![Upper Lachlan Shire Council CEO Alex Waldron. Picture supplied. Upper Lachlan Shire Council CEO Alex Waldron. Picture supplied.](/images/transform/v1/crop/frm/FkT3ZusFw5YrTvZCipmLUF/6d87b7b1-72ea-496d-84f2-4c32ab45e48e_rotated_270.jpg/r0_0_2252_3452_w1200_h678_fmax.jpg)
Upper Lachlan Shire Council will investigate whether to hike rates, given what it says are significant cost pressures.
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CEO Alex Waldron said the council would start the process to judge whether a special rate variation was justified for the 2024/25 financial year.
"As one of the 33 percent of councils that have never applied for a special rates variation (SRV), (the council) is reluctant to impose this increase on ratepayers, however our current circumstances dictate that we investigate this option," she said in a statement.
Ms Waldron said it was prudent to start investigations now and the council wanted to be open and transparent with the community to ensure "the financial position was sound for years to come."
The decision came at an extraordinary meeting on Tuesday where councillors decided in closed committee to endorse the SRV application in principle. In a closed session, they also allocated $115,000 for a consultant's report. This would include a financial sustainability review and gap analyses on the council's long-term financial plan and asset management strategy.
It would also cover a 'capacity to pay' report, resourcing strategy updates, community engagement and preparation of the SRV application.
Commercial negotiations will start with AEC Group to complete the reports.
Ms Waldron said the process would inform the percentage rate increase for which the council would apply.
The move is likely to spark community comment. But ultimately, the Independent Pricing and Regulatory Tribunal will decide the matter based on whether it has broad community support and if people have capacity to pay.
"Extensive community consultation and engagement is a key component of the process," Ms Waldron said.
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She said the council had a very small rate base, low population and a large geographical area to service.
"Improving the council's long-term financial sustainability to continue delivering existing services and infrastructure is critical," she said.
"The council has had operational budget deficit results in the past two years and is this is projected to continue in the long-term financial plan."
![Crookwell's multipurpose aquatic and activities centre, pictured here in June, is expected to cost Upper Lachlan Shire Council more than expected. It followed the March collapse of previous contractor, Lloyd Group, in March. Picture by Louise Thrower. Crookwell's multipurpose aquatic and activities centre, pictured here in June, is expected to cost Upper Lachlan Shire Council more than expected. It followed the March collapse of previous contractor, Lloyd Group, in March. Picture by Louise Thrower.](/images/transform/v1/crop/frm/FkT3ZusFw5YrTvZCipmLUF/eda13146-3249-4810-a6bc-899ada230755.JPG/r0_391_4288_2440_w1200_h678_fmax.jpg)
The 2023/24 budget forecasts a $3.98 million net operational deficit. It includes $13.6m to be collected in rates and annual charges and $24.2m to be spent on capital works.
It allocates $3.25m to Crookwell's multipurpose aquatic centre construction. The project, originally estimated to cost $8.25m, faced further pressures after the collapse of builder, Lloyd Group, in March. FDC Constructions is now building the centre and the council is lobbying for state and federal grant assistance.
Ms Waldron said councils across NSW were experiencing cost escalations, many of which were outside their control. These included the emergency services levy, audit fees, insurance, energy, depreciation, construction and capital works project costs that were "well above CPI."
"A snapshot of special rate variation determinations shows that only 42 of NSW' 128 councils have not applied for a special variation since 2011," she said.
"Eighty-six councils (or 67pc) across the state have implemented a special rates increase in their LGAs."
Ms Waldron said aside from AEC Group's analysis, the council was also required to examine productivity improvements, expense reduction and to review asset utilisation and an asset maintenance backlog.
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