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Questions about the Unsealed Roads Contributory Scheme

The following is a list of frequently asked questions about Contributory Schemes and the construction of unsealed roads in Knox.

What is a Special Rate or Special Charges Scheme?

Council uses the term ‘Special Rates and Charges Scheme’ when residents are required to contribute financially for the provision of infrastructure improvement works undertaken by Council. Property owners may apply for such a scheme to be introduced such as for road improvements.

On top of the normal Council rates that are levied each year, special charges are implemented at times and levied for the provision of works that have a direct benefit to adjacent residents. Council also contributes financially to these works and improvements.

Special rates and charges are applied to all benefitting property owners through contributory schemes as defined in the Local Government Act, and residents pay their proportion of scheme costs in accordance with the Act and in accordance with Council’s policy on Contributory Schemes - Special Rates and Schemes.

Under the Local Government Act 1989, Council can impose a special rate and/or special charge for works or services on property owners who Council believes receive a 'special benefit' from the provision of those works or services.

Why pay for the road? Why isn’t Council paying for the road?

Prior to the Local Government Act 1989, unmade streets were constructed using the Private Street Scheme Provisions of the 1958 Local Government Act. The old 1958 Act differentiated between Private Streets and Government Roads with owners along a Government road only liable for half the cost of construction of kerb and channel and footpath, while owners in private streets were liable for the full construction costs, including the road pavement.

It is accepted that contributory schemes are implemented to benefit an area. In most cases, other property owners who live on constructed roads, have paid for their street through a similar scheme or at the time of purchasing their properties. Owners on constructed roads argue that they should not have to pay again for someone else's scheme through Council rates.

The Local Government Act 1989 supersedes this Act and no longer differentiates between Government roads and Private streets. It states that those who are the primary beneficiaries from the works are liable for the cost under the Special Charge provisions of the Act.

Council reviewed its Special Rates and Charges Policy and resolved to contribute a minimum 10% towards the cost of works. The Policy also removes inequities with Council now paying for non-rateable land and also contributing towards what may be classified as community benefit. In some cases Council’s contribution could be in the order of 50% towards the overall cost of schemes.

What is Apportionment?

Apportionment is the method adopted by Council to calculate the level of benefit each property will derive from the new asset. This benefit factor is then applied to the cost of the project and a contribution amount is calculated for each property.

Council uses typical and acceptable formulas and criteria such as the zoning of the area, property dimensions, property road frontages, land uses and property access, to provide the most fair and equitable apportionment formula when calculating the contribution amount for each property.

Why is my property included?

Council establishes a 'Designated Area' for the ‘Special Rates and Charges Scheme’, which is the area that includes the properties identified that have the potential of gaining a direct benefit from the proposed asset. If your property gains a benefit from the works then it will be included within the scheme.

What type of road construction is proposed? What about my access?

A few design options may be considered in developing road construction costs for each owner.

In addition to these costs, owners with private crushed rock driveways can opt to have them fully constructed and, if they choose to do so, shall have them constructed to an approved Council standard which would be at the cost to that owner. (It is usually prudent to have driveways constructed at the same time of road constructions as contractors can offer good rates while their equipment is on site).

How accurate are indicative costs?

Usually a range of options are presented to property owners and these are based on concept plans or sketches. Indicative costs will be provided for these options which are usually within 30-50% of the actual cost.

Following general agreement for a particular option Council will prepare a detailed cost estimate based on engineering plans and specifications. The level of accuracy for costs is usually within 20%. These costs form the basis of the scheme and the amount which is levied to each property.

When a particular option proceeds, the engineering plans and specifications will be advertised in the open market where Council will have the opportunity to receive a competitive cost for the works.

Following completion of works, actual costs are then calculated and become the final amount payable by landowners. If the actual cost is less than the estimated scheme cost, a refund is forwarded to those landowners whose payment has been received in full. If the actual cost is greater than the estimated cost, landowners are advised and become liable for the additional cost (up to a maximum of 10% above the estimated cost of works). Where instalments are being paid by a landowner, these will be appropriately adjusted.

With payments, can we pay it off by instalments?

Contributions will not be required until construction has begun. Payment can be made by one lump sum or by 40 Council loan repayments over a period of 10 years. Council loan repayments will incur an interest rate which will be set at one percent above the borrowed rate (the Scheme interest rate will be set at the time the scheme is adopted by Council).

How is a scheme instigated?

A scheme can be instigated in several ways, such as: a resident petition; resident letter(s); or by Council through an adopted prioritised improvement works program for unconstructed roads. Initially, Council will send a letter and questionnaire to residents with indicative contributions from each property and residents are given the opportunity to support the proposed scheme. In accordance with Council's Policy, a minimum support level of 60% is generally required before Council can proceed to a detailed plan and estimate for a scheme.

However, Council may consider proceeding with a particular scheme based on compelling reasons related to safety, health or amenity.

What level of landowners' support is required to proceed with schemes?

Council will assess support level for the scheme and all the comments made at a resident/landowners’ meeting and then investigate the scheme options. If the results from the meeting show a strong support for one particular option (Council policy requires that at least 60% support is gained), then Council will proceed with its implementation. Residents will be kept informed of Council’s actions and will be offered further opportunities for input during the Scheme preparation process.

What level of landowners' support is required to proceed with schemes?

Council will assess support level for the scheme and all the comments made at a resident/landowners’ meeting and then investigate the scheme options. If the results from the meeting show a strong support for one particular option (Council policy requires that at least 60% support is gained), then Council will proceed with its implementation. Residents will be kept informed of Council’s actions and will be offered further opportunities for input during the Scheme preparation process.

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