Rate Increases May Help Council Mergers

Mosman Council is making an application to the Independent Pricing and Regulatory Tribunal (IPART) to increase rates permanently by 5%.

Mosman's mayor's occasional enews says that 884 residents responded to the community consultation over rates.  31% wanted rates to go down, 34% to stay the same and 36% were in favour of a rate increase.  So the council has decided to apply for a rate increase not withstanding that 65% of residents wanted them to go down or stay the same.  So much for the consultation, but the councillors know what is in their own best interest, or do they?

Its all about Council mergers and securing the ramparts (see earlier post).

Interestingly IPART has previously reviewed and endorsed the governments Fit for the Future criteria and their latest guidelines seem to encourage councils to ask for increases that help them meet the Fit for the Future tests.

It is possible that as the NSW government cost shifts and reduces funding grants for councils, they are happy for rate payers to be taxed more at the local level.  And it will be easier to merge councils if they are financially stronger.

Struggling councils when merged make larger and weaker organisations, while merging financially secure councils forms larger and stronger councils, which don't have to raise rates as part of the merger process. Allowing rate increases above the rate cap looks looks like a long term win, win situation for the Government and a short term win for small councils.

Check out my other website http://mergemosman.com

Extract from P Abelson's occasional letter to residents

As most readers know, we have conducted a community wide survey on three rating options. These were (1) not to renew a special 5% levy that has been part of Council’s budget for 15 years (2) to apply to the Independent Pricing and Regulatory Tribunal for renewal of the levy which is essentially the status quo or (3) to apply for levy renewal plus 5% increase. We received 884 responses with in round numbers 31% favouring option (1), 34% favouring (2) and 36% favouring (3). My view was that this suggested that levy renewal plus 2.5% increase would be an appropriate council response. However Council’s Audit Committee argued very strongly that (3) was the most financially responsible action and would best meet the State Government’s “Fit for the Future” financial ratios and hence criteria for financial sustainability and Independence, and Council resolved to request IPART for option (3).

Time to be Realistic - Mosman Daily

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Time to be realistic

Mosman Daily
4 Dec 2014
THE NSW Government is requiring all councils to submit a proposal by June 30, 2015, outlining how they intend to become “Fit for the Future”. Mosman Council will fail its assessment, we simply do not have the required “scale and capacity”. We are the...read more...

Tech Tags: Mosman Daily newspaper NEWS

Ku-ring-gai Council Opens Discussions on Mergers

Ku-ring-gai Council has taken the wise step to open discussions with surrounding councils on voluntary amalgamations.  They intend to employ facilitators and other consultants as necessary to enable a report to be brought back to Council by February 2015. 

Councils have been offered financial and organisational support for merger talks under the NSW Government's Fit for the Future initiative.

Councillors voted 6 to 4 at last weeks council meeting to prepare a submission to the NSW Government demonstrating that Ku-ring-gai is 'fit for the future' without the need for amalgamation. But at the same meeting, the Council also voted to open discussions with surrounding councils on voluntary amalgamations.

Mayor Jennifer Anderson said the Council needed to remain flexible in its approach to the Fit for the Future reform package. "We will consider the implications of all the options on the table, bearing in mind the best interests of our ratepayers," 

Mayor Anderson also flagged one of the potential hot issues that will arise, she said. "Our financial modeling shows that higher rates will follow a merger with a Council that has lesser land values, such as Hornsby."  

No doubt this issue will also arise if Mosman and North Sydney councils start to have a dialogue. Every council has different rate formulas that will have be rationalised over time.

It is great to see a traditionally anti merger  North Shore council preparing to consider all options in the interests of its residents.

Fix the Drains and Secure the Ramparts

Mosman Council recently called a public meeting to explain its plans to increase rates permanently by up to 10%.  There was suspicion that the proposed rate increases were in some way related to Mosman Council campaign against amalgamation.

drains feature highly in Mosman's future 

I was not looking forward to this meeting, imagining a gathering of fellow grey haired residents combing over endless columns of numbers and inspecting kilometres  of dilapidate drains.

Fortunately the Mayor's introduction was brief and to the point. He said the rate application was being done now ‘to get clear of any election’ and to ‘maintain independence’.

One of the rate increase options proposes a lesser increase of 5%, it is designed to replace an existing 5% Community Environmental Contract. The Mayor said ‘we can live with that’ ‘we are in pretty good shape anyhow’, ‘without the threat there would not be the will to go for extra 5%'.

One of the Councillors offered an assessment that we had a 50% chance of stopping amalgamations if the higher rates were approved.  He said ‘get ramparts secure, then we can make any argument we like’.

Mosman's iconic ramparts

At which stage the General Manager interjected to explain that the 'bureaucratic' reason for the rate increases was that 'the additional funds were needed to increase service levels particularly infrastructure renewal and maintenance and to achieve operating surpluses over the next 10 years.'

In response to a question about whether efficiencies could be gained from scale, a councillor said ‘resource sharing across councils in NSW had been pathetic and he hoped that when the amalgamation threat passes, it will trigger better resource sharing.  Someone rightly suggested mergers would solve this problem.

The event ended with a call for a round of applause for the staff and councillors.  The meeting was attended by 6 councillors, 6 council staff and 14 residents.

The suspect motives turned out to be well founded,  Mosman Council is looking to permanently increase rates beyond what is necessary to bolster its ‘fit for the future assessment’ all in the name of ‘An Independent Mosman’.

In the meantime the Government has released its Fit For the Future Templates.
The thresh hold issue is Scale and Capacity. Financial sustainability measures will only be assessed once this question has been answered.

Screenshot from guidelines

To read more see the guidelines for Fit For The Future.
http://www.fitforthefuture.nsw.gov.au/content/just-released-%E2%80%93-council-self-assessment-tool-templates-and-guidance

Mike Baird Could Have Said 'Put Self Interest Aside and Put the Community Interest First'

The NSW Premier Mike Baird recently addressed the Local Government Conference and was quoted by the SMH,

"How can we use this process to deliver better services and more infrastructure for our community? It's almost that sense of having to put pride into the back seat and put the community into the front seat."

I imagine the Premier was using the word 'pride' to diplomatically say put aside 'self interest' and put the community interest first.

I have now attended three community forums over the last year on the issue of council mergers and the same story emerges each time. The rooms are populated by people like me, grey haired, active in the community, well informed and well connected to existing council structures.  Every one upholds the virtues and achievements of their council, they say they know who to talk to and how to get things done. They fear this will all change if their council merges with its neighbour.

Sitting amidst the protest at an ILGRP consultation

Many meetings are addressed by former Mayors, Councillors and General Managers all speaking with fondness for their contributions to civic life, their involvement with their communities.

It is hard not to be sympathetic to these appeals.

The reality is however, that these very well meaning people, who are making a real contribution to their communities and current and past Councillors, have a strong interest in the status quo. They know how it all works, they know the right people, they have the established relationships, they hold local power and they don't want anything to change.

But we are not representative of the community, with our knowledge, contacts and relationships, we are a privileged and very small minority. Most residents would not know the name of their ward Councillor or the name of their council's General Manager.  They simply want cost effective services and representation.

This is the appeal the Premiere is making, it is in the interest of the community that councils merge, to have the capacity and scale to provide better services, become more efficient and better represent their communities.  So please put aside 'self interest' and put the community first.  Premiere Mike Baird is right on this occasion.

SMH Article: http://www.smh.com.au/nsw/premier-mike-baird-tells-councils-to-put-pride-in-the-back-seat-as-merger-talk-heats-up-20141020-118ktt.html#ixzz3Gkji53r6