For many years the City of Bayswater has pursued the option of merging with Bassendean. This even pre-dated the State government’s local government reform process which was in motion when I was elected in 2011. Despite the millions spent, it now seems that reform may now be off the State government’s agenda, so I thought I’d do an analysis on whether ratepayers would benefit from reform.
Let’s talk money.
The City of Bayswater’s latest ‘rate figure’ was 4.776 cents, and to determine council rates, this is multiplied by a property’s Gross Rental Value (GRV is determined by the Valuer General’s Office and is an estimate of 12 months potential rental income). The Town of Bassendean’s figure was 6.113 cents multiplied by a property’s Gross Rental Value. This is a 29% increase on Bayswater’s rate, so a house with a GRV of $20,000 p/a would pay rates of $1,222.60 in Bassendean and only $955.20 in Bayswater. These figures exclude rubbish charges and the emergency services levy.
The below are some key figures on Bayswater and Bassendean:
* Source: http://metroreform.dlg.wa.gov.au/Downloads/LGAB_Metro_LG_Report.pdf
^ – minimum rate amount
It is clear that the Town of Bassendean ratepayers would pay less rates if they were a part of Bayswater. But how would Bayswater residents benefit by incorporating a higher charging entity (Bassendean) into the City of Bayswater? I suggest that there will be cost savings which will reduce the overall burden on ratepayers.
First, a larger entity should increase economies of scale and provide better buying power and more favourable terms on contracts. It is necessary to point out that these economies of scale will likely start to diminish if the entity gets too big, but we are a long way from that.
Second, duplication can be avoided. I estimate the cost of the CEO, three directors and Councillors at Bassendean to be $791,500 per annum. This does not include PA’s or other office and support costs, so the figure is no doubt higher. These roles, and no doubt other such as IT, could be folded into Bayswater’s existing structure.
* Source: http://www.bassendean.wa.gov.au/3_your_council/agendas_minutes/Special-2014-03-an.htm
If there was a merger, two Councillors from Bassendean should join the Bayswater council in order to represent Bassendean; this would cost $60,000, so the total savings reduce to $731,500.
A $731,500 saving spread among the existing Bassendean dwellings would reduce rates by $114 each dwelling. This is roughly an 8% reduction from the average Bassendean rates of $1,485.
Third, with greater size, more services can be brought inside the entity. For example, Bayswater currently manages the parks and gardens in house, whereas Bassendean mainly outsource these functions. I suggest that having the staff in-house doesn’t just allow for a more responsive service, but also has cost benefits. As a combined entity, even more services could be performed in-house, and there be less reliance on costly consultants and contractors.
It is clear the benefits of a merger will be greater for Bassendean residents then Bayswater’s, however I do believe that everyone will at least receive some benefit.
The Town of Bassendean held a special council meeting on the 10th of February where they decided they “will no longer participate in the reform process, including attending Local Implementation Committee meetings”. I have admired Bassendean’s Councillors and their participation in the Local Implementation Committee, and they have raised some valid concerns, such as the Local Government’s Advisory Board’s strange recommended of having no ward system, as well as constructive input. To their credit they did also state at the council meeting they are “opposed to a boundary adjustment continuing, without its community having an opportunity to similarly express their views on the proposal”. Fair enough, I respect this and believe residents should be able to have a say; it always was a bit strange that some areas got a say whilst others didn’t.
So I ask Bassendean ratepayers and residents:
“Do you support merging with Bayswater and paying lower rates?”
It needs to be stated that I have no personal agenda in this analysis. If anything I would be disadvantaged from a merger because there is no financial gain for me, but there would be an increased workload. I am therefore as impartial as you can get and simply focused on what is best for the residents of Bayswater whom I represent. I think the benefits of reform are quite clear though.
(Please be aware that these views are my own and have not been endorsed by the City of Bayswater.)