Bellingen Shire’s rate rise – what happened at the SRV meeting

How much will you pay? Projected rate rise figures. Image via Bellingen Council.
How much will you pay? Projected rate rise figures. Image via Bellingen Council.

Five councillors – Steven Klipin, Desmae Harrison, Toni Wright-Turner, Jenny Fenton, Dominic King – signed off on the Special Rate Variation (SRV) at the Extraordinary Meeting of Council on Wednesday. 

The elected members concurred with council that the 6 per cent rate rise was needed to maintain local services, while allowing for urgent road resurfacing works.

In addition to the original recommendation, Cr Fenton made a motion, which was seconded by Cr Klipin, to add four extra points. The amendments were (that council): 

  • Express its concerns to state and federal government regarding the impact on our community, our roads and our bridges of non-rateable land, specifically State Forest and National Parks 
  • Make strong representations to the state and federal government in relation to payment of rates on land currently owned by the Crown, specifically State Forest and National Parks  
  • Make strong representations to both state and federal government regarding the distribution of Financial Assistance Grants, seeking a revision of the principles imposed by the federal government with the overall objective of a revised method of distribution by the state, based on need
  • Make strong representations to the relevant state and federal government departments and local members of parliament in relation to income supports to meet the essential needs (such as community housing) of low income earners (such as pensioners) 

Councillors 

Cr Jennie Fenton

“The best time to plan for a good road network is 20 years ago, the second best time is now.

“It’s unfortunate that we are now in this situation but we are in this situation. Almost four decades of rate-pegging have left many regional councils in a similar situation, especially those with a low rate base and a high proportion of non-rateable land area.

“The obvious irony is that two of the features most of us love most about this Shire, its small communities and its vast forests, combine with current government funding patterns, to significantly disadvantage us financially.

“Through learning about how council operates, what the organisation has done to increase revenue and to decrease expenditure, I’ve been struck by many things:

“Firstly, the legacy that has failed to provide for asset management isn’t a uniquely Bellingen Shire challenge, a mid north coast challenge, a NSW challenge or even an Australian challenge – it is global. Successive governments at all levels have quite simply failed to think ahead. And I personally can’t endorse another round of failure to think ahead.

“Secondly, in my career I have been a practitioner of strategic planning, clear reporting systems and financial accountability. I have worked with multi-million dollar budgets in state government and tiny budgets in community groups and I have seen dozens of councils doing business. In that context I have been pleasantly surprised at the professionalism at play here and the amount of work staff have done to develop systems, policies, plans and priorities that will enable services and works to be strategic, accountable and communicable.

“To not endorse the recommendations undermines the success of a new era for this council, an era where perhaps for the first time the organisation can operate with solid data and systems in place and what seems to be some pretty impressive and skilled leaders and doers.

“Thirdly, to not endorse the recommendations also takes us to the question of how do we fund our road asset management and the common cry is to sack staff and/or reduce services. Having come to an understanding that those services and all those staff who deliver them have already been reviewed or are in the process of being reviewed, it is clear that this would not deliver the desired outcomes and have the added disadvantage of trading our physical assets off for some of our human assets – a trade you can only make once.

“When we look at the employment statistics from other shires they can look leaner and yet they then need to use more consultants, a situation that costs more, frequently produces inferior quality and builds far less community.

“I personally found some of the ideas from ratepayers quite disheartening during the consultation period. The level of deliberate and unintentional misinformation about how Bellingen Shire compares with other shires was frustrating and time-consuming to correct. 

“The idea that the social services that council provides are somehow optional or legally expendable was pervasive and I can see that that is an area council needs to work on education-wise. Let me be absolutely clear that the best roads, gutters and rubbish collection in the world do not make community.

“We punch well above our weight in the provision of our shared places and spaces and these are vital to our unique character as a shire. These places and spaces are also vital to socially-just communities, being accessible to all. One comment from the consultation sums up my views perfectly: “A lot of these things – like libraries and swimming pools and the elderly facilities – whether I use them or not a lot, it maintains the standard of the community I live in … I don't use the swimming pool, but I think it's important that young people learn how to swim … They’re all things that make the community that I live in within the shire a better place to be.”

“But firmly alongside my commitment to our community facilities, I remain very concerned about the state of a lot of our roads. I read that nine of the first 11 road fatalities in NSW for 2017 were on roads like ours and I know we need to work seriously and continuously on our sealed road network. For our safety and for our local economy.

“Finally, we all heard loud and clear during the consultation period that there are many people in this shire who are struggling financially as the cost of most services (not just council services) rise faster than incomes.

“We particularly heard from pensioners how even the small amounts involved in this proposal will impact people. We wanted to table this rate variation proposal and talk to people about how it would impact them because we can see that it needs to happen but we are all very interested in seeing changes in the funding model that has lead this shire and many others into this financially vulnerable position.

“I therefore move to accept recommendations one to four, but add four further points that affirm our strong commitment as a council and our strong need as a community to see a change in this unsustainable situation in the near future.”

Councillor Steve Klipin

“Community has lots of bits and at no stage is it just about roads, rates and rubbish (RRRs).

“We have libraries, pools to teach kids how to swim, we have the quality of community life – that’s the thing that keeps everyone here.

“While we live in a beautiful area, it’s not just the reason why we are in the Bellingen Shire. There are many scenic places throughout Australia – no, the reason why we are here and choose to live here is the community … and I care about community.

“I want to talk about due diligence – post-truth … some of the stuff said of late is patently not true and it disturbs me. It is disingenuous ... the reason why we are going through what we are now is because of rate-pegging.

“In addition, council has made significant savings – hundreds of thousands has been saved. That’s the truth of it.

“Now to stewardship. No one wants their taxes increased and it’s easy to be popularist. But who wants to then tell the people you have no libraries, parks, tourism support ... ?

“To say it’s too hard now is throwing the baby out with the bathwater.”

Mayor Dominic King

“I acknowledge it is difficult to ask people to pay more in these times … but this problem is not unique to the Bellingen Shire. 

“The state and federal funding is inadequate.

“To be clear, council has external auditors, we have gone through the Fit For the Future process (and by extension their team of accountants) and councillors give their due diligence to every decision – but there is no magic pudding.

“It seems odd that people think rates never go up yet allow for other increments to goods and services. Council’s costs go up just like everything else – that council rates will stay the same does not make sense.

“To be honest, I find it tiring that there’s conspiracy theories that there is something else going on here.

“We can lead – Bellingen Shire has quality councillors and council staff.

“We are working together and the idea that a reduction of services or staff is the path forward is erroneous. The community as well understands this … this is a hard step, but we need to make them. And I do it with a clear conscious – that we are doing the right thing.”

Councillor Desmae Harrison

“I fully support the recommendation as presented to adopt the Long Term Financial Plan that includes the 6 per cent SRV … for the purpose of implementing and partly funding the sealed roads resurfacing programme as outlined in the report.

“I would like to thank all those who attended the drop in sessions across the Shire. Even though numbers of attendees was only a very small sample of residents, comments and concerns were noted. 

“I believe there is not one councillor or staff member in the chamber today's initially felt comfortable with the SRV application.

“The decision to apply was not taken easily. The majority of residents in the Bellingen Shire have indicated that they did not want to become part of any amalgamation, to lose the special identity that this Shire has – it’s special diversity, and maybe just become lost in another Shire.

“To become Fit the Future and remain stand alone (which was achieved) many, many hours of work were undertaken to meet this end and new projections relating to this were developed.

“The SRV of 6 per cent was part of this.

“On talking with people, I realise that some people will find the way forward a little harder with rates payments, but there is a Hardship Policy to cover these situations.

“The people this relates to should speak to council staff or a councillor regarding this.

“I was heartened by the number of residents who indicated that they supported an increase as long as the money is spent as applied for.

“I can assure you, that very strict guidelines on reporting are in place and that reports on progress on works completed and being undertaken are reported to councillors every two months.

“As a group of councillors the reporting is taken very seriously. I know this is the only way forward. Mistakes of the past should no longer be dwelt on.

“Current councillors cannot be held responsible for actions taken many years ago.”

Councillor Garry Carter

“In opposing this recommendation for a SRV rate increase it is my belief that this council’s inability and mismanagement to control council's business affairs over the last 20 to 30 years ... this is why this Shire is in the position it is in now.

“Also the lack of leadership shown by previous mayors and councillors to acknowledge its failing infrastructure by not putting the necessary measures in place.

“This council's direction needs to change now, we as newly elected members to council must all remember that councillors are accountable to the local community for the performance.

“Of this council, we must listen to what our community are telling us. And they are saying enough is enough.

“This council needs to go back to basics and councillors have an opportunity to do this today: Put rate rises on hold; reduce our wages and salaries budget by $400,000 over the next 12 months; and deliver basic services that our community expect as follows, fixing roads and bridges, supply water and sewerage, keeping our streets and parks clean, provide kerbside pick-ups of rubbish and supply limited library service ... then and only then councillors should look at what funds are left to supply other services that we could deliver.

“I urge all councillors to vote against this motion.”

Councillor Steve Jenkins

“I agree with what Cr Carter has said.

“And I will also add there has not been enough … no adequate work on looking at other alternatives. The potential for more efficiencies and cost-saving measures within Bellingen Shire Council have not been investigated properly.”

Councillor Toni Wright-Turner

“Cr Fenton’s amendment to the SRV proposal was an important one – I want to acknowledge those points and also add that I agree with everything she said.

“This has been a hard thing for councillors, but ultimately we have to do what is best for the community.

“The options were to increase revenue or reduce expenditure. To cut vital community services would not produce the right outcomes.”

Council notes

In the agenda, council stressed the SRV would allow for “greater focus on the strategic management of its infrastructure while putting steps in place to ensure that any renewal requirements are addressed.” 

“The SRV will assist in facilitating a refocus from reactive maintenance to proactive renewal of its transport infrastructure.”

Today’s announcement sets the scene for – perhaps – another 6 per cent rate rise next year, and following that, the next – a total of seven years all up.

However, council said that the incremental approach allows for the following scenario: “Council over time and in consideration of its community, will only apply for future SRVs if the other financial sustainability strategies to increase savings and efficiencies ... do not provide the appropriate level of funding to assist in delivery of its Long Term Financial Plan and required infrastructure renewal.”

The application of the 6 per cent SRV for 2017-18 means an extra $103,256 to go into general revenue, and $309,767 will be used for the road resurfacing program.

Councillors agreed with council that we can we afford the rise – and they have facts to prove it.

“In consideration of making an application for a SRV, council has considered the community’s capacity to pay based on the SEIFA Index of Advantage and Disadvantage, level of proposed increase and other cost indices,” council stated.

“Given that many comparisons were made with neighbouring councils by respondents to the engagement process, the following information is provided.

“Bellingen Shire’s SEIFA index, in comparison with some neighbouring councils, states Bellingen (950.1) has a higher capacity to pay compared to other like councils, e.g. Nambucca (900.0) that ranked higher in terms of their level of disadvantage. Kempsey also ranks higher with an Index of 879.7.

“When comparing residential rates across neighbouring councils, Bellingen Shire ratepayers pay less on average. While each council uses different multiple rate categories, the following information outlines comparative differences across Bellingen, Nambucca, Coffs Harbour and Port Macquarie local government areas.”

Compared with other council regions, Bellingen has lower business rates, with Nambucca nearly twice as high and Coffs Harbour non-CBD more than three times higher.

“Further comparisons between the four councils indicate that (Bellingen Shire) farmland and sewer rates are higher.

“When comparing Bellingen Shire residential rates to Coffs Harbour, including seven years of a 6 per cent SRV, it should be noted that Bellingen Shire rates remain lower than that may occur on average. It should be noted that this also does not include any future rate rises from Coffs Harbour.”

Council says it has also considered the Bellingen Shire average weekly household income.

“The 2011 ABS Census Data states that 31.5 per cent of Shire residents earn between $600 and $1249 a week compared to the NSW Regional average of 27.1 per cent and the Mid North Coast average of 30.8 per cent.”

Community – Formal Feedback

According to council 98 submissions were received across all mediums and are broken down as follows:

  • 19 – Formal
  • 6 – Generalised responses
  • 73 – Drop-in sessions

Feedback from all submissions provided a number of views with respect to the proposed SRV. Of the opposition submissions that were made regarding the SRV, many reflected factors “outside council’s control”, including:

  • The need to rate National Parks and State Forests
  • The NSW Government should support the cost for local roads and bridges
  • Realistic (land) values set by Valuer General
  • Historical issues from previous councils
  • Financial assistance grants need to be increased
  • Rate pegging

Comments were received regarding council internal costs and administration including:

  • The perception that there are too many staff compared to other councils
  • Staff are paid too much
  • Cutting council jobs would free up more funds to go towards fixing roads and bridges
  • The disparity between townships in terms of rate categories
  • Mismanagement of funds

Other comments generally included:

  • The impact on pensioners as a result of the increase
  • Too much money taken up in administration
  • Other neighbouring councils

Council said it received neutral and positive responses for the proposed SRV, including:

  • Long term maintenance a priority for our roads
  • Council’s roads and bridges need work
  • Not unopposed to a rate rise
  • No opinion at this stage
  • Extra money going to roads and not on administration