Council's rate rise application partially approved by regulator
Published on 14 May 2024
Kempsey Shire Council has been given permission to raise rates by 24% over the next two years by the NSW Government’s independent pricing regulator.
The Independent Pricing and Regulatory Tribunal (IPART) has announced a partial approval of Council’s application for a special rate variation, approving only the first two of the application for a 42% increase over three years.
The Special Rate Variation (SRV) application proposed a 7.9% increase in property rates for the first year, followed by 15% increases over the following two years. IPART have approved the first two years of the proposal.
Kempsey Shire Council Mayor, Leo Hauville, said that IPART have recognised the significant financial pressures Council faces, while acknowledging the concerns of ratepayers if the full increase was applied.
“This partial approval supports the need to generate increased income, and streamline services, to secure financial sustainability. Council will have to remain focussed on reducing costs, and ensuring the right services are being delivered in the most efficient way,” said Cr Hauville.
“The Long Term Financial Plan, currently on public exhibition, includes a range of actions in the Financial Sustainability Program. These now become even more critical to deliver.”
Council deliberately set a lower increase in the first year of the SRV proposal to reflect the current cost of living challenges and allow maximum time to achieve additional organisational savings, before proposed increases in future years.
The rate variation approved for the 2024-25 financial year is 3.2% above the already approved rate peg increase of 4.7%. In dollar terms the total average increase per household in the next financial year, including the SRV amount, will be $100.
Stephen Mitchell, Director Corporate and Commercial for Kempsey Shire Council, said the IPART determination is a fair representation of the challenges faced by Council and the ratepayers.
“We are committed to making Financial Sustainability a focus of the Councillor induction and planning sessions following the September 2024 Local Government elections,” said Mr Mitchell.
“There is still a significant forecast deficit to manage, and over the next year we will look for savings by reviewing operations of Kempsey Airport, conducting service level reviews, and aligning the most efficient staffing levels with those services through the Workforce Management Plan.
“Many difficult decisions will need to be considered in the Council Chambers over the next 12 months, to address the ongoing funding gap.”
During May, Council will make submissions to state and federal government inquiries on the financial sustainability of local government. This advocacy work to review the rate peg method and cost shifting from other levels of government is an important step to identify a more equitable funding model.
The draft Operating Plan and budget for 2024-25 remains on public exhibition until Sunday May 19 ahead of Councillors making a final decision on setting the 2024-25 rates at the June Council meeting.
The community are invited to review and comment on the documents at www.ksc.pub/budget2024