There has been much discussion about a 5.20 per cent rate rise every year for four years until a total of 22.5 per cent.
Let me make this clear, it is scaremongering – I’ll explain why.
The hypothetical 5.20 per cent was a computer generated model in an attempt to work out the first budgets, many other percentages were looked at also. After de-amalgamation there was no financial data from which to hypothesise a plan to carry Douglas Shire out of debt that was incurred due to de-amalgamation.
The revenue was unknown, the expenses were unknown, only the amount of debt was known. Using best guess estimates of the unknown data it was believed that possibly to bring the shire back into surplus in 5/6 years, rate rises of 5+ per cent would be necessary.
Now the truth; the first budget rate rise 0 per cent (6mth 2014), second budget 5.2 per cent (2014/15), third budget 3.9 per cent (2015/16).
Budgets are decided yearly because revenue and expenditure change yearly. As an example, if 10 000 new houses are built then revenue increases significantly without increasing individual rate payments. With improving technologies and better practices it is also possible that there are yearly decreases in expenditure.
There has never been any council resolution that says there will be a 5.20 per cent rate rise for 4 years. The budget is decided yearly and if someone tries to tell you otherwise it is incorrect.
If a candidate promises no rate rises for their 4 year term, please ask them some questions;
• Ask them if they value the shire and want long term financial stability - because it will never get out of debt.
• Ask them to roughly outline a plan as to how they will come up with a budget that balances.
I am NOT endorsing any one particular rate rise percentage. I am explaining that nothing can be predicted before full budget deliberations are started and accurate figures can be compiled.
I hope this has made things clearer.
Abigail Noli, councillor