MARIBYRNONG City Council may need to increase rates or cut services to cover $1 million in costs moved this year from State and Federal budgets to local government.
The council must again pay the state imposed Metropolitan Fire Brigade levy of $135,000, and absorb the cost of the Federal Government’s withdrawal of the National Competition Policy $226,000 grant – funding given to councils to acknowledge efficient work practices.
These fees are only two of 12 cost-shifting exercises (totalling of $1.177 million) the council has to cover in this year’s budget.
At the same time the council is juggling a $26.6 million debt, inherited from the Footscray Council pre-amalgamation.
Nick Foa, council’s general manager of corporate services, said the budget would be finalised only in June.
But he said the council had a budget of $74.6 million for 2005/06, with $42.4 million made up of rates and $32.2 million from other sources.
Mr Foa said the council would need to look at a number of options to balance the budget.
“Cutting services is the first one. The second thing of other fees and charges is something we will look at,” he said.
“There are some fees that we just can’t put up, but where possible we will increase fees and charges.
“The third is advocacy on government grants and, while some of that is out of our control, we certainly do our darndest to put as many grants out there as we can attract.
“Essentially, we either reduce costs, increase fees or get government grants.
“And, if we can’t do any of those things, the last thing we look at is increasing rates.”
Mayor Janet Rice said if Federal and State government funding continued to drop the council would need to rely on rates to pay for infrastructure repairs and services, that were also increasing in cost.
“Our funding from State and Federal grants has dropped from 17.2 per cent to 11.6 per cent of our overall income in the last five years,” she said.
“In our long term financial plan, we aim to increase rates in line with CPI each year, but we can’t possibly manage this if costs are increasing greater than CPI- due to cost shifting.”
Cr Rice said public infrastructure, such as roads and footpaths were deteriorating at a rapid rate.
“Sped up by the increasing traffic from the ports using our residential streets,” she said.
Mr Foa said at a budget workshop last Wednesday that the council would also review its assets in an attempt to reduce the amount of money spent on the upkeep of capital works.
Residents who attended the workshop questioned why the council could not claim rates from Victoria University, to make up some of the government’s cost shifting.
But Mr Foa said all educational facilities were exempt from rates under government legislation.
On the heels of the council’s concern, the State and Federal Government announced an agreement with the Municipal Association of Victoria (MAV) to consider the “financial capacity of local governments” when services and responsibilities are transferred to councils.
