The Narrandera Shire Council will lodge a special variation application under Section 508(2) with the Independent Pricing & Regulatory Tribunal for a permanent rate increase of two per cent in the 2022-23 financial year.

If granted it will yield additional income of $67,600 in 2022-23 and, assuming a future peg of 2.5%, $757,000 over the ten years of the LTFP.

Across the Shire, 51% of assessments will have a rate increase of less than ($4) per instalment and 85% less than $12.50 per instalment during 2022-23 should the special variation of two per cent be approved.

Council considered that the impact of the two per cent increase for ratepayers in each of the rate categories and subcategories was reasonable.

It also acknowledged that the special variation was required as the underlying inflation rate and wage increases exceeded the proposed two per cent increase in rate yield.

The application to the Independent Pricing and Regulatory Tribunal (IPART) under the one-off Additional Special Variation (ASV) is available for the 2022-23 financial year.

The Local Government Act,1993 (The Act) in Section 506 provides for a limit of annual income from rates and charges. These provisions are more widely referred to as “ratepegging”.

The limit is determined by providing a maximum percentage increase that can be applied for the coming year to a council’s previous annual income from rates and charges. The percentage increase is calculated each year by the IPART for determination by the Minister.

IPART normally releases its rate cap percentage early in the second quarter of the financial year (September/October) allowing councils an opportunity to indicate their intention to seek special rate variation for the next financial year.

However for the 2022-23 financial year, IPART did not release its determination until December 2021 which coincided with the local government elections where, in most cases, councils were not in place until January 2022.

In addition to the delay, the rate peg percentage was set at 0.7%, well below the rates set by councils in their financial forecasts. The delay meant that only four councils were able to lodge a special rate variation with IPART within the normal timeframe.

In recognition of this fact, the Office of Local Government (OLG) provided an opportunity for councils to make an Additional Special Variation application to IPART.

IPART will notify councils of its decision no later than June 21 2022 and Narrandera Council is currently preparing its budget for adoption in May 2022 with implementation on July 1.
Reasons for the need for the increase are:

• Lake Talbot Pool increased management contract and operating expenses $97,900
• Internal audit expense in response to ARIC draft guidelines $25,000
• Councillor superannuation contributions $14,800
• Councillor training $9,500
• Security increased contract expense $9,800
• Engage school-based apprentices $26,900
• Depreciation expenses new infrastructure $199,00
• Employee expenses including super 10.5% $105,100
• Green waste expenses $35,000

Items removed from the 2021-22 LTFP to maintain Council’s financial position were:

• Reduce administration assistant hours by 40% $27,800
• Remove Grant Officer position from operating budget $48,000
• Remove contractor support from finance team $15,000
• Reduce contributions to local organisations $6,000
• Reduce FBT expenses $10,000
• Active transport plan – defer pending grant funding $40,000

Income budgeted in the 2021-22 LTFP that has been removed:

• Financial Assistance Grant 2% increase $101,800
• Dividend paid from water fund $60,000
• Interest income $57,700

Income not budgeted in the 2021-22 LTFP that has not been included:

• Temporary transfer of water allocation $279,000.

This article appeared in the Narrandera Argus, 24 March 2022.