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HomeLatest NewsCouncil bids for 39.6% rate rise in Tuesday vote

Council bids for 39.6% rate rise in Tuesday vote

A rate rise of almost 40% has been recommended by Council staff ahead of an extraordinary meeting of councillors to vote on the issue next Tuesday.

Rates are local taxes that are levied on the basis of property (land) values, issued by the Valuer General. They are Council’s main source of income, currently being 44% of total revenue.

Councillors agreed in November to put a survey to residents essentially asking how much they were willing to have their rates increase by for Council to meet its costs and service expectations. It is a requirement to prove the community was consulted if you are looking to increase rates by more than limit set by the Independent Pricing and Regulatory Tribunal (IPART).

Council’s consultation included an opt-in survey with four options: This included the status quo, which would require a cut in services (non-specified) but an already approved increase of roughly 10% over 3 years, or accepting a large cumulative rate increase over three years of between 31.1% to 46% to maintain, improve or supercharge Council services (Options 2, 3 and 4).

The four options being considered by Northern Beaches Council.

The survey found most of circa 6,000 respondents went for Option 2, Maintain Services, which would still mean a sizeable increase of 31.1% (cumulative over three years). However, Council staff have instead proposed councillors vote for Option 3 – a special rate variation that would permanently increase rates by 39.6 percent (building incrementally over three years).

(Editor’s note: This could be a genuine recommendation for Option 3 or a strategy allowing councillors room to show political push back and insist on Option 2 – which would still result in over 30% increase but may prove politically more popular.)

Council’s own report confirms the survey found the majority showed overall support for Option 2 Maintain service at 72% in the opt in survey, followed by Reduce service at 57%.

The survey showed a majority of 51% overall opted for the least expense and a reduction in services via Option 1, with a clearer majority of 64% choosing this as their first option when responding by mail.

However, the recommendation for councillors to vote for Option 3 is made clear:

“Based on the need to maintain financial sustainability and to continue to deliver services and assets as expected by our community, it is recommended that Council apply to IPART for a cumulative rate increase of 39.6% (including peg) over 3 years commencing in 2025/26,” the report states. “The cumulative rate increase would comprise a special variation to rates of 29% and a rate peg of 10.7% (rounded to one decimal place) which would remain in Council’s rate base.”

The report says most ratepayers can afford to take the hit

Further, the report says most ratepayers can afford to take the hit, given the Northern Beaches is “ranked within the top 5% of areas in Australia for advantage according to the Socio-Economic Indexes for Areas (SIEFA) and Index of Relative Socio-Economic Advantage and Disadvantage (IRSAD).” The Capacity to Pay Report is a publicly available document.

Northern Beaches Council is not the only one seeking rate increases in NSW, with some, like nearby North Sydney Council, looking at substantially larger increases of potentially over 100% to meet increasing costs. However North Sydney Council states its average rates are much lower than others in the area, including Northern Beaches.

The current average residential rates under existing approved amounts as presented by North Sydney Council.

What will this mean in real terms?

You can check online what the different options will mean to your annual rates notice. For example, the property in which this writer is residing will, under the recommended option, increase from $2,500 a year in council rates to closer to $3,600 by year 3, plus any additional rate pegs thereon. Our previous residence, a unit in Manly, will jump from $1435 to about $2,000 by year 3.

A group of residents protesting the rate rise outside of Dee Why library, 11 January 2025.

Is there resistance?

The request has agitated some observers, and a minority of councillors (chiefly Crs Vincent De Luca and newcomer Liberal-endorsed Cr Sunny Singh), who claim bureaucratic inefficiency has not been adequately addressed before asking more from the community.

A collection of residents has formed an alliance to protest the increases, not only holding a small rally outside chambers recently but also taking out advertisements in most local media, including Manly Observer, calling on the community to attend the upcoming meeting and email councillors to voice opposition to increases.  The (NBPV) Northern Beaches People’s Voice community group, created by resident and former government environmental consultant Stuart Gold, has a mission to object strongly to rate increases during living and housing crises.

Mr Gold said he thought the consultation program “used strategies which forced people into validating a predetermined Council preferred option, not asking the community what they would like to see happen” and aired concerns that “any rate increases will have a flow on inflationary effect throughout the Northern Beaches community which will lead to higher rents and cost of goods and services.”

An advertisement placed in local media encouraging residents to join a rally against a rate rise.

When flagging the potential increases on our social media channels, some critics pointed to recent inefficiencies involving traffic decisions, such as the road dividers that had to be removed soon after being installed along the Steyne, parking signs re-instated, and the rewinding of works along Oliver Street in Freshwater that caused traffic disfunction.

Residents had also been promised efficiencies with the amalgamation of Manly, Warringah and Pittwater Councils, but have experienced subsequent rate increases since ( particularly in Manly when rates harmonisation was applied).

But Council says the current approved increase is  now half the inflation rate, there is a backlog of repair works and significant new and unexpected costs.

“Rates income is now $24 million lower each year than it would have been if it had been keeping up with inflation. Additionally, ageing assets and the heavy cost of natural disasters, the COVID-19 pandemic, and ongoing cost shifting to Council from other tiers of Government is impacting Council’s long term financial sustainability,” Council said in a statement.

“A Special Variation to rates will be required if Council intends to continue to meet community expectations and deliver existing services and service levels as well as ensure availability of funding for new and upgraded assets, environmental outcomes, loans and unforeseen events such as storm events, to be financially sustainable in the long-term,” the Special Variation to Rates – Community Engagement report details.

You can read more about Council’s position in our previous article flagging the rate rise in November. 

What might happen next, exactly?

Should Option 3 be approved on Tuesday (and then by IPART), then there will be an across-the-board rate increase of 12.1 percent for FY25/26, 11.7 per cent for FY 26/27 and 11.5 per cent for FY 27/28. This increase would raise an additional $57 million in rates income per year by year 3 and “Council would seek to continue all existing services, address the asset renewal and maintenance gap and support environmental and natural risk reduction programs, as well as provide the opportunity to deliver larger renewal projects in future years such as the renewal of the Warringah Aquatic Centre”.

The vote will be held at Northern Beaches Council chambers in Dee Why at 6pm on Tuesday 28 January 2025.  It is open to the public, but seating is limited. Manly Observer will be in attendance and you can watch the discussion online in a link we will make available here once ready.

You can view the agenda in its entirety here.

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