Special Rate Variation

Update 6 September - Rates calculator

Council has developed a rates calculator to help to help you understand the impact of the proposed special rate variation options on your rates. The proposed rate rise only applies to the general rate charge. This is the base rate and land value (or ad valorem) charge on your rates notices. It does not apply to garbage or general waste, sewerage, stormwater, or water access charges. To use the rates calculator you can either enter your address or your rates assessment number. Access the Rates Calculator via this link

Update 30 August - Tickets for community information sessions are now available at

https://www.123tix.com.au/events/profile/2463

Timings

Monday 18 September

2pm – Panorama Room, Panthers Bathurst

6.30pm - Panorama Room, Panthers Bathurst - Business community

Tuesday 19 September

7.30am Courtyard Room, Bathurst RSL

2.30pm Kelso Community Hub

5.30pm BMEC conference rooms

Wednesday 20 September

9am BMEC conference rooms

11.30am BMEC conference rooms

Background

Council has voted to start a conversation with the community about a potential Special Rate Variation (SRV).

How did we get here?

Council has supported a steadily growing population and maintained its infrastructure and services within the scope of its revenue growth in line with the rate peg increases set by the State Government. However, in recent years this has become increasingly difficult. The recent COVID pandemic, impacts on infrastructure of recent weather events, and the current highly volatile inflationary environment which has increased Council’s costs faster then its revenue growth have resulted in extreme pressure on Council’s budget.

With costs out-stripping revenue, resulting in Operating Deficits, Council has needed to utilise its cash reserves and reduce infrastructure renewal and maintenance to ensure a balanced budget. In some areas, Council has also been able to utilise State and Federal Grants to fund infrastructure renewal and operations. With unrestricted cash balances dwindling and State and Federal budgeting constraints reducing the likelihood of future substantial grants, Council must consider increasing rates revenue to adequately fund its current services and infrastructure needs.

Council identified in its 2022 Community Strategic Plan the need to consider a Special Variation for rates to ensure its ongoing financial sustainability. In its 2022-26 Delivery Program, Council endorsed the objective to review the need for a Special Rate Variation (SRV) to its rates. In the 2023-34 Long Term Financial Plan (LTFP), Council commenced the process of modelling an SV in one of its financial planning scenarios.

Since then, Council has undertaken further analysis on the need for and amount of a potential SRV and asked independent financial experts Morrison Low to undertake an independent financial assessment of Council to assist in this process.

Council has never applied for an SRV, one of very few Councils across the state to have never applied for a SRV.

What has Council done to save money?

Council undertakes regular reviews to ensure that it is containing costs and implementing efficiency gains, so that it is able to provide value for money to the community. Council has found savings of approximately $3.6 million per year through implementing 75 initiatives, including restructuring and reducing from five to four directorates, reviewing advertising, and installing cost-efficient LED lighting.

Going forward, Council has identified further improvement initiatives that it will implement in the coming years providing a further annual net benefit of $957,000, with one-off implementation costs of $273,000. These improvements have been included in the updated LTFP. There are an additional 31 improvement opportunities identified that need to be further assessed and costed before implementing, which are not included in the updated LTFP.

Council has also identified additional costs that it must incur to ensure its ongoing organisational sustainability, these are investing in cyber security of Council technology systems and adequately resourcing the recreation team to maintain and manage Council’s parks and open spaces. These additional costs total $2.4 million per year and $1.4 million in one-off costs, which have been included in the updated LTFP.

Further details on these improvement initiatives and organisational sustainability requirements can be found in the Council’s Organisational Sustainability Review and Improvement Plan report (July 2023). A copy of this report is included in the document library.

What are the options Council is considering for a Special Rate Variation?
The rate rise only applies to the general rate charge. This is the base rate and land value (or ad valorem) charge on your rates notices. It does not apply to garbage or general waste, sewerage, stormwater, or water access charges.

Council is taking three special rate variations options to the community; plus the status quo, or base case which is relying on the rate peg set by IPART each year and keeping rate increases to this level.

In the analysis undertaken in the Background Paper (available in the Document Library) “How will the increase impact Council’s ongoing financial sustainability?” the base case option is not a financially sustainable option.

The three SRV options are for relatively similar increases overall, the difference being the number of years to implement the full extent of the rate rise, one, two or four years; and enable Council to meet all financial sustainability objectives.

What does this mean for the average residential rate?

Base case: Maintain the status quo

The base case is increasing rates by the rate peg each year for the next four years. For the average annual rates for a residential ratepayer the four year increase is an extra $144.62. This means in year 1, it is an increase of $44, or an extra 85 cents per week; Year 2 an increase of $77 over the 2023/24 year or an extra $1.48 per week, in Year 3 an increase of $110 over the 2023/24 year or $2.12 extra per week and in year 4 it is an increase of $144.62 over the 2023/24 year of $2.78 per week.

SRV Option 1:

This is a one year rate increase of 58.5%, then reverting to the rate peg in following three years. This a cumulative increase over the period of the SRV of 58.5%.

For the average annual rates for a residential ratepayer the four year increase is an extra $892.16. This means in Year 1 it is an increase of $738, or an extra $14.20 per week; in Year 2 an increase of $788 over the 2023/24 year or an extra $15.16 per week, in Year 3 it is an increase of $840 over the 2023/24 year or $16.15 per week and in Year 4 it is an increase of $892.16 over the 2023/24 year or $17.16 per week.

SRV Option 2:

This is a two year rate increase. In year 1 the increase if 43.5% and in year two an increase of 17.5%, then reverting to the rate peg in the following two years. This is a cumulative increase over the period of the SRV of 68.6%.

For the average annual rates for a residential ratepayer the four year increase is an extra $973.71. This means in Year 1 it is an increase of $549, or an extra $10.56 per week; in Year 2 an increase of $866 over the 2023/24 year or an extra $16.66 per week; in Year 3 an increase of $919 over the 2023/24 year or an extra $17.68 per week and in Year 4 it is an increase of $973.71 over the 2023/24 year or an extra $18.73 per week.

SRV Option 3:

This is a four year rate increase. In year 1 the increase is 33.4%, in Year 2, 12.5 %, in Year 3, 7.5% and Year 4, 7.5%. The cumulative increase over the period of the SRV is 73.6%.

For the average annual rates for a residential ratepayer the four year increase is an extra $928.42. This means in Year 1 it is an increase of $423, or an extra $8.13 per week; in Year 2 an increase of $633 over the 2023/24 year or an extra $12.18 per week; in Year 3 an increase of $776 over the 2023/24 year or an extra $14.91 per week and in Year 4 an increase of $928.42 over the 2023/24 year or an extra $17.85 per week.

The impact on Business, Farmland and Mining rates is detailed in the Background paper- the proposed special variation to Council rates.

Information to explain the rate scenarios

• Bathurst Regional Council - Background Paper - Special Variation
• Draft 2023 - 2034 Long Term Financial Plan
• Frequently asked questions document
• Rates Calculator

All these documents are available in the document library (found to the right on a computer or scroll down on a mobile device). They are also available at the Civic Centre in Russell Street or at Bathurst Library.

Submissions can be made until 4.30pm 31 October 2023 and can be made in the following ways.

• By submitting your comments online below
• By email to council@bathurst.nsw.gov.au (referencing SRV in the subject line)
• By mail to PMB 17, Wiradjuri Country, Bathurst NSW 2795
• Delivered in person to the Civic Centre, Russell St, Bathurst