easy to find accommodation in Monash, will add to their CIVs and be hit with higher Rates bills. That should deter them from providing housing. Better still, the lack of local housing for prospective workers will deter prospective employers from offering jobs. It’s a win-win.

And if new workers can’t afford accommodation in Monash, neither can your kids who are about to fly the nest, or your elderly parents who need to be near you so that you can look after them. Apparently that’s another win-win.

6. Property owners should be penalized for using the right, and rewarded for wasting the right, to build higher-density housing.

The mere permission to build higher-density housing on a site increases its value. It makes little difference whether that permission comes from an as-of-right zoning system, or from surviving an objection process. Under SV rating, getting that permission increases the Rates bill but using it does not. Under CIV, because the taxation of buildings allows a lower rate on the site, getting the permission causes a smaller increase in the bill, but using it causes a further increase. This further discourages those public nuisances who want to add to the supply of housing for the benefit of undesirables like employers, employees, children and parents.

7. Ratepayers need the threat of Big Brother snooping around inside their houses to keep them compliant.

Under CIV rating, the value of your house — not just the land — affects your Rates bill. Valuers don’t come inside your house to make the initial valuation. But they do come inside if you appeal. And under CIV, ratepayers are more likely to want to appeal, because there’s more to argue about. The need for an internal inspection will make them think twice about such insolence.

I hope that clarifies the issue for you. For further details, you might consult… [ see this paper instead].

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VAGO Integrity Guide

As Monash ratepayer advocates, we have the responsibility to monitor integrity in Monash Council and report incidents of maladministration, misconduct and corruption to the appropriate authorities.

Writing such incidents about Council matters and getting the desired results is an art-form, capability developed through a long enduring period of many trial and errors.

One approach is to understand and apply Council’s complaint system (which is fragmented and vague); the Local Government Inspectorate, the Victorian Ombudsman and the Independent Broad based Anti-corruption Commission (IBAC), and other parties in Victoria’s integrity system:

Reproduced from VAGO Guide, Safeguarding Integrity, Figure 2, Page 6

The Victorian Auditor General Office (VAGO) has released a guide to the integrity system in Victoria (called Safeguarding Integrity) which gives deeper insights into to recognise misconduct and corrupt conduct and know what to do about it. It is a guide worth reading, to enhance your complaint writing about any government agency, including local government.

One highlight is the definition of behaviours relating to maladministration, misconduct and corruption, summarized below:

Reproduced from VAGO Report, Safeguarding Integrity, Figure 4, Page 16

Use this VAGO Guide in addition to the complaint guidelines given by the party you are lodging the complaint to.

For a pdf copy of this post, click here.

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2014 Christmas Message

Hello all

As 2014 draws to a close, the highlights of MRI’s advocacy findings are:

Happy Christmas

  1. The no end saga to Monash Council’s continuous increase of rates by 6%, which is more than double current CPI. What is scary is the Council’s media propaganda assumes its community is stupid (attend a Council listening post session or attend a Council meeting , you will experience this first hand) and some Councillors continue to manipulate statistics to claim Monash offers one of the lowest rates rise. When you vote for new Councillors in 2016, choose those who are resolved to lowering rates while optimising relevant services and have professional and organisation management skills.
  1. Budget games remain elusive in Monash city. Our Council has slashed away at least $23.5 million this year as unrestricted cash, which was reduced from an original planned surplus of $27.7 million. Not only we have a variance of $4.2 million within less than 6 months, it was planned to increase to $44.5 million by 2016/17 (2014/15 Budget, page 44, 57). Yet our Council cries poor. However in their 2014/15 budget update, they are compelled by legislation to report the true financial status – ie declaring their long term financial position has improved remarkably (primarily because of the sale of Council’s two aged care facilities and some marginal cost saving effort). Note they use the term “long term”, so that they can cry poor short term – this is the language of manipulative media The small attempt to investigate efficiency improvements is because one Councillor (the only one) has a professional skills in finance and has directed Council Finance officers to investigate budget downsizing. The 2013/14 Mayor took ownership and claim/plagiarize as one of his achievements. The positive is that there is untapped budget downsizing capacity in Council, which means there are opportunities for optimising rates to reduce to CPI or lower. Furthermore, the 2013 ALCEG report on strengthening Local Government revenue for the 21st century, also verified that Victorian Councils have not explored or optimise their capacity to reduce expenses (hence rates) through efficient improvements and service level reviews. There are 2 barriers against this responsible budget/rates improvement initiative:
    • Many Monash Councillors lacks financial management (especially budget planning) literacy (VLGA (page 20), 2014) and cannot lead Council Officers to downsize;
    • Strong political resolve to keep high rates increase to maintain legacy high salaries for executive staff (Herald Sun, 2009; Mojo, 2012; Herald Sun, 2013 and 2014 ) and provide plenty of money to make Councillors look good in their achievements and support some of their state or federal political ambition’s profile building and training (Australian Parliament Report, 2011).
  1. Councillors addressing more of their personal aka political ambitions in their roles, than to truly serve in the interests of their community. The federal and state elections were evidence to that. We had two Councillors run for the federal election. Three Councillors participate as state candidates. We also saw manipulation of local decision making positioning (over the sale of Hangover St car-park) to win votes in Oakleigh, still leaving the people of Oakleigh without resolving their escalating car parking and crying poor while delaying the construction of Atkinson St car-park, which is only a partial and short term solution. The current push for not selling Hanover St car-park is a short term decoy for state election purpose, as the 4 years budget plan assumes the sale of Hangover St to finance other capital expenditure in activity centres, especially Glen Waverley. The very Councillors who are voting to not sell Hanover St are the ones who pushed strongly for its sale during the last one to two terms – it is all in the public meeting minute records. MRI representatives were invited to a traders; meeting but were quickly “kicked out” by Council officers for sharing insights about the Hanover St / Atkinson car parking matters and Council’s unrestricted cash reserves.
  1. Lacking good governance in conduct, decision making and community engagement continues to grow. During meetings, debating about the person rather than the issues continue to increase, especially when Mayors are now given discretionary powers to control meeting conducts. We continue to see a legacy bullying culture and groupthink dominance in how Monash Councillors present themselves during Council meetings; poor decision making that is emotionally oriented, lacks evidence and impact analysis; implementation and KPI outcomes accountability. Inappropriate conduct continues, taking a new height when the new Mayor personally recently threatened the MRI President in Council office venue that he has been investigated and police checked. This conduct and action represent a complete failure of good governance, as the Mayor has not asked for the MRI President for consent to be checked and in doing so he has breached the Federal Government Laws concerning the ‘Privacy and Data Protection Act 2014′ and irresponsibly exposed Council to unwarranted legal liability risk.
  1. There is grapevine talk of unfair procurement oligopoly practices involved in the street lighting bulk purchasing arrangement offered by the Municipal Association of Victoria (MAV) and its partner, Ironbark Sustainability. Prior to Monash Council making the final decision to go ahead, one of the suppliers was in court over copyright violation allegations and Council is aware of the choice of street-lighting technology provided in the MAV/Ironbark offer is one of old technology and lesser value giving in terms of energy saving. The decision making did not consider the total cost of ownership aspects, when they claimed that LED streetlights are too expensive to implement. Another flaw is that Council procure the old fluorescent streetlight technology and pass asset ownership to its energy supplier, which would result in Council to pay remaining depreciated capital value when they decide to refresh streetlight technology in the future. The 2013/14 Mayor is a paid Board member of the MAV and his partner works in MAV, a point not raised as a conflict of interest when the streetlight decision making occurred.

Initiating issues prevailing in 2015 will include:

  1. Rate increases – whether ALP Councillors would go against Daniel Andrew’s clause to increase rates above CPI and whether Daniel Andrew’s capped Council rates policy allows for a big escape clause for tyrannical Councils to call for exceptions and keep pushing for higher rates.
  1. Unknown defined benefits liability – there is no report of Council’s exposure to defined superannuation benefits liability managed by Vision Super. As financial markets shiver in more uncertain global economic conditions, what is the risk that MAV is exposing Councils and our rates money to? Our ex Mayor is one of Vision Super Trustee Directors since 2009 and his role is supposing to ensure Vision Super is managed properly in the best interests of all members – and yet we had the last defined $12+million benefits liability blowout.
  1. Monash Housing Strategy, which forces Councillors and Planners’ viewpoints that the city will support higher density development that will change the liveability landscape and conditions for every present and future ratepayers, residents and business operators. They are not canvassing for higher levels of community engagement (the Council website’s search engine does not locate it, one has to use the Internet to locate the plan – that says a lot about limiting public accessibility) and Glen Waverley will be the worst off, as the first decision to support a 15 storey tower complex permit sets in. The risk of Council decisions linking to group and self interests will be hard to ascertain, but are very real and unmonitored present and future exposures in city planning and permit approval decision making.
  1. Increase targeted and publicized propaganda profiling of Mayor and some Councillors’ achievements, to build traceable profiles for the 2016 Council election.

MRI will continue to monitor and advance its advocacy to lower rates, monitoring and reporting good governance performance in Council and explore new territories in collaborative community partnerships and development. We will start issuing quarterly newsletters to inform ratepayers, residents and business operators about the truth in Council matters. We are also expanding our collaboration networks and use of social media, to strengthen our collaborative advocacy and achievement capacity. Watch this space in 2015.

We wish you and your families and friends a wonderful merry Christmas and a joyous happy new year.

Happy Festive Cheerio from your MRI Team

Australian Xmas

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Are ratepayers going to pay for 2 mayors in Monash?

Paying for 2 Mayors in Council

Mayor GLWe just checked the ex Mayor’s personal blogging website and twitter  and he still claims to be the Mayor when the position has been terminated. The question is “are ratepayers paying for two Mayors in Monash Council?” Maybe two heads are better than one?

Not only our Councillors don’t commit to good governance practice in matters of using official Council information on personal website + social media and now this ludicrous claim of having two Mayors in Monash ! Great Mickey Mouse performance Mayors of Monash!

GL Still Mayor 2.jpg

 Update 14 Jan 2015: he updated his twitter to say he is just an ordinary Councillor (poor thing), but not his private blog. Lake no longer Mayor

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