Supplementary AGENDA 1R

Distributed on 26 February 2021

Extraordinary Council Meeting

MONDAY 1 MARCH 2021

6.30PM

Extraordinary Council Meeting 1 March 2021

MEETING AGENDA – PRECIS

SUPPLEMENTARY ITEMS

The following attachment appears as late item as information required for the preparation of the report was not available at the time of distribution of the Business Paper.

1          Reports for Council Decision

ITEM                                                                                                                                         Page

C0321(1) Item 1  Harmonisation of Rates

                            (Attachment 5 - Rates Harmonisation Analysis $565 Minimum Rate)         3

Attachment 5

Harmonised Revenue Policy

Inner West Council – Statutory Minimum

26 February 2021

Introduction

Council requested further analysis with the inclusion of the 2021/22 statutory maximum minimum of $565.

Two options for analysis and comparison, both with $600k income movement from Business General to Business Mall:

• option 3 with maximum minimum of $565 for both Residential and Business

• option 4 with minimum of $850 for Residential and $820 for Business.

Minimum rates – impact of different amounts

• The following slide details the impact of the 2 options for the Residential and Business categories in terms of:

• land value cap amount for each minimum

• number of assessments captured as minimum.

Note: for the next slide both Business Airport and Mall have high land values, hence were not affected by the minimum amount and therefore was not included in the analysis.

Minimum rates – impact of di ferent amounts cont.

Category and Subcategory	Option 3 Minimum            Land Value                           Number of Amount               Capped                            Minimum			Option 4 Minimum            Land Value            Number of Amount                Capped                            Minimum
Business General Industrial Marrickville Industrial St Peters Industrial St Peters North Industrial Camperdown Residential	565	141,082	441	820	204,756	653
	565	100,483	114	820	145,833	122
	565	99,714	3	820	144,718	14
	565	99,662	1	820	144,642	1
	565	100,054	3	820	145,212	6
	565	439,993	24,185	850	661,937	30,945

Residential options

Ashfield	Base Amount $727	Minimum $565	Minimum $850
Leichhardt	Minimum Amount $686	Minimum $565	Minimum $850
Marrickville	Minimum Amount $710	Minimum $565	Minimum $850

• The following slide details the change in total rates income for the former councils.

• The general trend still remains, regardless of the minimum amount, rates income moves from former Ashfield to Marrickville.

• Under the $565 minimum structure, option 3, more income moves from Ashfield to Marrickville than with option 4.

• Former Leichhardt income movement is slightly lower under the

$565 minimum than the $850 minimum.

Former	Current	Current	Option 3	Option 3	Option 4 Income $850 M $'000	Option 4 Income $850 M %
Councils Residential	Income $'000	Income %	Income $565 M	Income $565 M
			$'000	%
Ashfield	23,971 K	27%	18,828 K	21%	19,647 K	22%
Leichhardt	32,688 K	37%	33,997 K	38%	32,629 K	36%
Marrickville	30,653 K	35%	36,968 K	41%	37,517 K	42%
Total	87,312 K	100%	89,792 K	100%	89,792 K	100%

• The following slide details the $ range of increases and decreases for the former councils.

• With higher minimum of $850, former Marrickville will experience more increases at the higher $ range.

• Former Ashfield will experience a reduction on both minimum options, greater under option 3.

• Former Leichhardt will experience higher increases with minimum amount of $565.

Residential	Option 3
Former Council	Marrickville		Ashfield		Leichhardt
$ Rate Increase Range	# of Assessment	% of Assessment	# of Assessment	% of Assessment	# of Assessment	% of Assessment
Below $-400	0	0.0%	6,705	41.4%	-	0.0%
$-400 to $-200	-	0.0%	5,933	36.6%	-	0.0%
$-200 to $-75	12,306	37.0%	1,473	9.1%	5,692	24.2%
$-75 to $0	376	1.1%	617	3.8%	506	2.1%
$0 to $75	423	1.3%	603	3.7%	2,230	9.5%
$75 to $200	965	2.9%	639	3.9%	13,995	59.4%
$200 to $400	10,462	31.5%	151	0.9%	912	3.9%
Above $400	8,689	26.2%	92	0.6%	217	0.9%
	33,221	100%	16,214	100%	23,552	100%

Residential	Option 4
Former Council	Marrickville		Ashfield		Leichhardt
$ Rate Increase Range	# of Assessment	% of Assessment	# of Assessment	% of Assessment	# of Assessment	% of Assessment
Below $-400	0	0.0%	4,014	24.8%	35	0.1%
$-400 to $-200	1	0.0%	6,487	40.0%	269	1.1%
$-200 to $-75	1	0.0%	3,919	24.2%	5,493	23.3%
$-75 to $0	3	0.0%	1,323	8.2%	10,214	43.4%
$0 to $75	2	0.0%	392	2.4%	583	2.5%
$75 to $200	18,858	56.8%	44	0.3%	6,935	29.4%
$200 to $400	13,494	40.6%	13	0.1%	4	0.0%
Above $400	861	2.6%	22	0.1%	18	0.1%
	33,221	100%	16,214	100%	23,552	100%

Residential			2020/21
Land Values	IWC Proposed minimum $565	IWC Proposed minimum $850	Ashfield	Leichhardt	Marrickville
500,000	722	850	1,229	686	710
750,000	1,084	963	1,477	1,008	778
1,000,000	1,445	1,284	1,724	1,344	1,037
1,500,000	2,167	1,926	2,219	2,016	1,556
3,000,000	4,334	3,852	3,702	4,032	3,111
5,000,000	7,224	6,421	5,681	6,720	5,185

• Former Ashfield will experience a reduction under both options, with a greater reduction under option 3, $565 minimum, due to current rate structure with base amount of $727, and also with lower land value comparatively with the other former councils.

• Former Leichhardt current structure is minimum amount $686, in option 3 the lower percentile will experience a decrease due to lower minimum at $565 before higher ad valorem kicked in, and vice versa under option 4.

• Former Marrickville will generally experience increases except for lower percentile in option 3, due to higher current minimum amount of $710, with the greatest impact being option 4.

	Residential	Assessments	2019 Land values	2020-21 Rates	Option 3 rates	Option Change	3 $	Option 3 % impact	Option 4 rates	Option 4 Change $		Option 4 Change %
	Ashfield	16,214
0	Lowest	1	1,150	322	565	243		75.6%	266	(	56)	(17.4%)
0.1	10th percentile	1,621	191,884	921	565	(	356)	(38.7%)	850	(	71)	(7.7%)
0.2	20th percentile	1,621	265,998	994	565	(	429)	(43.2%)	850	(	144)	(14.5%)
0.3	30th percentile	1,621	317,364	1,046	565	(	481)	(46.0%)	850	(	196)	(18.7%)
0.4	40th percentile	1,621	370,000	1,097	565	(	532)	(48.5%)	850	(	247)	(22.5%)
0.5	50th percentile	1,621	500,000	1,217	709	(	507)	(41.7%)	850	(	367)	(30.1%)
0.6	60th percentile	1,621	868,000	1,584	1,241	(	343)	(21.6%)	1,103	(	481)	(30.3%)
0.7	70th percentile	1,621	1,050,000	1,773	1,517	(	257)	(14.5%)	1,348	(	425)	(24.0%)
0.8	80th percentile	1,621	1,230,000	1,942	1,763	(	179)	(9.2%)	1,567	(	375)	(19.3%)
0.9	90th percentile	1,621	1,570,000	2,278	2,254	(	24)	(1.1%)	2,003	(	275)	(12.1%)
1.0	Highest	1,621	13,400,000	13,989	19,360	5,370		38.4%	17,207	3,218		23.0%
	Leichhardt	23,552
0	Lowest	1	3,750	5	565	560		11110.3%	213	207		4116.3%
0.1	10th percentile	2,355	214,816	686	565	(	121)	(17.6%)	850	164		23.9%
0.2	20th percentile	2,355	345,455	686	565	(	121)	(17.6%)	850	164		23.9%
0.3	30th percentile	2,355	597,442	779	839	60		7.8%	850	71		9.1%
0.4	40th percentile	2,355	824,000	1,090	1,173	83		7.6%	1,043	(	47)	(4.3%)
0.5	50th percentile	2,355	931,000	1,243	1,336	93		7.5%	1,188	(	55)	(4.5%)
0.6	60th percentile	2,355	1,030,000	1,384	1,488	104		7.5%	1,323	(	62)	(4.5%)
0.7	70th percentile	2,355	1,180,000	1,572	1,690	118		7.5%	1,502	(	70)	(4.5%)
0.8	80th percentile	2,355	1,340,000	1,788	1,922	134		7.5%	1,708	(	80)	(4.5%)
0.9	90th percentile	2,355	1,600,000	2,137	2,297	160		7.5%	2,042	(	95)	(4.5%)
1.0	Highest	2,355	24,200,000	32,525	34,963	2,438		7.5%	31,075	(	1,449)	(4.5%)
	Marrickville	33,221
0	Lowest	1	48,323	247	565	318		129.1%	173	(	74)	(29.8%)
0.1	10th percentile	3,322	176,878	710	565	(	145)	(20.4%)	850	140		19.7%
0.2	20th percentile	3,322	233,272	710	565	(	145)	(20.4%)	850	140		19.7%
0.3	30th percentile	3,322	303,898	710	565	(	145)	(20.4%)	850	140		19.7%
0.4	40th percentile	3,322	567,000	710	819	109		15.4%	850	140		19.7%
0.5	50th percentile	3,322	741,000	765	1,066	301		39.3%	948	182		23.8%
0.6	60th percentile	3,322	840,400	871	1,214	342		39.3%	1,079	208		23.8%
0.7	70th percentile	3,322	932,000	967	1,345	379		39.2%	1,196	229		23.7%
0.8	80th percentile	3,322	1,070,000	1,110	1,546	436		39.3%	1,374	264		23.8%
0.9	90th percentile	3,322	1,270,000	1,317	1,835	518		39.3%	1,631	314		23.8%
1.0	Highest	3,322	36,500,000	37,853	52,733	14,881		39.3%	46,870	9,017		23.8%

• In option 3, the percentage range is between minus 48.5% to plus 39.3%, with net percentage range of minus 96.3%. The dollar range is between minus $532 to plus $518, with net dollar range  of minus $947.

• In option 4, the percentage range is between minus 30.3% to plus 23.9%, with net percentage range of plus 48.8%. The dollar range is between minus $481 to plus $314, with net dollar range of minus $834.

• Option 4 has overall less impact when compared to option 3.

Ashfield	General	Minimum Amount $820	Minimum $565	Minimum $850
Leichhardt	General	Minimum Amount $686	Minimum $565	Minimum $850
Marrickville	General	Ad valorem	Minimum $565	Minimum $850
Marrickville	Industrial Marrickville	Ad valorem	Minimum $565	Minimum $850
Marrickville	Industrial St Peters	Ad valorem	Minimum $565	Minimum $850
Marrickville	Industrial St Peters North	Ad valorem	Minimum $565	Minimum $850
Marrickville	Industrial Camperdown	Ad valorem	Minimum $565	Minimum $850
Marrickville	Marrickville Metro	Ad valorem	Minimum $565	Minimum $850
Marrickville	Airport	Ad valorem	Minimum $565	Minimum $850

• The following slide details the change in total rates income for the former councils.

• The movement of income between option 3 and 4 are very similar, with income shifting from former Leichhardt to former Marrickville and former Ashfield.

• Both options includes income movement of $600k from Business General to Business Mall.

Former	Current	Current	Option 3	Option 3	Option 4	Option 4
Councils	Income	Income %	Income	Income	Income	Income
Business	$'000		$565 M	$565 M	$850 M	$850 M
General			$'000	%	$'000	%
Ashfield	4,921 K	20%	5,249 K	21%	5,249 K	21%
Leichhardt	12,580 K	50%	9,558 K	39%	9,579 K	39%
Marrickville	7,544 K	30%	9,638 K	39%	9,618 K	39%
Total	25,045 K	100%	24,445 K	100%	24,445 K	100%

• The following slide details the range of increases and decreases for the former councils.

• In both options, former Marrickville will experience most increases above $400, with option 4 slight greater.

• Former Leichhardt will see significant reductions below $400, with both options having a very similar impact.

• Former Ashfield will also experience increases above $400, with 32% in option 3 and 26% in option 4.

Business General	Option 3
Former Council	Marrickville		Ashfield		Leichhardt
$ Rate Increase Range	# of Assessment	% of Assessment	# of Assessment	% of Assessment	# of Assessment	% of Assessment
Below $-800	0	0.0%	-	0.0%	1,024	60.0%
$-800 to $-400	1	0.1%	1	0.1%	290	17.0%
$-400 to $-200	1	0.0%	111	13.4%	191	11.2%
$-200 to $0	1	0.0%	44	5.3%	200	11.7%
$0 to $200	132	6.9%	160	19.3%	2	0.1%
$200 to $400	227	11.9%	250	30.1%	0	0.0%
$400 to $800	704	36.7%	143	17.2%	-	0.0%
Above $800	850	44.4%	121	14.6%	-	0.0%
	1,917	100%	830	100%	1,708	100%

Business General	Option 4
Former Council	Marrickville		Ashfield		Leichhardt
$ Rate Increase Range	# of Assessment	% of Assessment	# of Assessment	% of Assessment	# of Assessment	% of Assessment
Below $-800	0	0.0%	-	0.0%	1,050	61.5%
$-800 to $-400	1	0.1%	1	0.1%	281	16.5%
$-400 to $-200	1	0.0%	-	0.0%	129	7.5%
$-200 to $0	1	0.0%	156	18.8%	54	3.2%
$0 to $200	58	3.1%	243	29.3%	192	11.3%
$200 to $400	214	11.2%	214	25.8%	0	0.0%
$400 to $800	862	45.0%	118	14.2%	-	0.0%
Above $800	779	40.7%	98	11.8%	-	0.0%
	1,917	100%	830	100%	1,708	100%

Business General			2020/21
Land Values	IWC Proposed minimum $565	IWC Proposed minimum $820	Ashfield	Leichhardt	Marrickville
500,000	2,030	2,002	1,803	2,517	1,543
750,000	3,045	3,004	2,705	3,775	2,314
1,000,000	4,061	4,005	3,606	5,033	3,085
1,500,000	6,091	6,007	5,409	7,550	4,628
3,000,000	12,182	12,014	10,818	15,100	9,256
5,000,000	20,303	20,024	18,030	25,166	15,427

• Former Ashfield will experience slightly higher increases and decreases under option 3, while option 4 will have the least impact comparatively with current structure minimum amount of

$820.

• Former Leichhardt current structure is a minimum of $686, in both options former Leichhardt will experience a decrease due to lower ad valorem.

• Former Marrickville will generally experience increases due to higher ad valorem, with greater increase under option 4.

A l Busines                                              snapshot analysis cont.

• In option 3, the percentage range is between minus 31.9% to plus 24.4%, with net percentage range of minus 24.8%. The dollar range is between minus $3,251 to plus $1,053, with net dollar range of minus $3,152.

• In option 4, the percentage range is between minus 25.5% to plus 56.1%, with net percentage range of plus 40.2%. The dollar range is between minus $3,399 to plus $863, with net dollar range of minus $3,925.

• Option 3 has less overall impact when compared to option 4.