Byron Shire Council has moved a step closer to seeking a special rate rise, unanimously endorsing a community engagement program that will form a key part of any future application to increase rates above the state-imposed cap.
While councillors are publicly stating that no final decision has been made, debate at last week’s meeting highlighted the increasingly central role a Special Rate Variation (SRV) is playing in Council’s response to its worsening financial position.
The community engagement plan will see Council spend $120,000 on a four-month consultation process beginning in August, with feedback to be reported to councillors before a decision is made on whether to formally apply to the Independent Pricing and Regulatory Tribunal (IPART) for permission to increase rates above the annual rate peg.
Council’s recently adopted Long Term Financial Plan paints a bleak picture of the organisation’s finances, forecasting ongoing operating deficits, declining unrestricted cash reserves and a growing inability to keep pace with infrastructure renewal.
The plan warns that continuing with a ‘business as usual’ approach is ‘not financially sustainable in the long term’.
Under the scenario currently being modelled, ordinary rates would increase by a compounded 35 per cent over three years, including rises of 12 per cent in 2027-28, 10 per cent in 2028-29 and 9.6 per cent in 2029-30.
Community understanding
The engagement plan is designed in part to satisfy IPART requirements, which require councils to demonstrate that the community understands both the need for and the extent of any proposed rate increase.
Greens councillor Elia Hauge sought to broaden the focus of the consultation, arguing that residents should be engaged in a wider discussion about financial sustainability rather than being presented with an SRV as the preferred solution.
‘I was a bit concerned at how parts of the community engagement plan were framed,’ Cr Hauge told the meeting.
‘We want this to be a meaningful conversation about the financial position of Council, about what we can do without a special rate variation. What does that mean for the community? But equally, what does a special rate variation get us?’
However, Council staff warned that shifting the focus too far away from an SRV could undermine any future application to IPART.
‘If we’re going out to community and asking general questions around financial sustainability, it would be hard in an application to demonstrate that we’ve been adequately clear with our community about asking for a special rate variation,’ staff advised.
‘If by over-subscribing what this engagement is asking for, we undo IPART’s ability to approve the variation, we’re shooting ourselves in the foot before we’ve even started the race,’ said Deputy Mayor Jack Dods .
After discussion, Cr Hauge withdrew several proposed amendments but retained a provision requesting that community engagement seeking views on options that could redistribute the total rates collected to lessen the burden on lower-value properties.
Mayor Sarah Ndiaye said Council needed to have an honest conversation about its financial future.
‘I was ready to go, “look, too hard, don’t do it”,’ she told the meeting. ‘But then I really looked at what the impact was of the minimal rate increase that we did in 2017.’
Cr Ndiaye said the previous SRV had helped fund major improvements to roads, bridges, and other infrastructure and argued that councillors needed to approach the current discussion in good faith, even if it proved unpopular.
The community engagement process will run between August and November, with councillors expected to decide later this year whether to proceed with a formal application to IPART.
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