The Independent Pricing and Regulatory Tribunal [IPART] has knocked back Port Macquarie-Hastings Council’s total requested rates increase.
IPART announced its decision regarding Council’s application to increase total rate revenue by more than the rate peg amount of 2.8 per cent.
Port Macquarie-Hastings Council applied to increase its general income by 15.34 per cent in 2011/12 and by 6 per cent in 2012/13.
IPART decided to approve a special variation to the Council’s general income of 10.10 per cent for 2011/12 only.
For the average ratepayer, this will equate to an approximate rise of $24 for the 2011-2012 financial year.
IPART found that the main purpose of the requested special variation was consistent with community priorities in Council’s strategic plans.
However, IPART has not approved the full special variation sought, because the proposed increase:
-   Would have a sub-stantial impact on ratepayers (in terms of increased rates). Average residential rates are currently above those of comparable councils and the State average while the Council area’s income levels are relatively low.; and
– Was not consistently communicated to the community. Further, the council did not adequately demonstrate broad community support for the requested special variation.
The revised special variation increase will allow the Council to fund maintenance and asset renewals, IPART stated.
Council’s Acting General Manager Jeffery Sharp, has expressed disappointment in the decision.
“Unfortunately we are now in a situation of not being able to finalise long-term plans for addressing our infrastructure backlog as we only have a confirmed budget position for a single financial year,” he said.
“Maintaining the level of the 2010/2011 rate rise for another year will allow the continuation of the ‘back to basics’ commitment to road maintenance. It won’t fund much of the infrastructure works program that was supported by the community in the 2011/2012 Operational Plan that was exhibited.
“Part of the feedback from IPART stated that Council had not explored all alternative funding options, particularly referring to the strategy of reducing the level of debt rather than borrowing to fund additional spending on new infrastructure.
“We will now have to go back to the information the community gave us about their expectations of our level of service and assess the IPART feedback to make a decision on the scope and funding sources we adopt for the 2011/12 Operational Plan.
“This budget situation was referred to as Scenario 2 in the development of the Integrated Planning documents, but I don’t believe it is as simple as just cutting the works program,” said Mr Sharp.
In order to comply with the Integrated Planning and Reporting legislation, Council must adopt the 2011/2012 Operational Plan and the 2011/2015 Delivery Program by July 1.
The proposed increase for 2011 included the continuation of a special variation rise of 7.36 per cent previously approved for 2010/11 for one-year only; a special variation increase of 5.18 per cent; and the rate peg increase of 2.80 per cent.
The 2012/13 increase includes a special variation increase of 3 per cent and an estimated rate peg increase of 3 per cent. These increases represent an annual average increase of 7.7 per cent above the rate peg over the two years.
Details of the special variation application can be found on IPART’s website www.ipart.nsw.gov.au.
