Special Rate Variation

Rates increase each year in line with an amount set by the Independent Pricing and Regulatory Tribunal (IPART). This amount is calculated every year and is called the ‘rate peg’.

For the 2023/24 financial year the rate peg applied to Griffith City Council, will be 3.7%.

If a council’s rate revenue is not sufficient to maintain service levels or undertake capital works, it can apply to IPART to increase overall rate revenue by more than the rate peg. This is known as a Special Rate Variation (SRV). In order to apply for an SRV, councils must demonstrate to the community and IPART that they need the money and have implemented improvements to be more efficient and productive. Council has already identified $1M in savings annually.

The rate increases set by IPART have not kept pace with cost escalations faced by Council in providing services to our community. Cost shifting from other levels of government and diminishing value of annual operating grants over time have also contributed significantly to the pressure on Council’s financial position.

The additional funds received through the SRV will increase the money available to address and correct Council’s operating position and enable sufficient funds to be available for renewal and maintenance of assets and the continuation of current service levels.

Council will have to look at options to reduce the levels of services to the community. Examples of community facilities that may have reduced hours are the Griffith Regional Aquatic Leisure Centre, Griffith Regional Theatre, Pioneer Park Museum, Griffith Regional Sports Centre and Griffith City Library. In addition, service levels will be reduced. Some examples of these include our roads, parks and gardens, strategic planning and storm water drainage.

The proposed rate increase is based on Council's funding requirements.

Griffith City Council is seeking the community’s viewon a proposal to apply to the Independent Pricing and Regulatory Tribunal (IPART) for approval to raise ordinary rates through a Special Rates Variation (SRV) by 10.5% (inclusive of the assumed 3.0% rate peg) each year for three consecutive years from 2024/25 to 2026/27 (a cumulative total increase of 34.9%). The increase would be retained permanently in Council’s rate base.

Based on Office of Local Government Performance comparative data FY2020/21 - average Griffith

Special Rate Variation Estimator here Ratepayers are encouraged to assess the impact of the SRV on their respective properties by using this estimator.

Council must restrict funds to the water, sewer and waste areas. It is a legal requirement to do this. Council does not include capital works in the Long-Term Financial Plan for major projects in the outer years as they are not within the Councillors Delivery Program period (ie; 4 years). Council must ensure that it has sufficient cash reserves to fund major future renewal of existing infrastructure and growth for new development.

This SRV will allow Council to become financially sustainable in the General Fund to maintain existing services and provide the capability to grow. Future regulation changes, additional State Government cost shifting and future capital works programs as determined by Councillors may influence future SRVs.

Yes

If a SRV is approved the current level of services will be maintained. If a SRV is not approved, examples of community facilities that may have reduced hours are the Griffith Regional Aquatic Leisure Centre, Griffith Regional Theatre, Pioneer Park Museum, Griffith Regional Sports Centre and Griffith City Library. In addition, service levels will be reduced. Some examples of these include our roads, parks and gardens, strategic planning and storm water drainage.

The proposed SRV will increase the rate base annually over the 3-year period of implementation with the third year being 2026/27.
The annual rate base as from the 2027/28 year will increase by the annual rate pegging limit as set by IPART.

The proposed SRV is not a decision taken lightly. Council recognises the delicate balance between providing essential services, maintaining infrastructure, and ensuring affordability for our residents. Council offers the Pensioner Rebate Scheme, which financially supports this important group in our community. Council also has a Hardship Policy to accommodate the special needs of those unable to pay their rates in full on time. The increase is proposed to come into effect in July 2024 and staged over a 3-year period, recognising the impact and in an effort to minimise this impact as much as possible whilst ensuring Council’s financial sustainability.

Regardless of whether Council resolves to apply for an SRV, Council's Senior Management Team is committed to finding $1 million in savings each year starting from 2024/25. This will be achieved by identifying operational efficiencies. Councillors are also being encouraged to identify possible alternate revenue sources and potential saving opportunities.

The NSW Valuer General’s Office is responsible for the valuation of all rateable land in NSW and is revalued every three (3) years. Rateable land within the Griffith LGA was revalued during 2022 and these values were provided to Council. Council calculates rates using the land value determined for your property plus a base amount.
The land revaluation process does not provide any additional rate revenue for Council. The total increase in rate revenue to Council is capped on an annual basis by the Independent Pricing and Regulatory Tribunal (IPART. For the 2023/24 year the rate cap increase is 3.7% above 2022/23 level (ie approx. $700,000).
Changes to land values will impact the amount of rates payable for individual properties but the total increase in rate income received by Council for the year does not exceed the rate cap as determined by IPART.
Whilst we acknowledge that some individual assessments have moved by much greater than the 3.7% rate pegging figure, many have also increased by less and in fact some assessments have reduced in line with new land valuations.

Without a Special Rate Variation, Council would need to consider reducing the levels of services provided to the community to save costs. Examples of services that may be impacted include the Griffith Regional Aquatic Leisure Centre, Griffith Regional Theatre, Pioneer Park Museum, Griffith Regional Sports Centre and Griffith City Library. In addition, service levels will be reduced. Some examples of these include our roads, parks and gardens, strategic planning and storm water drainage.