Rate in­creases not set in stone

Western Suburbs Weekly - - News - By JON BAS­SETT

COTTES­LOE coun­cil wants an av­er­age 4 per cent an­nual rates rise in its 10-year long-term fi­nan­cial plan adopted at Novem­ber’s meet­ing.

“It’s an at­tempt to an­tic­i­pate an av­er­age over 10 years and not an in­di­ca­tion what­so­ever of the ac­tual in­creases which are done each year,” Mayor Jo Dawkins said.

Neigh­bour­ing Mos­man Park coun­cil sparked some coun­cil­lors’ and res­i­dents’ ire when a 3.4 per cent rates in­crease, sub­se­quently re­duced to 2.4 per cent, was pro­posed for 2016-17 to boost re­serve funds.

Mrs Dawkins de­nied her coun­cil was cre­at­ing expectations of set rises for a decade.

“It’s not go­ing to be 4 per cent be­cause it’s not a bud­get, but it’s to put the mes­sage out there that there are no known peaks or troughs,” she said.

Ad­ja­cent Clare­mont coun­cil uses greater housing den­sity to gen­er­ate new in­come that cush­ions rate in­creases.

“In a com­par­i­son with our neigh­bours, Clare­mont has greater res­i­den­tial in­come with more apart­ments, whereas Cottes­loe has no im­me­di­ate po­ten­tial to in­crease res­i­dences, and even any de­vel­op­ment of the rail­way land is 10 to 15 years away,” Mrs Dawkins said.

The 4 per cent av­er­age con­cerned coun­cil­lors Sally Pyvis, Rod Thomas and San­dra Boul­ter, who said she could not sup­port it when in­fla­tion was low, the na­tional CPI at 0.8 and WA’s CPI at 0.5.

“If the coun­cil can keep its rates in­crease near in­fla­tion then the coun­cil will sur­vive for the next 10 years,” chief ex­ec­u­tive Mat Hum­frey said.

A staff re­port said it was “likely” in­creases would be lower in the first few years of the plan and slightly higher in its sec­ond half dur­ing “small” pro­jected deficits and sur­pluses over the com­ing decade.

How­ever, the re­port cau­tioned that fore­shore and town cen­tre im­prove­ments funded by the $9.1 mil­lion sale of the Town’s de­pot would have a “sub­stan­tial” im­pact on a rec­om­mended 0.9 as­set sus­tain­abil­ity ra­tio, which is the dif­fer­ence be­tween spend­ing on as­sets com­pared to their de­pre­ci­a­tion.

The re­port said the coun­cil would ex­ceed the ra­tio in the plan’s first year, go be­low it in the sub­se­quent five years and above it for the re­main­der. Im­prov­ing the ra­tio was sug­gested by us­ing re­serves to re­new as­sets, and seek­ing greater State Gov­ern­ment con­tri­bu­tions to the fore­shore im­prove­ments, but us­ing de­pot funds to re­duce debt was re­jected be­cause of the fi­nan­cial penal­ties on the loans.

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