GOOD planning and a rigorous search for efficiencies has enabled South Gippsland Shire Council to propose a budget for 2016/17 which meets the challenge of rate rise capping while continuing to deliver the same level of service and even increase spending on capital works.
The Mayor, Cr Bob Newton, declared this a great achievement.
“To increase our capital works program compared to past years while also adapting to rate capping is a significant achievement. Remaining efficient while ensuring the community has vital infrastructure and assets available is a high priority for Council,” he said.
The Minister for Local Government, Natalie Hutchins, has instructed that Victorian council rate increases will be capped at the rate of inflation; 2.5 per cent for the 2016/17 financial year. The stated aim is to protect ratepayers from uncontrolled rate rises, which have averaged 6 per cent every year for the past decade. In South Gippsland rates rose an average of 4.9 per cent last year, and the waste service charge was increased by 2 per cent.
Due to the rate rise cap, South Gippsland Shire Council will receive $38.9 million less rates and charges revenue over a 14-year period in comparison to the previously adopted 2015/16 Budget and Long Term Financial Plan.
“We have been gearing up for it for some time. [Keeping to the rate rise cap] is well planned for,” said Council’s finance manager, Tom Lovass.
However, Council’s director of corporate and community services, Jan Martin, admitted that it hadn’t been easy and Council had had to apply some belt tightening.
Ms Martin and the CEO, Tim Tamlin, said that the executive team had long been working with staff to meet efficiencies.
“We are consistently looking at how we can be more efficient and make savings,” Mr Tamlin said. “More collective procurement, so that costs are shared, is one way in which we have been more efficient.”
The six Gippsland councils have signed a Memorandum of Understanding on collaborative services. It is seen as a model for the state.
Mr Tamlin said last year’s staff restructure saw a reduction in staff costs which has flowed through to this year. The restructure delivered $200,000 in recurrent savings ongoing.
Savings have also been made by reducing photocopying, and more savings are expected through a ‘unified communications’ system. “Little things make a big difference,” said Mr Tamlin.
“Lots of money has been invested in doing things better and finally it’s starting to pay off,” he added.
Council does not plan to borrow any more money and will be paying interest only off its loan for the next few years in a further attempt to keep costs down.
At $19.97 million, the 2016/17 capital works program is 29 per cent of the proposed budget and $766,000 higher than was allocated in 2015/16. It is significantly greater than the $4.5 million allocated in 2014/15 and the $4.72 million in the 2013/14 budget.
“It is promising to see an extensive capital works program planned for 2016/17. A number of the projects identified are of a high community interest and vital for future development in South Gippsland,” said the Mayor.
Big ticket items include the Karmai Children’s Centre in Korumburra, which should be completed and opened during the 2016/17 financial year at a cost of $2.46 million. A further $180,000 is being allocated to rebuilding public toilets at Sandy Point and $100,000 for toilets at Waratah Bay. The Foster Streetscape Project will go ahead if a government grant is received. Council has also named the restoration of the Port Welshpool Long Jetty as a Priority Project in the hope of attracting a government grant.
“In my years in local government, never have I seen so much emphasis on community engagement,” said the Mayor, pointing out that the community was invited to provide feedback on the development of the 2016/17 Budget via the OurSay online community engagement process.
The planned development of an arts and culture strategy is one of the results of asking the community to identify priorities.
“In 2016/17 we will be working with the community on an exciting community budgeting process for the towns of Foster, Korumburra, Mirboo North and Venus Bay, with projects expected to be implemented the following year,” said the Mayor.
Rates revenue essential
At $39.9 million the income from rates and charges is the equivalent of 60 per cent of the overall 2016/17 proposed budget.
Receiving revenue through rates is essential to Council’s performance, said the Mayor.
“All rate payers are reminded that without their contribution many of the services Council provides would not be viable. Although Council is financially capable of meeting the rate cap in the short term, it will reduce Council’s service capacity in the longer term,” said Cr Newton.
Council will consider the Proposed Annual 2016/17 Budget at the council meeting next Wednesday, March 23.
The document can be read on line, where it is an attachment to the Agenda of the council meeting.
Once a draft budget is endorsed, the community will have until April 27 to consider it and make formal written submissions. Council encourages community members to send their submissions by email if possible.
Council is scheduled to formally consider and adopt the 2016/17 Annual Budget at its June 22 meeting.