Council CEO responds to rate rise issue



Published Friday 4 March 2016

Douglas Shire Council CEO Linda Cardew has pushed the issue of rate rises firmly into the laps of politicians and candidates, saying it is the elected representatives who “determine general rates and charges each year”.

Following Newsport’s investigation into the potential for high rate rises over the next four years, Ms Cardew said the strategy to achieve a balanced budget was signed off by the council and submitted to the state government in 2014.

Ms Cardew confirmed the forecast of a 5.2% rate rise and a 3.6% increase in council fees and charges each year over the next four years were correct, with the final figures to be decided by the next elected Mayor and group of councillors.

Despite being signed off in 2014, the predictions of 5.2% annual rate rises and 3.6% annual increases to council fees and charges only came to light in recent days, just weeks before the fiercely contested council election is due to be held on March 19.

“The current Council endorsed a strategy to achieve a balanced budget in early 2014 as a financially responsible approach to the management of Council’s finances,” Ms Cardew said.

“The strategy to achieve a balanced budget was endorsed by all Councillors in 2014 when they unanimously adopted Council’s 2014/2015 Annual Budget.

“This strategy is based on rates revenue increasing over the years. The actual rate increase is formally determined by Council at the adoption of each annual budget.”

Ms Cardew said the issue of 5.2% rate rises over coming years was “just a plan” that is not “set in stone”. Rather, the financial forecasts submitted to the state government were used as a “guide only” when formulating the Budget.

“Each year Council reviews and adjusts the rates based on the budget requirements at the time,” she told Newsport.

“The 5.2 per cent annual forecast relates to rates revenue, that is, the total income Council derives from all rateable properties.

“Natural growth in the number of rateable properties, as the result of development in the Shire over the next few years will also reduce the actual increase to be applied to individual ratepayers.

“The forecast is a just a plan showing how Council may achieve a financially sustainable position within a nominated period of time (indicated by a balanced budget) as required by the State Government.

“The actual rates set by Council each year may vary from the forecast. As above, this occurred in 2015/16 budget when a 3.9 per cent general rates increase (not 5.2 per cent) was adopted by Council.

“The rates set each year are dependent on services and projects to be supplied and any ongoing operational savings achieved.

“If a future Council does not consider it important to achieve a balanced budget it may choose to reduce the rates, and carry an operational deficit for a longer period of time.”