Jamie Chaffey says councils are drowning under escalating costs

The council has come under fire over its resourcing strategy and a financial report suggesting it increase rates by between 40 and 44 per cent over three years to rebuild cash reserves depleted by repeated natural disasters and the COIVID-19 pandemic.

Cr Chaffey said councils across the state were in similar positions, and were "drowning under a wave of escalating costs, cost-shifting by state and federal governments, increasing responsibilities and ageing infrastructure".

"This is a desperate time for local government, and it calls for desperate measures," he said.

The Gunnedah Mayor said people across the state relied on their councils to provide clean water, remove their waste, provide and look after their local roads, assist in planning, provide airport facilities, cultural and community facilities, sporting fields, walking tracks, swimming pools, tourism and economic facilities, and more.

"And yet the support, resources and funding available to local government is rapidly shrinking," he said.

"Councils are having to take action to find the funds they need to continue to provide services through the only avenue left available to them - special rate variations."

Cr Chaffey said the rate pegging system had "hogtied local governments that provide community services, limiting a critical source of income as councils' responsibilities increase".

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Some of those growing responsibilities came through cost shifting, with a Local Government NSW report putting the cost of councils taking over responsibilities for state government services and infrastructure running at more than $460 annually for each ratepayer.

Meanwhile funding from state and federal government was falling, Cr Chaffey said, and not keeping pace with the need to repair and replace infrastructure.

"Add to this the massive costs associated with recent floods and fires, and local government is in trouble," he said.

"Recent research published by the Grattan Institute showed our roads were in a state of dangerous disrepair, especially in the regions, and would continue to get worse without an extra $1 billion in funding each year."

Cr Chaffey said there was a growing gap between what councils were expected to provide and the money they had available.

"But the fact remains, in the face of increasing costs and evaporating assistance, the money must come from somewhere."

Cr Chaffey argued no council wanted to pursue a special rate variation, but simply had to because "the system is not working, and ... it has not been working for many years".

And he said IPART would grant SRVs only after stringent reviews of a council's financial planning, asset management, service planning and other areas.