2019/20 Special Rate Variation Determination

IPART has partially approved Council’s Special Rate Variation (SRV) application. The approved increase in rates is 9% from 1 July 2019.

In its determination, IPART stated “we found that the 9% total cumulative increase was more consistently understood by the community than the requested 11.7% cumulative increase.”

As the 2019/20 rate peg of 2.7% was only announced by IPART on 11 September 2018, Council could only specify the proposed cumulative increase of 11.7% in its community consultations from that date. Earlier communications referred to the proposed increase as being 9% plus rate peg.

The approved SRV represents an increase of 1.53% on last year’s rates (including the expiring SRV of 4.77%) plus the 2.7% standard rate peg increase. Council may increase the average residential rate by $29 in 2019-20. Average business rates would rise by $165, average farmland rates by $55 and average mining rates would increase by $6,099 in 2019/20. Council will consider the IPART decision at the Council meeting of 27 May 2019.

Council recognises the impact of any increase on the community and its capacity to pay. Council will carefully monitor any hardship sustained by any ratepayer and work with them to achieve a satisfactory outcome.

For 2019/20, Council has not increased water or sewer charges. Council proposes to reduce waste charges by decreasing the special waste charge for kerbside recyclables from $28 to $22 per service for 2019/20.

As a result of the partial approval of Council’s SRV approval, the draft SRV program is being revised. As Council will have $343,362 less rates revenue than proposed in its application, operating expenditure will be reduced accordingly. Less funding will be available for roads, buildings and drainage maintenance than the budgets included in Council’s draft 2019/20 Operational Plan (currently open for public submissions).

The Office of Local Government still expects Council to demonstrate its financial sustainability by meeting the operating and asset management performance benchmarks over the 10 year term of the Long Term Financial Plan. As such, the partial approval of Council’s SRV application would require Council to consider a future Special Rate Variation application, as well as to find efficiencies and reduce services to allocate sufficient funding to asset renewal and maintenance over the years ahead.

IPART approved 8 SRV applications in full (Burwood, Kiama, Richmond Valley, Ku-ring-gai, Muswellbrook, Hunters Hill, Randwick and Sutherland Councils), 3 applications in-part (Lithgow, Dungog and North Sydney) and declined 2 applications (Port Stephens and Tamworth).