The proposed rate increases of 19%, 17%, 14% and 10% from 2023/24 to 2026/27 have been presented in council’s draft documents and will be on public exhibition until Wednesday, May 31.
The documents include an updated Delivery Program for 2022-2026, a proposed Operational Plan for 2023-2024 and associated budget and other required documents.
A decision on council’s proposed SRV by the Independent Pricing and Regulatory Tribunal (IPART) is expected this month. As required under the NSW Integrated Planning and Reporting framework, financial modelling of different scenarios must be presented, providing an idea of how much flexibility is in the plan. Council has prepared three options which are presented at the foot of this story.
At its latest monthly meeting, in Urana on April 24, council unanimously endorsed the draft combined Delivery Program 2022-2026 and Operational Plan 2023-2024 (including draft Annual Budget 2023/2024), updated 10-year Long Term Financial Plan and Statement of Revenue Policy, to be placed on Council's website and public exhibition seeking the community feedback for a period of 28 days.
The final documents will be presented to council’s monthly meeting on June 27 with a report detailing community feedback received and any proposed changes to the drafts as presented to be outlined, for adoption of a final set of plans for implementation from July 1, 2023.
Council’s increased communication process with the community is underway with three-hour daytime pop up sessions this whole month – see Federation Snippets (Page 12). Council will also host a series of round table stakeholder meetings with community groups.
Prior to council’s draft documentation, council conducted pop up sessions in Corowa, Howlong, Mulwala and Urana from March 13 to 26 resulting in over 130 face-to-face conversations and over 200 survey forms being distributed. A total of 33 submissions was received.
Federation Council’s General Manager Adrian Butler said that rate pegging introduced in the 1980s for NSW councils means there has been a systemic underfunding of council assets, combined with other factors such as councils picking up additional services due to the community demands, and factors such as continuing cost shifting from the State Governments to local councils.
If council was to apply the proposed SRV rate increase, this would result in an additional $1.7 million in revenue. Current plans provide for these additional funds to be allocated for the following purposes: $618,000: Asset renewal and maintenance of sealed local roads; $191,000: Asset renewal and maintenance of unsealed local roads; $151,000: Urban storm-water drainage improvements; $541,000: Increased annual cost escalation to council in respect to materials, wages and contracts; $235,000: Delivery Program initiatives identified in consultation with the community in 2022.
“In the event that the SRV is not approved either in part or in full, some projects will need to be postponed or rescheduled to a later date,” Mr Butler said.
“The late announcements of the SRV decisions by IPART is problematic as it requires council to place these plans on exhibition prior, to allow the deadline of 1 July to be met incorporating the public exhibition/community engagement,” he said.
The three scenarios
Planned Scenario (Recommended)
Council obtain approval for multiple year SRV commencing 2023/24 to 2026/27. Outcome to be announced in May 2023. This scenario provides a $46 million annual operating program and $10.4m capital program for 2023/24 and a $170m total capital program over the 10 years. It contains special rate variation increase for four years from 2023/24 to 2026/27 being 19%, 17%, 14% & 10%. This would provide capacity for Council to address the asset management demands of existing infrastructure over an extended period of time, improve service levels in infrastructure areas, maintain similar levels of service to those currently delivered in other areas and continue to improve its financial sustainability. This would enable Council to address the concerns being raised within the community regarding Council’s local road network and other ageing infrastructure.
Baseline Scenario
Council unsuccessful with the SRV application with future general rates income only increased by rate pegging. This scenario provides a $45 million annual operating program and $9.4m capital program for 2023/24 and a $129m total capital program over 10 years. It contains rate increases at 4.3% for 2023/24 as announced by IPART, followed by a rate increase of 2.5% for future years. This scenario would reduce Council capacity to address the asset management demands of existing infrastructure, reduce levels of service in infrastructure areas from that expected by the community and critically deteriorate Council’s financial position. It would also require a significant reduction in levels of service to those currently delivered.
Alternate Scenario
Council unsuccessful with the SRV application with consideration to address SRV commencing from 2024/25 to 2027/28. This scenario provides a $45 million annual operating program and $9.4m capital program for 2023/24 and a $164m total capital program over 10 years. It contains rate increases at 4.3% for 2023/24, followed by a special rate variation for four years from 2024/25 to 2027/28 being 19%, 17%, 14% & 10%. This scenario would delay Council’s ability to address the concerns being raised within the community regarding Council’s local road network and other ageing infrastructure by another year. Council manages its finances using a Funds accounting approach.
