Council budget severely effected by State Government cost shifting

Council Chambers and Offices at WyongCouncil Chambers and offices at Wyong

Central Coast Council expects to pay the State Government $32.5M in waste levies this 2020-21 financial year.

In return, the State Government will grant Council about $300,000 this year from the Better Waste Recycling Fund, which is funded from the waste levy.

It is one example of “cost shifting” says the council, which cost it about $45M in the 2017-2018 financial year.

The figures come from this year’s Operational Plan adopted at Council’s meeting on July 27.

The Plan explains cost shifting as being how the responsibility and/or costs of providing a certain service, asset or function, are shifted from a higher level of government to a lower level of government without providing corresponding funding or adequate revenue raising capacity.

“Cost shifting continues to place a significant burden on Council’s financial situation of about $44.7M in the 2017-18 financial year, which is estimated to be about eight percent of Council’s total income before capital grants and contributions,’’ it said in the report.

Other examples of cost shifting were listed as contributions to the NSW Fire and Rescue, NSW Rural Fire Services, NSW State Emergency Service, and lack of adequate funding for public libraries.

The report mentioned the failure of the State Government to fully reimburse councils across NSW for mandatory pensioner rebates, for instance, on rates and water services.

The Central Coast region has a higher proportion of aged pensioners compared to other local government authorities.

Council provides a rate reduction on the combined ordinary rate levy amount and the domestic waste management charge of 50 percent, with a maximum combined reduction of $250 to eligible pensioners.

Of this reduction, 55 per cent is reimbursed to Council by the NSW Government.

The estimated total amount of pension rebates for ordinary rates and domestic waste management charges in 2020-21 is $6,340,000.

As well, the State moved in on developer contributions.

“The local contributions levy for the Gosford City Centre has been reduced to one percent (was previously four percent) of the cost of development due to the Gosford City Centre Special Infrastructure Contribution (SIC) under the Environmental Planning and Assessment – Gosford City Centre Determination 2018,” the report said.

“The SIC is collected by the NSW Government.

“Council is still required to deliver the infrastructure under the local contributions plan for the Gosford City Centre and is required to apply to the NSW Government for funding to contribute to these projects.”

Council said that income related to development applications had fallen in the 2019-20 financial year and a significant proportion of this was a result of changes to State Significant Development provisions, including the specific provisions for the Gosford City Centre.

It said the fees were significant on a per application basis because they were for larger developments.

Council forecasted for a decrease this year in the number of developer applications and correspondingly a decrease in development application income and associated developer contributions due to the uncertainty from COVID-19.

Merilyn Vale

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