Adelaide Lord Mayor Sandy Verschoor wants universities to start paying council rates
Adelaide Lord Mayor Sandy Verschoor wants universities to pull their weight and start paying rates as her council faces bleak financial times. TAKE OUR POLL
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Adelaide City Council has renewed calls for a review of properties exempt from paying rates as it faces tough financial decisions in the fallout from the COVID-19 pandemic.
Elected members have been urged by staff to start considering increasing rates, charges, freezing capital works projects, introducing special levies to fund infrastructure such as a new aquatic centre and borrowing more money.
They also have suggested increased efforts should be made to remove rate exemptions operating throughout the city, especially tertiary institutions.
Exempt properties include universities, schools, hospitals and churches but also the new Lang Walker office building approved for Festival Plaza, SkyCity casino extension and the Lot Fourteen commercial development underway on the former RAH site on North Tce.
Staff have detailed the full extent of the council’s worsening financial situation – compounded by the severe impact of COVID-19 on the Adelaide CBD – during a workshop.
The council is facing an operational deficit of $39m this financial year, while its borrowings are expected to increase to $92.8m.
Staff also have revealed the council will lose $35.5m in potential rate revenue this financial year from properties within its boundaries which are exempt from paying rates, including all buildings on Crown land and the city’s rapidly expanding universities.
During a two-hour briefing, finance associate director Sonjoy Ghosh outlined how councillors had to start working on a long-term financial plan to restore the council to operating surpluses after three consecutive years of deficits.
One potential source of extra revenue was changing rate exemptions.
Mr Ghosh said exemption from rates for universities was being legally challenged by the National Local Government Association in SA, Victoria and NSW.
“Each university has its own act and in the acts it states that they will be exempt from rates,” he said.
Lord Mayor Sandy Verschoor said the council had to investigate how to change the exemption system, especially for universities.
“Universities are big businesses and I don’t understand why there is an exemption,” she said.
“Even if there is a discretionary rate in terms of them not having to pay 100 per cent but certainly I don’t think there should be 100 per cent of no rates,” she said.
Ms Verschoor said there were other examples “right now across the city” of where rates were not being paid on properties being used for commercial purposes, such as Lot 14.
“If that was a hospital, it is no longer a hospital,” she said.
“There may be parts that are still part of the university or used for education or the (Aboriginal) cultural centre but there are big parts which are not.
“There are also properties which have been bought by the universities which are currently not being used for education purposes which I also think should be investigated.”
North Adelaide ward councillor Philip Martin said the various revenue raising measures being suggested by staff would be “a giant belt in the face for ratepayers”.
“The council is in financial strife,” he said.
“In order to extricate the city from that strife the consequences are do nothing which would be disastrous or do something.
“As a result of that we will ask ratepayers to pay more in their rates, will ask ratepayers to pay more in charges and we will ask them to accept fewer services.
“It is going to be a bitter pill to swallow and will require some pretty deft footwork.”
Council chief executive Mark Goldstone stressed no decisions had been made about which steps would be taken to earn more money.
He said the meeting was only a workshop to present information to councillors about the financial situation confronting the council and options to move forward.
“This is an important moment for our council and one which requires an adjustment in our eroding income and our future finances,” he said.
“No decisions have been made.
“Those decisions will happen subsequently as we go through the budget process.”
The matter will be discussed again by council next month.
Originally published as Adelaide Lord Mayor Sandy Verschoor wants universities to start paying council rates
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