Rate rise a moveable feast but council settles for two courses

In May 2022 council staff believed a 35 per cent rate rise was required to cover the "immediate and significant need to generate additional revenue to cover increasing costs and ongoing asset management needs".

During discussion at the council meeting on June 29, 2022 the CEO Anthony McMahon was clear in his warning to councillors saying if council didn't do something very soon it would "run out of cash and not be able to pay creditors".

By the end of 2022, council staff were recommending a 90 per cent increase. At a community meeting Mr McMahon was asked how things had moved from 35 per cent to 90 per cent and said there had been a gap in information around capital expenditure and what assets might fail.

READ ALSO:

Now, after recommending a step back to 43 per cent, council has voted to apply to IPART (Independent Pricing and regulatory Tribunal) for a 43 per cent increase split over two years, following a motion from the mayor, Russell Fitzpatrick.

Cr Helen O'Neil seconded Cr Fitzpatrick's motion adding a call to the NSW State Government to fully fund the pensioner rate rebate (currently $250 a year and of which, council pays 55 per cent) and to increase it, given the rebate had not increased since 1993.

But before the motion could be voted on, Cr Mitchell Nadin indicated he had a foreshadowed motion to defer a rate rise while financial documents were updated and put on exhibition.

He remains concerned about the level of detail in how extra money will be used and whether council has sufficient documents to get IPART's approval.

"We will get $120m extra over 10 years, what is it going to be spent on? I don't understand the methodology. I don't blame the public for their anger because council hasn't explained how it came to this figure and how it will be spent," Cr Nadin told ACM

Council's communication with the community was also an issue for Cr O'Neil who agreed the public wanted to know more about what they might lose in services.

"The consultation process had so many problems," Cr O'Neil said.

Cr Nadin said the problem with council's financials had been building up over the years and it was a can that had been kicked down the road.

READ MORE:

He questioned whether the long-term financial plan, which must now be adjusted, should have been on exhibition and said water, sewer and waste charges should have been taken into account as well when looking at the capability to pay any increase in general rates.

But Cr Fitzpatrick questioned whether no rate rise was right for the long-term future of council.

"I personally have more to lose by putting this forward," he said in reference to his bid for election to the NSW State Government.

"We're in the third year of an infrastructure backlog. It's a very hard discussion," he said.

Mr McMahon had already flagged that a further rise could be needed in four years' time under the 43 per cent rise option.

"The thing that really bothers me is this rate rise will not make us financially sustainable. All we're looking at is boosting the revenue. We will be doing this again in four years' time," Cr Nadin said to applause from those listening in the gallery.

Cr Liz Seckold said Bega Valley wasn't alone in its call for a rate increase and 17 other councils in NSW were doing the same.

"The SRV will bring undue hardships but we have to keep the shire going," she said.

Cr David Porter said it was important to go through the due process.

"I have concerns about the way council spends the money. There's talk about sending to IPART a document that needs further massaging. I don't want my name on a submission that fails. We need to have this ready for the community. This year we are not properly prepared. I understand the need for an SRV but get the plans right, put them on public exhibition and let us review them," Cr Porter said.

But Cr Tony Allen said at last there was a document that told the truth.

"We have known for a long time it's coming. There's been 18 years of leaving off depreciation - allowing our assets to fail. We're damned if we do and damned if we don't," he said.

Cr Cathy Griff found herself in the somewhat unusual position of agreeing with Cr Nadin. She said local government was underfunded with the state government still holding tight the purse strings.

The SRV process had been shocking for the anger and vitriol directed towards staff and the misunderstanding by the public, Cr Griff said.

"Our communications failed to convince or inform. We could look at a people's assembly to develop policy, it's been successful used around Australia. Now's the time to let people to have more say, have input in to the situation," Cr Griff said.

"Developers are knocking on our doors and more could be asked of them. Also debt is not a dirty word, we're not running a public business," Cr Griff said.

For Cr O'Neil it was about the risk to council's financial integrity.

"IPART makes the decision. Our responsibility is to come up with the best submission to IPART," she said.

"We were warned a rate rise would be needed. Bushfire grants have dried up, rural councils have a broken model. We all know construction costs and project management costs are going up higher than in cities," Cr O'Neil said.

"It's a problem to find skilled professionals. Now we're paying so many consultants to do what staff had done in the past. My view is clear, roads, bridges and land use planning need a lot of attenion. Fix the roads and clear the DA backlog.

"This plan puts some money into roads, not enough, but gives us time. In town planning we're trying to recruit people. There are an increasing number of people clearing land in my area because they don't think they can get an answer on their DA in six months.

"Let's do the hard work - don't make it harder for us to get council into a fit state," Cr O'Neil said.

In summing up Cr Fitzpatrick said he knew it would hurt, but they had to be financially responsible.

"We can't have $20m black holes like in the past," he said.

Cr Fitzpatrick's motion was carried with Crs Nadin, Griff and Porter voting against and so Cr Nadin's foreshadowed motion wasn't debated.

Cr Nadin remains concerned over the council's financial situation saying that council had "a spending addiction".

"We are over serviced in this shire and council doesn't seem to have any spending restraint. We spent three months on service reviews and didn't cut one dollar from jobs. It's time we worked to a budget," Cr Nadin said.

Our journalists work hard to provide local, up-to-date news to the community. This is how you can access our trusted content:

Bookmark www.begadistrictnews.com.au

Make sure you are signed up for our breaking news and regular headlines newsletters

Follow us on Twitter: @Bega_News

Follow us on Instagram: @begadistrictnews