Councils across the New England have not escaped the brunt of rising costs, as four council areas seek special rate variations over the coming years.
Most significantly is Tenterfield Shire Council, with a proposed special variation rate of 104 percent over two years. Breaking down the proposal, Council is asking for an 86 percent special rate increase, plus the annually approved rate pegging amount, cumulating over two years to a total 104.49 percent increase. The Independent Pricing and Regulatory Tribunal (IPART) had some questions about that big increase, and the independent body tasked with approving rate increases have now reopened community consultation on the Tenterfield Council proposal after they updated a number of documents.
The updated documents are:
- revisions to its forecasted income statements from 2022-23 to 2032-33 (see file: Tenterfield Shire Council – Application Part A – Updated – WK8 LTFP)
- revisions to its forecasted financial and infrastructure ratios from 2022-23 to 2032-33 (see file: Tenterfield Shire Council – Application Part A – Updated – WK9 Ratios)
- revisions to its cash forecasts from 2022-23 to 2032-33 (see file: Updated – Tenterfield Shire Council – Revised General Fund Cash Forecasts – no-SV versus SV scenarios)
- additional commentary clarifying the materials provided above and responding to questions put forward by IPART regarding its SV application (see file: Updated – Tenterfield Shire Council Response to IPART Further Questions – Meeting 15 March 2023 – Submission).
Tenterfield residents can continue to make submissions to IPART on the revised proposal until the 5th of May. Submissions have closed for the other local councils.
Why does Tenterfield need such a big rate increase?
Tenterfield Shire Council has one of the lowest rates in New South Wales, but has a lot of upkeep according to Mayor, Bronwyn Petrie.
“We are one of the lowest rated shires in the state and we are an infrastructure shire.”
“We’ve got a large number of bridges, culverts, roads, etc, in both the town and our region.”
“We also have community services, such as parks and gardens, cemeteries, libraries, and a swimming pool to maintain,” Mayor Petrie said.
“Our costs overtake our income.”
Tenterfield Shire Council relies heavily on Federal, State and other grant funding, as well as rates, to keep up with a significant back log of maintenance work in the shire.
With Tenterfield’s rates capped at $4.8 million a year, and 30 per cent of the shire on public land and exempt from paying rates, the burden falls to the remainder of the community through a rate rise.
Tenterfield Shire Council acknowledges their part in the current financial chokehold.
“By pushing those earlier works out, and previous councils before that not doing those works, has meant that we are seeing addition costs in bridge renewals, road maintenance, the pool and our buildings,” Mayor Petrie said.
“We are not denying that is a failure earlier on in the life of Council.”
“We have 152 bridges in our shire, a lot of those are timber, a lot of those we have had to replace or upgrade, over 40 of them, and that has come at a significant cost, but we had to do it because we were putting load limits on those bridges.”
“It nearly paralysed the shire when we had those bridges tested.”
A tumultuous few years for the New England with natural disasters, the pandemic and inflation, upkeep is at an all-time high, and the price tag to match. Tenterfield Shire Council is actively seeking grants to help cover costs.
“We have had a near catastrophic failure in our administration building and we also found out that our Memorial Hall building, the roof lining that was done many years ago, was not fit for purpose of the original structure.”
“We were very lucky the Memorial Hall was funded 95 percent by grant funding.”
Can locals afford it?
Tenterfield residents have not seen a rate rise since 2014, and there is concern people can’t afford this special rate variation and will leave town. The Ratepayers of Tenterfield Shire Association says some locals have already indicated they cannot afford to pay.
“77 percent of the people in the Tenterfield Shire are in the low socioeconomic range, so that’s going to have a tremendous impact on them,” said a spokesperson for the Ratepayers of Tenterfield Shire Association.
“We are not against a sensible rate rise, but the 104 percent is ridiculous and with the fees and charges that council raise every year, it is a lot of money to the bill.”
The Ratepayers of Tenterfield Shire Association has written to IPART with a ‘please explain’ questioning Tenterfield Shire Council’s reasons, expenditure, and proposal at hand.
“Had they, over the last ten to fifteen years, spent their money responsibly they wouldn’t be in this situation,” said the spokesperson.
“We’ve been saying to council you haven’t bothered to curb you spending and cull your expenses.”
“We do have low rates, but we have some of the highest water and sewage charges, and these charges go up every year,” said the spokesperson for the Ratepayer of Tenterfield Shire Association.
What else is Council doing to balance the books?
Tenterfield Shire Council assures the community they are taking steps to minimise the cash bleed.
“We are going to have two major roads here returned to the State Government,” Mayor Petrie said.
“These are interstate roads that are very important and need to be funded by the State, not by local councils and rate payers.”
“We have decreased the staff, we have left a lot of vacancies vacant, we have sold some assets and unfortunately, with inflation and the increase cost of other goods, that has eaten into many of our savings. But thankfully we made those savings, or our situation would be worse.”
As well as lobbying the Federal Government to lift their assistance.
“We are hoping the Federal Government will increase the Federal Assistance grants because they have been reduced from 1% to 0.55%, and we want that back to 1% of GDP,” Mayor Petrie said.
“If that is the case, then we don’t need nearly as much of a rate rise, if we got that grant increase.”
“We are taking steps to make sure our financial situation is proper, and unfortunately, if we cannot get additional federal financial assistant grants our only other source of income is rates.”
How much is 104 per cent really?
The average rates for a Tenterfield resident in town is $650 a year. If approved, the average increase to a resident in town would be $13.25 a week, and more on the land.
“The average for farmland is around $38 a week, but for some farmers that will be hundreds of dollars a week.”
“Some people will be higher, some people be lower – farmlands is where you will get more of a variation because of size of farms and evaluation,” Mayor Petrie said.
As previously reported by the New England Times there are four councils in the New England region seeking Special Rate Variations for 2023. Armidale Regional Council and Walcha Council are also both seeking special rate variations of over 50 per cent over three years. Walcha is in a similar position to Tenterfield, with high infrastructure costs and a currently very low level of rates. Armidale’s requested rise will be the most expensive by far, adding hundreds of dollars a year to the rates bill for most residents. An example shared widely by Armidale Mayor Sam Coupland indicated that an Armidale resident currently paying a total rates and charges bill of $2,470.30 would be slugged an extra $488.
New England region councils seeking a special variation to rates for 2023/24 and beyond
|Council||Year 1||Year 2||Year 3||Cumulative increase|
|Armidale Regional Council||16.67%||16.67%||16.66%||58.8%|
|Liverpool Plains Shire Council||18.8%||18.8%|
|Tenterfield Shire Council||43%||43%||104.49%|
“If Armidale get their 50 percent and we get the 86 percent, they would still be dearer than us.”
“Some people say they’ll move into Stanthorpe, well Stanthorpe is already double our rates,” says Mayor Petrie.
“We have had a lot of community consultation – obviously, not everyone is happy about it.”
“We have a lot of people who say we don’t like it, but we understand why.”
Tenterfield Shire Council is in preparation to hand down their budget in June 2023, which will be heavily dictated by IPART’s decision.
“We do not know what IPART will allows so we are currently working on three budgets; one is with no rate increase other than the pegging of 4.2%, one is with the full increase, and one is somewhere on the middle.”
IPART is expected to hand down their decision on special rate variations in May 2023.
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