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Monday, 12.18.2017
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11:39 AM
The Council Plunders Warrandyte Businesses

Manningham Council is again preparing to plunder businesses on the pretense that they are going to help and improve business opportunities for them. Manningham Council is planning to renew a 'Special Charge Scheme' for shops and businesses in Warrandyte.

There are several problems with these 'Special Charge Schemes' the council levies on businesses.

If I may, I would like to go through these problems one at a time.

 

a) Do These Council Run Marketting Schemes work?

Not everyone thinks so.

Manningham Council runs a similar scheme for the Tunstall Square Shopping area, however when they tried to renew a similar special charge scheme for Templestowe Village, they had a mutiny on their hands.

Business owners at Templestowe Village saw what the council was doing and pushed back in a big way.

There are three articles on this website relating to these special charge schemes. The first called "Manningham Council receives some Push Back", I think, summarises the issues at Templestowe Village.

The other two articles are "Manningham Council struggles with Business Concepts" and "Manningham Council's Hidden Tax".

What is interesting with the Warrandyte Special Charge Scheme is that it makes no mention of Templestowe Village and the Council's inability to renew the special charge scheme there.

It appeared that several businesses at Tunstall Square also thought the special charge scheme was not really assisting their businesses. The council's reply was to throw the problem back at them.

Manningham Council's reply was this. If a business did not receive a benefit from their scheme then the business was not really a 'successful business'. I.e. if you do not receive a benefit from the council scheme then it was not their scheme's fault, it was your business's fault. Yes, they actually said that.

 

b) What were the problems at Templestowe Village?

First the benefits for Templestowe Village were almost non-existant.

The council kept referring to a website as one of the benefits. However this website was ridiculous. It simply listed businesses at the shopping area. There was no promotional material. Also the description of the businesses appeared to have been written by the website developers. The yellow pages telephone directory performed a similar, if not better role.

The second problem was that not all the money collected was going to be spent on promoting the shopping center. Only a 'portion' of the money was.

The balance of the money was going to be used by the council to fund infrastructure and repairs and so on at Templestowe Village. Many thought that these items should be paid for by the council. The council actually said that if the special charge scheme was not renewed then there would be an additional drain on council finances.

 

c) Can these problems be repeated at Warrandyte?

First, you will note that all references to money being spent on repairs or infrastructure at Warrandyte has been carefully expunged from the documents. It would appear that the council does not want another rebellion on their hands like they had at Templestowe Village.

However all the conditions that were in place at Templestowe Village are still in place at Warrandyte. If you read through the council documents for Warrandyte, you will see that all spending of money collected is under the complete control of the council. The council must agree with all spending and can veto spending on any item if they wish:

A. Council having considered all submissions received and taken account of all objections lodged and complied with the requirements of sections 163A, 163B and 223 of the Local Government Act 1989 (Act) hereby declares a Special Rate under 163(1) of the Act (Special Rate) for the purposes of defraying expenses to be incurred by Council in providing funds to the incorporated body known and operating as the Warrandyte Business Association Incorporated, which funds, subject always to the approval and direction of Council, are to be used for the purposes of funding a Shopping Centre Coordinator, and promotional, advertising, marketing, business development and other incidental expenses as agreed to from time to time between Council and the business association, all of which are associated with the encouragement of commerce, employment and retail activity in the Warrandyte Activity Centre (Scheme). (Page 6551. Minutes. Point A.)

And:

(B) Acting in accordance with sections 163(1A) and 163B(3) of the LG Act, directs that public notices be placed in “The Age” daily newspaper and the “Manningham Leader” newspaper of the intention of Council to declare the Special Rate at its special meeting to be held on 13 September 2016 in accordance with the Proposed Declaration of Special Rate (Attachment 2), such Special Rate to be for the purposes of defraying expenses to be incurred by Council in providing funds to the incorporated body known and operating as the Warrandyte Business Association. The funds are to be used by the Business Association, on an administrative basis only and subject always to the approval, direction and control of Council, for the purposes of contracted support, promotional, advertising, marketing, business development and other incidental expenses as approved by and agreed to from time to time between Council and the Business Association, all of which are associated with the encouragement of commerce, retail and professional activity and employment in the Warrandyte Activity Centre. (Page 6545. Minutes. Point B.)

However any suggestion that a portion of the money will be spent on infrastructure or repairs to council property has been expunged from the documents for Warrandyte. The closest they come to saying anything along those lines is:

14.3 Directly and indirectly, the viability of Warrandyte Activity Centre as a commercial, retail and professional area will be further enhanced through increased economic activity by:

  • Continued collective marketing and promotion of the precinct as a whole, which will assist to create a greater awareness and profile of the area, including what it has to offer to the community and its customers.

  • All businesses benefitting from the continuation of a Business Association that coordinates the daily management of activities and drives the overall strategic direction with the support of Council.

  • Enhanced use, enjoyment and occupation of properties and overall business goodwill as Warrandyte Activity Centre will be considered a more desirable location to conduct business.

(Page 6550, minutes 13 December 2016. Point 14.3

And the closest the council has come to doing anything along those lines, as far as I can find, is the following:

"Another initiative that has received wide spread positive feedback is the purchase of 190 hanging geranium baskets, window baskets and wine barrels which have provided a visual landmark to the shopping precinct and attracted far reaching attention." (page 23, Warrandye Business Precinct Plan.)

(The question to be considered regarding the last quote is this. Should the council or should businesses pay for the wine barrels and flower baskets that decorate the main street of Warrandyte? Business would get some benefit, but many would argue that these decorations would also provide a benefit to the town as a whole.)

While council documents for the special charge scheme at Warrandyte no longer say that the traders money is going to be spent on capital works or repairs, all conditions and controls remain in place for Manningham Council to follow the exact same route at Warrandyte that they were planning to follow at Templestowe Village.

 

d) What kind of benefit will the special charge schem provide?

This is where Manningham Council becomes simply outrageous.

How does Manningham Council propose to measure the success of the special charge scheme at Warrandyte? Let me give you the complete quote from the Council Minutes:

7 COUNCIL PLAN/ MEASURE OF ACHIEVEMENT OF ACTION

7.1 The renewal of the Special Rate Scheme at Warrandyte Activity Centre is in accordance with Council’s overall vision and capacity to support a vibrant, desirable retail and commercial activity centre.

7.2 The Council Plan (2013-2017) supports sustainable, cohesive and well resourced communities with relevant services and facilities. Council seeks to ensure that all community members have access to vital services that meet their needs, and values our distinct local villages and activity centres, seeking to promote and support businesses and traders to build a resilient local economy. A key strategic indicator in the current Manningham Council Plan is participation in Special Rate and Charge Schemes for the purposes of marketing and promotion.

(Minutes 6548 point 7

 

That is all Manningham Council has to say on the matter.

In short, the only measure of success they have is whether or not the shopping area participates in the special charge scheme. If they do participate then presumably the scheme will be successful. This, off course, is nonsense!

Does the Warrandyte Business Precinct Plan have anything to add?

"Achievements of the actions outlined in the Business Plan are to be evaluated during and at the end of each financial year. Key performance indicators to be included in the evaluation are:

  • Extent of completion of projects specified in the Business plan and Quarterly Work Plan

  • Level of business participation in activities and promotions

  • Business and customer perceptions about the success of promotions and advertising campaigns

  • Financial accountability

A short evaluation report is prepared at the end of each quarter and presented to Council. The report addresses the degree of compliance with the performance indicators."

(page 13 Warrandyte Business Precint Plan 2016-2020)

The Warrandyte Business Precinct Plan is more promising. 

However, note that Manningham Council has no intention to measure the increase/decrease in foot traffic. And it has no intention to measure growth/decrease of business turnover. There is no quantifiable measurement proposed by the council. All we get from Manningham Council is wishful thinking.

If you look at the council minutes you will see again and again that the council, in their wisdom, 'consider' businesses will derive a 'benefit' from the scheme. That is all. They repeat this again and again. (Minutes: page 6543 Summary, point 1.1; page 6544 point 1.5; page 6546 point 2.5 ... and on it goes.) They continue repeating this, until at the end, the council becomes so sure of itself that they state it as a fact.

 

These services will provide a ‘special benefit’ to the owners and the occupiers of the land and the commercial and business properties located in the Scheme area. (Minutes 6548 point 6.2)

From assumption to fact with no quantifiable measurement of financial benefit to businesses to back it up. That is incredible.

And note also how the Council dismiss businesses who disagree with their special charge scheme. Please see Appendix 6 of the Warrandyte Business Precinct Plan. Appendix 6 is a spreadsheet of the businesses at Warrandyte who claim they derive no benefit from the council's scheme. See how Manningham Council simply dismisses their objections by: "It is considered that all commercial properties in the Warrandyte Activity Center will derive a 'special benefit' from the ... Special Rate funds..." They repeat this again and again as they dismiss people's objections.

One final point. In the minutes, Manningham Council says that a key performance indicator is whether or not Warrandyte businesses participate in this special charge scheme. The council suggest that if they do participate, then this is a measure of the success of the scheme. Please see the quote from the minutes above.

However, this is a sleight of hand. It just so happens is the state government measures the performance of local councils by the number of these special charge schemes they have running. In fact, one of the KPI's placed on local governments is the number of special charge schemes they run.

So participation in the special charge scheme is indeed a KPI. But it is a KPI of the performance of the council. It has absolutely NOTHING to do with the benefits provided to businesses involved in these scheme.

The whole proposal by the council is simply outrageous. It appears to be entirely self interest on the part of the council.

 

e) Who really benefits from the special charge scheme?

The council states on page 6550 point 14.1 that:

 

14.1 It is considered that the only persons to derive a ‘special benefit’ from the expenditure of the Special Rate proceeds are those persons who are liable or required to pay the Special Rate, whether they be the owners or the occupiers of the land and the commercial and business properties included in the Scheme area ....

However that is not entirely accurate. There is another organisation that will derive a benefit from this scheme, which the council fails to mention.

I ask you to please read the other articles linked to above. In those articles I show you the sections from council documents that explain who else derives a benefit from the money collected from businesses.

That organisation is, off course, Manningham Council itself.

First and foremost, the performance of Manningham Council is measured by the state government by the number of these special charge schemes they set up. So clearly the council is deriving a benefit.

However that is not the only benefit to the council.

The other benefits are explained in detail in the other articles linked to above. I will not repeat all the details here. However basically Manningham Council is under pressure from the State government to enhance shopping areas to make them 'vibrant' places, places where people will want to come, that offer a range of services, etc.

Manningham council calls these areas 'Activity centers' and they are a key part of the State government's and Manningham Council's plan to increase the population of Manningham. Basically you cannot build large numbers of high density residential dwellings without something for these people to do and somewhere to go.

This is why the state government is so keen for councils to establish these special charge schemes. They hope they will be a means of developing activity centers into places that will attract and entertain people.

Also the council hopes to be able to build high density residential properties around the shopping areas, as they are doing at Doncaster Westfield. However at Warrandyte, they will not be able to do this to anywhere near the same extent.

So we see that Manningham Council also has a lot to gain by establishing these special charge schemes. It is not accurate to say that only the businesses will benefit from these schemes. Manningham Council stand to benefit also.

 

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