Council-under-administration’s submission to the Federal Parliamentary Inquiry into Local Government Sustainability lists all the pressures councils in general face.
They include:
1/ Rate pegging poses a notable constraint on local government finances, limiting the extent to which councils can adjust rates to provide suitable services and meet community expectations.
2/ Cost shifting exacerbates the financial strain on local government by transferring responsibilities from higher levels of government without corresponding funding allocations. Examples include state roads, lighting, SES levy, and a proposed new dam safety levy.
3/ Funding for ongoing maintenance and depreciation of new assets: balancing the grant funding and political desires for new assets is a challenge without concurrent allocations of ongoing continuing expenses to cover “ongoing operational costs” which is funded by Council. These costs include asset depreciation costs, costs to operate the asset (ie, electricity, staff costs) and ongoing maintenance and cleaning costs.
4/ Developer contribution funding: Council utilises developer contribution funding to fund new infrastructure works. However, these developer contributions do not fund ongoing depreciation, maintenance and operational costs associated with the new infrastructure. Unless a development creates a commensurate increase in rates income, the additional costs from these new or upgraded assets must be met from a Council’s existing revenue placing greater pressure on the Council’s resources.
5/ The hoops council needs to jump through to get a special rates variation (fancy way of saying getting a rate increase beyond the rate peg).
Not only is the SRV process quite lengthy and costly to Council, there is often negative sentiment from the community when Councils pursue this option, the submission states.
“The ongoing need for Councils to continue to apply for SRV’s in order to fund the services which the community expects, is generally perceived as being poor for Council’s reputation, the community’s perception of Council, and typically results in negative feedback from the community,” Council’s submission states.
Council also acknowledges that an SRV often seeks a steep, one-off jump in the total rates that a resident pays to Council. This sudden jump in expenditure is often difficult for many households, who are often managing their budget on a week-to-week basis, to manage.
6/ Standards, legislation, specifications and best practice: continue to rise alongside higher levels of service expected by the community. With evolving technological advancements and growing population needs, Council is tasked with meeting increasingly stringent standards while balancing limited financial resources.
The above list leaves councils with an unenviable choice between absorbing funding shortfalls from other levels of government or leaving key services inadequately funded, the submission said.
The same submission was sent to the Upper House Standing Committee on State Development Inquiry into Ability of Local Governments to fund infrastructure and services.
The closing date for submissions for one of the inquiries was 26 April and it was therefore not feasible to present the draft submission to Council for endorsement, the report noted.
“Accordingly, a staff submission was provided to the Inquiry and this is attached to this report for noting.”
But Administrator Rik Hart, at the May council meeting, said he agreed with the views.
Council is an asset manager, he says.
