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HomeLatest NewsThe only way is up: further rate rises on the agenda for...

The only way is up: further rate rises on the agenda for Northern Beaches residents

Northern Beaches Council is proposing a further rate increase of 2.4% in its 2022/23 budget now on public exhibition.

In a detail missing from the Council’s official budget media release but discussed at length during last week’s chamber meeting, Council intends to apply to the Independent Pricing and Regulatory Tribunal (IPART) for approval to increase rates by 2.4% in the next financial year.

Council’s communication team was, however, swiftly forthcoming when asked for some  information on factors behind the rate rise pitch.

Inflation pressures

By way of background, it was explained that the need had arisen because of higher than anticipated inflation rates.

Each year the Independent Pricing and Regulatory Tribunal (IPART) set the maximum amount rates can be increased by for all Councils in NSW.  In December 2021 IPART announced the limit would be 0.7% for the 2022/23 financial year, but it is Council’s position that this was based on outdated inflation information.

With inflation currently at 5.1%, the Minister for Local Government has established a process through the IPART for Council’s to apply for a higher increase that is consistent with the Council’s expected level of rating income (to a maximum of 2.5%). Council has resolved to apply to IPART for approval to increase rates by closer to the maximum, 2.4%.

Split vote

While the majority of councillors voted to put the draft budget, including the request for an increase, on public exhibition, some expressed their concern that rates were continuing to rise when amalgamation was meant to lead to efficiencies.

Cr Vincent De Luca said he was concerned that “every year since amalgamation, rates have increased”, and pointed the finger at spending too much money on senior roles, legal expenses and bureaucratic inefficiencies.

Cr David Walton

Liberal councillor David Walton said he felt that council “Had again not kept control about operational expenses and are again putting the burden on the rate payers and the community through increased rates and charges.” A sentiment echoed by Cr Rory Amon.

The argument for and against the need for a rate rise is nuanced and difficult to properly convey in one news article.  While Cr Walton pointed to an increase of staff costs since amalgamation of over $20 million, but Council management countered that modelling using increases to the employee award system shows that the current Council staff costs would be $2 million less than if the three Councils were still in operation today.

Cr Sarah Grattan, who represents Manly Ward and also works as the Chief Operating Officer for UNICEF Australia, argued an increase was essential to meet the rising costs of services.

“In 2022 we have heard today that inflation is now running at 5.1%. The local government award has a 2.5% increase in salaries and wages. Our contracts typically have CPI escalators. We simply can’t afford to have our costs rising by 2.5% or higher, but have our revenue increase capped at 0.7%,” she explained to Manly Observer.

Cr Sarah Grattan

“If our rates were capped at 0.7% then we would have around a $3 million shortfall. Over 10 years it would be more than a $30 million shortfall.  To afford it we would have to reduce the amount we are spending on services to the community and/or capital projects in order to balance our budget. There is a list of items in the council papers but includes a 25% cut in library books; $1 million less on roads resheeting; $200k less on our ocean rock pools etc.

“Finally, after the last couple of years Northern Beaches Council has faced $46 million cost of the COVID pandemic plus additional costs faced from the storms and recent flooding. We have delayed capital projects in order to afford these hits to our budget. But the amount of spare cash we have to pay for these one off hits has fallen a lot and it is time that we try and build up that unrestricted cash.

But for Cr Walton, operational costs should first be looked at to find efficiencies.

“Lowering or containing operational costs is one of the most effective ways to save money and reduce the burden on our rate payers. It’s an important exercise for any business,” Cr Walton said.

“It starts with understanding what your business is spending money on, before reviewing each activity in data to see where you might be able to make savings or gain productivity improvements [rather than] in some cases, building monuments to ourselves.”

The draft Northern Beaches Council 2022/23 budget will be on public exhibition until 29 May.  It includes an operating surplus of $9.4m, debt repayment of $5million and an $85 million investment in new and renewed capital projects.

The community can have their say on the draft budget and other guiding documents at Your Say from Friday 29 April.

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