SRV Survey
Council is proposing to prepare an application to IPART to retain the previously approved temporary rates increase from 2021/22 and 2022/23, adopting the NSW Government announced rate peg amount of 3.7% in 2023/24.
The proposed SRV will be used to fund our existing services and enhance maintenance on assets including:
- Grading unsealed local roads to meet existing service levels;
- Additional maintenance of rural roads, such as bitumen maintenance, drainage, patching, roadside slashing, gravel maintenance, and vegetation management;
- Roadwork and renewal of urban streets;
- Additional bitumen resealing and gravel re-sheeting to keep our roads at a good standard and prevent them from deteriorating; and
- Culverts, causeways, drainage and footpath renewal.
The proposed permanent SRV will apply to your general rates only and will not apply to the waste management, water and sewerage charges on your rates notices. SRV funds would not be used on waste management, water and sewerage services, which are all funded through direct fees and charges.
If the SRV is not approved, Council will need to defer necessary capital works, as well as revise the range and levels of services to avoid a deteriorating cash position – which is not sustainable in the long term as assets deteriorate further.
Council has considered three options as part of it’s Long-Term Financial Plan:
- Option 1: Existing SRV increases retained: Models the revenue increases from the temporary SRV expiring at 30 June 2023 becoming permanent and adopting the rate peg in following years. This scenario generates additional cash of $12.85 million over a 10-year period. This scenario requires continued cost containment strategies to achieve NSW Office of Local Government Financial sustainability benchmarks and marginal financial sustainability.
- Option 2: Removal of temporary SRV: Models the removal of the temporary SRV and the increase in revenue being limited to the rate peg, which is proposed to be 3.7 per cent in 2023-2024. This model does not provide a sustainable future in either the short term or long term and would mean a significant reduction in Council own-source revenue for services and asset management in 2023-24 (approx. impact will be a revenue decrease of $0.8M)
- Option 3: Existing SRV increases retain, rate peg in 2023-24 and 5% SRV in 2024-2025: Models the extension of the temporary SRV approved by IPART permanently with an additional permanent SRV at 5 per cent in 2025-2026 and increases year on year of the rate peg. This option was considered financially sustainable in the long-term.
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Frequently Asked Questions
What has Council decided to do?
At the Ordinary Meeting on 26 October 2022 the Council decided to proceed with notifying IPART that the Council intends to apply for a permanent special rate variation (SRV) to effectively maintain the current rates levels enabled by a temporary SRV expiring on 30 June 2023 and increase rates by the State Government announced rate peg of 3.7% in 2023/24.
Following the period of community engagement, Council has requested to receive a report on the community engagement outcomes, following which a further decision will be made by the Council to submit the application by the deadline of 3rd February 2023.
What is a Special Rate Variation (SRV) and Rates Pegging?
Rates increase every year in line with an amount set by the State Government. This amount is calculated every year and is called the ‘rates peg’. It is decided by the Independent Pricing and Regulatory Tribunal (IPART). The rates peg applied to the 2022/23 financial year will be 3.7%.
Councils can apply to IPART for a Special Rate Variation (SRV) to seek additional funds above the rates peg. Any rate increase above the rates peg amount is called a ‘Special Rate Variation’ (SRV).
What is the need for a special rate variation?
Liverpool Plains Shire Council has a significant deficit in the Comprehensive Income Statement. In the 2020/21 financial year the Council produced a slender favourable net operating result but the adjusted underlying deficit (excluding capital income) remained significant at ($3.5M) which was in line with previous year. Independent reports and financial sustainability performance measures continue to indicate that Council is challenged with achieving a financially sustainable position.
If adjusted underlying deficits continue, Council can only avoid a deteriorating cash position by delaying/avoiding necessary capital expenditure (renewing assets), reducing services or being heavily reliant upon grants. This is not sustainable. Council aims to correct the operating position to maintenance of existing levels of service.
Since the implementation of the 2021/22 Special Rate Variation, Council have significantly reduced operating costs and further improved organisational efficiency in an effort to reduce the rate burden on residents. However, the revenue base of the Council needs to be increased to address the operating deficit, and in doing so, ensure sufficient cash is available to maintain the community infrastructure and services.
Without the increase in the revenue base of Council, and to address the asset management requirements, Council experience a revenue decrease by $0.8M in 2023/24. Such an impact would have significant implications for Council to maintain existing services and asset management levels both in 2023/24 and into the future.
What will happen if the special rate variation is not implemented?
Council will need to defer necessary capital works, as well as revise the range and levels of services provided to the community to avoid a deteriorating cash position which is not sustainable in the long term.
What are the next steps in the application process?
A range of community engagement methods will be implemented in November 2022, after which the final reports will be prepared for Council’s consideration and a decision on whether to submit the SRV application or not.
Where can I find out more information?
Council’s website will be continually updated with relevant information regarding the SRV. To seek addition information please email your request through to specialvariation@liverpoolplains.nsw.gov.au
Further information about the SRV process is on the IPART website at the following address - https://www.ipart.nsw.gov.au/Home/Industries/Local-Government/Special-Variations
Liverpool Plains is currently proposing to apply for a Special Rate Variation (SRV)
At the Ordinary Council Meeting held 26 October 2022, Liverpool Plains Shire Council resolved to notify the Independent Pricing and Regulatory Tribunal (IPART) of its intention to apply for an SRV in 2023.
This site contains background information on our decision to consult on a proposed SRV. Further details and resources will be added to the page over the coming weeks to assist you in making an informed decision. Below is a list of engagement opportunities and guidance on how you can provide feedback through a formal submission to Council and/or IPART.
What is an SRV?
A SRV allows a council to increase its general income above the rate peg to provide the services and infrastructure desired by their communities. SRV’s can be either for a single year or over multiple years and can be permanent or temporary.
What are we proposing?
Council intends to apply for a permanent SRV to effectively maintain the current rates levels enabled by a temporary SRV expiring on 30 June 2023 and to increase rates by the State Government announced rate peg of 3.7% in 2023/24.
Council will need to submit the application by the deadline of 3rd February 2023.
Our Long-Term Financial Plan and Asset Management Plans reflect the proposed SRV, and these documents are available to access via the following links:
- Long-Term Financial Plan
- Asset Management Plans
Our financial position
Over the past two years Council has undertaken a significant productivity improvement and cost containment project to become more sustainable. There is still more work to be done, and Council is mindful of the impact on the community if these measures impact too greatly on valuable services.
Council has successfully reviewed many of the services it provides and modified our delivery approach to ensure the efficient and effective use of rate payer funds. We have also increased our productivity in many operational areas, delivering more with less resources.
Liverpool Plains is delivering more for less, however there is still the need to secure the level of funding necessary to ensure that we can continue to maintain and renew our asset base.
What the SRV funds will and won’t be used for
The proposed SRV will generate a net additional revenue of approximately $334,000 in 2023/24 by retaining the previous temporary SRV and adopting the rate peg amount of 3.7 per cent. These funds will be used to maintain and renew local road infrastructure.
The SRV will apply to your general rates only and will not apply to the waste management, water and sewerage charges on your rates notices. These services are funded through direct fees and charges.
What will happen to the services if the SRV is not approved by IPART?
Without additional revenue Council will need to constrain expenditure on services and its maintenance on assets, which will result in prioritising critical assets.
Services that are not the core statutory requirements of Council will need to be reviewed, including swimming pools, gymnasium, parks and gardens and sport and recreational facilities.
Community Information Sessions
Council will be facilitating the following Community Information Sessions in November to provide details on Council’s Financial position, the SRV options, the progress Council has made in improving productivity and delivery cost containment.
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Location
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Date
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Time
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Venue
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Quirindi
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21 November 2022
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5.15pm - 6.45pm
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Quirindi Library Community Hub, 193 George Street, Quirindi
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Wallabadah
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21 November 2022
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7:30pm – 9.00pm
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Wallabadah Village Hall
Martyn Street, Wallabadah
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Werris Creek
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22 November 2022
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5.15pm - 6.45pm
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Railway Institute Hall
Anzac Parade, Werris Creek
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Currabubula
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22 November 2022
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7:30pm – 9.00pm
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Currabubula War Memorial Hall
Davis Street, Currabubula
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Premer
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23 November 2022
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5.15pm - 6.45pm
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CWA Rooms
Ellerslie Street, Premer
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Spring Ridge
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23 November 2022
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7:30pm – 9.00pm
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Spring Ridge Hall
Darby Road, Spring Ridge
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Quirindi
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24 November 2022
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7.30am - 9.00am
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Quirindi Library Community Hub, 193 George Street, Quirindi
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Willow Tree
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24 November 2022
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5.15pm - 6.45pm
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Willow Tree Hall
New England Highway, Willow Tree
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Feedback Opportunities
Council wish to provide the community with the following avenues through which to provide feedback on the SRV options:
Via email to: specialvariation@liverpoolplains.nsw.gov.au
Via post - addressed to : The General Manger
Special Rate Variation submission
60 Station Street
Quirindi NSW 2343
Web-base survey: https://www.liverpoolplains.nsw.gov.au/Council/special-variation
Additionally, the community will have the opportunity to provide submissions to IPART following Council submitting the SRV application. This will occur during February 2023.
IPART
Further information on the SRV process, including fact sheets and information papers are available on the IPART website that can be accessed via the following link:
https://www.ipart.nsw.gov.au/Home/Industries/Local-Government/For-Councils/Apply-for-a-special-variation-or-minimum-rate-increase