Coffs Harbour City Council to apply for special rate variation

‘It’s not our doing’ said one Councillor in relation to a pending rate rise but Coffs MP Gurmesh Singh says the Cultural and Civic Space could have something to do with it.

Coffs Harbour City Councillors at their first meeting in February 2022. Back row: Rodger Pryce, Jonathan Cassall, George Cecato, Tony Judge. Front row: Sally Townley, Tegan Swan, mayor Paul Amos, Greg Wolgamot and Julie Sechi. Picture: Janine Watson

Claims of cost shifting and ‘goof ups’ have been made by Coffs Harbour City Councillors as they do the maths on rates moving into the new financial year.

The state government body that sets the base rate that councils can charge (the rate peg) uses a mathematical formula to help set the rate each year.

But this year something went wrong according to a senior staff member, and the robots at the independent Pricing and Regulatory Tribunal (IPART) spat out an “abnormally low” base rate of 0.7 per cent.

“The bizarre outcome is because of how the maths is worked out and it didn’t accommodate for the Covid pandemic,” director of business services Andrew Beswick said.

Andrew Beswick. Picture: Janine Watson

“For example, it was based on the quarter ending in June 30, 2020, where we actually had deflation so there was a distortion in the normal flow of things.”

Coffs Harbour state member Gurmesh Singh says the state government is not to blame.

“That’s what the I in IPART stands for - it is an independent body.”

Mr Singh accepts the rate was low this year and says that’s why the local government Minister will conduct an investigation into the methodology moving forward, and put in place a special provision for councils to ask for an added special variation to boost coffers for the 2022/23 financial year.

Mr Singh also brought up the controversial Cultural and Civic Space building currently under construction in the CBD which will house new council offices, library and museum.

“Council is under pressure because costs have gone up but they also have added pressures because the Cultural and Civic Space is costing more than what was anticipated,” Mr Singh said.

Anticipating costs on the controversial building could come up in the context of rising rates, mayor Paul Amos said he has been “keeping a close eye on that” and that costs are on track as the majority of contracts were locked in before the “massive” increase in material costs.

The question of whether or not to apply for a special variation to make up the shortfall was on the agenda at the recent Coffs Harbour City Council meeting.

Councillors were being asked to consider applying to the state government for an added special variation (ASV) of 1.8 per cent above the 0.7 per cent rate peg.

Councillor George Cecato and Coffs Harbour MP Gurmesh Singh. Picture: Tim Jarrett

During the debate Cr George Cecato claimed the state government had “goofed up” and that now the onus was on councillors to go to the community to make up the shortfall.

“This is not our doing. It is nothing to do with previous management - but purely due to a slight hiccup of state government,” Mr Cecato said.

Other councillors including Tegan Swan described the situation as a form of cost shifting.

Newly elected councillor Scott Wolgamot expressed some “horror” at the thought of continuing to be able to deliver services on such a low rate in the context Australia’s largest quarterly and annual increase in inflation rate in decades.

Ultimately councillors decided to go ahead with their application for a 1.8 per cent added special variation. Councillor Rodger Pryce was the only one to vote against the motion.

Councils were given just a 20-day period to apply for the variation with applications closing on April 29.

So far the IPART website is showing that 86 councils (including neighbouring Bellingen Shire Council) have applied for the variation.