Muswellbrook Shire Council receives one year endorsement to implement its expenditure program in 2018-19

THE Independent Pricing and Regulatory Tribunal (IPART) conditionally approved a Special Rating Variation of 10 per cent, in real terms, to Muswellbrook Shire Council’s rating on Tuesday to fund a number of projects in town.

IPART chair Dr Peter Boxall said the decision to support council’s application for one year enabled the council to implement its expenditure program in 2018-19, while considering whether to apply for a special variation in future years.

The projects include:

* Improvements in stormwater management; 

* Upgrades to Muswellbrook’s Olympic Park sporting precinct; 

* A new Regional Entertainment and Convention Centre for the region; 

* Additional support for job creation across the Shire; and 

* The recovery of rating income lost as a consequence of the conversion of mining biodiversity offsets to voluntary conservation agreements. 

The approval has been granted for 12 months with an invitation to apply in March next year for the increase to become permanent once the Delivery Program (a document updated only every four years) is reviewed on an ad hoc basis to include the projects. 

IPART noted that council demonstrated community awareness, that the impact on ratepayers was reasonable and that there were demonstrable productivity improvements and cost containment in the council organisation. 

Council’s financial spokesperson Cr Scott Bailey spoke in relation to the decision.

“It’s a validation of the projects and it speaks to IPART’s satisfaction with council’s financial management,” he said.

“IPART is clearly satisfied with our community consultation and the decision permits council to begin more detailed design work in readiness to roll out those projects over the forthcoming years.”

Council will carefully consider IPART’s determination and community feedback before announcing its position with respect to IPART’s decision on the special rate variation in coming weeks. 

“We are satisfied the [Muswellbrook Shire] council has demonstrated the need for additional revenue to ensure its financial sustainability and to fund operating and capital costs,” Dr Boxall said.

“But, we are not satisfied that the Integrated Planning and Reporting (IP&R) documents that were exhibited and adopted were sufficient for this application.”

IPART’s decision follows an unsuccessful application made by the council last year.

If the council adopts the temporary variation, the average residential rate will increase by $91, average business rates will rise by $292, while farmland rates and mining rates will go up by $350 and $55,989 on average respectively from July 1, 2018. 

Rates would decrease in 2019-20 to previous levels, adjusted by the annual rate peg increases unless another special variation is sought and approved.

IPART has attached conditions to its decision on Muswellbrook Shire Council, requiring the additional income to be used for the purposes outlined in the application in 2018-19, and that the council report to the community about how the additional revenue is spent.

Upper Hunter and Muswellbrook were among 13 councils across NSW (of a total of 128) to make a special variation application to increase rates for 2018-19. 

IPART approved nine applications in full, two applications were approved in part, and two were not approved.

IPART will set the next rate peg, to apply from July 1, 2019, in September this year to provide councils with more time to prepare annual budgets and consult with their communities if they are considering applying for a special rate variation.

Muswellbrook Shire Council

Requested special variation - 14.7 per cent single year increase to be retained permanently in the rate base

Outcome (including rate peg) - 14.7 per cent single year temporary increase, the increase above the 2.3 per cent rate peg (or 12.4 per cent) is to be removed at the end of 2018-19.

Increase in the average residential rate 2018-19 - $91

Summary of purpose - fund new and existing programs and infrastructure, including the development of a Regional Entertainment and Conference Centre and Olympic Park Precinct Upgrade