Despite a flood of community opposition, Central Coast Council will formally apply to the Independent Pricing and Regulatory Tribunal (IPART) for a 15 per cent rate rise next year.
The increase, which includes an annual 2 per cent rate peg, would be applied once and remain permanently in the rate base from the 2021-22 financial year if approved by IPART.
But Peninsula Chamber of Commerce President, Matthew Wales, says if approved by IPART the rise will be an extra impost on Peninsula landlords which they will be forced to pass on to tenants.
“Because of the impact this will have on small businesses, which could be anywhere between $800 and $1,000, it is the last thing the business community needs as we come out of the COVID crisis,” Wales said.
“Business and property owners will have to pay to meet a debt racked up by an incompetent Council.
“The Chamber understands why the Administrator feels it’s necessary and we empathise with his problem in trying to find sources of funds to meet the commitments of the Council.
“But we are all deeply concerned that we are the ones who are going to have to pay for it and no-one’s going to be held accountable for it.
“This is why the Chamber has called for an inquiry so that we can all understand how this happened and who was responsible.
“We need to be very clear that this decision will be made by IPART and not the State Government.”
The decision follows extensive community consultation, with well over 10,000 responses to an online survey and direct submissions received.
While Administrator Dick Persson said he understood community concern and even anger about a rate rise, he said it was needed to repay restricted funds that had been spent on projects the community had benefited from.
“It is by no means an easy decision at all; none of this is easy,” Persson said.
“I have been upfront about Council’s financial situation, the reasons why and how we will turn it around and make sure it never happens again.
“That plan includes a rate rise.
“We have done everything we can to find savings.
“There is no more juice in the lemon to squeeze here.
“We are legally obligated to repay the restricted funds, which were not spent with the necessary authorisations.
“With a 15 per cent rate rise, Council will be able to repay $100M within 10 years by delivering modest budget surpluses.”
Persson said a 10 per cent rise would see the Council still in deficit by 2026-27, meaning further service cuts and job losses.
He said there was a very real risk Council’s bank loans would be impacted if it did not receive approval for the 15 per cent increase, with the potential for an early call on the loans.
“While the community consultation clearly showed the majority of respondents were against a rate rise, when presented with the three options, a 15 per cent rise was more preferable than 10 per cent,” he said.
Persson said he understood the timing of the proposed rise came at a difficult time for the community.
“We have a long list of actions to help this Council recover, and this rate rise is only one part of the solution,” he said.
“I understand that it has been a difficult year and that many in the community will find any rate rise difficult; however, we have crunched the numbers and even with a rate rise of 15 per cent it is very likely a lot of the former Wyong ratepayers will pay less than they do now, when harmonisation is taken into account.
“Looking at our neighbouring councils, even with a 15 per cent rise, Central Coast residents will still pay less than Lake Macquarie, Newcastle and Cessnock ratepayers.
“Regardless, we are here to help – rebates and payment plans will be possible and we have updated our Debt Recovery and Hardship Policy.”
These policies went on public exhibition this week.
Persson said he wanted to “continue the conversation with the community”.
Council will continue to receive submissions on the rate rise until Friday, February 26, and these will be passed on to IPART.
IPART itself will accept submissions direct until Monday, March 1.
A decision from IPART on the proposed 15 per cent rise is expected in May.