19 May 2015 IPART Decision Welcomed

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19 May 2015 IPART Decision Welcomed

The decision by the Independent Pricing and Regulatory Tribunal (IPART) to approve an application for a two-year Special Rate Variation (SRV) for Coffs Harbour has been welcomed by Council.

“This is good news for the Coffs Harbour Local Government Area. It will provide us with the platform we need to continue giving residents the services they want into the future,” said Coffs Harbour Mayor, Councillor Denise Knight. “We didn’t make the application lightly. We totally understand that the question of ‘can I afford this rate rise?’ is uppermost in people’s minds.

“We listened to those concerns and that’s why we voted to freeze water and sewer access charges, as well reduce the fee for septic system inspections for the next three years, so that we could keep any increase affordable for the average ratepayer.”

IPART has approved a two-year Special Rate Variation (SRV) of 8.14% for 2015/16 and 7.75% for 2016/17, which includes the rate peg in each year, being 2.4% in 2015/16.

With the price freeze in water and sewer annual charges - the overall increase in annual bills will be limited to no more than approximately 3.9% for the average urban ratepayer. The 3.9% will also include the annual rate increase set by the State Government.

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 $4.2m (above the rate pegging allowances) in rate revenue by the second year – which will be dedicated to asset maintenance and renewal so as to prevent the further deterioration of our public infrastructure assets, such as roads, bridges, buildings, playgrounds and amenities.

“Efficiency and affordability are also the watchwords that Council is operating under,” said Andrew Beswick, Council’s Director of Business Services.

“We applied for the SRV as a way to continue providing the services the community desires, while also making sure that the infrastructure that underpins those services can be kept in a safe and reasonable working condition.”

“We’re also well on the way through our own internal Transformation to Sustainability Program, which is forecast to produce savings through efficiency of $3.2m after three years,” said Mr Beswick.

“Plus we’re continuing to look for ways to increase profits through our business units and the commercialisation of Council’s CityWorks construction division, as well as further improving our management of assets and services to ensure the community receives the most value for money.”

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, which represents a statistically accurate portion of the Coffs Harbour Local Government Area population.

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 of certain charges to reduce the impact of the ordinary rate increases on the total rate bill. This played a key part in the decision to approve Council’s application.

Council will consider a report on June 11 2015 to adopt its rating structure for 2015/16.