FITNESS TEST: Shoalhaven City Council says it faces challenges if it is to meet the NSW government Fit for the Future criteria.THE next step in Shoalhaven City Council’s Fit for the Future program will take place at the end of June.
All NSW councils must hand in their submissions to the Independent Pricing and Regulatory Tribunal (IPART) by June 30.
IPART set seven benchmarks each council must strive to meet.
Each council in NSW was required to assess its capacity and performance and prepare a plan to ensure it can continue as a viable entity into the future.
For some councils, this will include a merger with their neighbours.
According to Shoalhaven Mayor Joanna Gash and deputy mayor John Wells, that will not be the case for Shoalhaven.
“Council certainly sees itself as a viable council area,” Cr Wells said.
“We have the critical mass to keep operating in the same geographical area.
“Our main challenges will be in relation to infrastructure maintenance and the backlog of works this current council inherited,” he said.
What Fit for the Future will mean for the Shoalhaven, they say, is rate increases in order to deal with that infrastructure maintenance backlog and ensure more infrastructure investment in the future.
A Fit for the Future report and an attachment was made available to councillors pm Thursday afternoon.
The report talks about how council plans to meet the IPART benchmarks.
General manager Russ Pigg said the plan involved a mix of long and medium-term strategies.
“One of the benchmarks is about addressing our backlog of work on infrastructure and how we will fund asset renewal,” he said.
“By 2019, even with rate increases, we won’t meet all of the IPART ratios.
“We will still be short on the assets maintenance and renewal ratios.
“However we have to be able to demonstrate a trend line of improvement.”
He said the report showed rate increases of 7.5 per cent in 2017/2018 and another 7.5 per cent increase in 2018/2019 would get Shoalhaven up to the must-meet ratios.
“If we want to meet all seven ratios we’re likely to need 20 per cent rate increases in both those years, plus spend another $50 million on assets,” Mr Pigg said.
“So you can see it’s a longer-term plan.
“You just can’t go from the levels we have got to 100 per cent in that time frame.
“I know the rate increase subject is contentious in some quarters, but the reality is rate pegging has been an inhibitor to council,” Mr Pigg said.
The report showed Shoalhaven City Council will have almost 20 per cent less in residential rates in 2016 compared to similar group five classified councils like Coffs Harbour, Port Macquarie, Tweed and Wollongong.
“On the cost-cutting side we are trying to drive efficiencies in the organisation. We’ve had the restructure, cut down on operating costs, and will continue to drive efficiencies as we go forward.
“When you compare our revenue side to the other councils, we have more swimming pools, more of some facilities and larger areas of open space to maintain, but we are trying to provide that with a much lower rate base.”
He said from a financial and asset management point-of-view the Fit for the Future exercise was good because it forced councils to put themselves in a position where they can maintain their assets into the future.
“To achieve that the state government is telling councils become more efficient now, and so we can afford the facilities you want to provide in the future we’ve got to look at our revenue base.”
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