Special Rate Variation

Griffith City Council Receives Special Rate Variation Determination
The Independent Pricing and Regulatory Tribunal (IPART) has partially approved Griffith City Council’s Special Rate Variation (SRV) application to increase its general rate income above the rate peg for a two-year period and not the three-year as applied.
Council has been granted a 22.10% cumulative increase for 2024/25 and 2025/26 instead of a 34.9% cumulative increase over 3 years, as requested.
Griffith Mayor, Councillor Doug Curran said while this might not have been the overall outcome Council was hoping to achieve, it was still a positive one.
“IPART has highlighted that the Art Gallery Project compromised Council’s justification for additional rate revenue in 2026/27. I think it’s unfortunate that the third year was clouded by the potential art gallery, but we are two thirds of where we wanted to be,” he said.
“I want to thank the many Griffith residents who engaged with Council throughout this process. It just reinforces that we need people to come forward for the Community Strategic Plan (CSP) review that we are currently undertaking.
“We need everyone to tell us what services they want us to provide so we can plan further out.”
The draft budget for 2024/25 and Long-Term Financial Plan is based on approval of the SRV by IPART. Council will need to amend its Long-Term Financial Plan for 2026/27 and subsequent years by reducing projected rate income by approximately $1.5M per annum.
More information can be found on IPART’s website http://www.ipart.nsw.gov.au/

UPDATE 25 October 2023
At the Council Meeting on Tuesday, 24 October 2023, Council resolved to proceed with an application to the Independent Pricing and Regulatory Tribunal (IPART) for a permanent Special Rate Variation (SRV) of 10.5 per cent each year for three years – a cumulative permanent increase of 34.9 per cent.
Council now intends to formally submit an application to IPART by the end of January 2024 accompanied by a comprehensive report summarising the feedback received.
Community members will have additional opportunities to provide feedback directly to IPART as part of the application process and details on how to have your say can be found on their website at https://www.ipart.nsw.gov.au/
IPART will then consider the application and feedback and provide a decision in May 2024. If Council’s application is approved, the rate increase will come into effect on 1 July 2024. 
The resolution can be viewed here: Resolution of Council - SRV

BACKGROUND
At the Council Meeting on Tuesday, 9 May 2023, Council gave in principle endorsement for an application to be made to the Independent Pricing and Regulatory Tribunal (IPART) for a Special Rate Variation (SRV) to be implemented over three years commencing 2024/25 financial year.  You can view the Council report here and our IP&R documents including the Long Term Financial Plan

What is a Special Rate Variation (SRV) and Rate-Pegging?
Rates increase each year in line with an amount set by the Independent Pricing and Regulatory Tribunal (IPART). This amount is calculated every year and is called the ‘rate peg’.

For the 2023/24 financial year the rate peg applied to Griffith City Council, will be 3.7%.

If a council’s rate revenue is not sufficient to maintain service levels or undertake capital works, it can apply to IPART to increase overall rate revenue by more than the rate peg. This is known as a Special Rate Variation (SRV). In order to apply for an SRV, councils must demonstrate to the community and IPART that they need the money and have implemented improvements to be more efficient and productive. Council has already identified $1M in savings annually.

Why do we need a Special Rate Variation (SRV)?
The rate increases set by IPART have not kept pace with cost escalations faced by Council in providing services to our community. Cost shifting from other levels of government and diminishing value of annual operating grants over time have also contributed significantly to the pressure on Council’s financial position.  

The additional funds received through the SRV will increase the money available to address and correct Council’s operating position and enable sufficient funds to be available for renewal and maintenance of assets and the continuation of current service levels.

What will happen if the SRV is not implemented?
Council will have to look at options to reduce the levels of services to the community. Examples of community facilities that may have reduced hours are the Griffith Regional Aquatic Leisure Centre, Griffith Regional Theatre, Pioneer Park Museum, Griffith Regional Sports Centre and Griffith City Library. In addition, service levels will be reduced. Some examples of these include our roads, parks and gardens, strategic planning and storm water drainage.

What level of rate rise is Council considering?
The proposed rate increase is based on Council's funding requirements.

Griffith City Council is seeking the community’s view on a proposal to apply to the Independent Pricing and Regulatory Tribunal (IPART) for approval to raise ordinary  rates through a Special Rates Variation (SRV) by 10.5% (inclusive of the assumed 3.0% rate peg) each year for three consecutive years from 2024/25 to 2026/27 (a cumulative total increase of 34.9%). The increase would be retained permanently in Council’s rate base.

How much will rates change?

Based on Office of Local Government Performance comparative data FY2020/21 - average Griffith

 Special Rate Variation Estimator here Ratepayers are encouraged to assess the impact of the SRV on their respective properties by using this estimator.
 
How can I have my say?
Griffith City Council values community input and actively seeks feedback during the consultation period for the Special Rate Variation. (Up until Thursday 31 August 2023)  
You can email admin@griffith.nsw.gov.au or write to PO Box 485 Griffith, 2680. You can also make an online submission using the button below.
Make a submission here

Following extensive community consultation, should Council resolve to apply to IPART for a Special Rate Variation, members of the public will also be able to make a submission to IPART. 

We will have community information sessions: 

Community Consultation Results
Thank you to members of our community who took the time to provide Council with feedback during the consultation period.
The results of this consultation can be viewed below:
SRV Community Engagement Summary (includes Community Engagement Plan and submissions received)

When will the decision on the Special Rate Variation be made?
The decision on the Special Rate Variation will be made by Griffith City Council after intensive community consultation has been undertaken.
Following the public consultation period, a further report will be considered by Council in October 2023. At that meeting Council will make a final decision as to whether it will apply to IPART for the Special Rate Variation. If IPART approves the application, the first stage of the increase will be effective in July 2024.

View the online SRV Presentation here 


View the SRV Flyer here

View our latest PowerPoint presentation here

TIS National interperative service 
TIS National is a - phone 131450 - language service.

SRV - Frequently Asked Questions  from community consultation 

1. The Cashflow statement shows that Council will have around $190M in cash in June 2033.  Why is this SRV necessary if Council has so much money in the bank?
Council must restrict funds to the water, sewer and waste areas.  It is a legal requirement to do this. Council does not include capital works in the Long-Term Financial Plan for major projects in the outer years as they are not within the Councillors Delivery Program period (ie; 4 years).  Council must ensure that it has sufficient cash reserves to fund major future renewal of existing infrastructure and growth for new development.
2. Does this SRV guarantee no future SRVs?
This SRV will allow Council to become financially sustainable in the General Fund to maintain existing services and provide the capability to grow.  Future regulation changes, additional State Government cost shifting and future capital works programs as determined by Councillors may influence future SRVs.
3. Will water and other charges increase?
Yes.
4. What services will be impacted?
 If a SRV is approved the current level of services will be maintained. If a SRV is not approved, examples of community facilities that may have reduced hours are the Griffith Regional Aquatic Leisure Centre, Griffith Regional Theatre, Pioneer Park Museum, Griffith Regional Sports Centre and Griffith City Library.  In addition, service levels will be reduced. Some examples of these include our roads, parks and gardens, strategic planning and storm water drainage.
5. Is the SRV increase permanent or will it wind back after 3 years?
The proposed SRV will increase the rate base annually over the 3-year period of implementation with the third year being 2026/27.
The annual rate base as from the 2027/28 year will increase by the annual rate pegging limit as set by IPART.
6. With the cost of living going up so much now, how can we be expected to manage this increase?
The proposed SRV is not a decision taken lightly.  Council recognises the delicate balance between providing essential services, maintaining infrastructure, and ensuring affordability for our residents. Council offers the Pensioner Rebate Scheme, which financially supports this important group in our community. Council also has a Hardship Policy to accommodate the special needs of those unable to pay their rates in full on time. The increase is proposed to come into effect in July 2024 and staged over a 3-year period, recognising the impact and in an effort to minimise this impact as much as possible whilst ensuring Council’s financial sustainability.
7. What is Council doing to remediate the situation?
Regardless of whether Council resolves to apply for an SRV, Council's Senior Management Team is committed to finding $1 million in savings each year starting from 2024/25. This will be achieved by identifying operational efficiencies. Councillors are also being encouraged to identify possible alternate revenue sources and potential saving opportunities.
8. What do land valuations have to do with my rates?
The NSW Valuer General’s Office is responsible for the valuation of all rateable land in NSW and is revalued every three (3) years. Rateable land within the Griffith LGA was revalued during 2022 and these values were provided to Council. Council calculates rates using the land value determined for your property plus a base amount.
The land revaluation process does not provide any additional rate revenue for Council. The total increase in rate revenue to Council is capped on an annual basis by the Independent Pricing and Regulatory Tribunal (IPART. For the 2023/24 year the rate cap increase is 3.7% above 2022/23 level (ie approx. $700,000).
Changes to land values will impact the amount of rates payable for individual properties but the total increase in rate income received by Council for the year does not exceed the rate cap as determined by IPART.
Whilst we acknowledge that some individual assessments have moved by much greater than the 3.7% rate pegging figure, many have also increased by less and in fact some assessments have reduced in line with new land valuations.
9. What is the alternative to the proposed rate increases?
Without a Special Rate Variation, Council would need to consider reducing the levels of services provided to the community to save costs. Examples of services that may be impacted include the Griffith Regional Aquatic Leisure Centre, Griffith Regional Theatre, Pioneer Park Museum, Griffith Regional Sports Centre and Griffith City Library. In addition, service levels will be reduced. Some examples of these include our roads, parks and gardens, strategic planning and storm water drainage.

READ NEWS AND UPDATES HERE: 
2 June 2023 Council seeks support for propsed SRV
8 June 2023 COG Meeting kicks off community consultation 
22 June 2023 SRV consultation continues 
13 July 2023 Have you had your say on the proposed SRV yet?
25 July 2023 Rates estimator now available 
8 August 2023 Council’s Special Rate Variation Consultation Progress Update
21 August 2023 Time running out for residents to have their say on Council's proposed SRV
1 September 2023 Council's SRV next steps
25 October 2023 Council resolves to proceed with an application for a Special Rate Variation 
14 May 2024 Council Receives Special Rate Variation Determination


For more information on Special Rate Variations visit the IPART website here