The independent pricing regulator has rejected Northern Beaches Council’s bid for a 39.6% rate increase, citing it had not demonstrated the financial need.
The NSW Independent Pricing and Regulatory Tribunal (IPART), however, approved an increase of 25.2% acknowledging that its current position was unsustainable long term and an infrastructure backlog, among other requirements, could not be met without a significant change in income.
The increase would be brought in over two years, representing a $50 million boost.
The increase is not in effect until councillors vote for the final budget in June this year.
In its application, the Council states the proposed increase would improve financial sustainability, address infrastructure and maintenance backlogs, expand environmental and risk reduction program, improve disaster management, and ensure council has sufficient funds to enhance services and renew major assets.
Cost shifting from the State Government continues to be an additional stressor on the council, particularly with the impost of a large emergency services levy, and impending removal of state funding for beach water quality testing.
The bid has been met with significant community resistance, which culminated in a rally that received national attention earlier this year.
In its decision IPART states “Many stakeholders told us that the council’s proposed rates increase is likely to create affordability challenges in the current economic climate.”
“For criterion 1 on financial need we found on balance that the council has not demonstrated a financial need for the SV as set out in its application We found it has demonstrated a need for additional funds for the first 2 vears.”
“…We made this decision after considering the council’s financial need for additional income to secure its long-term financial sustainability, address the backlog on infrastructure and maintenance and to provide additional funds to improve services for its community.”
Mayor Sue Heins said the IPART decision recognised the considerable pressures on Council’s budget.
“IPART has acknowledged the critical need to address the shortfall in Council’s budget caused by high inflation and increasing costs,” Mayor Heins said.
“The approval gives us the opportunity to achieve what we set out to do – maintain core infrastructure and secure financial stability.
“Council now has the ability to confidently move forward and continue to repair and renew roads, footpaths , rock pools, stormwater infrastructure and other community facilities.
“It allows for a correction in rates to better meet the real cost of maintaining our community assets which has increased significantly over many years alongside the financial impacts of multiple natural emergencies, cost shifting and other budget pressures.
“This has been a tough conversation to have with our community in this economic climate and we appreciate the feedback and input from our ratepayers.
“We can get on with the job of delivering for our community as we continue to focus on efficiencies and delivering value for money to ratepayers.”
Council today stated that removal of the proposed third year of rate increase (essentially the reduced approved increase) will “likely result in some larger renewal projects like the Warringah Aquatic Centre or Manly Lifesaving Club redevelopments not proceeding without significant external funding or a separate IPART application”.
View the full IPART decision document can be viewed here
