Rate rise is only a matter of time, says Goulburn Mulwaree Council

Corporate services director Brendan Hollands made the comment after handing down the draft 2023/24 budget.

READ MORE: Sporting chance: Council champions new pavilion in spending plans

While not on the agenda this year, Mr Hollands said the council might need to consider a special rate variation for 2024/25 or the year after. This would allow time to consult the community.

"If I was brutally honest, I'd say a special rate variation is not an if but a when," he told The Post.

"But we are trying to take our time so that when we do apply, we are not talking about the figures being bandied about at the moment. Some councils are talking about a 100 per cent variation over the next three years."

Mr Hollands said he'd like to think any general rate hike could be limited to possibly 10 per cent for several years, but this was down the track. Extensive community consultation would firstly have to take place and councillors had to agree to the application. The Office of Local Government will only approve a variation if it has "broad community support."

But first, the council will fully assess the condition of its roads, buildings and other assets to ensure any application is based on 'good science.' This 10-year plan for upgrade and replacement will take about 18 months. An assessment of road condition is well underway and grant funds are being expended.

ALSO READ: Keeping pool project paddling after construction firm hits choppy waters

"We have set ourselves a goal that when we do go for a rate variation, the impact on ratepayers is kept as low as possible," Mr Hollands said.

In 2024/25, the council will collect a further 3.7 per cent in general rate revenue, taking the total to $23.8 million. The state's 3.7pc rate cap is just one of the key challenges. Mr Hollands said it was not keeping pace with real costs, and despite the council's work to meet the State's fit for the future criteria, was "not sustainable in the long term."

Rising costs have also hit council coffers. Insurance premiums have risen 25pc in the past two years. Mr Hollands said the council had $1m in insurance policies and this was unlikely to decrease.

Information technology costs had also climbed from about $160,000 annually to almost $1m per year. This covered security and software systems. The council hopes to gain some future efficiency savings by providing more e-services for ratepayers.

Power costs have also "increased considerably" with higher bills expected in future years.

"The inflation rate is 7pc but often construction costs are higher than that, yet we're limited to 3.7pc in our major source of income. Compare that to 2.5pc (rate peg) this year and it makes it more and more difficult," Mr Hollands said.

Local Government NSW has hit out at the State's decision to impose the full emergency services levy on councils. Following previous outcry, the government provided a $200,000 subsidy but councils have just received bills for the full amount. For Goulburn Mulwaree, it means a $752,056 payment, an increase of $301,000 on the 2018/19 levy.

ALSO READ: District power outages bite as cold weather takes hold

LGNSW described it as "catastrophic for councils" and "blatant cost shifting" by the state government. President Darriea Turley has sought talks with local government minister, Daniel Mookhey.

In addition, the council is bracing for a higher wages bill. A new three-year local government state award is being negotiated and will take effect on July 1. Mr Hollands expected the increase to be higher than previous years due to high inflation and cost of living pressures. The draft budget estimates an almost $2m rise in employee costs in 2023/24.

While facing higher costs, the council hopes to tap into more grant revenue. Mr Hollands said by assessing its assets, like roads, the organisation would be "ahead of the game" when applying for opportunities.

ALSO READ: 'Bloomin' great': Ken wins recognition for Festival contribution

Overall, he described the council's position as "okay." The draft budget projects an operating surplus after capital grants of $12.8m in 2023/24. Total debt as of June 30, 2022 stood at $38,321,000. This will reduce to $35.8m by June 30, 2023.

"We're not as strong as we have been," Mr Hollands said.

"Over the next few years we'll have to make the tough decisions and continue on that consolidation path until we know where we're at. It's really a period of consolidation now."

If a special rate variation was needed, Cr Prevedello hoped the community would engage in the conversation.

"It's a two-way street and councillors represent the community," he said.

Our journalists work hard to provide local, up-to-date news to the community. This is how you can access our trusted content: