The service charge for each property should, subject to Council determination, approximate the service charge indicated in the survey letter sent in 2016 to all owners of properties in the project areas. The service charge for each property will be determined by Council after detailed project cost estimates are known and Council has considered the proposed charges. This should occur mid-2019 and all property owners will be advised when the details are known.
In keeping with practice established in previous projects, property owners will not be sent service charge tax invoices until underground power is available to the affected property. Because of the approximate 18 month time frame for each project area, not all properties will have underground power at the same time and hence some property owners will receive tax invoices earlier than others. It is anticipated that the first tax invoices will be issued sometime around late-2019 or early-2020, dependent on progress of the project and availability of underground power to each property.
In previous projects Council has provided the option of paying the service charge over a period of up to seven years. If this option is chosen, tax invoices are issued quarterly interest is applied to the balance remaining at the end of every quarter.
The Round Six projects in the Town are 50% funded by the state government. The Town is required to fund the other 50% and the majority of the Town’s portion is raised by a service charge on each property within the project area. If significant numbers of property owners choose the extended payment option, the Town borrows money to meet its 50% contribution requirement. This borrowing is usually from state treasury and in previous projects, property owners have been charged interest at the state treasury rate plus 0.5%. In the last project (Lathlain) the amount of interest applied to outstanding balances was 5.5%.
In previous projects the Town has contributed up to 25% to of the 50% of the project cost that it is required to pay, thus effectively reducing the service charge to each property owner by 25% of what it would otherwise have been. Council is not obligated to provide this 25% contribution and it is at Council’s discretion to determine the amount of any contribution it may make.
Once a tax invoice for the underground power service is issued it becomes a charge on the property in the same manner as Council rates are a charge on the property. Outstanding charges on a property are recoverable by the Town in court in the regrettable event that there is absolute resolve by a property owner to not pay outstanding amounts.
Any outstanding underground power service charges on a property must be paid in full at settlement when a property is sold.
If Council has determined the amount of the underground power service charge for a property but has not issued a tax invoice for the service charge because underground power has not yet been provided to the property, there are guidelines in the “Joint Form of General Conditions for the Sale of Land” (the General Conditions) produced by the Law Society of WA and the Real Estate Institute of WA. Broadly speaking, the General Conditions state that if, before the contract date for sale of the property, the local government has not prescribed an Underground Power Rate and the manner in which it must be paid, then the buyer will be liable for any Underground Power Rate subsequently applied.
If before the contract date for sale of the property, the local government has prescribed an Underground Power Rate and the manner in which it must be paid, then the seller will be liable for any Underground Power Rate applied to the property. The General Conditions may be varied by any special conditions applied to a contract for the sale of a property, and it is recommended that you seek expert professional advice if you have an enquiry regarding a particular contract of sale.
The Town has authority under Section 6.38 of the Local Government Act 1995 and Item 54 of the Local Government (Financial Management) Regulations 1996 to apply a service charge for the provision of underground power.
Some properties within the project areas have what is known as a pillar to pole connection (P2P). This normally comprises a green dome or pillar just inside the property boundary, connected by underground cable to the nearest street pole. There is also an underground cable from the dome to the meter box within the property. Since 1999 it has been compulsory that any new building or significant redevelopment of a property has a P2P connection. A P2P connection does not mean that a property has “underground power.” The largest proportion (approximately 85%) of the costs involved in an underground power project is the installation of new underground cables in the street, installation of new streetlights, installation of new domes, connection of domes (new and existing) to the underground street cables, and demolition and removal of old wires and poles.
Those properties with pre-existing P2P connections retain the pre-existing underground cable within the property from the dome to the meter box, but have the pre-existing dome to street pole underground cable replaced by a new underground cable to the new underground street main cable. As there is an approximate saving to the project of approximately 15% of the service charge for a single property for each pre-existing underground cable within the property from the dome to the meter box, a discount of approximately 15% to the service charge is applicable to all properties with a pre-existing P2P connection. Those properties with a pre-existing underground from service pole connection receive a discount of approximately 7.5% to the service charge.
It is anticipated that eligible pension and seniors card holders will receive discounts in accordance with State Government conditions relating to the granting of those rebates. Card holders must be eligible to receive the rebates and meet State Government requirements in respect to payment of the tax invoice by due dates. Details of the dollar value of rebates are not yet available but will be provided when the service charges are determined by Council.