Rates up by 12% Yipee?
by Cat Holloway /
Shoalhaven ratepayers will pay 12% more from July 1, 2025. But that might not be enough to save the Council from administration.
Weeks of community consultation and workshopping didn't increase Shoalhaven’s appetite for a rate rise.
Nevertheless, at the Council meeting on Tuesday, December 17, most councillors voted against the community to install the unpopular option of the highest rate increase of 12%, including the 3.8% rate peg.
Almost everybody spoke, some at length. Here's the gist.
With extreme reluctance and acknowledging the hardship many residents expressed during the public feedback period, 10 councillors said they felt their only responsible choice was to apply the largest of the three rate increase options offered to Shoalhaven's ratepayers.
Three councillors, Cox, Clancy and Kemp, voted against the extra rate hike, citing the expectations of most of the 1966 responses to Council's financial education campaign over the past month.
Unsurprisingly, 64.8 per cent of respondents asked for no rate increase above the obligatory 3.8% rate peg. The 8% option was accepted by 17.3%, while 17.9 % of the respondents accepted a 12% increase.
Tuesday's Council meeting was characterised by an unusually small, demure gallery and ardent praise from Councillors for the organisation's finance staff and the acting CEO, James Ruprai, who delivered a plan to save $10 million over the next four years.
It was noted that much of that cost savings plan was developed by the previous CEO, Robyn Stevens, whose abrupt and acrimonious departure, soon after Mayor Patricia White took office, cost Shoalhaven Council an undisclosed amount estimated at well over $300,000.
Stevens’ resignation was followed almost immediately by that of City Performance Director Kerrie Hamilton, adding to Council's potential payout costs and mobilising the United Services Union to intervene to seek security for the jobs of hundreds of Council employees amid public calls to sack staff to save money.
A deputation from Burrill Lake Community Association representative Ron Cox highlighted how little influence the community actually has on this process. Mr Cox said his community could not abide by a rate increase unless Council found a way to achieve more than their projected $10 million of savings over 4 years.
"The common feeling is - pathetic," Mr Cox said of the latest financial plan.
He said the information provided was too hard to understand, and the outcomes were "minuscule", leaving the community feeling that Council was not taking this seriously enough and that the level of debt (more than $190 million) was not made clear.
Cox said "None of the options get anywhere near" the revenue required to repair Council finances.
He said the Burrill Lake community would only support the 12% increase if Council "got serious" about saving at least $10 million in one year (not four) as well as promising no new SRV for the next two years.
Acting CEO James Ruprai said Council could not commit to having no further SRVs, and he apparently misunderstood the Burrill Lake ultimatum, saying his plan of saving $10 million over four years was in line with Mr Cox's goal post.
Some councillors predicted that ratepayers would be up for at least a 29.5% rate increase if an administrator were to take charge of Shoalhaven City and remove the current elected councillors from office.
With updated information from Council CFO Katie Buckman on what it would take to bring Council's books back from the brink, Clr Ben Krikstolaitis focused on keeping administrators away and preserving jobs by trying to move an amendment for a 29.5% SRV.
But acting CEO Ruprai, in recommending the 12% increase, explained that Council could only apply to IPART for the three options presented to the public.
Krikstolaitis voted for the 12% and said a lot of people incorrectly saw this rate rise as a "bailout" but said that leadership meant "not always doing what is popular, but always doing what is right".
"This is going to hurt, this is not going to be popular, but we have to do it."
Clr Jemma Tribe, operator of the Nowra Community Food Store, said she was acutely aware of many people's inability to fund the extra increase and wrestled with voting for the "financially responsible decision" to install the 12%.
"It was heartbreaking to read those comments and have to come to this position," Clr Tribe said.
She stated nervousness about a "lack of discipline in this chamber", saying that some councillors were "chipping away" at savings and organisational changes.
"Every notice of motion, there are requests for staff to do more things... more reports, more letters," Tribe said.
"The recruitment freeze has had an impact...staff are having to do more with less.
"If we (Councillors) don't pull up our boots... I would find it difficult to support any further rate rises.
"I hope that councillors realise the seriousness of this situation and we don't find ourselves in this position in 12 months."
Clr Matthew Norris said that 12% would not fix Council's extreme financial shortfalls and that the 3.8% peg was not "even close enough to keep this council afloat".
"The rate peg alone would avoid controversy in the short term but guarantee disaster in the long term," Norris said.
"These figures represent choices about whether we patch problems or fix them, choices about whether we plan for tomorrow or gamble on today, choices about whether we lead with courage or abdicate our responsibility.
"If we fail to act decisively tonight...we fail our community, we fail the future of Shoalhaven."
Clr Wilkins offered up some new metaphors, such as the rate choice being like the terrifying Russian roulette scene in The Deer Hunter, a violent 1978 Vietnam war movie.
He then said the ratepayers were like Paul Simon (a still-prolific and awarded songwriter, performer and multi-instrumentalist) while Council was like the singer Art Garfunkel (a skilled tenor whose popularity faded after the folk-rock pairing folded in 1971.)
"We need to get it together," Wilkins said, supporting the 12% recommendation as "unpalatable but unavoidable".
Clr Natalee Johnston said she was torn but supported the 12% as necessary and reminded Council of the costs associated with another, likely, natural disaster.
She also said that without a rate rise, the community could lose access to essential council services, including pools and libraries, "that many of us, including me prior to being in this position, probably took for granted."
Moving the motion for 12%, Councillor Bob Proudfoot claimed that if the previous Council had installed a special rate variation, the current Council would not be facing it now.
Ironically, Proudfoot's party, The Shoalhaven Independents, ran a vehement campaign against rate rises, fuelled by widespread anger over the 40-44% rate increase over three years proposed by the previous Council to stop the organisation's debt from spiralling further out of control.
But in Proudfoot's enthusiastic summary of the new financial reports, he said it was "an exciting time to turn the ship around" and that the staff efforts to identify savings were "most comforting for our ratepayers".
"We're putting in the building blocks right now, we're making the hard decisions right now," Proudfoot said.
"We're not going to squib it, we're not going to turn our back on our community, but we have to make sure this is sustainable."
Meanwhile, SIG compatriot Clr Denise Kemp, after confusion about when to speak, refused to accept an SRV because "the residents have spoken for a rate peg only".
Kemp, who led a previous vitriolic grassroots campaign gathering more than 7300 signatures saying no to a 3-year 44% rate increase, said the rate rise was especially hard for pensioners and that she was also struggling financially.
"I understand why the community is so angry," Kemp said.
"This extra increase cuts in on their food on the table.
"I offered to help last year, and I offered to help this year, but some serious decisions need to be made. The community is very upset.
"To me, leadership is not doing what you think, you know, on a lead dragging someone down, whatever is gonna be the rise.
"Leadership is about doing the right thing to educate people about how much debt the council is in and what can we do to fix it, and also advising that administration is looming.
"People are also at the point of losing their houses or administration - those things are very real.
"These people are ready to pack their bags and lose their family home, that's what it comes down to - there isn't another loaf of bread in the freezer for the week.
"I don't care what you say about leadership and doing what's right - sorry for the faces Ben (Krikstolaitis).
"I have to come here tonight with the hope that we have better representation, a new mayor, a great CEO."
Kemp then confused the process again and tried to move a motion for a "staff freeze". But the acting CEO explained that a "staff freeze" would mean Council could not function because essential positions such as water treatment workers would be needed.
Clr Jason Cox, a Bendigo Bank branch manager, opposed the 12 % SRV, noting the increase in water rates and cost-of-living pressures meant Council already had 10% of ratepayers in arrears and that a rate rise would increase those debtors to one in five.
Clr Selena Clancy applauded the Council staff's action plan. She said she personally would have been happy with a 12% rate rise but was "going out on a limb here and going with the community".
She said she "conducted the mean median mode test" and so picked the 8% option as closest to the middle, thus voting against the motion for 12%.
Clr Gillian Boyd said her experience on the previous council was that austerity measures and implementing the AEC review recommendations "has been a pretty rough ride for all of us and certainly for the last council" after they voted in line with community demands last January against a special rate rise.
She said Shoalhaven needed to compare their rates with other regions.
"We have low rates in a disaster-prone LGA with a large area and low population density and extensive, poorly maintained roads and drainage," Boyd said
"I don't think 12% is unreasonable."
Mayor Patricia White thanked the residents who engaged in last month's feedback opportunities.
“After careful consideration of the individual responses from more than two thousand residents, we strongly believe this rate increase strikes the right balance,” Mayor White said.
“While the 12% rise will assist Council to prioritise some of the backlog of maintenance across the city, it also recognises the financial pressures being felt by many in our community at this time."
Clr Casmiri voted for the 12% but said it was not enough. He repeated his long-favoured solution not to increase rates again but to instead find more ratepayers, claiming that money only came from two sources: ratepayers and developer contributions.
Casmiri's familiar anti-nature equation did not calculate tourism, roads, infrastructure costs or construction timelines.
"Guys, we need to get together and get the movement of development going again," Casmiri pleaded.
"We must put a sign up saying Shoalhaven is open for business.
"There's hundreds of millions of dollars of development waiting.. and they're all being delayed because...of the environment, because of the character.
"Mate, whatever. Let's get it fixed and move on. We need more money."
(Casmiri joined Kemp later in Tuesdays Council meeting as the only Councillors who voted against the Planning Department’s 10 Strategic Growth Principles that prioritise diverse densification in town centres and protection for threatened habitats and species in Shoalhaven’s smaller villages and towns.)
In November 2023, Council staff recommended the Council endorse a Special Rate Variation following an independent review of the organisation’s finances, which then identified an annual shortfall in the general fund of up to $35 million.
Shoalhaven Council will now apply to the Independent Pricing and Regulatory Tribunal (IPART) for a 12% Special Rate Variation (SRV). After a series of reports and details provided to IPART, the rate increase will probably be approved by May 2025, in time for the next financial year.
