'Sustainability of local councils is at stake' with 0.7 per cent rate peg says Bega Valley Shire mayor

Council has been flagging it's financial issues for some time but the rate cap of 0.7 per cent for the year 2022/23 is the lowest in 20 years and threatens core services, Cr Fitzpatrick said.

"While no-one likes to see rates go up, here in the Bega Valley a 0.7 per cent rate increase equates to just $187,500," he said.

"With a large geographic area to look after and a low rate base, this is crippling for us. It definitely won't cover the increase in supplier and material costs that are going up at a phenomenal rate-up to 30 per cent in some cases.

"We have already made significant cuts in our 2021-22 financial year Operational Plan and Budget as the 2 per cent rate increase for that year didn't even cover the increases to our insurances and the emergency services levy.

"This latest decision from IPART means we will need to make further cuts to our core services next financial year unless the government intervenes - cuts the community can't afford us to make, particularly as we are still recovering from the compounding effects of the Black Summer bushfires, multiple floods and COVID-19-but we currently have no other option," Cr Fitzpatrick said.

He told councillors that in the past week, he and acting CEO Anthony McMahon had met with both the Local Government Minister and Shadow Local Government Minister to raise the impact of IPART's decision.

"They understand our predicament, but no commitments have been made," he said.

The severe drop in the rate peg followed the NSW Local Government Minister's request in March 2021 that IPART look at the rate peg taking into account population growth. Bega Valley Shire has been listed as having zero population growth and so can only apply the 0.7 per cent base rate peg for 2022/23.

The alternative is to apply for a special rate variation (SRV) but that had to be submitted by February 7 to be considered for the financial year 2022/23. Given that council had just been through elections and that a community consultation in relation to an SRV would be required, there was not sufficient time.

It does not bode well for future service levels or plans given that the long-term financial plans were based around a 2.5 per cent increase.

"It is important that both major parties work together on a solution to the current position all councils across NSW are in. We are calling on the NSW government to undertake a review that properly considers Award and Local Government Cost Index increases, in addition to COVID and supply chain impacts," Cr Fitzpatrick said.

"We are also calling on the NSW government to fund the gap between the 2.5 per cent rate peg increase we were expecting, and the 0.7 per cent increase actually provided. The sustainability of local councils is at stake and we need the NSW government's help.

Council is submitting a motion to the upcoming Local Government NSW conference to seek their support in advocating for the needs of councils across the state.