| JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL STREAM : DEVELOPMENT & RESOURCES ACT : LOCAL GOVERNMENT ACT 1995 (WA) CITATION : MANFREDI and CITY OF ROCKINGHAM [2011] WASAT 155 MEMBER : MR M SPILLANE (SENIOR MEMBER) HEARD : 22 NOVEMBER 2010 10 MAY 2011 (FINAL DOCUMENT FILED)
DELIVERED : 26 SEPTEMBER 2011 FILE NO/S : DR 504 of 2009 BETWEEN : GRAZIANO MANFREDI Applicant
AND
CITY OF ROCKINGHAM
Respondent
Catchwords: Local government - State Government Underground Power Program - Specified area rate - Benefit to ratepayers or residents within the area Legislation: Local Government Act 1995 (WA), s 6.32, s 6.37, s 6.38, s 6.73, s 6.76, s 6.77, s 6.82, s 6.82(3)
Local Government (Financial Management) Regulations 1996 (WA), reg 54
Electricity Corporations Act 2005 (WA), s 60
(Page 2)
Result: The application for review is dismissed
The rate imposed by the respondent and under review is affirmed Category: B
Representation: Counsel:
Applicant : Self-represented
Respondent : Mr Haddington
Solicitors:
Applicant : N/A
Respondent : N/A
Case(s) referred to in decision(s):
Smith and City of Stirling [2006] WASAT 6
(Page 3)
REASONS FOR DECISION OF THE TRIBUNAL:
Summary of Tribunal's decision 1 Mr Graziano Manfredi owns a property at Palm Beach in Rockingham. In September 2009 the City of Rockingham imposed a specifed area rate on the residents of Palm Beach for underground power. 2 Mr Manfredi lodged an objection to his rate notice which was disallowed by the City of Rockingham. Mr Manfredi made an application to review that decision to the State Administrative Tribunal. 3 At the hearing before the Tribunal the parties put forward their arguments under the following points: 1) Background of the State Underground Power Program; 2) Identifying proposed underground project areas; 3) Underground power projects applied for; 4) Financial model summary; 5) Property owner survey; 6) Palm Beach project history; and 7) Underground power charges. 4 Having considered the parties' submissions under each of the points the Tribunal was satisfied that there was a benefit to the ratepayers of the area in getting underground power and the City of Rockingham's decision to impose the rate was affirmed.
Background 5 In September 2009 the City of Rockingham (City, Council or respondent) imposed a specified area rate for the purpose of funding its portion of the cost of providing underground power to the Palm Beach area of the City. 6 Under the heading 'Background' at page 4 of a booklet titled 'Underground Power Program, Major Residential Projects, Round Four Guidelines' (Guidelines) the genesis of the Underground Power Program (Program) was set out as follows: (Page 4)
In 1996, the Underground Power Program was established to contribute to the Government of Western Australia's longterm goal of improving the state of the electricity distribution network. … The May 1994 storms, resulting in widespread blackouts across Perth, were a significant catalyst for this multimillion initiative. The State Government recognised that placing power cables underground gave improved security of supply in severe weather conditions. Planning rules were changed to require underground power for all new developments and the Underground Power Program was established to replace existing overhead supply with underground power. … The Program is undertaken and funded jointly by the State Government (including its wholly owned business, Western Power Corporation) and participating local governments. The Underground Power Steering Committee is responsible for the management of the Program, and is comprised of representatives from the Office of Energy, Western Power, and the Western Australian Local Government Association. 7 Appendix H of the Guidelines sets out the areas which were completed through pilot projects and Rounds One to Three of the Program. The City had unsuccessfully applied for three underground power projects in Round Three of the Program in 2004 and again submitted these projects for Round Four in 2005. These projects were: a) Rockingham Beach; b) Palm Beach; and c) Shoalwater. 8 For the purposes of this matter it is only the Palm Beach project that is of relevance. 9 Various investigations and modelling were undertaken by the City, which are referred to later, before Council resolved to proceed with the Palm Beach project. 10 Following the imposition of the specified area rate in 2009, Mr Manfredi (applicant) who resides in the area where the rate was imposed, wrote to the City by letter of 18 September 2009 objecting to the imposition of the rate as he was entitled to do under s 6.76 of the Local Government Act 1995 (WA) (LG Act). 11 The City considered the applicant's objection and by letter of 12 November 2009 disallowed it stating: (Page 5)
In respect to your objection, I advise that this has been researched and considered taking into account all the points raised in your letter received 22 September 2009, and I advise that your objection in respect to the imposition of a Specified Area Rate on your property within the Palm Beach Underground Power Project area has been disallowed on the basis that Council has lawfully imposed the Specified Area Rate on an equitable basis to its ratepayers. 12 The City then went on to explain in that letter its reasons for its decision. 13 Following the disallowance of that objection the applicant filed an application for review under s 6.77 of the LG Act with the Tribunal on 23 December 2009.
Legislation 14 The parties' submissions relate to the following sections of the LG Act: (Page 6)
work, service or facility if the local government considers that the ratepayers or residents within that area (a) have benefited or will benefit from; (b) have access to or will have access to; or (c) have contributed or will contribute to the need for, that work, service or facility. … 6.69. Right to pay rates, service charges and costs, and stay proceedings (1) Up to 7 days prior to the time of the actual sale of any land for non-payment of rates or service charges a person having an estate or interest in the land may pay the rates or service charges and the costs and expenses incurred to that time in proceedings relating to the proposed sale. (2) At any time after the 7 days referred to in subsection (1) but prior to the time of the actual sale of any land the local government may, upon such terms and conditions as are agreed between the parties, accept payment of the outstanding rates or service charges. (3) On payment being made under subsection (1) or (2) the proceedings relating to the proposed sale are stayed and the local government is required to make such notifications and take such measures as are prescribed in relation to the payment and the cancellation of the proposed sale. … 6.76 Grounds of objection (1) A person may, in accordance with this section, object to the rate record of a local government on the ground (a) that there is an error in the rate record or (Page 7)
(Page 8)
under this section if it could be, or could have been, resolved under section 6.76. (3) The State Administrative Tribunal dealing with a matter referred to it under this section may make an order quashing a rate or service charge which in its opinion has been improperly made or imposed. 15 Section 6.82 of the LG Act only allows an application for review where there is 'a question of general interest' as to whether a rate or service charge was imposed in accordance with the LG Act. The Tribunal was satisfied in the present case that the question raised by the applicant was one of general interest and allowed the review to proceed.
Issues 16 Following several directions hearings before the Tribunal it was agreed by the parties that the issue to be determined was: Whether [t]he Specified Area Rate of $929.79 and the Service Charge of $287.50 contained in the Rate Notice to the applicant dated 25 September 2009 were imposed in accordance with the Local Government Act 1995. 17 In its written submissions the respondent set out its case under seven points they believed were relevant, and in his reply, the applicant responded in respect of those points. 18 For purposes of clarity the Tribunal will therefore deal with each of the points in turn, which were: 1) Background of the State Underground Power Program 2) Identifying proposed underground project areas 3) Underground power projects applied for 4) Financial model summary 5) Property owner survey 6) Palm Beach project history 7) Underground power charges (Page 9)
Point 1: Background of the State Underground Power Program 19 The respondent explained that about 49% of the metropolitan area is now serviced by underground power and that since the Program began 60 projects have been completed providing underground distribution systems to over 70,000 properties. The Program is funded 50% by local governments (through ratepayers who directly benefit), 25% by the State government and 25% by Western Power. In respect of Western Power, the respondent stated: Western Power under the Economic Regulatory Authority is required to operate with fiscal responsibility. Undergrounding existing over head systems is not justified without shared funding. Also owners gain a considerable benefit for the amenity improvement. In addition owners gain the greatest benefit in terms of less power outages and safer, more evenly lit areas. 20 The applicant agreed with those contentions but added as 'Additional Facts': The applicant further stated: As [W]estern Power is required to manage its funds so to [sic] am I. I have a democratic right to manage my funds as I see fit as I am aware of my financial position and should have the right of not being threatened with legal prosecution and the confiscation of my home when the [C]ouncil decides to support a program which was not supported by the community in a fare [sic] and equitable manner.
Consideration 21 The issue of resident support for the project is a matter the applicant returns to on a number of occasions throughout his submissions and is dealt with in detail later under the point 'Property Owner Survey'. 22 The Guidelines referred to earlier explained that the Underground Power Steering Committee (Steering Committee) was responsible for the management of the Program on behalf of the State government. The Steering Committee invited proposals from (Page 10)
local governments to participate in the Program and following receipt of those proposals, the Steering Committee decided which proposals would be funded. 23 The Guidelines outlined: • the process to be followed by local governments that wished to participate; • the level of the funding available; • the selection criteria for short listing projects; and • the process for prioritising and selecting projects. 24 Page 7 of the Guidelines stated: Local governments should note that the Steering Committee does not make any representation or provide any undertaking to local governments in relation to proposals submitted for Round Four of the Program. Proposals submitted are not guaranteed funding … 25 It is clear from all of the documents available to the Tribunal that decisions as to which programs were funded and whether relevant criteria were met were matters entirely for the Steering Committee to decide and not for Council.
Point 2: Identifying Proposed Underground Power Projects
Point 3: Underground Power Projects Applied For 26 Both of these matters are related. The applicant made submissions in respect of Point 2, but made no comment in respect of Point 3. The Tribunal will therefore deal with both matters together. 27 Appendix A of the Guidelines sets out the selection criteria by which expressions of interest would be assessed. Under the heading 'Power system reliability (technical) criteria', a number of criteria are listed, against which each proposal is assessed and ranked in respect of current and future requirements and the risk of power system failure in nominated areas. 28 Under the heading 'Project feasibility (nontechnical) criteria' further criteria are listed to assess the feasibility of major residential projects and to assist in the selection of proposals that are competitive in terms of the power system reliability. (Page 11)
29 In respect of Points 2 and 3 the respondent stated: To identify areas for the Underground Power Program[,] Local Governments were encouraged to seek assistance from the Underground Power Program Group (within Western Power) in order to identify areas within their municipalities in which the network [is] poorly performing or is at greatest risk of damage and therefore, are likely to benefit most from the replacement of the overhead powerlines with underground power. Evaluation of proposed sites was based on both technical and non technical criteria. … The City of Rockingham applied for [three] underground power projects in Round 3 in 2004 which were unsuccessful and therefore submitted again in Round 4 in 2005 for the areas of:- a) Rockingham Beach b) Palm Beach c) Shoalwater These areas were chosen because of:- The benefits to Council for this project proceeding included a) Revitalisation of Palm Beach area; i.e. enhanced amenity (more attractive streetscapes[)] b) City gains nearly $10 million of infrastructure enhancement c) Improved streetlighting brings improvement in community safety and security d) Removing the need for street tree pruning under powerlines The benefits to property owners included (Page 12)
c) Improved property values d) More reliable power supplies e) Improved road safety due to fewer poles in the streetscape along with frangible street light poles f) Removal of unsightly tree pruning 30 In respect of Point 2 the applicant submitted: Consideration 31 Questions of system reliability, power quality, growth requirements and natural characteristics were all criteria set out in Appendix A of the Guidelines as being relevant for assessing proposals under the 'Power system reliability (technical) criteria' and were to be applied by the Steering Committee in making a decision as to whether to grant funding to a proposal. 32 Even if the applicant's contention as to the reliability rating is correct, and the Tribunal is not satisfied on the documents it has seen that that was the case, it only addressed one issue under the technical criteria. It may well have been that the 'Project feasibility (non-technical) criteria' were in the committee's view more important in respect of granting funding. 33 Although a local government may have addressed each of those criteria in their submission, it was also open to the Steering Committee to obtain information from other sources such as Western Power and ultimately it was the Steering Committee and not Council that applied the criteria and made the relevant decisions. (Page 13)
34 The applicant also raised s 60 of the Electricity Corporations Act 2005 (WA) dealing with exempting Western Power from planning laws, however the Tribunal could not find any relevance in that argument in considering this matter. 35 On the evidence before it, the Tribunal was not satisfied that the respondent was not entitled to either identify or apply for the Palm Beach area to be considered by the Steering Committee for inclusion in the Program.
Point 4: Financial Model Summary 36 The respondent explained its decision to select the financial model it did as follows: There are a number of complexities associated with determining contributions from the individual property owners towards the total cost of the project, involving issues such as: a) rebates for pensioners; b) concessions for properties with existing underground connections; c) concessions for owners affected by new electrical equipment near their properties; d) distribution of costs between multiple dwellings on one lot; and e) vacant lots[.] Officers commissioned a consultant with expertise in this field (who had undertaken similar work for other [l]ocal governments in respect to underground power financial modelling) to develop a series of financial models for Council consideration and to provide a recommendation. Six financial models were developed by the consultant[.] [T]hese models were: 1 Standard connection cost Based on standard usage 2 Standard connection cost Based on GRV 3 Standard connection cost Fixed costs equally variable costs usage 4 Everyone pays equal contribution 5 Everyone pays based on standard usage 6 Everyone pays based on Western Power meter records. (Page 14)
37 The respondent explained that a working group was set up by the respondent to review and agree the most equitable financial model for determining owner contributions and a list of agreed criteria were used to evaluate the six models which resulted in Option 2 the 'Standard connection cost - Based on GRV' model being recommended and eventually chosen by Council for implementation. 38 The applicant submitted that selecting the financial model it did was a means of gaining support and removing his democratic right to be treated equally. 39 He submitted that the network's main cable, or ring main system, is the same size feeding all properties, the size being determined by the capacity requirements of the network. He explained the reason for such a system is that if a fault occurs within the network, part of the line can be isolated without affecting too many properties while maintaining system requirements. 40 The applicant contended that if the same size cable is used throughout the network passing each property, how can there be a difference between the charges to each property.
Consideration 41 If Option 4 of the six financial models considered had been chosen then everybody would have paid an equal contribution. However, that is not the option that was chosen. 42 As stated earlier, Council stipulated criteria to be used when deciding on a model, which were: a) Existing underground power connection pay only 30% of connection fee b) Multiple properties on one lot sliding discount scale for connection fee, [for example], [maximum] 50% discount for [eight] [plus] units c) Pensioners to receive up to 50% rebate against network charge based on equity in property d) Vacant lots 100% rebate on connection fee e) Council properties be included as normal property owner f) Owner occupied properties to be treated [the] same as investment properties (Page 15)
43 Applying those criteria resulted in Option 2 (GRV model) being recommended, chosen and implemented. 44 To comply with the criteria set down by Council, such as allowing a 50% rebate for pensioners, then a model other than the equal contribution model had to be chosen. There was no onus on Council to choose one model over the other. 45 As a democratically elected body with the power given to them under the LG Act, Council was entitled to choose the model they believed best suited the circumstances and the Tribunal is satisfied that Council went through a thorough process before deciding on a model they believed to be fair.
Point 5: Property Owner Survey 46 In respect of the issue of community support, Council explained: Two surveys were conducted of property owners within the proposed Palm Beach project area. Council considered the outcome of the first survey at it's [sic] 28 August 2007 meeting, at which it was resolved: That Council take the following action: Due to the closeness of the vote and the high percentage of submissions received, not support the Palm Beach Underground Power Project and advise Western Power and the Office of Energy of this decision, and to advise property owners of the decision. Following the communication of this decision to the Underground Power Steering Committee at the Office of Energy, representations were made by the Steering Committee to Council representatives highlighting the significant overall benefits of the project and proposing that additional local consultation to further promote the project be undertaken, and this be followed by a more detailed survey. Council considered this matter again at its 25 September 2007 meeting resulting in the following resolution: [t]hat Council support the approach proposed by the Underground Power Steering Committee to further promote the Palm Beach Underground Power Project to affected property owners and to conduct a more detailed survey later in 2007, subject to Western Power paying for the cost of such survey. (Page 16)
47 In respect of this the applicant contended: Consideration 48 There is no requirement for consultation when imposing a service charge or a specified area rate under s 6.32 or s 6.37 of the LG Act respectively. However, it is recognised that at Appendix C of the Guidelines, under the heading 'Community Support', the Guidelines state: Confirmation of community support may be demonstrated through a detailed survey. The local government will need to implement a consultation program, including the provision of public information. This needs to be handled with care and sensitivity, particularly when the local government plans to raise the bulk of its funds from directly affected property owners through rate notices. State funding is conditional on the availability of clear evidence of substantial and continuing community support. The State will not proceed with proposals that do not demonstrate adequate support from the local community[,] and Council therefore undertook community consultation and the surveys referred to. (Page 17)
49 More than 50% of the responses received to both surveys voted in favour of the project, although it is recognised that nowhere near 100% of the ratepayers actually affected by the decision responded. 50 In non-compulsory voting processes such as local government elections, voter turnout can vary dramatically, particularly depending on the interest of the electorate in an issue. 51 There is no requirement for consultation when imposing either a service charge or a specific area rate under the LG Act and there is certainly no requirement for the 50% of the total number of ratepayers to support the proposal as contended by the applicant. 52 The Guidelines were a matter for the Steering Committee to apply and the Steering Committee made the ultimate decision to grant funding allowing the project to proceed. 53 There is no evidence to show that the Council failed to consult adequately or proceeded with a lack of procedural fairness. Indeed, quite the opposite appears to have been the case, with the Council considering the matter on a significant number of occasions and only resolving to support the project after further consultation and a second survey.
Point 6: Palm Beach History 54 The applicant made no submissions in respect of this point. 55 The respondent set out a summary of the reports presented to Council on the Palm Beach Underground Power Project with each summary containing the date the report was presented to Council, the purpose of the report and the Council's resolution. 56 In all, Council considered the matter in one form or another on 10 separate occasions, namely: October 2005, May 2006, March 2007, August 2007, September 2007, December 2007, March 2008, April 2008, August 2008 and, finally, September 2008. 57 In particular, it is noted that the impact on ratepayers of a charge as proposed was recognised by Council in December 2007 when a resolution was moved which stated: Subject to confirmation of the Department of Local Government and Regional Development that it is permissible, approve the placing of an upper limit on the network charge payable by property owners so that no individual property owners/s [sic] will be rated more than $8,000 as a network charge. (Page 18)
Consideration 58 It is clear from the documents before the Tribunal that Council gave the matter extensive, if not exhaustive, consideration on a number of occasions before resolving to support the Palm Beach Underground Power Project and no evidence has been put before the Tribunal to show that Council erred or was not entitled to make the decisions it made.
Point 7: Underground Power Charges 59 Under this final point the respondent summarised its position in respect of both the specified area rate and the service charge and referred to the relevant sections of the LG Act. They submitted that the LG Act allowed Council to charge 'the cost of the provision by it of a specific work, service or facility' and that it makes no difference who actually performs the work, the City, Western Power or an independent contractor, and that both the charges were properly imposed. 60 The applicant submitted: I have not been given an interpretation or a definition of this law and have not been given any facts to substantiate the use of this law. … A local government may impose a specified area rate on ratable [sic] land within a portion of its district for the purpose of meeting the cost of the provision by it of a specific work, service or facility if the local government considers that the ratepayers or resident within that area • Have benefited or will benefit from[;] • Have access to or will have access to[;] or • Have contributed or will contribute to the need for that work, service or facility • [However] [w]here does it state in the Local Government Act 1995 or the Local Government (Financial [M]anagement) Regulations 1996 that a [C]ouncil can apply this rate to an asset owned by a corporation and managed under other [R]egulations and Acts. • The network system is not an asset of the City of Rockingham so how can this be ratable [sic] when the asset is owned by a corporation who has considerably gained the most benefit from what is a major infrastructure upgrade. 61 The applicant went on to comment on the benefits of the proposal outlined by the respondent, namely: (Page 19)
• More reliable power • Approved street lighting with frangible columns • Removing the need for unsightly tree pruning • Enhanced local amenity • Removal of unsightly overhead power poles and lines • Improve road safety due to fewer [p]oles in the streetscape[,] and took issue with of each of those contentions. 62 The applicant also contended that as Western Power is required to supply power and is responsible for the upkeep of the system, they should also be responsible for any upgrade of the system.
Consideration 63 Section 6.37 of the LG Act under the heading 'Specified area rates' states: (1) A local government may impose a specified area on rateable land within a portion of its district for the purpose of meeting the cost of the provision by it of a specific work, service or facility if the local government considers that the ratepayers or residents within that area (a) have benefited or will benefit from; (b) have access to or will have access to; or (c) have contributed or will contribute to the need for, that work, service or facility. 64 The goals of the Program set out at page 3 of the Guidelines are: 65 The 'Program Objectives' that the Steering Committee sought to achieve were: (Page 20)
66 The Program is undertaken and funded jointly by the State government, including its wholly owned business Western Power and participating local governments, and was aimed at the longterm goals of improving the state of the electricity distribution network. 67 While it is recognised that as part of its service of supplying power and upkeeping the system Western Power would maintain and from time to time upgrade the network, there would be no requirement on it to underground the power. 68 Therefore, when a government decision is taken to underground power services generally, which is the basis of this Program, it is not unreasonable that the cost of such an undertaking should be borne not only by the service provider but by the community who get a tangible benefit from such works. 69 The Tribunal is satisfied that the work undertaken through the Program comes within the matters for which a specified area rate under s 6.73 of the LG Act can be imposed. 70 As for the applicant's contention that the assets are not owned by the City, s 6.37 of the LG Act does not mandate that the 'asset' needs to be owned by the City, it speaks of a 'work, service or facility' being provided. 71 The City is only part funding the Program which will personally benefit the residents of Palm Beach in ways that are tangible and measurable. 72 There is nothing in the applicant's submissions which convinces the Tribunal that the local government is not entitled to impose the charges it did. 73 The minutes of the respondent's meetings clearly show the consultation undertaken by the City and the considerations the City gave the matter. The applicant has not shown that the respondent failed to follow proper statutory procedures. (Page 21)
74 A required element in applying a specified area rate under s 6.37 of the LG Act is that there needs to be a 'benefit' to the ratepayers and the applicant clearly believes he has not personally obtained such a benefit. 75 In Smith and City of Stirling [2006] WASAT 6 this Tribunal, in dealing with a similar matter, discussed the issue of 'benefit' and after reviewing a number of superior court decisions, stated at [46]: The discussion in all of these cases, we think, indicates that a relevant 'benefit' will include a benefit (whether direct or indirect) which is rationally found to be additional to or greater than that which other ratepayers or residents receive arising out of the identified 'specific work, service or facility'. Such a benefit may be considered in an abstract sense. Thus, such matters as the views of the present owner of the affected land or the present use of the land are not determinative of whether something could be said to be for the objectively determined benefit of ratepayers or residents. 76 The Tribunal adopts and applies that reasoning in this matter in respect of the specified area rate. 77 As for the service charge or network charge, s 6.38 of the LG Act states: 78 The services for which a local government may impose a charge under that section are clearly prescribed in reg 54 of the Local Government (Financial Management) Regulations 1996 (WA) and include: 79 Again, neither the Act or Regulations state that the local authority must own the asset in respect of which the service is delivered as (Page 22)
contended by the applicant. Indeed, when you examine the other prescribed services under reg 54, such as television and radio services, or water, the respondent would be unlikely to own the asset in those circumstances either. 80 Section 6.37 of the LG Act provides that local governments may impose a specified area rate on land for the purpose of meeting the cost of the provision of a specific work, service or facility which the local government considers the ratepayers or residents within that area have or will benefit from and have or will have access to. 81 In the present case, the respondent has imposed such a rate for the placing of electricity underground and the Tribunal is satisfied that the ratepayers and residents of the project area have received a benefit over and above the general ratepayers of the City. 82 The Tribunal is also satisfied that the local government may impose a service charge for the provision of underground electricity which the respondent has imposed in the present case.
Conclusion 83 On the evidence before it, the Tribunal is satisfied that the specified area rate and the service charge in question have been properly imposed in accordance with the LG Act and that there are no grounds for setting them aside.
Orders |