What will Council do with its extra $25M per year, asks citizen Brooks

Resident Kevin Brooks wants Central Coast Council to explain what is going to do with an extra $25M it will have at its disposal once it pays back the last of its emergency loans in November.

Brooks addressed the April 29 meeting, pointing out issues with Council’s long-term financial plan, tabled as part of its operational plan and budget for the coming financial year.

The long term plan’s preferred scenario keeps a 15 per cent rate rise imposed for 10 years from 2022.

Council wants to keep the rate rise permanently.

Brooks argued that the temporary rate increase was granted for short term emergency purposes, including the repayment of emergency loans and proposing to extend it was unjustified.

“It was an IPART condition that 41% of the extra money be used to repay the loans – not 38% as specified in the report – and 41% is about $12.5M per year,” Brooks said.

Council is repaying the loans within five years, which means it is repaying about $25M per year.

Brooks says that means that later this year, after the loans are fully repaid, Council will become $25M per year better off. 

The $25M previously used for loan repayments will suddenly be available for other things.

“What does Council intend to do with this newly available money?” Brooks asked.

“And how come, despite this $25M per year windfall, Council can’t balance the books without extending the temporary rate hike?”

Brooks said IPART approved extra money outside loan repayments as a 10 year breathing space to improve efficiency and productivity.

He claimed the numbers showed efficiency has actually decreased in four years and productivity is lower now than in 2017.

“And that is why the General Manager is now asking for yet more rate hikes,” he said.

The long-term plan proposes an efficiency target from 2026/27 to save $12.7M by 2030.

But Brooks asked why Council was going to wait another 12 months before introducing the efficiency target.

He said it should have been introduced four years ago and that, if implemented straight away, a one per cent target would be enough to avoid extending the temporary rate hike.

“Rates income has already increased 39% in four years,” Brooks said.

“Rather than imposing yet more rate hikes upon rate hikes, it is time to address root causes within the organisation.”

See rates story here: https://coastcommunitynews.com.au/councillors-dont-mention-4-3-per-cent-rate-rise