Manningham News

Tyranny?

Is that a bit harsh? Not really.

Under the local government act, Councils are able to compulsorily acquire land from ratepayers under certain circmstances.

If they require land for road widening, easements, etc. and it is less than 10% of the value of your existing block then they can issue you with a notice and later simply take your land.

There are some controls in place to ensure that power-driven bureaucrats do not abuse this power.

For instance it is supposed to be an act of council, that is, it is meant to be discussed at council meetings, to be open to questions from the public and finally a vote is taken on it.

At Manningham Council it still requires a resolution from the council.

However, that is not the cause of concern.

Manningham council will still make a resolution to acquire private land. But what they have done - which is a cause of concern - is to delegate their full authority as a council to one person, the CEO, who will then go out and negotiate the acquisition of the private land.

The CEO has a lot riding on this. He is the senior manager of both staff and business at the council. The CEO will need to maintain his credibility as a manager in front of his staff. He has been given a massive amount of discretionary power to acquire private land. He also has the law backing him and, simply put, he is expected to come back with ownership of the land in an acceptable period of time and at an acceptable price.

What is even more worrying is that Manningham Council appear not to be that concerned about how the CEO goes about negotiating for the land.

He will report back to the Council's Capital Program (and so to the community) on progress and results. Note that he will not report back to a ordinary meeting of council but to a small subgroup within the council. It appears that the ratepayers will be informed of progress through the Council's Capital Program.

Note that progress will simply be 'reported'. What actually took place will be edited into a presentable form after it has been given careful consideration and careful wording. That is the normal practice when council minutes are prepared. You will very rarely find anything controversial or any unwanted or embarrassing fact in minutes of council meetings.

However an ordinary meeting of council is open to the public. The public can ask questions and criticize what the council does and so on. But under this new arrangement, it appears that the public will not be given the opportunity to ask questions, nor find out how negotiations were conducted i.e. the methods and tactics employed. It seems that none of this will be open to public scrutiny. And that is a major cause of concern.

And what do you think the approach of the CEO will be when it comes to valuing land and negotiating to purchase it?

It is not hard to imagine.

It will be what it nearly always consists of when government bureaucrats approach the public. It will consist of quotations of the law, a statement of the council's rights under law. Threats and penalties for non compliance. And a take it or leave it approach.

This negotiation process will not be open to public scrutiny. The unfortunate land owner will be left to deal with the council law-quoting bullies by themselves.

Manningham Council normally adopts a facade of benevolence.

Government bodies, including Manningham Council, like to present themselves as concerned guardians of the public interest. And this also is the case when it comes to compulsorily acquiring private land. However many people already know this is a facade.

Don't believe me?

Let's consider Manningham Council's rate relief program. The rate relief program has so many strings and conditions attached to it that it is almost impossible to get. Also it is such a small reduction in rates that it is almost meaningless.

On the other hand, should you not be able to pay your rates, Manningham Council resort to threats of court cases and very large interest penalties which only add a greater financial burden to the ratepayer.

And note that every time the state government allows Manningham Council to increase their penalty interest for non payment of rates, Manningham Council immediately adopts it. You would think that if people cannot legitimately pay their rates, then the council would not add to their burden.

In the end, these notions of compassion or having the public interest at heart at Manningham Council is simply window dressing designed to deflect attention away from what they really do.

Manningham Council has Turned the Tables on the Private Land Owners.

There is another area of serious concern regarding the compulsory acquisition of land by Manningham Council.

Manningham Council does not like being in the weaker position when negotiating and they complain about the delays and the cost of their staff's time and legal costs which are part of these negotiations. (See page 743 of minutes). In the private world such costs, delays and disappointments are just part of doing business.

The problem for Manningham Council was that they were not in a position of strength during these negotiations. For instance.

Also

Clearly the law was framed to protect the rights of ordinary people from government bureaucrats and give ordinary people an advantage.

However Manningham council is about to turn all that on it's head.

All that advantage you had as a private property owner protecting your property and interests from the encroachments of government is about to be taken from you.

Please read the following carefully and note the sequence of events. This has been taken word for word from page 744 of the minutes.

Notice how the tables have turned.

Before the land owner was in a position to protect their property from the encroachment of government. A reasonable price had to be agreed before the land could be acquired by council.

Now, the council first takes your land. Then, and only then, do you go and seek compensation.

Essentially you are negotiating a price AFTER the council has taken ownership of your land. This is not a position of strength. All the chips are now in the Council's hand. So after you loose control of your land you then negotiate for compensation. You can imagine all the 'take it or leave it' arrogance the council will then employ.

You will be negotiating from a position of extreme weakness where the heavy handed approach of government bureaucrats can have full effect.

That is a real cause of concern.

What was the problem with the old way of acquiring private land?

Up until now, Mannigham council negotiated with private land owners when they needed to acquire land. But they were not pleased with how this worked out.

The council complained about the length of time it took to negotiate the actual purchase of land.

They also complained about the price people wanted for their land. Manningham Council believed that ratepayers asked too much for their land and the council felt that they are being taken advantage of.

Manningham council gives an example of what they mean on page 740 of the minutes.

​​​​On page 743 of the minutes, the council describes how they valued some land they required at $11,000. The owner originally asked for $54,800 for the land. Council officers were able to negotiate this price down to $23,000 and the deal was done.

Many of us in the private sector would see this as part of the normal, typical process of negotiating and haggling when we think the price is not right for us. However Manningham Council did not like any of this at all.

Is it unreasonable for ratepayers to get the best price they can for their property?

Off course it's not unreasonable.

And in particular this is to be expected when it comes to property and land.

Property is one of the most easily accessible forms of investment available to ordinary people. Most ordinary people do not invest in shares, bonds, commodities, futures and so on. For most people we hold onto property until the price increases, then we sell and move on. And property investment is an area that yields good returns. It is also an investment where the gains are typically tax free. 

Also land is increasing in value so quickly in some areas of Manningham that land that is worth $20,000 now can double in price in a not too many years.

What the council is doing by taking land at current value is denying the land owner of the potential tax free gains they would get when they sell in the future.

Consider this. If we sell our land at current price value where would we turn to get a similar return on investment (land, in many areas of Manningham can increase at around 10% pa.) At present there is nowhere that I know of. And if I may remind you again, for any alternate investment we may find, we have to pay income tax at our highest tax rate on any gains we make.

Manningham Council cares nothing for any of this and have  now effectively forced you out of the negotiating process and into the courts if you want to challenge the money you get for your land. And you can be sure that the judge will agree that 'current market value' is fair and reasonable and the council will get what they want at the price they want. 

You can forget about any argument of future tax-free returns you will be loosing on. That's your loss and Manningham simply could not care less. The council will get what they want at the price they want and they use the law to do it. Being unable to appreciate the pressures and demands of normal everyday negotiations, they resort to government sponsored and government legitimized theft to get what they want.

So Just Who is Being Taken Advantage Of?

The council does not like paying what they think are unreasonable prices for land they want.

But what about you and me and the rates we pay.

Many of us think we are paying totally unreasonable amounts for our rates. And many of us feel WE are being taken advantage of by Manningham Council.

It is true that total rates intake this year only increased by 2.4%, as the State Government promised. But do you know how Manningham council got around that?

What they did was give massive discounts for rates of recreational land and lesser discounts for commercial land. Then they massively increased rates for private residential land owners. Even though the Council's total rate intake increased by only 2.4% overall, some residential land owners I spoke to saw a rate increase THIS YEAR of over 11%. This is because the council skewed the rate burden massively onto private residential properties and away from recreational and commercial land.

But why did they do that? The answer is very simple.

What type of property is dramatically increasing in number in Manningham? Is the amount of recreational and commercial land increasing? Not really.

However Manningham Council is approving many hundreds of permits for high rise residential properties each year. Now the odd thing about new residential properties is they are not taken into account when the budget is set. They are effectively left out of all budget calculations. So each year, when many hundreds of new homes start paying rates, it is a windfall to the council. They money from new residential properties that start paying rates during the year is income over and above the planned increase in rates.

Last year alone this windfall was $1,159,000 (Annual Report 2015/2016. Page 123 note 1, subnote 1)

Let's look at these numbers for a minute.

You will note that $1.1m is roughly 1% of rates. The state government allows the council to increase total rates by 2.4% each year. Combining the two, brings the total annual increase in rates to 3.4%. And what is significant about that number? Well, Manningham Council staff have a built in increase of 3.4% each year in their salary due to their Enterprise Bargaining Agreement.

What this means is that staff can continue to enjoy their outrageous pay increases without having attention drawn to it.

(And please be assured that a guaranteed 3.4% remuneration increase each year is massively generous. Let me ask you in the private sector, does your remuneration package increase each year by 3.4% without fail?)

Please let me explain how their little scam works.

Currently about 45% of our rates go to pay council salaries. If rates were to increase only by 2.4% while salaries increased by 3.4% then the proportion of rates that go to pay salaries would change. Soon it would be 47% of rates that go to pay salaries, later it would be 49% and so on. Also services provided by Manningham Council would start to decrease as a greater percentage of our rates goes to pay their salaries. More importantly, soon people would start to notice and start to ask questions about how much council staff are being paid. Manningham Council simply does not want that to happen.

So by squeezing an extra 1% increase out of the ratepayers over the 2.4% the state government allows, their self indulgent scam can continue without undue attention being drawn to it.

Odd isn't it how the numbers always work out to the council's benefit. Not to your or my benefit, but always to their benefit. Former Prime Minister Paul Keating used to say that 'the horse called self interest always comes in first'. He was certainly right when it comes to self interest at Manningham Council.

So how do you feel about this? Do you think this is reasonable? Do you think you are being taken advantage of so council staff can enjoy very large non-performance based pay increases? Do you think you are getting a good deal? Do you think Manningham council are the compassionate souls they like to think they are who have the ratepayers interest at heart?

I don't think they do. I think they are plundering us in every way they can and at every opportunity they get.

Remember how Manningham Council did not like feeling they were being taken advantage of?

Manningham Council does not like it when they get it in their heads they are being taken advantage of. 

So they resort to government sponsored theft, bullying and tyranny to get what they want.

And do you feel that you are being taken advantage of by the council? Too bad. You just need to live with it.