On 29 January 2019, North Sydney Council considered the stakeholder feedback received during the recent engagement period and resolved to proceed with applying to the Independent Pricing and Regulatory Tribunal (IPART) for a special rate variation (SRV) of 7% per annum for 5 years inclusive of the annual rate peg (Scenario 3) and a minimum rate increase, meaning the SRV will apply to all rateable properties, including properties on the minimum rate.
The SRV will increase the average residential rate by $66 per year or $328 in total over five years. The increase would allow Council to maintain current level of services and provide an additional $14.3m for renewing essential infrastructure such as drains, seawalls, retaining walls and footpaths.
It will also allow Council to upgrade the following assets:
- $4.8m - St Leonards Park
- $4m - Neutral Bay, Cremorne, Kirribilli and McMahons Point villages
- $2m - Bradfield Park South
- $750,000 - Anderson and Primrose Parks
- $700,000 - Sirius St Reserve, Grasmere Children’s Park and Merrett Playgrounds
- $480,000 - Badangi Reserve, Primrose Park, Brightmore Reserve and Gore Cove to Smoothey Park bushland trails
Council submitted its application to IPART on 11 February 2019. The application is available for viewing from Council's website and from the IPART website.
IPART Determination
IPART announced its determination on 13 May 2019. Council’s application hasbeen partially approved. From 2019/20 to 2021/22, Council can permanentlyincrease is general income by 7% per annum, inclusive of the annual rate peg,and this may be retained in the general rates base. Council can also increasethe ordinary minimum rate by 7% per annum for the same period.
IPART was satisfied that Council has partly demonstrated financial needfor the additional revenue to improve its financial sustainability, maintain,renew and invest in its infrastructure, reduce its infrastructure backlog andmaintain existing services. IPART was also satisfied that the Council hadlargely demonstrated community awareness of the proposed increases and that istaking steps to improve productivity and contain costs. This partial approvalwill allow Council to begin implementing its expenditure program whilstconsidering whether to apply for a further special variation in the future.
IPART’s approval means that Council can increase the average residential rate by $65 in 2019/20 or by $184 over the next three years, and average business rates by $190 in 2019/20 or by $933 over the next three years. The minimum rate will increase by $37 in 2019/20 or by $118 over the next three years.
Community Engagement Findings Summary
Council conducted a comprehensive consultation over 2.5 months which included direct mail to all ratepayers, four information sessions and eight drop-in kiosks. Council received feedback in the form of 549 self-elect submissions (combination online feedback form and general submissions) and a randomly sampled survey of 419 residents and 200 businesses (conducted by Jetty Research).
The random survey identified support for a SRV, with 75% of residents and 61% of businesses supporting a rate rise (either Scenario 2 or 3), while 39% of self-elect submissions supporting a rate rise (either Scenario 2 or 3). Overall there is demonstrated support for a rate variation and minimum rate increase, over operating within the annual rate cap of Scenario 1. The community feedback reaffirms the feedback that emerged during the 2018 review of the North Sydney Community Strategic Plan. That is, there is demand for high quality infrastructure and services.
To read the full Community Engagement Findings Summary refer to the Document Library - see Attachment 1: Community Engagement Summary within Council Report GMO01 - 29 January 2019 (Proposed Special Rate Variation to General Income and Minimum Rate Increase Applications - Engagement Outcomes).
Background
The North Sydney Council Resourcing Strategy 2018-2028 has identified that Council will need additional income to fund essential services and infrastructure. The Strategy includes three financial options to generate rates income:
Scenario 1 - by the annual rate peg (State Government-allowed increase)
Scenario 2 - by 5.5% per annum for 5 years, inclusive of the annual rate peg
Scenario 3 - by 7% per annum for 5 years, inclusive of the annual rate peg
Council has adopted Scenario 3 as its 'preferred' option. Council has resolved 'intent to apply' for a SRV of 7% per annum for five years effective from 1 July 2019. Before making a SRV application to the Independent Pricing and Regulatory Tribunal (IPART) Council has resolved to seek feedback as to your preferred option and willingness to pay.
The following table explains the three options including the additional funding available under Scenarios 2 and 3 and the expenditure reductions required under Scenario 1:
Scenario 1
increase by annual rate peg | Scenario 2
5.5% p.a. for 5 years inclusive of rate peg
| Scenario 3
7% p.a. for 5 years inclusive of rate peg
|
- need to reduce expenditure by $6.7m over 5 years to achieve a balanced budget (approx. $1.35m p.a.)
- further reductions or revenue increase required beyond 2023/24
- to achieve this cost reductions are required to discretionary services. This is where we could make cost reductions/reduce services:
verge mowing and street cleaning frequency reductions, reduced graffiti removal, reduced tree planting, less community events, reduced grants and subsidies to community centres and groups, less economic development/ support for local businesses, discontinuation of the precinct system - refer to Fact Sheet No.1 for full details
| - maintains existing service level
- plus provides $15.2m total additional funds over 5 years
- the proposed allocation of this funding: $9.3m for asset renewals, $3m for Neutral Bay and Cremorne village upgrades, $2m for Bradfield Park South Masterplan implementation, $700,000 for playground upgrades at Sirius Street Reserve, Grasmere Children's Park and Merrett Playground; and $180,000 for Badangi reserve walking trail upgrade - refer to Fact Sheet No.2 for full details
| - maintains existing service levels
- plus provides $27.06m total additional funds over 5 years
- the proposed allocation of this funding: all Scenario 2 plus, an additional $5m for asset renewals, $4.8m for St Leonards Park Masterplan implementation, $1m for Kirribilli and McMahons Point village upgrades, $750,000 for sportsfield reconstruction/drainage at Anderson Park and Primrose Park, $300,000 for walking trail upgrades in Primrose Park, Brightmore Reserve and Gore Cove to Smoothey Park - refer to Fact Sheet No.3 for full details
|
PROPOSED IMPACT ON RATEPAYERS
To give ratepayers an indication of how you will be impacted by the proposal to raise rates above the annual rate peg, we have published an Information Sheet (refer to the Document Library) which includes a table comparing the three financial scenarios, showing indicative rate increases by land value ranges and the average cumulative impact over the 5 year period. Note: property values are determined by the NSW Valuer General. Your property's land value is listed on your rates notice - if you do not know your property's land value phone 9936 8100.
Also refer to the series of Fact Sheets available from the Document Library.
This consultation links to Council's amended IPR plans - refer here for more information
SUBMISSIONS
Submission closed 16 January 2019.
INFORMATION SESSIONS
Council is hosted four Information Sessions. A session was held in each of the Council Wards. The presentation slides are available from the Document Library. Q&A session to follow the presentation.
Wednesday 7 November 2018, 6pm to 8pm at the North Sydney Leagues Club, Cammeray
Monday 12 November 2018, 6pm to 8pm at Hutley Hall, North Sydney
Thursday 22 November 2018, 6.30pm to 8.30pm at Neutral Bay Club, Neutral Bay (updated time)
Wednesday 12 December 2018, 6pm to 8pm at Hutley Hall, North Sydney (new dated added)
DROP-IN INFORMATION KIOSKS
We held eight Drop-In Kiosks on different dates/locations across the local government area. The kiosks provide opportunity to discuss the proposal with Council staff.
Sunday 11 November 2018, from 9am to 3pm, at Kirribilli Art Design & Fashion Markets
Wednesday 14 November 2018 from 11am to 2pm in Brett Whiteley Place, North Sydney
Saturday 17 November 2018 from 8am to 12 Noon, at the Ros Crichton Pavilion during the Northside Produce Markets
Wednesday 21 November 2018 from 10am to 2pm in Grosvenor Lane Carpark, Neutral Bay
Sunday 25 November 2018, from 9am to 3pm, at the Coal Loader Artisans Market
Saturday 1 December 2018 from 8am to 12 Noon, at the Ros Crichton Pavilion during the Northside Produce Markets
Tuesday 4 December 2018 from 10am to 1pm, at the Crows Nest Centre (Ford Room, Level 3)
Saturday 12 January 2019 from 8am to 12 Noon, Cammeraygal Place at Cammeray Village (between Miller St and car park on Miller Lane, Cammeray)
RANDOM SURVEY
Council commissioned a random phone survey of both residential and business ratepayers; sample size is 400 residents and 200 businesses. Participant recruitment commenced on 20 November 2018.
On 29 January 2019, North Sydney Council considered the stakeholder feedback received during the recent engagement period and resolved to proceed with applying to the Independent Pricing and Regulatory Tribunal (IPART) for a special rate variation (SRV) of 7% per annum for 5 years inclusive of the annual rate peg (Scenario 3) and a minimum rate increase, meaning the SRV will apply to all rateable properties, including properties on the minimum rate.
The SRV will increase the average residential rate by $66 per year or $328 in total over five years. The increase would allow Council to maintain current level of services and provide an additional $14.3m for renewing essential infrastructure such as drains, seawalls, retaining walls and footpaths.
It will also allow Council to upgrade the following assets:
- $4.8m - St Leonards Park
- $4m - Neutral Bay, Cremorne, Kirribilli and McMahons Point villages
- $2m - Bradfield Park South
- $750,000 - Anderson and Primrose Parks
- $700,000 - Sirius St Reserve, Grasmere Children’s Park and Merrett Playgrounds
- $480,000 - Badangi Reserve, Primrose Park, Brightmore Reserve and Gore Cove to Smoothey Park bushland trails
Council submitted its application to IPART on 11 February 2019. The application is available for viewing from Council's website and from the IPART website.
IPART Determination
IPART announced its determination on 13 May 2019. Council’s application hasbeen partially approved. From 2019/20 to 2021/22, Council can permanentlyincrease is general income by 7% per annum, inclusive of the annual rate peg,and this may be retained in the general rates base. Council can also increasethe ordinary minimum rate by 7% per annum for the same period.
IPART was satisfied that Council has partly demonstrated financial needfor the additional revenue to improve its financial sustainability, maintain,renew and invest in its infrastructure, reduce its infrastructure backlog andmaintain existing services. IPART was also satisfied that the Council hadlargely demonstrated community awareness of the proposed increases and that istaking steps to improve productivity and contain costs. This partial approvalwill allow Council to begin implementing its expenditure program whilstconsidering whether to apply for a further special variation in the future.
IPART’s approval means that Council can increase the average residential rate by $65 in 2019/20 or by $184 over the next three years, and average business rates by $190 in 2019/20 or by $933 over the next three years. The minimum rate will increase by $37 in 2019/20 or by $118 over the next three years.
Community Engagement Findings Summary
Council conducted a comprehensive consultation over 2.5 months which included direct mail to all ratepayers, four information sessions and eight drop-in kiosks. Council received feedback in the form of 549 self-elect submissions (combination online feedback form and general submissions) and a randomly sampled survey of 419 residents and 200 businesses (conducted by Jetty Research).
The random survey identified support for a SRV, with 75% of residents and 61% of businesses supporting a rate rise (either Scenario 2 or 3), while 39% of self-elect submissions supporting a rate rise (either Scenario 2 or 3). Overall there is demonstrated support for a rate variation and minimum rate increase, over operating within the annual rate cap of Scenario 1. The community feedback reaffirms the feedback that emerged during the 2018 review of the North Sydney Community Strategic Plan. That is, there is demand for high quality infrastructure and services.
To read the full Community Engagement Findings Summary refer to the Document Library - see Attachment 1: Community Engagement Summary within Council Report GMO01 - 29 January 2019 (Proposed Special Rate Variation to General Income and Minimum Rate Increase Applications - Engagement Outcomes).
Background
The North Sydney Council Resourcing Strategy 2018-2028 has identified that Council will need additional income to fund essential services and infrastructure. The Strategy includes three financial options to generate rates income:
Scenario 1 - by the annual rate peg (State Government-allowed increase)
Scenario 2 - by 5.5% per annum for 5 years, inclusive of the annual rate peg
Scenario 3 - by 7% per annum for 5 years, inclusive of the annual rate peg
Council has adopted Scenario 3 as its 'preferred' option. Council has resolved 'intent to apply' for a SRV of 7% per annum for five years effective from 1 July 2019. Before making a SRV application to the Independent Pricing and Regulatory Tribunal (IPART) Council has resolved to seek feedback as to your preferred option and willingness to pay.
The following table explains the three options including the additional funding available under Scenarios 2 and 3 and the expenditure reductions required under Scenario 1:
Scenario 1
increase by annual rate peg | Scenario 2
5.5% p.a. for 5 years inclusive of rate peg
| Scenario 3
7% p.a. for 5 years inclusive of rate peg
|
- need to reduce expenditure by $6.7m over 5 years to achieve a balanced budget (approx. $1.35m p.a.)
- further reductions or revenue increase required beyond 2023/24
- to achieve this cost reductions are required to discretionary services. This is where we could make cost reductions/reduce services:
verge mowing and street cleaning frequency reductions, reduced graffiti removal, reduced tree planting, less community events, reduced grants and subsidies to community centres and groups, less economic development/ support for local businesses, discontinuation of the precinct system - refer to Fact Sheet No.1 for full details
| - maintains existing service level
- plus provides $15.2m total additional funds over 5 years
- the proposed allocation of this funding: $9.3m for asset renewals, $3m for Neutral Bay and Cremorne village upgrades, $2m for Bradfield Park South Masterplan implementation, $700,000 for playground upgrades at Sirius Street Reserve, Grasmere Children's Park and Merrett Playground; and $180,000 for Badangi reserve walking trail upgrade - refer to Fact Sheet No.2 for full details
| - maintains existing service levels
- plus provides $27.06m total additional funds over 5 years
- the proposed allocation of this funding: all Scenario 2 plus, an additional $5m for asset renewals, $4.8m for St Leonards Park Masterplan implementation, $1m for Kirribilli and McMahons Point village upgrades, $750,000 for sportsfield reconstruction/drainage at Anderson Park and Primrose Park, $300,000 for walking trail upgrades in Primrose Park, Brightmore Reserve and Gore Cove to Smoothey Park - refer to Fact Sheet No.3 for full details
|
PROPOSED IMPACT ON RATEPAYERS
To give ratepayers an indication of how you will be impacted by the proposal to raise rates above the annual rate peg, we have published an Information Sheet (refer to the Document Library) which includes a table comparing the three financial scenarios, showing indicative rate increases by land value ranges and the average cumulative impact over the 5 year period. Note: property values are determined by the NSW Valuer General. Your property's land value is listed on your rates notice - if you do not know your property's land value phone 9936 8100.
Also refer to the series of Fact Sheets available from the Document Library.
This consultation links to Council's amended IPR plans - refer here for more information
SUBMISSIONS
Submission closed 16 January 2019.
INFORMATION SESSIONS
Council is hosted four Information Sessions. A session was held in each of the Council Wards. The presentation slides are available from the Document Library. Q&A session to follow the presentation.
Wednesday 7 November 2018, 6pm to 8pm at the North Sydney Leagues Club, Cammeray
Monday 12 November 2018, 6pm to 8pm at Hutley Hall, North Sydney
Thursday 22 November 2018, 6.30pm to 8.30pm at Neutral Bay Club, Neutral Bay (updated time)
Wednesday 12 December 2018, 6pm to 8pm at Hutley Hall, North Sydney (new dated added)
DROP-IN INFORMATION KIOSKS
We held eight Drop-In Kiosks on different dates/locations across the local government area. The kiosks provide opportunity to discuss the proposal with Council staff.
Sunday 11 November 2018, from 9am to 3pm, at Kirribilli Art Design & Fashion Markets
Wednesday 14 November 2018 from 11am to 2pm in Brett Whiteley Place, North Sydney
Saturday 17 November 2018 from 8am to 12 Noon, at the Ros Crichton Pavilion during the Northside Produce Markets
Wednesday 21 November 2018 from 10am to 2pm in Grosvenor Lane Carpark, Neutral Bay
Sunday 25 November 2018, from 9am to 3pm, at the Coal Loader Artisans Market
Saturday 1 December 2018 from 8am to 12 Noon, at the Ros Crichton Pavilion during the Northside Produce Markets
Tuesday 4 December 2018 from 10am to 1pm, at the Crows Nest Centre (Ford Room, Level 3)
Saturday 12 January 2019 from 8am to 12 Noon, Cammeraygal Place at Cammeray Village (between Miller St and car park on Miller Lane, Cammeray)
RANDOM SURVEY
Council commissioned a random phone survey of both residential and business ratepayers; sample size is 400 residents and 200 businesses. Participant recruitment commenced on 20 November 2018.
