Rates challenge ahead

Prioritising council services and reviewing a 10-year financial plan are some of the measures Latrobe City is taking to manage future capped rate rises.

Last week, a State Government bill passed through the Victorian Parliament, preventing councils from increasing their rates above the CPI level.

Latrobe City chief executive Gary Van Driel said although it wouldn’t be difficult for council to deliver the same level of services initially, this would become more challenging over time. “You need to be aware that last year our rate rise was 3.1 per cent,” Mr Van Driel said.

“So it’s not as though we’re a council coming off a five or a six or a seven per cent rate rise.

“We have progressively, over time, delivered business with low rate rises.”

He said council’s existing 10-year financial plan predicted there would be a five per cent rate rise per year; the CPI would remain about 3.5 per cent and state and federal grants would continue coming in.

But with an expected CPI of 2.3 to 2.7 per cent; capping of federal assistance grants; along with state and federal funding slowing down, Mr Van Driel said those assumptions no longer stood.

“If you just look at the model that was predicted then, versus the likely assumptions that could go forward, there’s a significant reduction in expected income,” he said.

“It will be necessary for council to look at the services and levels of service it provides.”

That will include potentially reducing or scrapping certain services, as deemed unnecessary by the community. Council will consider data from its annual satisfaction survey and undergo community consultation to determine what services ratepayers consider important.

“I think fundamentally we’ve got to get the community to be very knowledgeable and demanding in terms of what they do and they don’t want from the services council provides,” Mr Van Driel said.

The Fair Go Rates system will be introduced in the 2016/17 financial year.