Maintaining services and rates

Maintaining services and rates

Maintaining services and rates

What is the proposal for the community 

Council is proposing to maintain its current rate income beyond 2023-24 for a further 7 years to ensure financial and service sustainability. Securing the current rate income for a further 7 years will ensure that we can maintain the current service levels, continue to find more service efficiencies and pay back loans.  

We will be exploring this option with you through our community awareness and engagement program from October 2021 through to January 2022. This program will allow us to:

  • Better understand the community view on what services are important 
  • Define community expectations around the service levels
  • Respond to this in a future rate proposal

What has happened so far

In May 2021 the Independent Pricing and Regulatory Tribunal (IPART) approved a temporary rate increase of 13% (plus the 2% rate peg) which is retained in the rate base for three years and removed from the rate base at the end of the 2023-24 rating year for the Central Coast Local Government Area.  

This temporary one-off increase will provide $22.9M in additional income for the 2021-22 financial year and is one of a number of measures being implemented to ensure Council remains financially sustainable. 

In their final report issued in May 2021 IPART stated, “During this 3-year period, the council will be able to implement its proposed business recovery plan, consult with its ratepayers regarding appropriate service levels, and if required, apply for a permanent Special Variation.” 

On 29 September 2021, Council resolved to notify the Independent Pricing and Regulatory Tribunal (IPART) of its intention to apply to maintain the temporary Special Variation (SV) implemented in the 2021/22 financial year beyond its expiry in June 2024 for a further seven years.  Community feedback will help inform whether or not Council decides to formally apply to IPART for a Special Variation in February 2022.

At this stage, Council is not proposing to seek a permanent variation. 
 

What did Council do

In December 2020 and January /February 2021, Council consulted extensively with the community on options for new residential and business rates to begin in the 2021/22 financial year.   The proposals addressed long term financial sustainability.  This included the legal obligation for Council to reimburse the restricted funds that had been spent without the correct authorisation on projects that the community had benefited from. 

At the same time, Council informed the community about the impacts of rate harmonisation to address the inequity between the rates of the two former local Councils in response to the State Government requirement of amalgamated Councils.  Rate harmonisation was implemented from 1 July 2021 ensuring there is now equity in how rates are charged across the whole of the Central Coast region.

What did we hear from the community

Over 10,000 community responses to an online survey, telephone survey and direct submissions were received in response to Council’s proposal about a new rating structure.   The levels of community support and reasons for and against a rate rise were established through this consultation.  The majority of respondents did not support the proposal.   

More broadly, the engagement process affirmed that the community wanted Council to ‘fix the problem’, maintain services and create a sustainable pathway forward for Council.   The community was supportive of change to see better financial management and accountability put in place. They also wanted to see that they were not shouldering the burden of fixing the problem and that other things were being done as alternatives to a rate increase such as seeking NSW government funds, selling assets, reducing staff, reduction in capital works and scaling back services and expenditure in general.  

You can read the full summary of the consultation here.

How have we responded to community feedback

We have moved quickly to show that we are serious about helping to fix the problem.  Here is what we have done so far. 

  • Better financial management and accountability 
    • Chief Financial Officer appointment
    • Audit and Risk Committee meet every two months 
    • Monthly financial reporting publicly available 
    • Tighter budget management controls 
  • Reduced spending
    • Capital works program reduction to $175M in 2020-21 compared to $242M in 2019-20
    • Materials and contracts savings estimate of $20M
    • Reduced employee costs by $30M
    • Management salaries with reduction of nine Directors to five and senior managers from 38 to 25
  • Other financial recovery actions
    • Over $60M of property assets sold
    • Improved productivity with minimum service level reduction despite staff cuts
    • Bank loans secured and payments on track
    • Finding other revenue sources.  

What happens if the proposal is not approved

Council provides over 250 services that you value and these services contribute to the quality of life that is desired on the Central Coast.  

If the Council’s current rate income is not maintained beyond June 2024, we will be forced to reduce or cease many services.  

This means that we will be unable to maintain some assets at current levels resulting in poorer condition; facilities and amenities will deteriorate more quickly such as public toilets, sporting grounds and surf clubs; and some facilities may even need to close such as childcare centres and libraries. There will be strained service quality in other areas and Council will not have discretionary funds to support some community and environmental initiatives.  Reducing or ceasing services will also impact staffing and likely mean further staff cuts resulting in up to 250 local jobs lost on the Central Coast.  

It is important to note that returning to a pre-2021 rate base, does not mean that former Gosford ratepayers will pay less rates again.  The impacts of the State Government mandated rates harmonisation which was undertaken in 2020-21 will not be wound back. 

I want to have a say

Register your interest here!

Community Reference Group

A representative sample, of randomly selected ratepayers will form a Community Reference Group.  The purpose of the Community Reference Group is to provide guidance to Council about the key messages, the community engagement activities and to explore options in relation to Council service reductions should any application to maintain rates at their current levels not be successful.  An independent third party will recruit the members for the Community Reference Group which will commence late October 2021. 

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Initial investigation and research – we are here
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Who's listening

Who's listening

Who are IPART?

The Independent Pricing and Regulatory Tribunal (IPART) is an independent authority that determines how much Council can charge for rates and the annual increase or ‘rate peg’, which is 2% for 2021-22. A special variation is a change to the amount Council can charge for rates and can only be implemented if approved by IPART. 

How is this different to water, sewerage and stormwater drainage prices?

IPART also regulates the prices that we can charge for water, sewerage and stormwater drainage prices and this is a separate process.  IPART has commenced its own community consultation about Council’s pricing proposal that was submitted to IPART in September 2021.  For more information, including instructions on how to make a formal submission to IPART, visit yourvoiceourcoast.com
It is important to remember that every dollar that we receive from your water, sewerage and stormwater drainage rates can only be spent on water, sewerage and stormwater drainage services such as water mains renewals, the upgrade of water and sewer treatment plants and stormwater management to ensure the ongoing health of our waterways.

How are rates calculated?

Find out more and how rates are calculated using land values in our Rates FAQs
 

Where's it happening?

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