Council adopted its 2015-16 budget with residential rates to rise by 2.4 per cent this financial year.

The rise is in line with the rate pegging limit set by the Independent Pricing and Regulatory Tribunal (IPART).

Kiama Council places $73 million budget on public exhibition

A report on NSW local government (and published by the Office of Local Government) indicated that Kiama is the highest non-metropolitan council with an average residential rate of $1277.87 for 2013-14. It is also the third highest rated council in NSW.

The state government’s $1 billion Fit for the Future 

project looks to implement structural change at the local government level such as council amalgamations.

Kiama Mayor Brian Petschler told Fairfax Media their budget was based on a ‘‘responsible approach’’ with a view to the Fit for the Future reform package.

Cr Petschler said for many years, council benefited from income derived from its land development program via projects like Elambra Estate at Gerringong.

With land availability at Elambra exhausted, according to council, its delivery program and long term financial plan are dependent on the development of council-owned residential land at Spring Creek in 2016-17.

Council was required to submit its Fit for the Future proposal to the Office of Local Government before the end of June; at the June meeting, councillors endorsed the council’s submission.

Council’s response focused on internal efficiencies, policy improvements and new strategies to reduce expenditure and increase revenue.

‘‘Dependent on the success of the internal efficiencies and policy changes/improvements, financial modelling suggests that a special rate variation (SRV) may be required in four-five years to ensure council meets the operating performance benchmark and delivers a surplus,’’ council general manager Michael Forsyth wrote in a  report.

‘‘The $68 million investment in the Centre of Excellence in Aged Care has a significant impact on the operating performance ratio. 

‘‘As council borrows heavily to fund the project, this has a material impact on the ratio and dramatically forces the operating result further from the benchmark,’’ he wrote. 

‘‘Most significantly, however, revenue from the project, once beds become occupied, exceeds expenditure and within three years the impact on the ratio is reversed and council achieves significant and ongoing revenue as a result.

‘‘The significance of the hospital site re-development is reinforced in council’s submission,’’ Mr Forsyth wrote.

Cr Petschler said it was vital that council was seen to be financially responsible. 

He said it had been a decade since their last SRV application when they were approved for four years of such rate increases although they only used two of them.  

‘‘There are seven criteria we’ve got to meet,’’ he said of Fit for the Future.

‘‘We believe we meet four of them now. We are within an inch of meeting two others so by the time we’re supposed to meet them, we will meet them.

‘‘One of them we haven’t met yet; that will require some adjustments to meet. But overall, to continue to meet those criteria it may well be that we will at some time in the future, four or five years or so, start to have to look at an SRV to maintain our ability to do that.

‘‘If the community wants to stay alone, and they’ve clearly indicated they want us to remain autonomous, we’ve got to start looking seriously at all those issues down the track.”

All council submissions will be assessed by a government’s panel comprising IPART and a independent third party.