Nillumbik Council proposes no increase to 2020-21 rates
Nillumbik Council has proposed to freeze rates, backflipping on a controversial move to increase them above the State Government cap. But councillors warn the latest decision could add $1 million in debt.
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Nillumbik Council has proposed to freeze rates for 2020-21, backtracking on a move to increase rates in the next financial year.
But councillors warned the move would require borrowings of up to $1 million.
The 2020-21 draft budget forecast a three per cent increase in rates, according to councillors.
But this week councillors voted to adopt a new budget recommending ratepayers not be slugged with any increase to their rates bills.
While Cr Bruce Rankin embraced the decision he warned of long-term financial implications.
“When the draft budget was drawn up we had no idea COVID-19 was hitting us,” he said.
“While it’s great to pass these reductions on these are compounding effects that are going to continue now indefinitely for the next council and one after that.
“It will be hard for officers and the finance team to ensure they can keep a tight rein on the budget going forward.”
Cr Clarke estimated the council would need to borrow up to $1 million to cover any significant losses.
“That’s not unusual in these circumstances but still in my view should be sought to be avoided,” he said.
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Cr Grant Brooker said the council could reduce services to make savings, instead of borrowing.
“The problem is when revenues aren’t increasing by any great margins — and in Nillumbik our revenues aren’t increasing by any great margins — it certainly does make an impact in the future,” he said.
Rates did not increase in the 2017-18 Nillumbik Council budget, while ratepayers were slugged with 1.95 per cent and 2.25 per cent rises in the following two years.
The 2020-21 Victorian rate cap is set at two per cent.
Councillors will vote to officially adopt the 2020-21 budget on May 26.