Council's 'Special Charge' not cut and dried

On February 6 2012, the Victorian Civil and Administrative Tribunal (VCAT) reserved its judgment on whether the City of Greater Geelong (CoGG) can levy a 'Special Charge' of many thousands of dollars on residents from Central Road, Drysdale.

The residents had asked VCAT to examine a unanimous decision by CoGG 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 will enable 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. (For the background, see, 'VCAT to examine Council's "Special Charge" scheme' posted on January 13 on this blog.)

'Deferral' ... but at what cost?
In an article about the Central Road issue in the Independent (3 February), CoGG's Manager of City Services, Gary Van Dreel is reported as saying that the council would only levy the Special Charge when properties were sold or developed; and local ward councillor Rod Macdonald is reported as saying that existing owners could defer the Special Charge if their properties remained undeveloped. Neither of them mentioned a crucial point: if owners opt to defer payment of the Special Charge, CoGG will charge them interest on the outstanding amount.

However, Cr. Macdonald - who holds the council's Planning portfolio - is quoted as saying, 'It is the vendors' responsibility when they sell to come to an arrangement on the money that's due.' Such an 'arrangement' could rest on a vendor showing just how much 'special benefit' (if any) they gained from the drain's installation aand making a payment accordingly. This is a step forward from CoGG's current policy, which is to simply asserty that a property-owner will gain a 'special benefit' of thousands of dollars without providing any proof (e.g. assessments by independent real estate agents). Cr. Macdonald would appear to be offering a far more equitable version of CoGG's Special Charge scheme and, if this is the case, CoGG is to be applauded.

DCSCA has been assisting the Central road residents in their opposition to the proposed Special Charge and in light of Cr. Macdonald's satement, we shall read the VCAT decision with interest.