Rate increases not set in stone
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.