Given the rising costs of essentials, ratepayers will be asking what Bega Valley Shire Council's proposed rate rise means for them.
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Council is applying to IPART for approval to split a 43 per cent rate rise over two years and increase general rates by 24 per cent in the first year and by 21 per cent in the second year.
Check the first two lines of your rate notice for the rate category - residential, farmland or business - and the base rate. The total is the general rate for this year.
So what might we pay from July 1, 2023?
- Council says the average residential land valuation (land only) in the shire is $199,000, which results in an increase of around $260 a year/$5 a week.
- Small unit in Merimbula (land value $88,000) rates rise by $200 a year/$3.70 a week.
- Three-bedroom home in Bega town (land value $95,000) rates rise by $203 a year/$3.80 a week.
- Rural Nethercote property (land value $238,000) rates rise by $314 a year/$6 a week.
- Tura Beach property (land value $500,000) rates rise by $518 a year/$10 a week.
- Council said the average farmland value is $734,000 for which rates could rise by $650 a year/$12 a week.
- Council's average business land value of $340,000 could give a rate increase of around $650 a year/$12 a week.
What else do we need to consider?
The above examples are for the first year of the rate rise only, starting July 1, 2023. The following year the second part of the rise, around 21 per cent, would come into effect with the addition of whatever rate peg has been decided for that financial year.
IPART (Independent Pricing and Regulatory Tribunal) has been asked to review the way it sets the rate peg and take into account inflation and cost of providing services and a draft report is due in February 2023.
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Water, waste and sewer charges tend to increase each year. These are not included in the special rate variation (SRV) calculations.
Land values are another unknown but will have a bearing on rates. Bega Valley has seen dramatic increases in land values which will be applied from July 1, 2023, but not all of these will translate to rate increases.
Those who rent will also be affected as landlords are likely to pass on increases.
Council's CEO Anthony McMahon has warned more SRVs would need to be considered in four to five years' time.
What effect will this have?
From the outset council staff wanted a 90 per cent increase in general rates and said that would allow them to manage services, and provide renewals and upgrades to current assets, as needed.
But in June 2022 council had suggested that 35 per cent would be sufficient to fix the financial problems.
Following the capacity to pay report and a strong backlash from residents to a 90 per cent increase, a 43 per cent increase was proposed but Mr McMahon said $139m would need to be slashed from the budget over the next 10 years.
He said cost reductions would largely come from the capital program which would see a decline in the standard of roads and bridges.
As a result, items with no money set aside for them include Cuttagee Bridge, Six Mile Bridge, Wapengo Creek Bridge, the Zingel Place building upgrade, a range of parklands and sportsgrounds renewals, Barclay Street netball and tennis court upgrade and Merimbula boat ramp carpark upgrade.
$3.3m of operational costs disappeared with the removal of floodplain management plan actions, bridge structural assessments, road safety planning, stormwater pipe cleaning, community grant funding along with cultural, strategic planning and economic development projects, Mr McMahon said.
If grant funding is not received for some larger capital projects such as Bega Pool, the Sapphire Aquatic Centre and a range of coastal accessibility projects, work will not go ahead unless internal funds can be reallocated.
In the coming year, the rate increase will deliver around an extra $6.5m into council's general fund but the general fund is on track for a $10.7m deficit.
Bega Valley Shire Mayor Russell Fitzpatrick said there was $19m available in unrestricted cash - but that is money that could be used for other projects such as roads or to supplement grant funding for an asset renewal, if it's not being used to fill a black hole.
What happens now?
Council officers lodge an application with IPART on Friday, February 3. IPART will assess other relevant information, including the revised long-term financial plan, how residents and ratepayers were consulted and their feedback.
The community still has the option to provide feedback directly with IPART, once the application form and supporting documents are published on the IPART website.
IPART will then consider the application and a determination will be provided in May.
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Denise Dion
Regional daily news journalist on the Far South Coast of NSW. Contact me on 0418 213 780 or at denise.dion@austcommunitymedia.com.au
Regional daily news journalist on the Far South Coast of NSW. Contact me on 0418 213 780 or at denise.dion@austcommunitymedia.com.au
