Adelaide City Council maintenance backlog needs $150m over next 10 years to fix, Lord Mayor says

City council ratepayers face a rate hike as the Lord Mayor warns $150m is needed to fix a huge maintenance backlog – caused by chronic underfunding for a decade.

Adelaide City Council ratepayers face the prospect of soaring rates bills to pay for a $150m budget blackhole largely caused by underfunding from previous councils.

Lord Mayor Jane Lomax-Smith has told The Advertiser the council would need to spend an extra $15m a year over the next decade to “get control of it”.

The council’s finance committee on Tuesday heard it would take at least three budget cycles to catch up with chronic renewal underfunding over the past three years, especially for buildings, roads and footpaths, and public amenities and art.

Dr Lomax-Smith flagged raising rates as necessary to fix the city council’s financial position, which had been “damaged by keeping the rates down and giving away too much money”.

“People have gone on about how I’ve moaned about how the rates been frozen for 10 years and moaned about not charging for normal services and being too generous,” she said.

“But we have a significant maintenance backlog because of underspending for a decade.

“As custodians of the city infrastructure and of other people’s investments, we have an obligation to sort that out.”

Lord Mayor Jane Lomax-Smith at Adelaide Town Hall. Picture: NewsWire / David Mariuz

Dr Lomax-Smith said the extra funding required was on top of this year’s “record $110m investment on infrastructure”.

“A large amount of this money already has been spent on various projects, including footpath and street repairs, while other work identified through asset management plans is underway,” she said.

In March last year, she ripped into the council’s budget as “in crisis” saying that in reality rates had been frozen for nine years.

She told the finance committee the council had to stop “spending money on the things we don’t want”.

“It’s wonderful for a councillor or local government to get bright shiny things,” she said. “But we have to get rid of some of the dross, cut hard, or put the rates up, or have no bright shiny things.”

Councillor Phillip Martin told the committee underfunding meant only about $10m was being spent, instead of the required $15.4m.

The City of Adelaide viewed the eastern suburbs.

Cr Martin said the previous council – of which he was a part – failed to meet its budget obligations.

Acting council chief executive Michael Sedgman said it “was true and a matter of record” the council had fallen behind on its target ratio of renewing assets over the past three years.

He also flagged possible rate rises, saying the council needed to discuss if rises in line with CPI were going to be “adequate”.

The target ratio reveals whether enough money is being spent to maintain or replace council assets as they wear out.

The previous council worked towards a 69 per cent ratio in an effort to cut costs.

A new plan proposes 90 per cent, but Dr Lomax-Smith told the meeting it should be 100.

She said she did not blame council staff for underfunding infrastructure.

“It’s a combination of Covid and financial issues to do with freezing rates and finding money – it’s budgeting without delivery,” she said.

The committee heard Covid meant the council had been forced – like the private sector – to pay a premium for materials and had a major impact in renewal.