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Clarence Valley Council special rate variation application determined

The Independent Pricing and Regulatory Tribunal (IPART) has approved applications from Lismore Shire Council and Tweed Shire Council to increase income above the rate peg of 1.8% from 1 July 2016. Clarence Valley Council’s application was partially approved.
IPART has approved a temporary increase for just one year of Clarence Valley Council’s application to permanently increase its general income by 37% over the next five years.
IPART Chairman Peter Boxall said one increase of 6.5% has been allowed, instead of the five consecutive 6.5% increases the council requested. This amount includes the 1.8% rate peg.
“We have made the decision to partially approve Clarence Valley Council’s application for one year only, because the council did not adequately justify the need for the proposed special variation, or adequately communicate the impact of rate increases to the community,” Dr Boxall said.
“This made it difficult for the council to demonstrate the size of the increase needed, and that the community was aware of its extent and purpose.”
The council intended to apply for a larger special variation (cumulative 47%) included in its Fit for the Future proposal submitted in June 2015, also to improve its financial sustainability and reduce its infrastructure backlog and asset maintenance gap.
IPART found that the council was ‘not fit’ as it did not satisfy the financial criteria.
“Giving the council a temporary increase for one year will allow the council to consult with the community about a potential special variation application in the future and also reconsider the size of the increase needed to improve its financial sustainability and reduce road infrastructure backlogs,” Dr Boxall said.
IPART did not approve the council’s request to apply the 6.5% increase to its minimum rates, as this would have permanently raised the minimum rate above the limit applying under the Local Government Act.
“Based on the council’s application, we estimate that in 2016-17, the average residential rate will increase by $61, the average business rate by $163 and the average farmland rate by $85, but rates in 2017-18 will reduce unless another special variation is sought and approved,” Dr Boxall said.
The full report on the councils’ applications are available on IPART’s website <http://www.ipart.nsw.gov.au>.

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