The appeal to VCAT follows a unanimous decision by councillors on January 26 2011 to compel residents in the Central Road area to pay $1,149,476 (77 per cent) towards the cost of a new drain to service a retirement village in the area. The retirement village is planned by Melbourne-based property developer Pinnacle Holdings, yet the council wants local landowners to contribute - via the 'Special Charge' scheme - between $2,000 and $250,000 towards the cost. Unless VCAT stops the proposal, just under half the households in the area will face a bill for more than $10,000 each.
The residents - many of them retirees on fixed incomes - have argued that since the drain enables Pinnacle Living to build and profit from its retirement village, Pinnacle Living should pay for it. The council has responded that while the drain's primary purpose is to service the proposed retirement village, its presence will enable nearby residents to sub-divide and sell their properties at a profit - a 'special benefit' as the council calls it. From that perspective, the 'Special Charge' is a way to recoup the cost of the drain from the people who will gain a 'special benefit' (profit) from it.
Flawed arguments and lack of evidence
The Drysdale & Clifton Springs Community Association (DCSCA) has supported Central Road residents since they began their argument with CoGG in February 2010. DCSCA's position was set out on this blog ('Council compels residents subsidise a developer'. 26 January 2011). In essence, DCSCA has argued that:
- CoGG has no evidence to support its claim that residents will gain any 'special benefit' from the drain, let alone how much that 'special benefit' will be worth
- any 'special benefit' only comes from sale of the land - yet most residents don't want to sell their homes, so they won't receive a 'special benefit' (if, indeed, such a benefit exists - CoGG has no evidence that it does)
- CoGG changed the legal basis of its proposed ‘Special Charge’ for households in the Central Road area (it suddenly became a public health issue) after it was exhibited for public comment and after councillors were due to discuss it
- CoGG has provided no evidence to support its claim that the drain is a public health issue
- CoGG has entered a legal agreement with Pinnacle Holdings to share the drain's cost without budgeting for it
- CoGG doesn't know how it will recover any money outstanding from any deferred 'Special Charges'.
(There have been several reports about this argument on this blog. To see them, type 'Central Road' into the blog's 'Search' window.)