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Funding Our Future
IPART Approves Council’s Application to Increase Rates
 
The Independent Pricing and Regulatory Tribunal (IPART) has approved Council’s application for a two-year Special Rate Variation (SRV).
 
The permanent two-year SRV of 8.14% for 2015/16 and 7.75% for 2016/17 includes the rate peg increase of 2.4% for 2015/16 and an anticipated rate peg increase of 3% for 2016/17.
 
Council carried out a wide-ranging public consultation on the proposed SRV which included a brochure and reply-paid postcard for responses sent to all ratepayers, a public online survey and a survey of Council’s Online Survey Panel.
 
Around 5,500 postcards were returned to Council and approximately 500 people responded to the online survey. The consultation revealed significant opposition to the SRV with the main concern being the affordability of the rate increase. 
 
This opposition was noted by IPART, but the Tribunal also highlighted Council’s response to the affordability issue in proposing the freezing and reduction of certain charges to reduce the impact of the ordinary rate increase on the total rate bill. This played a key part in the Tribunal’s decision to approve Council’s application.
 
With the price freeze in water and sewer annual charges and a reduced increase in water usage charges - the overall increase in annual bills will be limited to no more than approximately 3.9% for the average urban ratepayer.
 
In addition, after the first year, Council will again review the progress achieved from its Transformation to Sustainability Program and other financial sustainability initiatives currently underway, and consider whether the rate increase proposed for 2016/17 is necessary.
 
The SRV rate increase will generate an approximate additional $4.2 million (above the rate pegging allowances) in rate revenue by the second year – which will be dedicated to asset maintenance and renewal to prevent the further deterioration of our public infrastructure assets, such as roads, bridges, buildings, playgrounds and amenities.
 
While rate increases are never welcome, the reality is that this rate rise is a necessary part of a wider, overall strategy to secure Council’s financial sustainability and - in particular - help improve the financial position of Council’s General Fund to ensure it can meet community expectations for services into the future.
 
If any ratepayers are experiencing difficulties in rate bill commitments – they should not hesitate to contact Council’s Rates Section on (02) 6648 4444 to discuss their situation, as Council is always willing to work with ratepayers experiencing financial difficulties.
 

Council’s formal application can be viewed on the IPART website (click on the link)

 

Transformation to Sustainability Project (T2S)
 
Council knows that increasing rates is only part of the solution to becoming financially sustainable. Council itself needs to reduce costs and find further efficiencies in the way we deliver services.
 
With this as a focus,  a ‘Transformation to Sustainability’ (T2S) project is underway aimed at driving further improvements to services in terms of cost-effectiveness and productivity.
 
Changes to Council’s senior management structure have already been completed. Further improvement initiatives are also underway with more to be rolled out over the next 12 months. Outcomes from the T2S project are projected to produce annual savings of approximately $3.2 million after three years.
 
In addition to this project, Council will continue to look for ways to increase profits through its business units and the commercialisation of its CityWorks construction division, as well as further improvement in our management of public assets to ensure we get the most value for money.

 

Will my new Land Valuation also have an effect on my land Rates?
The answer to this is ‘Yes’. This is because the new valuations affect the rates and charges payable on individual properties in different ways, depending on a number of individual factors.
 
A property’s land valuation is only used in the determination of the ordinary rate and environmental special rate (levy) on your rate notice. Other charges on your rate notice - for stormwater, waste, water, sewerage services etc - are not based on land values. This means that the valuation changes won’t affect these charges.
 
It is also important to understand that changes in valuations don’t change the total amount of general income (income from ordinary and special rates) that Council is allowed to raise each year. This total is restricted by rate pegging legislation under which Council has approval to increase general income by 8.14% for 2015/16 and 7.75% for 2016/17.
 
Because rates are largely based on land values, changes in individual land values can affect the amount of ordinary rate and environmental levy applicable to individual properties. In simple terms, the land valuation determines a property’s ‘share’ of the total rate burden that Council can generate. When new values are set, the size of these ‘shares’ can change because some land valuations will increase or decrease compared to others.
 
Whilst the land valuation process is conducted independently from Council, we are legally required to use the new land values to calculate the ordinary rate and environmental levy for individual properties from 1 July 2015.

 

What Happens Next?
Council will consider a report on 11 June 2015 to adopt its rating structure for 2015/16. A rating structure that incorporates the approved rate increase will generate additional rate income to support the required additional investment in public asset maintenance and renewal.

 

Update on 2014/15 SRV Projects
The additional rate funds associated with the rate increase approved for 2014/2015, like the approved rate increases for the next two years, have been allocated to increase our investment in the maintenance and renewal of public assets.
 
The additional rates funds generated by a rate rise for 2014/2015 have been used to fund a program of priority works including:
 
·         Road Renewal Works – Bonville Headland, Sawtell
·         Road Renewal Works – Bonville Street, Coffs Harbour
·         Road Renewal Works – Fitzgerald Street, Coffs Harbour
·         Road Renewal Works – Jordan Esplanade, Coffs Harbour
·         Road Renewal Works – Gross Michel Road, Korora
·         Renewal of Retaining Wall – Coffs Creek Park
·         Replace Footbridge – Thompsons Road, Coffs Harbour
·         Replacement of BBQs – Boronia Park, Sawtell
·         Replacement of BBQs – Mullaway
·         Restoration Works – Lowanna Hall
·         Restoration Works – Marina Drive Amenities
·         Restoration Works – Beryl Street Amenities

 

What to know more?

Our current situation

What have we been doing to improve our situation?

How do our general rates compare to other similar councils?

Where will your rates be spent?

What impact will the rate increases have on your rate bill?

Frequently Asked Questions