A PROPOSED rate increase of 3.6 per cent will only achieve a break-even result as Naracoorte Lucindale Council strives to cover an expected million dollar rise in expenditure in its 2012-13 draft budget.
In her first budget as CEO, Dr Helen Macdonald believes the council will have considerably higher expenses in 2012-13 than this year - $16,411,624 compared to this year's $15,374,231 - but only slightly higher earnings - $16,213,893 compared to $16,030,486.
That would leave the council with an operating deficit for the next financial year of $197,731, compared to an expected surplus of $656,255 for the current year.
Each of four key categories of council expenses will see a rise in 2012-13:
Employee costs (2011-12, $5,551,488) - 2012-13, $5,677,453.
Materials, contracts and other expenses ($4,652,000) - $5,172,880.
Finance costs ($195,327) - $308,714.
Depreciation, amortisation and impairment ($4,975,416) - $5,252,577.
CHALLENGES. Dr Macdonald and mayor Erika Vickery commented in the draft budget document that the increases were necessary for a variety of reasons. They included:
Increases in operating costs, including an extra 10 per cent for electricity.
Finance costs such as borrowings to fund the regional livestock exchange upgrade.
Depreciation of council assets, which was already large and now made larger with the addition of upgraded structures at the saleyards.
The need to comply with ever increasing financial, regulatory, transparency and accountability requirements from the State Government.
An increase in the numbers and size of heavy vehicles using council roads.
Funding constraints which affect the delivery of the range of services offered.
Enterprise bargaining agreements which provide for wages and salary increases. "It is becoming increasingly difficult to attract all levels of staff to work in rural areas so council need to offer competitive wage and salary conditions," Dr Macdonald said.
Requirements to maintain and improve infrastructure assets to acceptable standards including roads, footpaths, lighting, storm water drainage, street trees and plantings, open space and council properties.
Significant additional costs associated with compliance with EPA requirements relating to waste disposal and treatment of effluent at livestock exchange; costs associated with the upgrades to the livestock exchange.
Significant additional costs of waste management and transporting putrescible waste outside the council district.
REVENUE. The increased expenses will be offset in part by:
An increase in general rate revenue of 3.6 per cent.
A modest expected increase of 3 per cent in Federal Assistance Grants.
An increase in Naracoorte Regional Livestock Exchange Fees of 3.6 per cent.
A move towards cost recovery for use of council services (eg airport).
An increase in kerbside collection charges by 50 cents per week.
BIG TICKET ITEMS. Maintaining and upgrading road network $3,790,211. Includes $990,000 for resheeting program, $550,000 for resealing, $248,000 for Cadgee Rd widening and $168,500 for kerbing and water tabling.
Replace livestock exchange weighbridge $600,000.
Footpath construction $309,000.
Upgrade creek walk for cyclists $122,000.
Install Naracoorte Creek drainage on MacDonnell St $78,100.
RATE RISES. For 59.8 per cent of property owners, their rates will increase by up to 5 per cent; 34.2 per cent will see their rates reduced. The minimum rate for properties will rise from $300 to $310. The budget document suggested the rate rises were necessary "to continue the level of service that our community currently enjoys".
RATE IN THE DOLLAR. The rate in the dollar has been increased in all categories. Rural living will now be .444 (up from .431), urban .619 (.601), commercial .646 (.628), industrial .590 (.565), rural 3.79 (.366), township .526 (.510).
LEVIES. The Community Wastewater Management System charge at Lucindale will rise from $393 for occupied properties and $142 for vacant land to $434 for occupied properties and $157 for vacant land.
The waste recycling levy charge will be $276 per occupied rateable property in townships and the rural living zone, up from $250.
The Natural Resources Management levy will increase from $38.60 per rateable assessment to $40 in 2012-13.
Mayor Mrs Vickery and staff including CEO Dr Macdonald are currently "doing the rounds" with the draft document, speaking to a number of community groups as well as welcoming feedback in "on the couch" sessions at Kincraig Plaza this Saturday and next Thursday.
Written comments on the draft will be accepted by the council until 5pm next Thursday, or in person at a special council meeting for one hour from 7pm on June 12.