Kempsey Shire Council will hike property rates by 7.9 per cent for the upcoming 2024-25 financial year as an "essential" step to manage a multi-million dollar forecast deficit. However, significant cost-saving and revenue raising remains necessary.
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The confirmed 7.9 per cent rise in rates is 3.2 per cent higher than the already approved rate peg increase of 4.7 per cent.
The 7.9 per cent increase for the first year was included in council's Special Rate Variation (SRV) application to the Independent Pricing and Regulatory Tribunal (IPART) earlier in the year.
Council applied to permanently increase its general income by 42.7 per cent over a three-year period from 2024-25 to 2026-27, however the application was only partially approved by IPART, approving a permanent special variation (SV) of 24.09 per cent over two years from 2024-25; a 7.9 per cent increase in 2024-25 and a 15 per cent increase in 2025-26.
In IPART's report (May 14, 2024) it called the decision on ratepayers "reasonable". Some councillors and staff agreed that while a difficult decision, the increase was a reasonable step in the right direction.
However, others in the community remain disappointed by the decision.
More to be done
On Tuesday, June 18, councillors voted to adopt the 7.9 per cent commencing July 1, 2024. The potential 15 per cent increase for the following year will be decided in the future (June 2025) and after an election in September (2024).
The rate rise is a response to a multi-million dollar deficit forecast for council over the next 10 years.
While the rise in property rates will increase revenue for council and help assist in moving toward financial sustainability, there is still more work to be done by council to cut costs and raise funds.
Kempsey Shire Council Mayor, Leo Hauville, said the decision reflects a responsible balance of financial prudence and community need.
"We are living through challenging times and this difficult decision reflects the immediate concerns raised by our ratepayers and the need to generate increased income to secure our shire for future generations," said Cr Hauville.
"Council too is facing many increasing costs in providing services to the Shire."
In addition to the rate rise decision, council adopted a new financial sustainability plan. Council set the charges, including domestic waste services, storm-water management services, water charges and sewerage charges which have risen by 3.8 per cent in line with the anticipated Consumer Price Index.
Council is also moving forward with a $10M loan with Commonwealth Bank of Australia (CBA) with a fixed rate of 5.87 per cent per annum to be repaid over 20 years. The borrowings will enable the General Fund capital program to be delivered in 2024-25.
"Council will remain focused on reducing costs, and ensuring the right services are being delivered in the most efficient way," Cr Hauville said.
"We will continue to fight for increased Federal and State funding to overcome their cost-shifting to councils."
Craig Milburn, General Manager for Kempsey Shire Council, said the onus was now on council to deliver on the promised cost savings and efficiencies.
"This rate rise isn't a miracle cure, it's an essential step, but the whole organisation is now focused on the difficult decisions that will need to be considered over the next 12 months to address the ongoing funding gap," said Mr Milburn.
"There is still a significant forecast deficit to manage, and over the next year we will look for savings, conduct service level reviews, and align those services with the most efficient staffing levels."
Community member Julie Coburn believes council has not been clear on alternative cost-savings.
"We as a community haven't felt like council has actually come out and given us some sort of other plan apart from rate rises and more debt," Ms Coburn said.
"There has to be another way...give us alternative options of what we can realistically afford to go without."
In response to the rate rise decision, Ms Coburn says the community feels they have not been listened to.
"From a community perspective of course we are disappointed," Ms Coburn said. "Any rate rise above the rate peg is hard to take.
"The community has really consistently come out for over a year with a strong voice saying they don't want this, that [a rate rise] will have a financial impact on them."
Ms Coburn says low income earners of the area are already doing it tough with the cost of living and the 7.9 per cent increase is going to make things worse.
Information about the revised hardship relief processes available to minimise impacts on ratepayer's capacity to pay can be found at www.ksc.pub/payingrates
Information will be included in the upcoming rates notice to be distributed to all ratepayers.
