Wodonga ratepayers overcharged millions through waste management levy

 
Tuesday 24 April 2018
 
Wodonga Council collected at least $18 million in extra revenue from its waste management levy over the past decade, using the surplus to fund other council services, the Ombudsman has found.
 
Tabling her Investigation into Wodonga City Council’s overcharging of a waste management levy in the Victorian Parliament today, Ombudsman Deborah Glass said about 70 per cent of the revenue raised through the charge had been spent on waste-related services. Nearly a third had been spent on other council services, such as the maintenance of parks, gardens and other council activities.
 
Ms Glass said the council’s practice of generating a surplus was at odds with the intent of the Local Government Act, which allows councils to levy a waste management charge for ‘the collection and disposal of refuse’.
 
“I accept that the legislation does not explicitly require the council to recover only its reasonable costs. However, the intent is clear,” Ms Glass said.
 
“And our investigation found the council maintained the practice, among other things, to avoid ‘unnecessary negative public reaction which may result from shifting the charges to (general rates)’.
 
Ms Glass said while the council’s practice had been in place long before the statewide introduction of rate capping in 2016, the practice enabled the council to avoid large increases in general rates, the key issue which rate capping sought to address.
 
“Rate capping does put financial pressures on councils, especially rural councils with a smaller rate base and, often, ageing infrastructure,” Ms Glass said.
 
“But those financial pressures need to be faced head on, in partnership between councils and their communities, rather than buried in the financial fine print.”
 
Ms Glass said the financial pressures on councils were likely to increase, due to the statewide crisis in household recycling. “All the more reason for councils to be open and transparent with ratepayers about the true cost of a service,” Ms Glass said.
 
She welcomed Wodonga Council’s commitment to reduce its waste charge within three years, bringing it in line with the cost of providing waste-related services. Meanwhile, Local Government Victoria agreed to consider recommending legislative changes to prohibit councils from raising extra revenue through waste charges.
 
Ms Glass encouraged the 72 other Victorian councils that have waste management charges to satisfy themselves that their charges are a reasonable reflection of their waste-related costs.
 
“To do otherwise is to undermine the public’s trust in how their money is spent,” Ms Glass said.
 
 
Media contact: Ainslie Gowan | Tel 03 9613 6235 | Mob 0409 936 235 |  ainslie.gowan@ombudsman.vic.gov.au
 
Further information: Tel 03 9613 6222 | Regional 1800 806 314 | www.ombudsman.vic.gov.au | Follow @VicOmbudsman