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SRV: nothing to talk about here

Geoff Helisma Following the September Clarence Valley Council (CVC) election in September 2016, it seemed the valley had dodged a special rate variation (SRV), with six of the elected councillors having campaigned against applying for an SRV – at last week’s council meeting, seven of the eight councillors present voted to make the application, albeit for a 25.97 per cent permanent increase (including an assumed 2.5 per cent annual rate peg) over three years, instead of the 41 per cent spruiked during the election. Councillor Karen Toms was absent. Only Cr Debrah Novak voted against the SRV application, however, she did not talk about the issue, nor was there any discussion or debate from the other seven councillors. If the application to the Independent Pricing and Regulatory Tribunal (IPART) is successful, the extra $10.122 million in rate income over the three years, 2018/18 to 2020/21, will be used “to improve CVC’s financial and asset sustainability: …asset renewals only for 2018/19 to 2020/21, and asset renewals and asset maintenance from 2021/22”. Councillors also resolved to “publish in the annual report” a listing of each project and its cost to show what is “achieved by the extra [SRV] funds”. To meet its public consultation requirements, CVC must provide IPART with “evidence that the community is aware of the need for, and extent of, a rate rise”, and show that “the impact on affected ratepayers is reasonable”. To meet these requirements, councillors conducted informal consultations at various pop-up stands between April 28 and June 2. During public consultation for the council’s draft 2017/18 integrated planning and reporting documents (including the proposed SRV), drop in sessions were held at Maclean, Grafton, South Grafton and Yamba; and roundtable discussions (attended by various councillors and CVC staff) were held at Iluka, Maclean, South Grafton and Yamba. Similar public consultations, specifically for the SRV, were conducted during October. The council also sent information (including a survey) to every residence in the valley, utilised an online rates estimator (571 people logged on), advertised in local newspapers and on radio (including talkback with the general manager), utilised CVC’s Facebook page and facilitated a dedicated website. The survey elicited 3,305 written and 22 electronic completed surveys – 2,782 respondents voted against the SRV, 495 supported it and 28 did not indicate yes or no. One hundred and thirty-eight submissions were lodged. “A common response in formal submissions was from people, who said they were pensioners, saying that with other cost of living increases they would have difficulty meeting the payments,” the report to council stated. On this, the report to council suggested that “ratepayers suffering from financial hardship” could access CVC’s Rates Hardship Policy, which uses Centrelink criteria “for granting of a pensioner concession, including the assets and income test”. Criticisms highlighted in the report to council included: “financial issues were a result of incompetence, mismanagement or overspending on projects, and ratepayers ‘shouldn’t have to bail council out’”; “a number of councillors were elected on no rate increase platforms and should stick with that”; and, “the new works depot in South Grafton and [the] McLachlan Park [upgrade] in Maclean were cited as areas where money was wasted.” Suggestions to avoid an SRV included: “…council should operate more like a business or there should be more use of contractors”; and, seeking “additional funding from the NSW Government, reduc[ing] staff wages, improve management [and] get areas of high property values to pay more.” To justify ratepayers’ ability to meet the “substantial” but “reasonable” rates increase, the report to council compared its rates to the average rates across Office of Local Government (OLG) Group 4 councils in 2015/16: 7.7 per cent lower for residential; 22.9 per cent lower for business; and, 37.8 per cent for farmland. On the ability to pay, the report to council stated that the “median weekly household income increase[ed] by 18.5 percent, from $768 in 2011 to $910 in 2016”. Staff also cited a “downward trend in Council’s General Fund Rates and Annual Charges Outstanding Percentage between 2011/12 and 2016/17” as evidence of the community’s capacity to pay more, and the capping of water and sewerage charges at 1.5 per cent per annum until 2020/21. Conducting the SRV consultation cost “about $11,600”, not including the postage, which was mostly negated “as a ‘make good’” by Australian Post “after it failed to meet a contracted delivery schedule on a previous mail-out”, a CVC spokesperson said in an email. However, the cost of staff’s involvement has not and is unlikely to be quantified.