Adelaide City Council to discuss 7.4 per cent rate rise, cuts and new projects for 24/25 budget

Adelaide City Council rates are set to soar to claw back money for repairs, with councillors urged to make about $5.4m in cuts – and rethink their own projects.

Adelaide City Council is considering a 7.4 per cent rate rise and increases in fees and charges to claw back revenue to help fund a maintenance blackhole and pay for strategic projects next financial year.

It will also examine cuts to services and savings opportunities, with Lord Mayor Jane Lomax-Smith saying the council was “handing out $6m in various forms”.

Tuesday night’s finance committee meeting will discuss the council’s $110m capital works program and projects supported by councillors – including a years-long project by the Lord Mayor to plant nearly 500 new trees every year.

That $9.7m greening project would cost about $20,000 a tree on average, $1.7m next financial year and is part of the council’s climate strategy to tackle forecast 50C days next century.

The aim is to plant extra street trees across North Adelaide and the CBD as part of road renewal - and by resident requests - to increase the city’s canopy by 10 per cent, creating more shade.

The committee will also consider spending $150,000 on a Barry Humphries statue outside Her Majesty’s Theatre and the Adelaide Central Market plan for 24/25, with staff saying the market was budgeted for $400,000 deficit in the past quarter. A rise in employee costs is predicted ahead of the expanded market opening, with a near-$1m deficit predicted next financial year.

The Adelaide skyline. Picture Emma Brasier

The city council has already heard it needs to urgently increase funding to chronic renewal underfunding caused by previous councils, with about an extra $150m needed over the next decade.

Paying for asset renewal – and everything else staff are recommending – comes with a “price tag” of a 7.4 rate revenue rise.

The revenue increase could include increasing fees and charges and cutting services – meaning a lower rate rise – but projects championed by councillors themselves will cost extra.

Lord Mayor of Adelaide, Jane Lomax-Smith. Picture: NCA NewsWire / David Mariuz

Last year, Adelaide City Council rates rose by about 8.5 per cent on average, the committee heard. Other “established” metro councils are looking at rate rises of between 5.3 per cent to 6.2 per cent – but they are not in “budget repair”.

Two weeks ago, the committee heard staff had identified about $4.5m in of savings, including cuts to city business activation, fashion industry support, NYE events and consultancy.

At that meeting, The Lord Mayor said the council had not “drilled down” into grant subsidies – both those the council receives and also those it pays out.

“Council has been canvassing available choices and considering all options as we continue to address longstanding underfunded infrastructure investment and ongoing budget repair,” she said on Monday.

“We’re handing out $6m in various forms – we should look at critically at that,” she said.

She said council should consider cutting funds for Study Adelaide – a program aiming to assist bringing international students to Adelaide.

“We were innovative in 1997 when we kicked it off, we tipped in $300k a year to get it going – but I’m astounded I’m still paying for it,” she said.

She said the council had to separate “mission critical” funding from the “nice to do”.

“There has to be an assessment – $2.5m of these projects are mission critical,” she said.

“I think the savings are quite conservative, I don’t know if we wiped out all the Covid response. We need to go through this with a sharp knife and do a lot more cutting.”

Council documents show forecast borrowings will increase by nearly $25m to just over $72m in the 2024/24 budget, with an operating surplus of $4.6m needed that year – and $5.8m from the next – to sustainably repay the loan over 20 years.

There is a current shortfall of $7.525m for asset management, the committee heard at its last meeting.