Shoalhaven Council considering a 32 per cent rate rise next year

The council is holding an extraordinary meeting on Monday, November 20, to consider options including a 32 per cent rate rise in 2024/25, followed by smaller rises to equate to rates jumping by 40 per cent over three years.

Other options will be discussed at the meeting, both of which include rates jumping by 18 per cent next financial year.

One of the options includes a further 18 per cent rate rise the following year, while the other has a 13 per cent rate rise in 2025/26, and an eight per cent rate the following year.

Both would result in rates rising by 44 per cent over three years, following three years of budget deficits.

State Member for Kiama and former Shoalhaven City Councillor, Gareth Ward, has slammed the prospect of Shoalhaven residents being hit was with a steep rate rise.

"Having been a councillor and serving as the council's budget committee chairman, having served in government including as a Cabinet Minister, this proposal is the most outrageous and the least justifiable cash grab I have ever seen," Mr Ward said.

And he has called on Federal Member fr Gilmore, Fiona Phillips, and State Member for South Coast, Liza Butler, to also condemn the proposal.

"Do they stand with residents who are suffering through the cost-of-living crisis, or do they stand with Labor and Green Councillors and their insatiable appetite for other people's money?" he asked.

"Shoalhaven residents simply can't afford this. Not only will this be a huge burden on property owners, but this cost will also be passed onto renters which will hurt the most vulnerable," Mr Ward said.

"The Mayor talks a big game when it comes to addressing housing affordability but this outrageous 44 per cent rate increase will push home ownership further away and make paying rent even harder, forcing local families further into housing stress."

Mr Ward has started a petition against the proposal.

A report to Monday night's extraordinary council meeting warned of a dire situation developing if council did not apply for a special rate variation.

"Failure to pursue an SRV does not address the significant financial situation that exists," the report said.

"It would not take long for council's financial reserves to be drained, risks would escalate and services would need to be cut.

"If a natural disaster was to occur council would not have the available cash to respond."

Plans for the rate hike follow an independent financial sustainability review commissioned by council, which identified how the impacts of consecutive natural disasters and the COVID pandemic during the past five years had significantly depleted council's revenue and increased operational costs.

The review said the net cost of recovery from the disasters, including subsidies and waivers on fees and charges, reduced council's available cash by $14.6 million.

It also said there was an annual shortfall of between $25 million and $35 million in the general fund that needed to be addressed through a number of strategies.

"We engaged in this financial review process understanding that there were ongoing budget deficits that needed to be addressed and paused some of the planned capital works projects while we worked through the detail with councillors and the organisation," said council's CEO, Stephen Dunshea.

"We've managed and funded the impacts of 13 disasters in recent years and it's imperative that we act on the information we have been provided so that we have the resources and primarily the cash available to respond to the next natural disaster and maintain financial stability for the long term.

"The findings of the review present us with the reality of providing city wide services with a regional town budget," Mr Dunshea said.

"We have to adjust our approach to sustain the needs of a growing city and address the backlog of infrastructure maintenance that's been a priority for years.

"Investing more in repairing roads and asset renewal will ultimately reduce the ongoing costs of reactive maintenance and the backlog of servicing that's required," he said.

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"Finding efficiencies within the organisation will come from improving the way we operate - by being more strategic, improving our management systems and financial controls we can enhance our productivity and responsiveness."

Mr Dunshea said council was also looking at asset sales, and had set a target of $3 million in savings over four years through improved efficiencies.

The review said council's finances were impacted by limited income through lower average property rates for residential and business categories compared to similar-scale and neighbouring council areas.

Additionally, increased interest rates on loans to fund a large number of capital works programs during the past eight years were adding to council's operating costs.

Inflation had also increased the gap between revenue and expenditure, through additional costs of construction and operating costs.

Mr Ward said talk of council improving its efficiency was too late.

"Council wasted millions on its failed Bioelektra project. Why should residents hand over more hard-earned money to a council that doesn't deserve one extra red cent?" he said.

"In every single way, this council has failed our local community.

"From its failure to manage its books, its failure to maintain our roads, it's failure to deliver its planned waste contract which cost ratepayers millions, its failure to listen to residents who wanted the right to put lives and property ahead of dangerous trees, this 44 per cent rate increase is yet another example of a council that is out of control," Mr Ward said.