THE Central Highlands Regional Council has approved its 2013/14 budget, and determined that ratepayers will have an increase to general rates of just 1%.
Central Highlands Regional Council Mayor Peter Maguire said even though this is less than the real cost of providing local government services; the Council took the view when preparing the budget that residents should be protected from large rate rises as much as possible.
"We understand that local people are hurting, and we are doing everything we can to try to help," Cr Maguire said.
The exact increase for each ratepayer will vary depending on land valuation.
The Central Highlands Local Government area was subject to a revaluation during the past 12 months and this has seen some changes to valuation.
"Council will remove capping for the first time to ensure equitable outcomes for all ratepayers. This may mean that some ratepayers see a higher than benchmark increase as they have been kept at an artificially low position in the past. Every ratepayer with the same land value will now pay the same rate," Cr Maguire said.
After all valuation adjustments have been accounted for, total net revenue from rates and charges revenue moves from $ 63,496,549 in 2012/13 to $76,580,614.
The increase is not necessarily reflective of the exact increase in actual income due to a number of one off impacts.
After allowing for these the total increase in revenue for the 2013/2014 financial year will be just 2.8%.
"These one off impacts include an increase in the number of rateable properties, and the impact of the non-owner occupier rating category that have both now been factored into this year's budget."
Water access and usage charges have been increased to more accurately reflect the cost of providing and maintaining the infrastructure associated with water.
In Emerald, water charges will increase by 10%. The Mayor said this is due to the requirement for an additional water treatment to be constructed, to cope with the increased population and associated demand for water.
"This is infrastructure that is urgently needed to cope with the increased demand for water that a growing population brings. We have significant challenges ahead in our water management and future planning to understand and cope with demand," he said.
"In addition, as reported previously, we will be vigorously resisting the proposed increases to water supply charges by SunWater. The 780% rise they are talking about is beyond reasonable and cannot be supported or sustained by our community."
In Blackwater and other areas water charges will increase by 3%.
Taking into account all rates and charges (general, water, sewerage, waste) the average increase for urban areas will be 5.1% for towns with a population of more than 2500 people, and 2.8% for towns with less than 2500 people.
The rates discount of 15% and pensioner concession of 50% have been maintained.
Rates notices will now be billed half yearly, at the same time as water charges.
In order to bring water readings in line with the new rate schedules, water meters have been read over the past few weeks. Residents will receive their rates notices and water bills in September and February of each year.
The total budget allocated for the year is $213,166,596.
Operating expenditure for the financial year is calculated to be $134,969,109. Council has approved a further $78,197,487 for capital works.
"We have finished the 2012/13 financial year in a strong position, and we expect around $10 million in savings will be allocated to constrained reserves as a result," Cr Maguire said.
"With improvements to our systems and processes a priority, Councillors will be closely monitoring our expenditure against budget throughout the year to ensure our ratepayers receive value for their money."
The Council budget for 2013/2014 is based on:
Operating income - $150,078,181
Operating Expenditure - $134,969,109
Balance (for Capital Works) - $15,109,072
Capital Grants/Income - $9,926,371
Total funding available from operations for Capital Works - $25,035,443
The total expenditure for the Budget is:
Operating Expenditure - $134,969,109
Capital Expenditure - $78,197,487
Total - $213,166,596
COUNCIL APPROVES $78.6 million in CAPITAL PROJECTS
Central Highlands Regional Council Mayor Peter Maguire said that the decision to approve a Capital Works program of less than $79 million is a responsible one.
"This financial year we have allocated over $20.7 million to road and drainable works across the region," he said.
Two of the biggest projects in the capital works budget Council will commence are the construction of a new water treatment plant in Emerald, and works associated with the Emerald airport.
"As always, we have tried to balance large scale projects that attract external grants and other funding partners with those smaller items that will increase the amenity and liveability of our smaller communities," Cr Maguire said.
"In addition to this there remains an extensive program of flood damage repair works to complete during the year totalling $ 17,400,000. This has and continues to be a massive undertaking and drain on Council resources."
In the Sport and Recreation area, Council will finalise work on the Emerald Aquatic Centre, and also progress the upgrade for the Blackwater Aquatic Centre.
Land development planning will also progress in Capella and Springsure.
"This is a responsible capital budget, balancing the need to advance new projects providing essential infrastructure for our growing region, and maintaining our current assets to the standard our community expects," Cr Maguire said.
"This is extremely difficult in such a diverse region as ours, however I congratulate my fellow councillors for their engagement and commitment to ensuring the needs of all of our communities were considered the budget process."
MAYOR'S REPORT 2013-2014 BUDGET
The budget planning process commenced in February with the management team developing appropriate scenarios for review by Councillors.
Like any business the cost of providing services to the community does not get cheaper.
While the latest Consumer Price Index shows an increase over the last 12 months of 2.5% Council operations continue to be affected by higher cost pressures.
In order to better reflect the actual price pressures on local authorities a Local Government Cost Index is published each year by the Local Government Association of Queensland (LGAQ).
Over the last reporting period this index increased by 3.3%.
Overall Council services continue to be placed under cost pressures well in excess of the broader indexes with electricity costs in particular expected to increase around 15% - 20% over the next 12 months.
This will have a significant impact on areas like street lighting and water and sewerage treatment which are electricity intensive operations.
Also the cost to maintain insurance for community assets (general insurance and public liability) is now just over $ 1.5 million per annum and is increasing by approximately 18% from last year.
In recognition of cost of living pressures Council has been able to maintain rate increases in all categories to less than the Local Government Cost Index.
On average ratepayers will see a general rate increase of 1%.
The Central Highlands Local Government area was subject to a revaluation during the last 12 months and this has seen some changes valuations although the results are much more stable than previous years with the overall Shire valuation actually reducing in total by 1.99%.
As a result of this Council will remove capping for the first time to ensure equitable outcomes for all ratepayers.
This may mean that some ratepayers see a higher than benchmark increase as they have been kept at an artificially low position in the past.
Every ratepayer with the same land value will now pay the same rate.
The supply of water and sewerage services in our growing community continues to have significant impacts on Councils cost base with the cost of raw water, chemicals, electricity, for example, increasing well above CPI.
In particular, over the next two years, Emerald will see the construction of a new water treatment plant to augment water supply for the town.
On average water and sewerage rates will increase by approximately 3% in all towns with the exception of Emerald.
The increase in Emerald will be in the vicinity of 10% as the cost of constructing the new plant impacts on Council's budget.
Council has previously attempted to apply an even distribution of the rates burden across all major rating categories.
Further mining development in the region coupled with reductions in rural valuations has resulted in mining now contributing a larger portion of the rate burden.
Rating distribution for the 2013/2014 will be as follows:-
The percentage and monetary increase, based on a direct comparison between the budget and the previous adopted budget of all general differential rates, special rates and utility charges (water, sewerage, waste) net of discounts and remissions.
The increase for 2013/2014 is not necessarily reflective of the exact increase in actual income due to a number of one off impacts.
After allowing for these one off impacts the total increase in revenue for the 2013/2014 financial year will be 4.8%.
Legislative Budget requirements
The Local Government Act requires that Council approve its budget before 31st July of each year.
The budget must set out realistically expected revenues for the budget year for each revenue source; and must appropriate expenses for the budget year under the different centres of the Council as identified in the financial statements.
The budget adopted however is in a prescribed consolidated format.
These statements are to consist of:
Statement of Income to year ending 30 June 2023
Statement of Financial Position to year ending 30 June 2023
Statement of Cash Flow to year ending 30 June 2023
Statement of Changes in Equity to year ending 30 June 2023
Measures of Financial Sustainability to year ending 30 June 2023
Capital Projects Budget 2013/2014
As a result of legislation changes, Council is required to publish more information about its long term financial position and sustainability.
Significant resources have been employed during the 2013/2014 budget process to focus beyond just one financial year.
This is to ensure the impacts of today's decisions are considered over the longer term.
Overall Council's long term financial forecast and sustainability indicators highlight that, while there are significant challenges and risks to manage, Council is in a sound financial position.
Capital Works Snapshot
The capital program for 2013/2014 will total just over $ 78 million with significant investment to continue on Council's extensive roads network and community infrastructure.
Major projects will include:
In addition to this there remains an extensive program of flood damage repair works to complete during the year totalling $ 17,400,000.
This has and continues to be a massive undertaking and drain on Council resources.
I would like to thank Councillors for their engagement in the budgeting process.
Council consideration to approving the budget statements, financial statements and resolutions in regard to polices for the 2013/2014 financial year is now sought.
Mayor Peter Maguire
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