The Special Rate Variation

Tamworth Regional Council’s approach to improved financial sustainability includes improving our efficiency and effectiveness. Through a variety of cost-cutting measures and prudent management, Council has produced a balanced three year budget for the 2011/2014 Management Plan. The budget caters for what Council “can do” in keeping with the overall aim of fiscal responsibility. However, the constraints on Council’s ability to raise general fund income and continued lack of access to increased recurrent government funding combined with inflationary pressures on the costs of labour, plant and materials are so significant that they are inevitably leading to:-

• A widening gap between the amount of funding needed and the amount of funding actually spent on the maintenance and renewal of assets; and
• The need for Council in the near future to apply for a Special Rates variation in order to adequately maintain its stewardship role over community assets.

The latest comparative reporting on Local Government authorities indicates that the Tamworth Regional Council rates are at a level that is 14.9% below the category average for residential rates, 26.6% below the category average for business rates and 5.8% below the category average for farmland rates. Increasing the Tamworth Regional Council rates to a level in line with the respective category averages would yield an additional $4,090,000 per annum in revenue which would significantly decrease the funding gap for the maintenance and renewal of assets.

NB: This special rate variation is applicable to ordinary rates only. It does not include Water or Waste and Sewer

What will the additional rate money be spent on?

The additional money will be used for managing our existing infrastructure. This includes renewal and ongoing maintenance of assets such as our buildings, roads, bridges, parks and facilities (swimming pools). Renewal activities extend the life of the asset such as resheeting a section of road. Maintenance includes repairs, painting, replacement of broken fixtures etc.

The additional money will be quarantined for managing our existing infrastructure. It will not be used for building new infrastructure or providing new or expanded services.

Special Rate Variation Explained Council has resolved to make applicationfor a special rate variation of 20.6% (including 3.6% rate peg) to provide funding for an identifed shortfall in the annual maintenance of council's infrastructure assets.

Community Consultation - Have your say Late last year, Council started its conversation with the community to find out whether they thought it was reasonable for local residents to pay rates at levels comparable to other regional NSW cities. Currently Tamworth Regional Council’s general rating base is on average 17 per cent below that of comparable Group 4 councils such as Dubbo, Orange and Albury.

How will the money be spent All monies raised each year from the additional rate increase above rate peg will be used solely for the purpose of capital renewal works on existing community assets associated with council's general operations. This will be in addition to funding levels currently allocatedso that  the assets can be maintained at current condition.

Impact on Rates The impact, of a special rate variation, on rates will vary according to your rate category and land value.

IPART Determination IPART announced that it has decided Council can increase its general rate income by 14.6 per cent in 2012-2013 to fund additional asset maintenance and renewals work. The approved increase includes the 3.6 per cent rate cap available to all NSW council and an additional 11 per cent ordinary rate increase. Council had applied for a total increase of 20.6 per cent (17 per cent above the rate cap).