Council to Apply for Special Rate Variation

17 January 2025

At an Extraordinary Meeting held this week, the Gunnedah Shire Council unanimously endorsed an application for a Special Rate Variation (SRV) and associated Minimum Rate increase to the Independent Pricing and Regulatory Tribunal (IPART).

Background

This decision follows several months of consideration and engagement with the community by Council on the SRV, commencing in May 2024 with Council endorsing the draft 2024/25 Operational Plan and Budget. This report contained information that Council’s financial outlook was not financially sustainable and that an SRV needed to be considered.

Council subsequently determined an SRV proposal for a permanent cumulative 38.88% increase to be implemented over two years and undertook community engagement on this proposal during August and September last year. Following consideration of feedback from the first round of community engagement,

Council endorsed a revised SRV proposal for a permanent cumulative 37.67% increase to be implemented over two years. This increase includes the rate peg that would ordinarily apply. The revised SRV proposal caps the increase on Residential, Business and Farmland rate categories at 15% per year (32.25% cumulative) with the balance to be sourced from the Mining rating category. A second round of community engagement was held from Thursday, 7 November 2024 to Thursday, 19 December 2024 where the community was provided the opportunity to make submissions with their views on the revised SRV proposal.

Council received 27 formal submissions, and these were considered as part of the final determination on whether to proceed with applying for an SRV at the meeting. Submissions were received from Whitehaven Coal and the NSW Minerals Council in response to the increased differential, resulting in an 85.13% cumulative increase over two years, that would be placed on the mining category from the revised SRV proposal. While many of the respondents indicated that they did not want an SRV, there was also strong support for levels of service to be maintained or improved, which is not possible without an SRV.

What happens now?

Council will make applications for a Special Rate Variation and associated Minium Rate increase to IPART. Applications for the 2025-26 financial year are required to be submitted by 3 February 2025 and details about the process for SRV applications can be found at the following link - https://www.ipart.nsw.gov.au/Home/Industries/Local-Government/Reviews/Special-Variations-Minimum-Rates/Special-Variations-and-Minimum-Rates-2025-26 . Following Council’s lodgement of the application by February 3, IPART will undertake further community consultation with a view to a determination in May or June.

Quotes from Mayor Colleen Fuller:

“This has been a difficult but necessary process for Council to undertake.

“Whilst we recognise that, if approved by IPART, an SRV will be an added impost to any households or businesses that are struggling financially, the pressure will be lower in this revised SRV proposal for Residential, Business and Farmland categories and higher for the Mining sector than the original SRV scenario that we considered.

“It is also important to point out to our community that the impact will be partly offset by Council's resolution at its Ordinary Meeting in December 2024, that a freeze be placed on increases to Waste Management and Sewerage Annual Charges during the proposed Special Rate Variation implementation period.

“Council has also resolved to strive to find at least $930,000 through efficiency gains and operational savings over the next three years.”