Constituent Council contributions.

Contributions by constituent councils are the traditional method of financing county councils.

Such contributions are no longer compulsory.

Under the Local Government Act 1919 a county council could levy an assessment on its constituent councils based on the proportion that the unimproved capital value of rateable land in each area bore to the whole. The payment of the assessment was compulsory.

This provision was not reproduced in the Local Government Act 1993 presumably on the basis that a county council would obtain income, in the same way as other councils, from the sources set out in Section 491 of the Act, or from contributions by constituent councils pursuant to a regulation made under Section 399.

Such a regulation can make contributions compulsory, and set the level of contribution, but no regulation has been made.

Because of the terms of Section 400 of the Local Government Act 1993 the County Council does not have the power to levy an ordinary rate.

The County Council does have the power to levy a special rate.

Section 501 would permit the County Council to make an annual charge for noxious weed services provided, or proposed to be provided, on an annual basis by the council but only if the Minister was prepared to recommend to the Governor that the necessary regulation be made to prescribe noxious weed services for the purposes of Section 501. This has not been done.

In the absence of a regulation the County Council cannot make an annual charge.

At it's Meeting on 5 October 2007, the Council considered a report on contribution levels to be paid by constituent councils. Consequently a new funding formula was introduced. The "new" funding formula was based on the following;

The Local Government Grants Commission in calculating the general purpose component of the Financial Assistance Grants paid to local councils considers 20 expenditure standards.

One of these 20 standards is the cost of noxious plant control.

The noxious plant control standard is based on State average net expenditure on weed control calculated from councils’ Financial Reports and takes into account all expenditure on weed control, including urban properties and roads.

The standard is adjusted for each council having regard to disability factors which recognize the increased costs of weed control in areas of high weed infestation and mountainous areas.

The disability factors are determined based on a Noxious Plant Advisory Board Index.

The table shows the disability factors for the constituent councils of UMCC –

  Infestation   Terrain % Total %
 Lithgow  M - H  20  70% H - M   7  27
 Bathurst  M  15  25% H - M  2.5  17.5
 Oberon  M  15  40% H - M  4  19
Blayney  L-M  10  No allowance  0  10

The adopted apportionment method for funding calculates a theoretical cost of noxious weed control for each constituent council area by the following formula –

noxious plant control standard x disability factors x property number = theoretical cost

The theoretical cost for each constituent council area is added to give a total theoretical cost for the County area which represents 100%.

Each constituent council proportion of the total contribution to the County Council then bears the same proportion to the total as the theoretical cost for that council bears to the total theoretical cost for the County area.

The Grants Commission Annual Report 2011-12 provides the following:

Appendix 3: Standards used in calculation of expenditure allowances – 2012-13

Standard Costs are based on a five year average of the annual average net expenditures, per unit, by all councils in the State, using the 2006-07 to 2010-11 Financial Reports, Special Schedule 1.

12. Noxious Plants and Pest Control (per non-urban property) health: noxious plants $114.35

Noxious Plants and Pest Control

Infestation

Recognises: increased costs in areas of high weed infestation.

Measure: a disability factor determined by the Commision based on a Noxious Plant Advisory Board index.

Source: Department of Agriculture

Standard: Low

Weighting: N/A

Terrain

Recognises: additional costs related to access and constraints on using machinery in mountainous areas.

Measure: disability factors based on the proportion of council areas classified “mountainous” or “hilly”.

Source: CSIRO

Standard: N/A

Weighting: N/A

The new contribution ratios were applied to the 2008/09 gross payments, to be made by the four constituent councils as follows;

Calculation of Constituent Council contribution to Upper Macquarie County Council

Contributions from Constituent Councils on basis of agreed funding formula -

Bathurst Regional Council

38.46%
Lithgow City Council 31.50%
Oberon Council 17.72%
Blayney Shire Council 12.32%
Total 100.00%

Since that time there has been no agreement by consituent councils to generally increase the level of funding beyond the general increase in General Revenue permitted by the Minister each year under the "rate pegging" cap.