Central Coast household and water rate rises signal end of financial crisis

A “sigh of relief” swept over Central Coast Council as the final rate rise approval came through on Tuesday. See what it means for not only staff but the coast’s future.

“The financial crisis is behind us”.

Central Coast Council Administrator Rik Hart says the crisis which saw the council plunge $565m into debt has been turned around thanks to recent rate announcements.

In the last two weeks, the Independent Pricing and Regulatory Tribunal of NSW (IPART) has approved both the extension of the 15 per cent rate rise for the another seven years as well as a 28 per cent rise in water rates over the next four years.

The water rates announcement on Tuesday, which will see rates rise by $183 in the next financial year, was the final of council’s applications to IPART.

Mr Hart says it means no more cuts to council services as well as staff.

“It was palpable the relief that occurred in the organisation when the final announcement came through,” Mr Hart told the Express.

“A sigh of relief” ran through the business when the final water rate rise approval came through. Picture: Mark Scott

“With these two revenue lines locked in, we are now totally in charge of our own destiny. We are tracking well. Hearing staff when the final announcement came through … it’s just a big sign of relief. Their jobs are now secure.”

However Mr Hart said he was disappointed that council staff working across the region were still copping abuse and blame.

“The faster we can get away with the community being bounded by hatred and blame at staff the better,” he said.

“Just recently a staff member was threatened to be beaten up. It’s so disappointing to see the hatred out there.”

He pointed out that the new annual cost structure, including general rates and water/sewer rates, based on the use of 150 kilolitres of water, was $312 less than Lake Macquarie and $372 less than Newcastle.

Central Coast Council Administrator Rik hart and former Interim Administrator Dick Persson AM were brought it to fix the financial crisis in October 2020.

“We’re still cheaper than our neighbours. Our rate structure will be $2995 with Newcastle’s $3367,” Mr Hart said.

The council is tracking towards a $40m surplus at the end of the 2021/22 financial year.

“That compared to a $70m loss last year and $90m loss the year before,” Mr Hart said.

He said the next 10 years of surpluses would pay off the $150m in emergency bank loans which helped the council avoid bankruptcy in October 2020.

“At the end of the 10 years, we are looking to get down to a total debt for the organisation of $80m. As of now, we have eliminated a huge amount of the debt.”

EARLIER – MAY 24 2022

Coast residents will be slugged with another rate rise in July – this time our water rates.

The Independent Pricing and Regulatory Tribunal of NSW (IPART) has released its decision on what it will allow Central Coast Council to charge for its water services come July 1 2022 and over the next four years.

Council applied for a 37 per cent increase in 2022-23, which would have seen bills increase by almost $400, however this was denied by IPART.

Instead it has allowed an initial 17 per cent increase which means average household water bills will rise by $183 to $1242 in the next financial year.

The decision comes just two weeks after IPART’s announcement that council’s 15 per cent rate hike – introduced in 2021 to help council out of its crippling financial crisis – would continue until 2031.

IPART has stated that, in relation to the water rates, instead of slogging residents with a huge increase in the first year it has responded to affordability concerns and tried to ease impacts of rising bills over four years.

After the first hike, water bills could then increase by $80 (6 per cent) in 2023-24, $106 (8 per cent) in 2024-25 and $9 (one per cent) in 2025-26, as well as by inflation.

Over the four years, residents pay $393 less compared to the council’s proposal.

Household rates will increase by $183 in 2022/23.

“Our price path allows CCC Water to recover the same amount of money over the 4-year determination period as if we had decided to allow an immediate increase of 28 per cent in typical household bills from 2022‑23,” an IPART statement read.

IPART chair Carmel Donnelly said the review found that council must increase its spending in order to maintain water infrastructure across the region.

“Customers have told us there were persistent water quality problems in some parts of the water supply system. The increases should enable CCC Water to improve the quality of services its customers receive,” Ms Donnelly said.

Community feedback on the proposed prices included affordability and spreading out the increase over a number of years.

“Over 1000 stakeholders responded to our issues paper survey and 89 per cent indicated that they would prefer any necessary price increases be applied gradually. As a result, we have introduced the necessary price increases over the 4-year determination period in stages. We have also made recommendations to support pensioners and customers who may need extra assistance.”

Central Coast Council’s Administrator Rik Hart previously stated that Central Coast currently had the lowest water prices in NSW.

“We must return to pricing levels that will ensure we can meet the needs of our community,” he said.

Central Coast Council’s Administrator Rik Hart.

IPART’s water pricing decision in 2019 resulted in a major drop in water rates and annual loss of $39m to the council.

Mr Hart has previously stated that the application to increase water charges by such a high margin was to bring prices back in line with levels from 2018/19.

Ms Donnelly said IPART had also called for CCC Water to improve its performance and accountability to the community, requesting the State Government’s permission to review the council’s progress in two years.

IPART has explained that figures from its draft report released in March differed from the final report released on Tuesday due to inflation updates.