Special Rate Variation Questions
Q. What is a Special Rate Variation and a Rate Cap?
Rates increase every year in line with an amount set by the State Government. This amount is calculated every year and is called the “rate cap”. It is decided by the Independent Pricing and Regulatory Tribunal (IPART) and is approximately 3% per year.
Councils can apply to IPART for a Special Rate Variation (SRV) to seek additional funds above the rate cap. Any rate increase above the rate cap amount is called a “Special Rate Variation” (SRV).
Q. Where can I find more information above rates?
Frequently asked questions on rates and charges from the Division of Local Government’s website can be found here. http://www.dlg.nsw.gov.au/dlg/dlghome/PublicTopicsIndex.asp?mi=0&ml=10&id=8
Q. What are Council’s funding challenges and why are we proposing an SRV?
The SRV community newsletter provides a good deal of information on why Council is proposing and SRV. Essentially our road renewal and reseal program isn’t keeping pace to maintain roads to a satisfactory standard. Each year we are underfunding the amount money necessary to keep road condition to a standard the community expect.
Download: SRV Community Newsletter
Q. Where does Council get its income from?
Council’s main source of income is from grant funding. Last year, funding revenue was around 40%. Rates make up about 30% of revenue for Council’s income. This proposed SRV increase, along with other income sources, helps cover the cost of delivering services to the community.
Q. What would change if we got an SRV?
An SRV would ensure that future funds are available to either:
Maintain Services Levels
This scenario has been in the public domain for a number of years, having been deferred on several occasions during that period. It allocates all of the Special Rates Variations revenue above the rate peg amount towards road renewals and reseals. Over the 10 year cycle, Council would progressively be able to fund road renewal and reseals to bring road assets to a satisfactory condition.
Improve Service Levels
In the IMPROVE scenario, road renewals and reseals in MAINTAIN scenario are included, with added items that are consistent with the Community Strategic Plan. This will support community infrastructure, such as the Broadway Museum, Athenium and Junee Recreation and Aquatic Centre.
Q. What would change if we didn’t get an SRV?
Decline in Services
If rate increases are limited to the annual rate cap, without an SRV, service levels will only be maintained for the short term as costs are outpacing our income. The Council would need to reduce service levels in a number of areas to ensure our road network received additional revenue to help with renewal and reseals.
Q. How would my rates change?
See the Impact on Rates information for details.
Q. What happens next?
All community feedback will be reviewed and at the Council meeting in January 2014, Council will decide whether to proceed with an SRV. If Council does decide to proceed then an application for an SRV would be submitted to the Independent Pricing and Regulation Tribunal (IPART) in February 2014 and we could expect a decision from IPART by mid-June 2014.