naval base shacks

Copy of Letter to City of Cockburn

Posted: 14th May 2011

City of Cockburn

PO Box 1215

Bibra Lake DC  WA  6965

 

Dear Mr Cain

NAVAL BASE SHACKS – DETAILS AND PURPOSE OF FEES AND CHARGES

The purpose of this correspondence is to advise you of our concern and strong objection to the items that have been included in the fees and charges for the Naval Base Shacks for the 2010/11 budget and the use of market valuation to determine the fees.

 

Naval Base Fees for 2010/2011

 

Members of the Naval Base Holiday Association (NBHA) met with Mr Stuart Downing of your office on 12 April 2011, regarding the Fees and Charges for the Naval Base Shacks.

 

Following this meeting further information was sought regarding the individual items that formed part of the total fee and the dollar value of each item for 2010/11. This information was provided by Mr Downing via email on 21 April 2011, the items are listed below:

 

Site rent	$1,134.00
Waste Management	$345.00
Special (removal)	$600.00
FESA - ESL	$46.35
Co-Safe	$45.00
Total Lease Fee	$2,170.35

 

Budget Papers and Council Resolution 10 June 2010

 

The budget papers attached to the 2010/2011 budget agenda item considered by Council on 10 June 2010 and the Council resolution relating to this matter have been examined by NBHA members with respect to the Schedule of Fees and Charges and the proposed fees for the Naval Base Shacks. Based on this information the following facts have been identified.

 

The proposed fees in the Budget Papers attached to Agenda Item 15.3 relating to the budget considered by Council on 10 June 2010 were:

 

Lease – Naval Base Caravan Park	$1029.00
FESA Levy (min)	$45.00
Security Levy – total per lease site	$50.00
Total Fee	$1124.00

 

The Officers recommendation in the agenda item was not adopted. The minutes of the 10 June OCM indicate that Council resolved to:

 

 “amend the Schedule of Fees and Charges to include the charges for the lease of the Naval Base Caravan Park ($2079), FESA Levy ($46.35) and Security Levy ($45).”

 

The reason cited for the decision was:

 

“(e) Naval Base Caravan Park

The lease fees together with the FESA levy and Security Levy were not included when the Budget papers were circulated. Hence these charges are required to be included in the Schedule of Fees and Charges which forms the Municipal Budget for 2010/11.”

 

It is noted that the resolution and reason given suggest that there were no fees or charges included in the Schedule of Fees attached to the budget papers. Based on the budget papers, which are an attachment to the Agenda (available via website), this is not the case.

 

The conclusions that are apparent from the above facts are that in the space of 2 days (sending out of agenda and attachments on the Tuesday and the OCM on the Thursday) the City sought to double the fees required for the Naval Base leases by introducing a $600 levy on each leaseholder to go towards funding the removal of the their shack and a $345 fee for rubbish removal.

 

These additional fees have been imposed without consultation or advice to leaseholders.

 

The $600 removal levy has been imposed despite the fact that the conditions of each lease explicitly require the leaseholder to:

 

“remove the caravan from the site or make arrangements for the disposal of the single storey accommodation …”.

 

We understand that the $600 removal levy is to be charged in subsequent years until the estimated removal cost of $6000 per shack has been collected by the City. The lack of transparency regarding the components of the fees has meant that there has been no scrutiny over the manner in which this levy is to be held by the City; the accuracy of the removal estimate; whether leaseholders will get interest on their money; or have their money refunded should they remove their shack themselves; as they are obligated to do under the conditions of their lease.

 

The waste management fee has previously formed part of the site rent component of the lease fee and has not been charged as a separate item. The $345 being charged is the standard fee charged for provision of a weekly (52 per year) 240ltr bin service on a ratable residential premises. The conditions of the lease limits occupation of the site to a maximum of 4 months per year and waste removal is via bulk bins not an individual 240lt bin for each shack.

 

FAQ information Sheet on Naval Base Shacks Aug 2010

 

Until the meeting with Mr Downing and the provision of additional information sought from him, leaseholders were not aware they were being charged the newly introduced removal fee and waste management fee.

 

We are astounded that this information was not provided to us, or it would seem to elected members. The FAQ information on your website is quoted below.

 

“Why have shack lessees rates increased so much this year?

The City recently obtained an independent market valuation from a licensed valuer, which stated that the lease fee charged by the City was substantially below current market value. Lease fees have not been reviewed by an independent valuer for the past five years and lessees have been charged at a substantially reduced rate for those years. Instead of an increase in one hit, the City will gradually move to the new lease fee over three years so as to minimise the impact on all lessees.

 

What will be done with this extra income gained by the City by increasing rates?

All funds will be held in the Naval Base Shacks Reserve fund and be spent on improving and maintaining amenities on the reserve.”

 

There is no mention of the new fees for removal and waste management. The reason for the increase in fees is attributed to an independent market valuation and “All funds will….. be spent on improving and maintaining amenities on the reserve”.

 

It is now apparent that the valuation was used to increase the site rent component of the lease fee from $1029 in 2009/10 to $1134 in 2010/11, an amount of $105, which cannot be described as “shack lessee rates..”  which have “…increased so much this year”.

 

An increase of $105 is considered to be a reasonable and acceptable amount, consistent with increases imposed in past years.

 

The FAQ information is clearly not accurate and is misleading.

 

Valuations

 

As stated above the reason cited for the increase in the lease fee is based on recently obtained market valuations. We have obtained copies of these valuations and have visited a number of the sites used by the valuers as comparable for determining a ground rental fee.

 

Firstly the sites used as a basis for comparison are commercially operated sites run as business entities for profit. Secondly the facilities and standards of these sites are substantially superior to those provided at Naval Base. The sites used as a basis for comparison include facilities such as swimming pools, club rooms, laundry facilities with washing machines and dryers and the like. Access to non residents is controlled/restricted and the sites are managed by a caretaker/manager. A number are retirement village park home sites occupied on a permanent basis. The rental for these sites includes waste management and maintenance of amenities.

 

The sites used by the valuers are not a fair and reasonable comparison to the Naval Base site and we would argue that the valuations are therefore flawed and not valid or legitimate as a basis for setting lease fees for the Naval Base site. A valid valuation would be to compare the fees paid by other ‘shack’ sites of which there are a number in Western Australia and not commercially operated Caravan Parks or retirement park home villages. 

 

Notwithstanding the issue of the validity of the valuations obtained by the City we disagree with valuations being used as a basis for determining lease fees. Valuations are used for ‘commercial entities’ which the Naval Base leases (excluding the kiosk) are not.

 

Fees and charges imposed on leaseholders should be based on actual operational costs as has been done to date. This is the only equitable and justifiable means of charging fees on non commercial entities.

 

Conclusion

 

Based on the above we can only conclude that there has been a deliberate attempt to conceal the new fee components for removal and waste management from leaseholders and it would seem, the elected members and an attempt to charge shack leases on the same basis as commercial entities.

 

The lack of transparency, detailed information and consultation about the components of the fees and the significant increase in fees imposed upon leaseholders last year is disrespectful and unacceptable.

 

There is no justification for the charging of a removal levy given the obligations on leaseholders to remove their shacks in their current lease agreements. The waste management charge is excessive and inequitable given leaseholders can only occupy their site for a maximum of 4 months in a year. The shacks are not commercial entities and the basis for charging lease fees should be to cover operational costs and not to make a profit for the City.

 

We disagree and object to valuations being used as a basis for determining lease fees. Valuations are used for commercial entities which the Naval Base leases (excluding the kiosk) are not. Fees and charges imposed on leaseholders should be based on actual operational costs as has been done to date. This is the only equitable and justifiable means of charging fees on non commercial entities.

 

In view of the above we therefore expect that the issues raised in this correspondence will be referred to Council with appropriate explanations from officers regarding the events that have transpired and the lack of transparency related to the matter of the Fees and Charges for Naval Base site.

 

We also expect that:

 

·         the 2010/11 Schedule of Fees and Charges be reviewed and amended to delete the removal levy and waste disposal fee (previously covered in lease fee);

·         that the site rent component be charged on the basis of covering legitimate operational costs and not on the basis of valuations as the Shacks are not a commercial entity; and

·         proposed increases for future years be reviewed and amended on the same basis.  

 

We trust that our position on the issue of Fees and Charges is clear and that the unacceptable lack of transparency related to information regarding this matter is acknowledged and addressed as a matter of priority.

 

We are committed to maintaining a positive relationship with the City and the Elected Members and to working collaboratively to address issues of concern to both parties.

 

We look forward to a prompt response to this correspondence.

 

Yours sincerely

Nola Waters

Vice President

Naval Base Holiday Association

 

CC  Mayor and all Councillors