Packed gallery hears council has raked in millions from rate rises above pegging limits

And during an extraordinary meeting on Monday, November 20, it decided to push ahead with putting its resourcing strategy and out for public comments, including its recommendations for huge rate rises of between 40 and 44 per cent over the next three years.

A packed gallery attended the meeting and heard predictions the Shoalhaven was in for some financial pain after years of natural disasters and the COVID-19 pandemic had depleted savings in council's general fund.

Council's CEO Stephen Dunshea told the meeting cash reserves of at least $15 million were needed to ensure council was able to respond to any future emergency.

"History tells us that this happens regularly in the Shoalhaven," Mr Dunshea said.

"I am deeply concerned, from a risk perspective, that we do not have contingency funds in this organisation, any longer to support a response to an emergency situation, without stopping other works, without potentially closing facilities."

Mr Dunshea said responding to an emergency "costs a lot of money - people working 24/7, seven days a week to respond to those, and that cash is simply not there."

The shortfall was identified in a financial sustainability review prepared by independent organisation the AEC Group suggested huge rate rises, including the possibility of a 32 per cent increase in 2024-25, along with asset sales and efficiency savings.

But there was plenty of debate about the order in which things should be done, with several councillors saying council should focus on cutting its costs and finding savings within the organisation.

Cr Wells said the impetus for improving efficiency and funding savings within the council would be lost if the focus was on increasing rates.

"I'm saying let's pursue asset sales now, let's pursue cost efficiencies now, let's undertake service reviews on our service rollouts and our programing, let's look at cost efficiencies, let's look at our investment policies and capital programs now, and see what additional funds you might need later, rather than putting the cart before the horse and say 'Let's go for the money now and it will all work out later on down the track'," Cr Wells said.

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"Well I don't believe that is going to be the case."

The financial report suggested council find savings of $3 million over four years, but Cr Wells said that was "a joke" given council's annual budget was in the order of $300 million.

A five per cent efficiency saving on just wages, materials and services would collect $10.5 million, he said.

Meanwhile, council's planned $249 million capital works program could be pared back, Cr Wells said, as council had shown in recent years it was not capable of spending that much in a year.

The suggested rate rises would also result in the Shoalhaven having the highest rates in the region, Cr Wells added, despite the average household income in the Shoalhaven being about $240 a week less than neighbouring councils.

"I don't think we can underestimate what the community is going through at the moment," added Cr Serena Copley.

"I don't think we can underestimate what we're all living through with the cost of living crisis, and what that means for individual families and businesses.

"We need to look at our own back yard, we need to look at our own operations before we ask ratepayers to put their hands in their pockets," she said.

Cr Copley also questioned whether any money obtained through a special rate variation was going to be managed efficiently.

Cr Paul Ell said council needed to show it was committed to making savings and improving its efficiency before talking of large increases to rates.

"We need to look at what we can do differently, how we can improve productivity, how we can reduce duplication, how we can rationalise services, and obviously the project management principles that will be brought into play," he said.

Cr Ell asked for council's managers to report on what measures could be adopted immediately to save money and reduce costs within a month, before calling for public comment on the financial plan.

"We need a clear strategy and timetable on when things can be achieved, and how they can be achieved," he said,

Cr Ell conceded a rate rise was inevitable given the financial problems identified in the report, but "we don't want to flog our community in the middle of a cost of living crisis".

However Mr Dunshea said delaying the resourcing strategy's public exhibition would prevent council meeting the deadlines for applying for a special rate variation.

He pointed out an application to IPART for a special rate variation did not lock council into passing on those higher rates, particularly if savings and efficiencies had been found.

Cr Evan Christen called for council to adopt a "minimalist financial plan" for the coming year, while analysing its finances and identifying where savings and efficiencies could be found.

He said he wanted to make sure "any rate rise is absolutely minimised".

But Cr Christen warned against rushing any decisions for the coming year, allowing the community plenty of time to discuss future service levels.

During the public exhibition period, Shoalhaven residents will be asked to identify what sectors and services cold be reduced, and whether other services need to be expanded.

"I wouldn't rule out changing the balance across things," Cr Christen said.

The vote to put the resourcing strategy on public exhibition was carried seven votes to five.