Shoalhaven Council propose 3.8 per cent rate rise to battle financial crisis
A south coast council has proposed a substantial rate rise, just weeks after forming government, in a bid to fix an inherited financial disaster.
The South Coast News
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A south coast council is planning a substantial increase to rates just weeks after taking office, in a bid to battle an inherited financial crisis.
Shoalhaven Council papers reveal the local government body could increase rates by 3.8 per cent, with the plan to be discussed at an extraordinary meeting on Tuesday.
The newly elected council’s plan will also be put to the community for public consultation.
The proposed special rate variation is lower than the previously suggested rise by Shoalhaven Mayor, Patricia White, who told this publication the increase could be as high as eight per cent.
Council’s chief executive officer, Robyn Stevens, said the proposed rate rise would be implemented from the next financial year.
“Some of the causes of this position have been building progressively over a long period and some are much more recent,” she said.
“The combined effects of ongoing rate pegging at levels below actual cost, fair value accounting for assets, increasing compliance cost, impacts of natural disasters and growing community expectations have impacted council’s financial position.”
The proposed rate rise comes after an independent review by economics specialists AEC Group in November 2023 found the council was not “financially sustainable”.
The review found bushfires, floods and the Covid-19 pandemic “significantly impacted” revenue and stated the council was operating at a major deficit.
As a result, council proposed a 44 per cent rate rise increase which was voted down in February. A 4.5 per cent special rate variation was approved and started this financial year.
The coastal council also halted more than $60m of community projects in a bid to save funds.
Ms White recently revealed a plan to create a financial advisory body built of councillors and independent financial professionals, which would look over the council’s expenses and finances to ensure it was saving money and making the right decisions.
“Last term, we closed down 90 projects to try and save some money,” Ms White said.
“That can’t happen again.”
Meanwhile, Ms Stevens said the proposed rate rise was needed, noting council had produced a net operating deficit for the last four financial years.
“Financial forecasts indicate a significantly deteriorating operating performance,” she said.
“Without intervention, council will continue to generate operating deficits over the next 10 years.”
Council will discuss the proposed rate variation on Tuesday.
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