Effectively the application for 69.94% in rate rises is inclusive of and to lock in permanently to the rate base, the 19% including rate peg, and 17% including rate peg increases, levied across the 23/24 and 24/25 years, based on the temporary SRV approved by IPART across these two years.
Made at council’s extraordinary meeting on Tuesday, the decision was flagged by the previous Federation Council before last September’s election.
Supporting the motion were Crs Andrew Kennedy, Rowena Black, Pat Bourke, David Harrison, Sue Wearne and Mayor Cheryl Cook.
Against the motion were Crs David Bott, Derek Schoen and Richard Nixon.
A joint report by Federation Council’s General Manager Adrian Butler and deputy general manager Jo Shannon warned councillors about not accepting their recommendation for the SRV application to IPART.
“Should the application not be endorsed, effectively those increases are removed from the rate base placing council in an extremely vulnerable financial position with respect to managing assets and maintaining service delivery, whilst still retaining financial liquidity to meet commitments. Significant service reductions would be required,” the report for Tuesday’s extraordinary meeting stated.
“In addition to the additional rates sought, council continues on its productivity and efficiency program, and as evidenced in the application, has delivered on over $700,000 of savings/efficiency improvements in the previous year, and makes further commitments in future years. Unfortunately, savings and productivity and efficiency improvements alone are not enough to arrest years of underfunding, with this being a systemic issue across many rural and regional councils.”
Council’s application remains consistent with and informed by the many recent community engagement initiatives on the SRV reapplication process, including the community sessions facilitated by Professor Joseph Drew/The University of Newcastle.
“From the co-authors’ perspective, the endorsement is strongly recommended in order to ensure council continues to make all reasonable efforts to improve its revenue to manage its assets and deliver services, in a sound manner with respect to risk/safety and responsible economic principles,” the report stated.
“An example of this is to allow for increasing maintenance levels such as improving the frequency of bitumen reseals/gravel re-sheets, to reduce the amount of total road failures that then require expensive rebuilds.”
Cr Kennedy strongly encouraged fellow councillors to vote for the special rate variation application, mentioning that before the formation of Federation Council in 2016, both former councils of Urana and Corowa Shires were to seek SRVs, a recent independent study on the current shire’s assets revealed a shortfall of $164 million in asset renewal and that the rate increase to achieve the desired result would be 167% - a lot more than Federation Council is seeking. “Many roads that need attention are older than I am,” he said.
Cr Derek Schoen flagged his intention for an alternative motion, to delay the SRV pending further evidence of in-house cost-cutting measures which was supported by Cr David Bott.
Cr Bott referred to young people trying to establish themselves and the proposed rate increases at this time are excessive.
Cr Schoen said he hasn’t taken his course of proposed action lightly, acknowledging all the work which has gone into producing the paper work for councillors’ consideration.
“We councillors are well established but the young aren’t and with the cost of living pressures the SRV makes it so much harder for the young.”
Deputy Mayor Black said council cannot continue to defer the SRV. “We need to make the hard decision now. We’re nearly half-way through to the end point already,” she said.
“For the sake of people now and into the future we need to have these rate rises.”
Mayor Cook said it scares her if “we don’t put our foot forward now”. “There’s angst on both sides. It’s a very difficult decision,” she said. “But to achieve what we want to and for the community, we should push ahead with the SRV application without further delay.”
Council’s current proposal sees provision of a $55 million annual operating program and $19.3 million capital program for 2025/26 and a $210 million total capital program over the 10 years. It contains a permanent special rate variation for two years from 2025/26 at 52.01% and 11.80% (cumulative 69.94% increase). This effectively includes the temporary increases of 19% and 17% levied in 2023/24 and 2024/25.
A vast range of community views has been expressed to council, from those who are vehemently opposed to any general rate increase to those who said council should just get on with the rate increase and fix the roads.
Mr Butler and Ms Shannon believe if IPART approves council’s application, it would provide capacity for council to address the immediate asset management demands of existing infrastructure, increase service levels for roads and transport infrastructure, generally maintain similar levels of service to those currently delivered for other services and improve its financial sustainability over a ten-year period.
21°C