Hepburn Shire Council applies to Essential Services Commission for 10 per cent rate increase
A cash-strapped regional council could reduce services and has applied to increase rates by 10 per cent, with some residents calling the move a “disgrace”.
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A regional Victorian council has applied to increase its rates by 10 per cent in a bid to survive as insolvency looms and the council faces an “inability to fund essential services”.
Hepburn Shire Council has applied to the Essential Services Commission for a higher than usual rate cap, despite saving $1.5m in its 2024/25 budget.
It seeks an extra 7 per cent increase next financial year on top of the existing 3 per cent cap already imposed on Victorian councils, meaning a $2.2m total increase in rate revenue.
In application documents, CEO Bradley Thomas said the increased cap was a “’must have”, not a “nice to have” in order to help make up a forecast annual shortfall of $4m for the next decade.
“Projections show that without a rate cap variation, Council would have negative unrestricted cash every year for the next 10 years,” he said.
“It is estimated that Council would have extremely low cash levels in June 2031 equating to $230,000.
“This is not only unsustainable, but would mean Council was insolvent.”
Hepburn Shire contains about 11,000 ratepayers and 1400 km of roads.
More than 10 per cent of its ratepayers do not live in the tourism-reliant LGA.
The council has spent millions maintaining multiple town halls – those in Clunes, Creswick, and Daylesford – and lost over $5m when it bought The Rex in Daylesford, later suspended works on the building, and then sold it.
Costs associated with multiple recent natural disasters and years of rate caps lower than inflation have compounded the shire’s financial woes.
“Due to the significant financial pressures and Hepburn Shire being a traditionally low-rating Council, without this variation, we will be unable to maintain critical services, meet community expectations, and uphold our statutory obligation under the Local Government Act 2020 to ensure financial sustainability,” Mr Thomas said.
Hepburn Shire Mayor Don Henderson said that if the variation were approved, the average rate increase would be about $120 a year.
“Incidentally, I pay multiple of those rates, so it’s not something I’m doing to everyone else and not to me,” he said.
He said the council had already saved $1.3m in operational cuts by deferring capital projects and allowing the natural attrition of staff.
But in order to keep its variation request to an extra 7 per cent and get the ESC’s approval, he said it had to find another $2.6m.
“What it’s meant is that we’ve said, ‘Well, we won’t open the library on a Saturday morning,’ for example,” he said.
“We might close the transfer station for a day. Do we have swimming pools open all the time?
“So that saves on those costs of operating those things for that day … It’s a choice between cutting back a service and maintaining a service at a lower level.”
He said the variation would still have been required even if The Rex project controversy had not eventuated.
“We’ll have to be careful for the next 10 years,” Mr Henderson said.
“And I mean careful.
“We’ll have to go back to essentials.”
Many reactions online to the council’s plans have been less than agreeable.
“Would rather see this council go into administration than allow or agree to such a rate hike,” one person wrote.
“Release some employees would be a great start, not the guys on the ground as there are not enough as it is.
“Maybe remove some higher end paid positions. You’re a disgrace.”
Another said: “I cannot afford a rate rise like this it’s that simple.
“And I’m guessing most of the residents of the Hepburn Shire Council cannot afford it.”
Alpine Shire Council and Indigo Shire Council have also applied to the ESC for rate variations.
The ESC aims to make decisions about rates variations within two months of receiving the application – Hepburn Shire’s was submitted on March 6.
The shire will also consider its next budget on April 29.
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