Keysborough South Levy

The levy generally covers the residentially zoned area bound by Springvale Rd, Dingley Arterial, Chandler Rd and Greens Rd.

Traditional open space for residential estates is provided at 5%.  Keysborough South was developed at 20%, i.e. 15% more open space and related amenity than in traditional housing estates. It was developed and marketed as an estate with more open space and higher quality open space than a traditional estate (originally at the cost of the developer and now at the cost of Council to maintain).  Linear reserves, natural networks, pedestrian and cycle trails and a combination of a greater quantity and quality of open space was provided as part of the development.

The costs of maintenance of this ‘over and above the Council standard’ is recovered through the levy.  The residents of ‘Keysborough South’ benefit directly from this in two ways;

• Direct and easy access to this higher volume of open space, and
• The added value that this has brought to their property values by being within an area of greater open space and associated infrastructure.

Whilst other residents can access these areas, it is expected that this would be relatively small to those residents living in the vicinity.

No.

Council entered into voluntary Section 173 agreements with the original developers of the subject land to implement this levy. These agreements are registered on the original land Titles. The agreements then transferred to the Title of all new lots created by the developers, ensuring all new owners are aware of this as part of the purchase of the land. These agreements include the following wording:

Council agrees that it will:

• in respect of the Maintenance Levy received under this Agreement, keep proper records and accounts in accordance with its obligations under the Local Government act 1989;
• …. apply the Maintenance Levy for the purpose of defraying the cost of Council of maintaining and improving the Open Space Network. (or words to this effect)

The ability to levy the open space maintenance fee from the residential properties in Keysborough South is made enforceable by each property having a Section 173 agreement restriction on title that outlines Council ability to collect the levy.  These agreements form part of the Titles, and therefore can be viewed by residents who obtain a copy of their Title.

Further advice would be required to confirm this, however the wording of the agreement, as set out in the response to question 4, states that Council is responsible for collecting and administering the levy.

The levy is calculated to recover costs based on the full development of ‘Keysborough South’. The quantity of dwellings has a limit and the number of households paying is now almost at that limit (currently 4,988 dwellings). In real terms the levy does not cover the full costs of Council’s maintenance of the area covered by the levy. The level of maintenance undertaken for this area is higher than for the balance of the municipality.

The Levy is used for the maintenance of the additional 15% open space area – for capital improvements not covered by the Council’s capital works program, and is used, amongst others for the following general maintenance activities (which does include mowing and allocation of approximately an equivalent of six resources):

• Horticultural requirements
• Open space and sportsground mowing and renovation works
• Turf management
• Garden bed maintenance, renovation and infill planting
• Playground inspections and maintenance
• Maintenance of parks assets including seating, picnic settings and shelters.
• Maintenance and repair of park and reserve fencing
• Bushland maintenance and revegetation
• Riparian maintenance of wetland areas
• Gravel path maintenance and resurfacing
• Tree planting in parks and reserves
• Tree management and maintenance
• Landscaping and planting

If Council removes the levy, Council will need to fund the shortfall from general rates.

Other options that may be canvassed is a determining the service standards that are applied to these areas.  It may be possible for example to lower the current service standards to which these areas of open space are maintained. However, in doing so Council may need to undertake community consultation first.

There have been no specific improvements to date.

The current LTFP forecasts that the operational costs will exceed the annual inflows from this levy in 2030-31.  Council will require to consider options to fund the deficit including increasing the levy by CPI.  Notwithstanding provisions within the s173 Agreement that the $350/ annum levy can be indexed, it has remained at the original figure since inception in 2006.  In real terms the levy has actually decreased in dollar terms.  Over time the costs of delivering the required services have increased every year and the trend of ‘under-recovery’ will continue.

As from 1 July 2011, all levy funds paid to Council are placed in a dedicated Keysborough Maintenance Levy Reserve Fund and all expenditures from this Reserve are clearly identified. As at 30 June 2023, the balance of funds in this Reserve fund was $2.5 million. Residents can always view the latest balance in this Reserve Fund on an annual basis by reading Note 9.1 (Reserve Funds) in Council’s published Financial Statements.

As detailed earlier, the ‘Keysborough South’ development enjoys a far greater degree of open space compared to the rest of the municipality, in terms of both percentage (20% instead of 5%) and in terms of the level of infrastructure improvements (originally at the cost of the developer and thereafter now at the cost of council to maintain).  The costs of maintenance of this ‘over and above the Council standard’ is recovered through the levy. 

The estates within Keysborough South were designed in conjunction with Tract Landscape and Urban Design to create a network of green which threads throughout the development for the enjoyment of residents. The linear reserves rehabilitate natural waterways and provide a network of open spaces for both active and passive recreation. The estates foster pedestrian and cycling networks and provide for the retention of native remnant vegetation. The quality of the open space in these estates has been recognised in several awards.

Council has a rates and hardship policy that residents can access.

A newsletter was distributed to all residents in or around May 2016 (copy attached). The purpose of the newsletter was to provide residents with further information on the maintenance levy, why it exists, what it is used for, how the funds are protected and the future considerations regarding the levy. 

Any future changes to the levy will undergo further community consultation.

Even though the Section 173 enables Council to increase the amount by the inflation rate (CPI) this has never been done. The $350/annum levy was calculated just prior to the release of the first stage in ‘Keysborough South’ in late 2002 or early 2003.

Whilst Council has not exercised the option to increase, Council’s maintenance costs have grown greater than CPI.

In 2013 Council discussed the potential to remove the levy or reduce the levy.  Council considered removing the levy and passing these costs onto all residents. In previous years this would have required Council to increase rates on a sliding scale from 0.32 per cent in 2013/14 growing to 1.5 per cent by 2016 as all stages were passed to Council. With rate capping in place Council no longer has this option.  

Council further considered options of either reducing the quality of open space (and associated higher maintenance costs) by replacing garden beds with grassed areas or even the ability to sell open space to reduce the current percentage from 20 per cent to a figure closer to traditional estates. Neither of these options was considered an appropriate outcome.

Council has elected to maintain the levy at a constant amount which was to both provide future funds for additional expenditures/facilities in the estate and defer to a later period any need to increase the levy beyond the current $350 per annum.

Reducing the scope of works would result in a lower level of maintenance for Keysborough South compared to elsewhere throughout the municipality. This is likely to have a negative impact on overall amenity and presentation of parks and open space areas.  Keysborough South is maintained to exactly the same service standards and level of presentation as everywhere else throughout the municipality – the levy was primarily introduced to cover the costs of maintaining a proportionally higher amount of open space (20% compared to 5% elsewhere) rather than to maintain these areas at a higher level of presentation.

As from 1 July 2011, all levy funds paid to Council are placed in a dedicated Keysborough Maintenance Levy Reserve Fund and all expenditures from this Reserve are clearly identified. As at 30 June 2023, the balance of funds in this Reserve fund was $2.5 million. Residents can always view the latest balance in this Reserve Fund on an annual basis by reading Note 9.1 (Reserve Funds) in Council’s published Financial Statements.

Levy funds paid to Council are placed in a dedicated Keysborough Maintenance Levy Reserve Fund and all expenditures from this Reserve are clearly identified.