North Sydney councillors to consider 87 per cent rates rise

North Sydney ratepayers are staring down the barrel of a mammoth rates rise of nearly 90 per cent over the next two years as the council scrambles to keep its finances afloat while forging ahead with plans to reopen its costly $122 million Olympic swimming pool later this year.

North Sydney Council last year warned it would need to make “critical decisions” to fix its financial situation, which it described as “unsustainable” largely due to cost blowouts on the pool project.

Construction on North Sydney Olympic Pool is forecast to be completed in May.Credit: Dion Georgopoulos

To that end, the council last year requested feedback from the community on four options that would result in rates rises of at least 65 per cent and possibly up to 111 per cent over three years.

A council report published on Friday said that, following more than 1000 public submissions, staff were recommending a revised option that would result in an 87.05 per cent jump in rates over two years.

The proposal to lift levies comes hard on the heels of the furore that engulfed the Northern Beaches Council last week after most councillors voted to support a 39.6 per cent rates rise over three years.

North Sydney Council’s report said the proposed increase, which councillors will debate at a meeting on February 10, was “based on the need to achieve financial sustainability, continue to deliver services and assets as expected by our community, and prepare for the high expected growth in the community”.

“The outcome of the special rate variation will strengthen council’s financial position, provide funding for infrastructure renewal and reduce infrastructure backlogs,” the report said.

The proposed rates rise would include a 45 per cent increase in levies in 2025/26, and a 29 per cent jump the following financial year. The new rating structure would also incorporate several levies, including the council’s infrastructure and environment levies, into the ordinary rate.

The council is proposing to increase its minimum residential rate – which is paid by 77 per cent of landowners – of $715 to $1200, and its minimum rate for businesses from $715 to $1400 in 2025/26.

If councillors support the staff recommendation, the council will apply to the NSW Independent Pricing and Regulatory Tribunal for a so-called “special rates variation”. This would allow the council to levy businesses or households with higher rates than the rate “peg” – the maximum annual increase councils can charge ratepayers. Any changes would come into effect from July.

Mayor Zoe Baker has been a long-time critic of the former council’s handling of the pool redevelopment.Credit: Dean Sewell

The report also recommended the council seek an additional $10 million loan to help fund the redevelopment of the North Sydney Olympic Pool. The controversial project has been frustrated by cost blowouts, lengthy delays, heritage concerns, legal fights and doubts over its scale and design.

The council said the pool would cost $58 million when plans were approved in 2020. The site closed in February 2021, construction began in March, and the pool was supposed to reopen in late 2022.

Construction is forecast to be completed in May.

A November project update said the value of the construction contract was $91.47 million, but the council would need to find an additional $17 million as the forecast cost had risen to $122 million.

Mayor Zoe Baker has previously said the former council’s decision to sign the contract for the pool redevelopment before the designs were finalised had caused many of the cost blowouts. She defended the council’s rates as “the lowest residential rates in our regional organisation of councils and among the lowest in metropolitan Sydney”.

“It’s no comfort to North Sydney residents and ratepayers that we’re having to do this,” Baker said of the proposed increases last year.

A council report last year said its financial position was “very weak, and the financial outlook is unsustainable”.

“Through decisions made in the [pool’s] initial planning phase, including the contract strategy and the decision to proceed prior to designs being complete, significant risk was taken and has been realised.”

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