While the draft 2016-17 management plan includes a 1.8 per cent increase in general purpose rates and charges in line with the rate pegging cap set by the State Government, this may not be the case for the following financial year.

According to city treasurer Bob Roach, addressing council’s huge $50 million asset maintenance backlog is a concern for the local government organisation. 

“The magnitude of the backlog is of concern to council, which may look to an increase in the rate peg in future years,” he said. 

“A special rate variation needs to be considered in the detailed budget to occur in the 2017/2018 year. Any such decision will be subject to future discussions with the community regarding service levels and a review of council’s operations over the next 12 months.”

Mr Roach notes in his draft budget document –   which is set to go on public display following last night’s meeting – that council should be mindful of the squeeze on its ability to raise revenue through rates as compared to the pricing policies of State Government and commercial organisations. 

“Consideration needs to be given to increasing general rates above the ‘pegged’ limit or the reduction of current service levels into the future,” his report states.

“As councillors are aware, this budget has been prepared having regard to tight financial circumstances. Factors such as rate pegging, cost shifting, take-up of additional services, increasing costs such as electricity and imposition of tasks on councils with no corresponding revenue have continued to place extra pressures on the budget. 

“For example, council collects state fees under NSW Plan First and the Builders Long Service Leave schemes, but receives no recompense for this. Other examples include the Companion Animals Act Obligations and Child Care Services.

“In regards to transfer of cost, examples include Rural Fire Service charges. In 2013/2014 council paid $267,214, in 2014/2015 the levy was $724,897 and in 2015/2016 it is $417,471,  an increase on the base year (2013/2014) of 56 per cent.”

Mr Roach said take-up of additional services included the agreement by council to transfer to a 24-hour fire station operation.

“The first year (2011/2012) of operations council paid a Fire and Rescue NSW (State) Levy of $157,621 ... and the 2015/2016 levy is $384,285 an increase of 144 per cent increase over the base year (2011/2012) figure,” the report states. 

“Council was not allowed any corresponding revenue increases to offset any of these additional costs. The budget process is becoming more difficult every year as the effects of large cost increases outside council’s control are having a detrimental effect on council’s ability to operate within its confined income levels.”