Bellingen Shire Council has received formal approval from the NSW Independent Pricing and Regulatory Tribunal (IPART) for a special rate variation above the 2.3% rate peg from 1 July 2018.
Special rate variation requests were also approved for Kempsey, Ballina, Clarence Valley and Lismore.
IPART Chair Dr Peter Boxall said special variations are designed to give councils the flexibility to generate additional income above the rate peg to meet their specific needs, with an independent process to assess the increase.
Applications are assessed by IPART against the NSW Government’s published criteria, with submissions received directly from stakeholders also considered.
“In making these assessments, we have considered each council’s planning and reporting documents and financial need for the additional revenue, its community consultation on the proposed changes and the capacity and willingness of ratepayers to pay the requested increase,” Dr Boxall said.
“Although the Bellingen, Clarence Valley and Lismore communities were generally opposed to the increases, the councils have demonstrated they have provided opportunity for input and considered the impact on ratepayers.”
Through the rate peg and special variation process, IPART determines the allowable increases to councils’ general income. Councils decide how to allocate the increase among different ratepayer categories, such as residential, business, farmland and mining.
Bellingen Shire Council
IPART has approved Bellingen Shire Council’s application to permanently increase rates by a cumulative 19.1% over the next three years, 11.6% more than the assumed rate peg increase over this period.
The additional revenue will fund sealed roads resurfacing and bridge renewal, reduce the council’s infrastructure backlog and improve its financial sustainability.
Dr Boxall said Bellingen Shire Council’s application was broadly consistent with its 2015 Fit for the Future proposal and follows IPART’s approval of a 6% permanent single year increase in 2017-18.
“Over 100 submissions were received opposing the Council’s application. Nevertheless, the application met the criteria for approval by demonstrating a clear need for the additional revenue to improve roads and bridges, and steps are being taken to improve productivity and contain costs.
“Based on the council’s application, the average residential rate will increase by $66 in 2018-19, the average business rate will rise by $72, while farmland rates will go up by an average of $170,” Dr Boxall said.
Requested special variation - 19.1% cumulative increase over 3 years to be retained permanently in the rate base
Outcome (including rate peg) - Approved in full
Increase in the average residential rate 2018-19 - $66
Total cumulative increase in residential rate over 3 years (including the rate peg) - $212
Summary of purpose - Fund infrastructure renewal works as part of sealed roads resurfacing and bridge renewal program, reduce infrastructure backlog and to improve financial sustainability.
“While the decision to make a submission to increase rates is never an easy one, I welcome the decision as it means we can continue with council’s plan to address long term infrastructure issues impacting on our community and ensure the council continues to deliver outcomes that we know are priorities, for our community,” Mayor Dominic King said.
Bellingen Shire Council said the decision to apply for a special variation is part of a broader, long-term plan around community priority and financial sustainability.
“The revenue generated by the special variation means council will be able to fund important infrastructure renewal works as part of its sealed roads resurfacing and bridge renewal program and reduce its infrastructure backlog,” council said in a media release.
“Council’s adopted Long Term Financial Plan demonstrates that the Special Variation will be spent only on (road and bridge) infrastructure and over the next 10 years, council will be able to invest $20 million on a bridge renewal program and $8 million on the roads reseal program.
“IPART’s approval means council will be able to consolidate its efforts on improving Bellingen Shire infrastructure, while focusing on longer term resilience and financial sustainability which is of critical importance in our current economic and operating environment.”