Special Rate Variation

The documentation you are requesting is included in the Asset Management Plan, Workforce Plan and Long-Term Financial Plan.  The Financial Sustainability Review made a number of recommendations for Council to improve its efficiencies and financial position and these have been adopted in full by Council.   

Council is the expenditure review committee. In addition to the financial sustainability review, Council has undertaken a number of service reviews. Each of these reviews has made a number of recommendations to maximise the effectiveness of Council’s expenditure, including some changes in the number, and the roles, of employees. 

4% represents the rate peg and does not include any SRV. It is the option commonly raised as desired by the community, often expressed as ‘living within our means’. It involves significant reductions in services. The 2 remaining options represent the funds required to address the structural deficit Council has. One is the full rate applied at year one (53%) and the second is spread across multiple years. This is what is required to at least close the historical financial loss the Council is facing.

Thank you for your question, Pip, and much like the works being undertaken in Bombala at the Showground and in Delegate at the School of Arts; each of the projects you refer to are funded through government grants.  

Council have adopted the recommendations of the Financial Sustainability Review in full. The recommendations combined, including the SRV, will see Council in a much better position to maintain assets and continue services to the community. As you would have noted there are many more recommendations. Some of those have been costed and those costs included in the long term financial plan. The two different percentages come about due to the need to raise the same amount of funding over the ten years to meet the financial sustainability criteria. The later increases are put into place the greater they are, as each year expenditure increases by more than revenue due to inflation. 

The SRV is to fix the historical structural deficit to allow Council to start investing back into the infrastructure that has been deteriorating year after year. It will primarily going into roads, but also buildings and other structures. You were voting as to whether you wished to keep all the infrastructure and services Council currently provides (options 2 and 3) or have a much lower level of services (option 1) 

Option 3 is only increasing rates by the standard percentage set by IPART. Inflation impacts on the costs of Council. No increase in rates would worsen the financial sustainability of Council, leading to even more deterioration of the infrastructure. 

The rate increase is only one of several recommendations in the financial sustainability review. These are explained in the documents provided and can be referenced in several of the answers below.  Council has been reducing expenditure relative to rising costs. The financial sustainability review shows that the trend for the deficit starting with the last four years of the predecessor councils. At no stage have the predecessor councils or SMRC have been spending enough to properly maintain community assets such as roads, community halls, swimming pools, parks and gardens. Nor has there been sufficient cash put aside for future expenditure and emergencies. Reducing costs further will only exacerbate the deterioration of the assets. 

Rates are set based on the value of the land. General rates do not pay for waste, water or sewer. Those are covered by separate charges. Rates are not a fee for use, they are a tax to fund the services that the Council determines the overall community needs. Those services then need to be funded by the community. Based on where you live you currently benefit from the rating structure. The cost of providing your road for the properties along it on a fee for use system would be around $23,700. The rates from the properties along your road total $9,260. 

While you may only want one option sometimes in life there has to be compromises. By knowing peoples second choices we can get a better understanding of what people may prefer if they cannot have what they want. Your only other option is to send in an email, which will then go into the feedback. All feedback will be considered by Councillors prior to a final decision being made. 

The Snowy Mountains Special Activation Precinct is a NSW Government program to boost the snowy mountains tourism economy to transition into a shorter snow season as well as creating a year-round tourism economy. To kick start the program the NSW Government is planning to build a bypass, other road improvements and water and sewer upgrades. The existing roads that are bypassed and the new streetscapes, parks and water and sewer will then be handed to Council. Council will then have to manage and maintain those assets. 

The rates become effective each year from 1 July. 

The next election will be on 24 September 2024. 

Council will continue with the project to determine service levels. The SRV decision is on whether the community wants to keep all the existing services and infrastructure or reduce how much is provided. For roads there is a certain cost that needs to be spent. You cannot spend less and keep the road over the long term. It deteriorates faster than it should and then costs more over its lifetime than if you had spent the money to properly maintain it in the first place. The service levels will look at issues such as how much faster the community may want us to patch a pothole and where we mow grass on roadsides, but first decide if the actual road will be funded. 

If it is decided not to fund the current infrastructure and services Council will then need to start a discussion on what it is that is no longer provided. This may or may not impact on roads, depending on what is considered the priority. We cannot at this stage say if the feedback will prioritise the available funds on roads, parks, toilets, sport fields, etc. The 2021 customer satisfaction survey indicated that sealed roads were the most important service we provide. Unsealed roads rated 11th out of the 24 services listed. 

Currently the funds available are not sufficient to properly maintain and replace the existing infrastructure. The first two options start to address that issue by increasing the funding for the ongoing renewal of the infrastructure. In option 3 the amount of infrastructure and services needs to be reduced until a financially sustainable point Is reached. As an example of the impact of the SRV, under our current funding we will be able to properly maintain 136km of the unsealed road network. Under options 1 or 2 we would be able to maintain 1,400km of road network. 

Infrastructure projects in the operational plan are committed and the majority are either in full, or in part, externally funded. 

Yes, Council has applied for this funding. Council will secure a pre-determined allocation from the NSW government based on the total length of our road network. This program is to fund urgent road repairs, priority corrective maintenance works and the repair of potholes on local and regional roads. The revenue raised from the SRV, if approved, will contribute to funding the ongoing renewal of Council’s road network in a planned and orderly manner, based on an asset management system. The key difference is a planned renewal program will ensure that the road network does not deteriorate. The Regional and Local Roads Repair program targets rehabilitation of already deteriorated roads to bring them back to a reasonable condition. This is in addition to disaster recovery funding that is also helping return roads to pre-disaster condition. Therefore the funding from the NSW program and the SRV are used for two different purposes. Where at all possible the NSW program funding will target road asset renewal, it will not replace the need for the SRV revenue. 

The program is based on the length of road network managed by the Council. It is limited to maintenance and repairs and cannot be used for road renewals. As such it will not rely on a pavement management system to guide the works. 

The detail of why the Council is in deficit is in the financial sustainability review. The savings forecast in the merger proposal were achieved however the merger proposal recognised that the merged council would continue to generate deficits, but smaller than that predicted for the three predecessor councils if they had continued. The merger savings were never going to be sufficient to fund the structural deficit the Council inherited. All this information is in the financial sustainability review report. 

Councils, individually and collectively, have been lobbying for more money for decades and the only result has been for the level of funding has been reduced. Councils do not have influence over the State Government. Only when the funding of local services becomes an election issue due to pressure from the community that any change is likely to occur. Without that pressure we can only deal with the situation that we are in. 

The impact of rates across the various communities was considered when the rates were harmonised. Following community consultation, a model was put forward from members of the community working group that there should be a system where each community contributed based on their land values. When you compare land values to household incomes you can see that overall the land values reflect the earnings within those towns. So the townships with lower earnings pay lower rates. 

Council has hardship provisions for those who may be suffering short term hardship as a result of the changes. We only have provisions for ratepayers, but that can allow for deferral of payment and interest free periods to help with the adjustment. 

Council does not have funding to provide support services. If we wished to fund increased social support services the funding for this would need to be added to the proposed rate increase. We do work closely with many of the providers and will continue to do so to encourage a reasonable level of support services across the region.