City of Ballarat councillors will this week decide whether to appeal its rate cap and hit residents with an extra 1.2 per cent increase.
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Council is one of 20 in the state seeking an exemption to the new 2.5 per cent cap set to be enforced by the state government from the start of the 2016-17 financial year.
The recommendation for this Wednesday’s agenda is to request the Essential Services Commission to allow a cap rise up to 3.7 per cent.
Council’s proposed application cover sheet to the ESC states that a 1.2 per cent cap increase for 2016-17 could lead to an increased rate revenue of $1,033,322.
However, similar sized council, the City of Greater Bendigo, is expected to accept its 2.5 per cent cap.
Bendigo mayor Rod Fyffe said it won’t affect significant infrastructure works in the region.
“We can produce our capital works and operating budgets that we want to,” Cr Fyffe said.
“We have larger government grants than we had expected and we’ve also identified some deficiencies (to ease financial pressure).
“Those sorts of things will allow us to do what we want to deliver.”
In contrast, Ballarat mayor Des Hudson said a variation on the 2.5 per cent cap, enforced under the Melbourne Consumer Prince Index, is crucial for the development of City of Ballarat projects.
“I’m probably not confident of the application being successful,” Cr Hudson said.
“(But) we’ve had this conversation with the community and the community has been accepting of the fact that it’s for capital projects.”
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In previous budget estimates, the City of Ballarat had factored in a rate increase of 5.5 per cent.
“We were factoring that (5.5 per cent increase) into our budget, but this (new cap) could leave a significant hole in our budget,” Cr Hudson said.
“There are significant capital projects that we need to finish off and we also need to be able to maintain and bridge that asset renewal gap.”
Cr Hudson said council would have to investigate other methods to help finish key projects if any request to the ESC is denied.
He also said that the state government needs to apply flexibility when capping certain councils, with 15 of the 20 councils seeking an exemption operating in rural and regional areas.
“Whether or not they’re aware, you’re not comparing apples with apples – it’s not a one size fits all,” Cr Hudson said.
