Clarence Valley’s councillors have voted 5-4 to prepare the way for incoming councillors to apply to the Independent Pricing and Regulatory Tribunal (IPART) for future special rate variations (SRV).
At last week’s council meeting, councillors adopted the for-one-year-only IPART-approved 6.5 per cent increase for 2016/17, “as advertised” in the exhibited draft 2016/17 operational plan.
Concurring with the council officer’s report, councillors directed the general manager to “undertake preliminary planning” to allow “timely community consultation” if the council elected in September “decides to apply to IPART for a Special Rate Variation for 2017/18”.
A newly elected council has until early December to decide if it will apply for a SRV for the 2017/18 financial year.
Meanwhile, an extra scenario, to “become financially sustainable”, was included in the adopted 10-year long term financial plan: it proposes applying for a 5.44 per cent increase for each of seven years from 2017/18 to 2023/24.
This would be a cumulative 41 per cent, including whatever the annual rate peg is set at – it has been assumed that this will be 2.5 per cent each year.
This increase, if it comes to fruition, would remain in the rate base forever, unlike the approved 6.5 per cent for 2016/17.
Over the seven-year period, an approved SRV would reap an extra $26.965million in revenue, which would be “applied to roads and roads related infrastructure to address the infrastructure renewal backlog” (valued at $49.855m) and “the annual maintenance gap” (valued at $4.292m) as of June 30, 2015.
This scenario was not included in the documents put on exhibition, which provoked the ire of Cr Karen Toms.
Councillor Toms said she was “upset that [the long term financial plan] was changed after being exhibited to the public”.
“We are making considerable changes and again setting the valley up for a SRV,” she said.
“Why bother exhibiting if we are prepared to … make such significant changes to a document without sharing it with councillors and, more importantly, the public.”
The general manager, Scott Greensill, said making the changes “is about timing, so the new council …, if they wish, can go down that path”.
Councillor Toms said she didn’t see “why we should be doing preliminary work … that might not be necessary”.
Councillor Jim Simmons said community feedback was “strongly against the SRV” and wondered why the council was embarking on the construction of the new depot at South Grafton at a cost of “$14m … and three to $4million for other projects … and maybe others I’ve missed”.
“Why would staff not offer other considerations [to reduce expenditure]” he posed, “like the lease back of the depot?
“What’s the difference between leasing a completed works depot or plant and equipment?
“I’m not saying I support [that idea], but it’s something we should look into.”
Councillor Andrew Baker said he had, at first, thought the idea of a SRV would be “embraced by all because we would be open and honest” with the community.
He said that when he saw the advertising that “was all about roads to recovery”, it was “rubbish”.
“We didn’t tell [the community] why were doing it, or how … we just told them it cost a cup of coffee.
“… That’s how we tried to put it over IPART and the community – IPART didn’t fall for it.
“… Let’s stick it out again [an application for a SRV] when we still haven’t considered alternatives.
“… All this does, is just slug the ratepayers again.”
Councillor Margaret McKenna didn’t have a problem with preparing the way for future SRVs; however, she said she did not support the now approved 6.5 per cent SRV.
She pointed out that, as the equitable levying of rates across the valley had still not been completed since amalgamation; that those still paying higher rates for similarly valued properties, particularly commercial properties, would, unfairly, pay more.
She suggested that each ratepayer could have been levied the same amount, say $50.
“I don’t’ recall much debate on that in the chamber,” she said.
Councillor Sue Hughes said it wasn’t an “easy decision” to make, “but we need to do something”.
Councillor Craig Howe said he was “happy to pay an extra $26 a year” knowing the “benefits to the community … there’s quite a bit of benefit in $1.9m for road works [the amount the 6.5 per cent will realise in 2016/17]”.
He said supporting the preparation for future SRV applications was “keeping all options open” … and that the next council “may well decide to put it off or not do it at all”.
Councillor Arthur Lysaught said he believed that councillors should respect the status quo.
“Once the majority formulates a policy, it should be followed,” he said.
Cr Jason Kingsley said he was “not overly thrilled with proceeding”, however, the “staff spent hundreds of hours on the SRV”.
“It’s a tough decision [but] I support an option based on facts and figures,” he said.
The mayor, Richie Williamson, said “showing leadership is not always easy or popular”.
“This is not simply slapping the ratepayer … this is an adult conversation we have started and, if successful, the new council [will be able to] continue the conversation,” he said.
“…Here’s the rub, there does need to be a course of action; to do nothing is an irresponsible act.”
He said without future SRVs the valley would face a “future with a network of crumbling roads, unusable public spaces and buildings crumbling down”.
“We have the reports that tell us if the roads decline, then insurance increases,” he said.
“I fully respect those who oppose and their reasons but here is a matter that needs to be resolved.”
He pointed out that the council had capped future increases in water and sewer charges to 1.5 per cent a year, compared to recent years when those increase have been well above the consumer price index.
“We’re trying to overcome a long term infrastructure backlog and we need a long tern plan: that starts tonight,” he said.
Councillors Toms, Baker, Simmons and McKenna were opposed; councillors Williamson, Hughes, Howe, Lysaught and Kingsley were in favour.