Upper Lachlan Shire Council proposes major rate hike

The council will go to the people with two options - a 55 per cent general rate rise in 2024/25, followed by a 2.5pc hike in each of the ensuing two years. It equates to a cumulative 62.85pc increase over three years.

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A second option proposes a 35pc rise in 2024, followed by 15pc in 2025/26 and five per cent in 2026/27. It will mean a 63.01pc increase over three years, according to the council.

But it will also present the 'base case,' relying on the annual rate peg set by the Independent Pricing and Regulatory Tribunal annually. This is assumed to be 3.5pc in 2024 and 2.5pc for the two ensuing years.

It follows Goulburn Mulwaree Council's bid for a 43.5pc rate rise in 2024/25 or to split it over two years, which it says will "spread the load."

In a statement, a ULSC spokesperson said the council felt the hike was "necessary."

"Without this variation, the council will not be able to continue to maintain and renew essential infrastructure like bridges, roads, sporting fields, playgrounds, libraries and sporting facilities," the spokesperson said.

"If the SRV is not pursued, the council will need to reduce the range and level of services provided. This will impact the community's liveability and it is therefore not an option councillors wish to pursue."

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They said the decision had been reluctantly taken but was largely "out of necessity" due to "a very small rate base, low population with a large geographical area to service."

Councillors agreed in principle to pursue the SRV at an extraordinary meeting in July. If they proceed, following community consultation, an application will be made to the Independent Pricing and Regulatory Tribunal (IPART).

Consultants, AEC Group, were engaged to prepare a financial sustainability review, long-term financial plan gap analysis and asset management. Councillors considered an update at their October 19 meeting, setting in train a round of community consultation.

AEC Group's report stated the council had produced consolidated net operating deficits, excluding capital grants, for the 2020/21 and 2021/22 financial years. Deficits were also budgeted for 2022/23 and 2023/24.

General fund cash was also deteriorating from $18.5 million in 2022/23 to negative position in 2033/34.

Authors said this was not expected to be corrected without increasing income or decreasing expenses.

"A key expense is depreciation...(This) has increased due to new and upgraded assets, as well as a general increase in the valuation of assets... With operating deficits it is likely asset condition and performance will deteriorate..."

The consolidated net operating result before grants and contributions was a $2,078,000 deficit in 2022/23. This is forecast to increase to a $4,251,000 deficit in 2023/24.

The consultants suggested a combination of options to boost the general fund, but recommended a SRV form part of them. Other actions included operational efficiencies, increasing fees and charges, reducing the range and level of services and sale of surplus assets.

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The council had $31.3m in cash and investments in 2021/22 but consultants said this would drop to $24.1m in 2023/24. Moreover, much of this was externally restricted for works.

"Based on the current financial settings, the council will not be financially sustainable in the long term," the consultant's report stated.

"Without intervention, Council's infrastructure backlog will continue to grow, and assets will deteriorate and not meet the desired service levels."

Option one - a permanent 55pc rise, including the rate peg, from 2024/25 and then the rate peg thereafter, would generate an additional $4.48m compared to option two in 2024/25.

The council said it was vital to improve its long-term financial sustainability.

A spokesperson said ULSC had not applied for an SRV before and pointed out that only 42 of the state's 128 councils hadn't taken the same course.

Mayor Pam Kensit urged people to inform themselves.

"It's important that the Upper Lachlan community ensure they are informed and have their say, so we encourage people to attend the engagement sessions set to take place across the Shire from November 1," she said.

"If you are unable to attend one of these sessions, an online presentation will also be available on our website."

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Sessions will be held on:

People can also make a submission via the council's website or by email addressed to Council chief executive officer council@upperlachlan.nsw.gov.au or by post to PO Box 42, Gunning, NSW 2581.

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