Special Rate Variation Community Engagement Report - Shoalhaven City Council

FAQs
1. What is a special rate variation?
2. What is a rate peg?
3. Who is IPART?
4. How much will my rates increase?
5. What are the proposed rate increase options?
6. Why does Council need more funding to pay for its assets?
7. How will Council prioritise the spend of additional money?
8. Why do Council construction and upgrade projects appear to cost so much?
9. When will rates rise?
10. What happens if Council's application for a rate increase is unsuccessful?
11. How have we saved money so far?
12. How do we get our income?
13. What about all the new developments – do developers contribute?
14. Can our community afford an increase in rates?
15. What options are available to those that can’t pay a rates increase?
1. What is a special rate variation?
Council’s Long Term Financial Plan has identified a gap between current projected funding for asset renewal
and what is needed to ensure assets are maintained to an acceptable level into the future in line with the
expectations of our community. That is why Council is proposing to apply for a Special Rate Variation (SRV),
as a way of securing these funds. This is a process by which we apply to the Independent Pricing and
Regulatory Tribunal (IPART) to increase rates beyond the rate peg. The SRV is being proposed only after all
other sources of income and cost saving measures have been examined. A SRV allows councils to increase
general income above the rate peg, under the provisions of the Local Government Act 1993 (NSW).
Since 1977, council rate revenue has been regulated in NSW under an arrangement known as ‘rate pegging’.
Rate pegging allows all councils to increase their total rate revenue in line with the annual change in the rate
peg. The rate peg is a percentage that is set each year by IPART, mainly based on an index of typical council
costs. The rate pegging system also provides flexibility for individual council circumstances by allowing
councils to apply to IPART for a special variation. Special variations allow councils to seek to increase their
rates by more than the rate peg, after engaging with their communities as part of their Integrated Planning
and Reporting.
2. What is a rate peg?
Council’s rating revenue is regulated under “rate pegging”. IPART sets a rate peg which limits the amount by
which councils can increase their rate revenue from one year to the next. For many years, the rate peg limit
has not kept pace with the spiralling increases to costs for councils in NSW to deliver vital community
services.
3. Who is IPART?
The Independent Pricing and Regulatory Tribunal is the main independent pricing regulator in NSW. IPART
set prices for water, electricity, gas and transport businesses. They set the rate peg for local councils.