IT might be welcomed by some ratepayers but Blayney Shire Council mayor Scott Ferguson has described the Independent Pricing and Regulatory Tribunal's proposed rate peg of just 0.7 per cent as a disaster for local government areas across the state.
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"When we prepare our budgets for the following year they give us a bit of an idea of approximately what they think the next rate peg would be," he said.
"This year we budgeted for 2.5 per cent and to only receive 0.7 per cent is a complete disaster for local government and it's totally unacceptable."
The crux of the issue is that the formula that was formerly used included increases in the Consumer Price Index amongst other factors. The current formula is primarily based on population growth.
"This is a real backward step in regards to our future budgets and we'll be losing $160,000 of what is operational income or real money that we get from ratepayers," Cr Ferguson said.
"This is not the same as the millions we're getting in grant funding for the pool. This is our core income and with staff costs increasing by three per cent as well as the cost of building materials going through the roof, the new formula just isn't right."
The slow and irreversible erosion of services such as lawn mowing and road repairs could be impacted by the cut in income Cr Ferguson said.
"It will be a subtle impact because we can't just go pulling $160,000 out of one service like regrading a few kilometres of road or not mowing some of the ovals," he said.
"The community may not notice the changes but these sort of cuts are cumulative and once you lose something it's extremely hard to get them back."
Regionally, Orange, Oberon, Lithgow, Dubbo Regional, and Mid Western (Mudgee, Gulgong and Rylstone) LGAs also have 0.7 per cent pegs. Bathurst Regional Council is 0.9 per cent, as is Cabonne.
Cr Ferguson added that the cost to council's coffers of the COVID pandemic haven't been fully comprehended by the state government.
"Councils across the state have all lost money because of fees that they were unable to levy on sporting associations and business groups on the hiring of sporting facilities that they didn't use,' he said.
"Here in Blayney we didn't charge for food inspections to help our local businesses and none of that is included in the IPART determination."
In its final report on the rates pegging, IPART said its methodology would increase the total general income of 96 of the 128 councils in NSW.
It also increased the total general income of the local government sector by 1.5 per cent, that is an additional $287 million.
The report also noted several ways councils could increase their revenue outside the rates peg including, contributions from developers to fund infrastructure necessary to serve the needs of the development, supplementary valuations, ie when the Valuer General issues a supplementary valuation due to changes in land value (e.g. when land is rezoned or subdivided) and special variations, where councils can apply to IPART for a special variation to increase their general income above the rate peg.