What you need to know

The Policy provides the foundation for Council’s rates setting and determines how each Council activity is to be funded.

Through the RFP, Council determines:

• The valuation basis for rating: land value or capital value
• The mix of funding for each council activity, including the mix of general and targeted rates, fees and charges as well as capital revenues and borrowing
• How general rates are allocated across different property categories, including through the setting of general rates differentials.

Requirements for the RFP are set out in the Act, in particular sections 101 (3), 102 and 103. Importantly, the Act requires Council to follow a two-step process when setting its RFP.

Step one involves Council determining the best way to fund each activity.

This involves undertaking a funding needs analysis to assess:

• Community outcomes that each activity supports
• Who benefits from the activity or who causes the need for the activity
• How long the benefits last, for example, short-term or over many years
• The most appropriate funding sources, including the benefits of funding the activity separately through fees and charges or targeted rates, or through general rates.

Step two is where the Council applies its judgement about the overall effect of how costs are shared on the current and future wellbeing of the community.

This includes considering, for example, how rates affect affordability and business competitiveness, whether rates are shared fairly across different categories of ratepayer, and whether the rating system is too complicated and could be made simpler and more efficient to administer.