The Mirror News

Budget proposes 4.9 per cent rate rise

“FINANCIALLY sustainable and responsible” or “a gamble”? Not even the shire councillors are in agreement about the 2015/16 Proposed Budget for South Gippsland Shire Council.

The summary document points out that the proposed budget, which flags a rate rise of 4.9 per cent, captures many of the requests raised by the community.

“Cost-shifting, ageing infrastructure and rate capping heading our way next year have added pressure on our resources to meet the growing demands. So more than ever, we’ve needed to know what you see as priority projects and services and what services you may need less of, or delivered differently”.

The summary document trumpets productivity savings of $5.8 million, thanks to better fleet fuel and oil management, photocopy maintenance, reduced paper usage, Workcover and insurance savings, FBT savings, green street lighting, labour savings through contract staff going in-house, and savings through group purchasing schemes.

Councillors Andrew McEwen and Don Hill, however, have described the budget as “a gamble”. They would like to see an alternative budget strategy and have indicated they will be pressing for change at today’s council meeting, where the budget is on the agenda.

More community consultation than ever before has gone into the preparation of this budget, but there still remain further opportunities for ratepayers to have their say on how their rates are spent. Formal written submissions can be made and a further OurSay engagement process will run from March 30 to April 29. There will even be a Community Question and Answer session on the proposed budget on April 15.

Community consultation began last October with an OurSay online survey focused on the budget. This was followed by two community workshops in which the ideas jostling for attention were whittled down to the top ten priorities. Council then met with the authors of the top five ideas to flesh out their projects’ viability and potential budget allocations. Two further weeks of online engagement followed.

Respondents to the most recent OurSay survey gave a clear indication that physical infrastructure and community services are more important to ratepayers than economic development. A key theme was a request for Council to focus on improved productivity or a leaner structure.

Community requests taken up by the budget include:

  • Aquatic Strategy review, including the possibility of community ownership;
  • Business case for an equestrian centre;
  • Arts policy review;
  • Rate reduction through productivity savings;
  • Coal Creek plan to reduce costs while increasing tourism;
  • Coastal Infrastructure Strategy responding to coastal towns issues.

All extension/upgrade programs have been cut back to prepare for rate capping, which is set to take effect from 2016/17, but key capital projects will go ahead. Capital expenditure is budgeted at $17.09 million. The operating expenditure (including depreciation) will be $57.33 million. The rate and charges income will be $32.28 million. This will be paid for by a 4.9 per cent increase in rates and a 2 per cent rise in charges for waste services.

Because of the loss of the Municipal Charge, not everyone’s rates will rise – though most will to some degree. Will yours? The following should give you some indication.

The 2014-2018 Rating Strategy was drawn up by a committee which included community representation. Its second and final stage will be implemented in 2015-16. Against a general rate of 100 per cent, it sets the farm rate at 70 per cent, the vacant land rate at 200 per cent, the industrial and commercial rates at 105 per cent and the cultural and recreational rate at 50 per cent. The Municipal Charge (a flat rate, so generally deemed inequitable) went down to $181.70 last year and there will be no charge in 2015/16.

Under the assumption that those living in lower valued properties are also on lower incomes and hence have less capacity to pay, the Rating Strategy Steering Committee recommended the abolition of the Municipal Charge. This lowers the rates for a majority of ratepayers in lower valued properties in all property categories.

The following provides an indication of what ratepayers can expect. The majority of residential properties are in the lower and middle valued range.

Examples of typical properties are:

  • Lower valued properties (2,477 properties) in $150,000 – $200,000 range
    • $175,000 valued property: 2014/15 Rates and Charges $1,153.30 included;
    • $175,000 valued property: 2015/16 Rates and Charges (not including the new Green Waste fee) $1,132.00;
    • Equates to a 1.85% rate reduction.
  • Mid valued properties (2,808 properties = most number of properties in a range) in $200,000 – $250,000 range –
    • $225,000 valued property: 2014/15 Rates and Charges $1,379.73;
    • $225,000 valued property: 2015/16 Rates and Charges (not including the new Green Waste fee) $1,403.22;
    • Equates to a 1.70% rate increase.
  • Higher valued properties (1,080 properties) in $350,000 – $400,000 range –
    • $375,000 valued property: 2014/15 Rates and Charges $2,059.01;
    • $375,000 valued property: 2015/16 Rates and Charges (not including the new Green Waste fee) $2,216.91;
    • Equates to a 7.67% rate increase.
  • It should be noted that residential properties will receive a new Green Waste service in 2015/16 that will incur a green waste collection charge of $85 additional to the amounts shown above.

The Proposed Annual Budget 2015-2016 is on the agenda of today’s council meeting. It can be read online, or copies are available at the main office of Council and at local libraries.


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