Funding our future
Update: 9 May, 2017
The Independent Pricing and Regulatory Tribunal (IPART) have approved Byron Shire Council’s special rate variation of 7.5 per cent per year for four years.
The cumulative increase is 33.55% over four years, raising $11.72 million, and will be allocated to reducing Council’s infrastructure backlog and improving financial sustainability. The special rate variation includes the rate peg.
The additional funding will be spent on roads, stormwater drainage, rural drainage and culverts, buildings, public amenities and parks. Council will also borrow an additional $6 million over the next four years to fund a bridge renewal program.
The special rate variation increase will come into effect from 1 July 2017.
Consultation results and outcome
To everyone who participated in our conversation about the proposed Special Rate Variation over the past 4 months, thank you. Council received feedback from approximately 2,600 people in the community.
The latest feedback on the public exhibition of Council's Integrated Planning and Reporting documents was presented in a report to Council at its 2 February, 2017, Ordinary Meeting. The report can be read within the 25 January Council meeting agenda via this link
- Report (item 13.2) http://byron.infocouncil.biz/RedirectToDoc.aspx?URL=Open/2017/02/OC_02022017_AGN_602_WEB.htm
As a result of the meeting, Council resolved to apply to the Independent Pricing and Regulatory Tribunal (IPART) for a special rate variation of 7.5 per cent per year on the ordinary general land rate, for the next four years.
The 7.5 per cent increase includes the rate peg. It does not apply to water, waste, stormwater and sewer charges. At the end of the four year period, the special rate variation increase would be built into the rate base and permanently retained.
Council Resolution (2 February, 2017):
1. Receive and note the submissions and feedback received from the community during ‘Phase 4 – Public exhibition of the IP&R documents’ during the Special Rate Variation Consultation & Engagement process, conducted over the period from 17 December 2016 to 18 January 2017.
2. Notes that an application for a Special Rate Variation is a key strategy from its “Fit for the Future” Council Improvement Plan (CIP) adopted in June 2015.
3. Adopts ‘Option 1’ – being a 7.5% compounding annual rate increase per year over a four year period commencing July 2017 to June 2021 as its preferred option for a Special Rate Variation.
4. Subject to determination and incorporation of an SRV option as recommended in part 3 of the recommendation, Council adopt the revised Integrated Planning and Reporting documents as presented to Council on 15 December 2016 (#E2016/103981), (#E2016/100839) and (#E2016/103686).
5. Lodge a Section 508A permanent Special Rate Variation application to the Independent Pricing and Regulatory Tribunal, for increases to the ordinary rate income (general revenue) of 7.5% (including rate peg) in 2017/18, 7.5% (including rate peg) in 2018/19, 7.5% (including rate peg) in 2019/2020 and 7.5% (including rate peg) in 2020/21
6. Continue to actively campaign for the state government to legislate to enable the Council to levy a bed tax and thus provide a source of revenue for infrastructure renewal funded by the growing number of tourists to the area.
7. Continue to lobby the Office of Local Government and the NSW Grants Commission for a revision of the Financial Assistance Grants (FAGs) funding distribution formula so that the impact of tourists upon Council and its ratepayers is adequately recognised and compensated for as a disability factor.
8. Continue to closely monitor the IPART review of NSW council rating systems and advocate for an expansion of rating categories that would facilitate Holiday Let establishments being rated as or similar to Business.
9. Establish a Byron Shire Revenue Exploration Working Party to work alongside staff to identify non resident revenue sources and to report the outcomes of research at each community roundtable.
10. Write to the local Member, Tamara Smith, Ben Franklin MLC and Minister of Tourism, seeking an urgent meeting to discuss State Government potential for more targeted tourism support in the Byron Shire.
11. Develop a SRV quarterly expenditure auditing and reporting profile linked to Council’s CIP in conjunction with Council’s auditors within 3 months of any SRV approval issued by the IPART.
Plus, you can also find out more about some of the frequently asked questions and issues raised on the right hand side of this page, titled FAQs. The consultation report from October and November can be found on the right hand side of this page under attachments.
Frequently asked Questions - click here
Why do we need a Special Rate Variation?
Our community has consistently told us that assets like roads, footpaths and drainage are important but we need to improve their condition. Our Community Satisfaction Surveys in 2013 and 2016 rated our roads as the most important asset. In 2016, 80% of our community said that rural and urban roads should be a priority and more funding needed to be invested. You can read more about the findings from this survey here.
As we identified within our Fit for the Future Council Improvement Plan, part of the solution is a Special Rate Variation. Click here to read more about our Plan and what we have been doing to improve our financial sustainability.
We have three documents which have been amended to reflect an application for a Special Rate Variation that we would like you to consider. The proposed options for a Special Rate Variation are set out below based on a funding increase and including the NSW State government’s rate peg recently released for 2017/18 at 1.5% and estimated rate peg of 2.5% for the following three years.
At the end of the four year period the Special Rate Variation increase would be built into the general rate base and permanently retained. We would also borrow an additional $2 million each year for 3 years to help maintain and renew our infrastructure.
If you would like to see how the average general rate increases under the estimated 2.5% rate peg cap, click here.
To read more more about our infrastructure assets and their condition, click here.
Base case - rate peg only
- No increase above the rate peg (in early December 2016, IPART set the rate peg at 1.5%).
- Required expenditure will significantly exceed the current budget allocation.
- Increased significant failure of high risk assets that will not be fixed immediately; this will include potential bridges, roads and building closures.
- Based on the rate peg of 1.5% for 2017/18, plus an estimated rate peg of 2.5% each year for three years; the cumulative rate increase is 9.3% on general rates (ordinary land rate) - excludes water, waste and sewer.
Special Rate Variation of 7.5% each year for four years. Over the four year period this is a cumulative increase of 33.5%.
Some of our assets would continue to deteriorate. We would focus our available funds into high risk, poor condition asset renewal and maintenance.
FUNDING IMPACT - This option would generate an additional $16.58 million over four years and allocated to the following assets:
- $13.07 million on roads, road drainage, footpaths and bridges
- $468,000 on urban stormwater
- $330,000 on rural drainage, causeways and culverts
- $2.16 million on buildings and public amenities
- $544,000 on parks and open spaces
Special Rate Variation of 10% each year for four years. Over the four year period this is a cumulative increase of 46.4%.
We would stop the deterioration of our community assets. We would focus our available funds into high risk, poor condition asset renewal and maintenance.
FUNDING IMPACT - This option would generate an additional $22.28 million over four years and allocated to the following assets:
- $16.9 million on roads, road drainage, footpaths and bridges
- $719,000 on urban stormwater
- $507,000 on rural drainage, causeways and culverts
- $3.3 million on buildings and public amenities
- $836,000 on parks and open spaces
Special Rate Variation of 12.5% each year for four years. This includes the annual estimated 2.5% rate peg. Over the four year period this is a cumulative increase of 60.2%.
We would improve the quality of our community assets by being able to fund the required asset renewal and maintenance. The works program would be accelerated and we would be able to fund new essential infrastructure.
FUNDING IMPACT - This option would generate an additional $28.26 million over four years and allocated to the following assets:
- $20.86 million on roads, road drainage, footpaths and bridges
- $983,000 on urban stormwater
- $693,000 on rural drainage, causeways and culverts
- $4.57 million on buildings and public amenities
- $1.14 million on parks and open spaces.