A Special Rate and Special Charge Scheme enables councils to support the delivery of projects that directly benefit a select group of property owners.
Property owners pay for part or all of the works over time through a charge on their rates notice. A special charge can apply to property owners even if they don’t support the project.
Council has drafted a Special Rate and Special Charge policy to provide clarity on the consultation process, level of support required, and method and timeframes for collecting contributions through a Special Charge Scheme.
Under the draft Policy, for a Special Charge Scheme to progress beyond initial request it must have the support of at least 80% of affected property owners. Exceptions to this include where drainage is required for public health reasons or Council is a significant contributor to the scheme.
Steps in a Special Rate and Special Charge Scheme
The process of initiating a Special Rate or Special Charge Scheme project is guided by requirements in the Local Government Act 1989 and the Special Rates and Charges Ministerial Guidelines September 2004.
This timeline briefly covers the key steps. More detailed information on each stage is set out in the draft Special Rate and Special Charge Scheme Policy 2022.
A Special Rate and Special Charge may be initiated by Council, property owners or external authorities requesting Council makes special infrastructure improvements in a particular location.
Affected residents will be provided with project information, including estimated costs, and asked to respond to an initial questionnaire to help Council understand the level of support for the project.
Council will typically only proceed with further investigation if there is support from at least a majority of 80% of those who would be liable to pay the Special Rate and/or Special Charge.
Council may decide to proceed with less than majority support, in accordance with the Local Government Act, if:
- The levy of the Special Rate and Special Charge Scheme does not exceed two thirds of the total cost. In this case, Council would normally need to contribute at least one third of the total cost; or
- A drainage Special Rate and Special Charge Scheme is required for reasons of public health.
The decision on whether to proceed to the next stage will be made by a Director at Bayside City Council, with property owners and other stakeholders notified of the decision.
Council staff prepare detailed designs, specifications, construction standards, estimates and apportionments (how much each property owner may need to contribute).
Everyone likely to be directly affected by the proposal will receive a letter, which will include:
- How the investigations have been initiated
- An explanation of the basic principles of the scheme and future steps
- Concept options and associated preliminary estimates
- An indication of cost to potential contributors
- Contact details for enquiries
- Advice that a public meeting may be called to discuss designs.
Property owners will also be asked via questionnaire whether or not they would support Council formally giving notice of its intention to declare the Special Charge Scheme.
If majority support remains for the Special Charge Scheme, Council will consider at a meeting whether or not to give formal public notice of its intention to declare the Special Charge.
The meeting agenda report will also indicate how Council proposes to consider any submissions it receives from the community, under Section 223 of the Local Government Act.
The Local Government Act requires Council to carry out certain formal processes before it can declare a special charge scheme:
- A letter is sent to all property owners, advising them of Council’s intention to declare a Special Charge Scheme and the ways they can make a formal submission.
- The scheme is also advertised via public notice on Council website and in The Age newspaper.
This process enables property owners to make submissions and objections to Council regarding any aspect of the scheme, which must be lodged within 28 days.
Property owners can make a written submission in support of or opposition to a Special Charge Scheme, and request to be heard by Council to support their written submission.
A committee of Council is then convened to hear from these submitters.
After the committee has heard all submitters, it will make a recommendation to Council for a final decision by Council.
Following a consideration of all submissions, and the recommendation(s) of the committee, Council will consider a detailed report on the Special Charge Scheme and may decide to:
- Abandon the proposed Special Charge Scheme
- Prepare a new Special Charge Scheme due to the need to significantly modify the original scheme (this would recommence the process)
- Proceed, with or without minor variation, to declare the proposed Special Charge.
All submitters and people affected by the Special Charge Scheme will be advised of Council’s decision and the reasons for it.
If no submissions have been lodged, Council may resolve to proceed to declare the Special Charge.
If Council resolves to declare the Special Charge Scheme, a notice is issued to each owner liable to pay the charge. This indicates the estimated amount of the rate or charge and advises of rights to seek a review via the Victorian Civil and Administrative Tribunal (VCAT).
A person may apply to the Victorian Civil and Administrative Tribunal (VCAT) for review of a Council decision to impose a Special Charge on that person within 30 days after the date of issue of the Notice of Levy.
An application to VCAT must be lodged within 30 days of the issue of the Council notice.
On application, VCAT will conduct a hearing and advise all parties of its decision.
Once the works have commenced, Council will start to send invoices to collect payments for the scheme.
When works are completed, the costs will be finalised.
When works are completed, a final report will be provided to Council to advise of the final costings, and residents will be advised of any cost adjustments.
If the finalised actual costs are lower than the amount paid or invoiced, a refund or reduction will be provided. If the actual costs are higher, an adjustment may be made to each owner’s costs to reflect the actual, final costs or Council may decide to pay the difference.
Based on the actual cost of the works, a Final Notice of Special Charge Liability will be sent to all contributors.
Timeline item 1 - complete
Development of draft Policy
Timeline item 2 - active
1 August – 4 September 2022.
Community feedback will be considered and amendments made to the draft Policy, as required.
Timeline item 3 - incomplete
Council is expected to consider community feedback and adopting a proposed Policy at its November 2022 meeting.