Another $263,000 will need to be found from Cootamundra-Gundagai Regional Council’s (CGRC) budget after an application to continue a special rate variation was rejected.
In 2008, a 12.89 per cent special rate increase was approved for 10 years to cover the former Gundagai Shire Council.
On June 30, the variation will come to an end and CGRC had asked for it to continue.
In a letter NSW Minister for Local Government Gabrielle Upton rejected the request and said the government required a new council “to maintain the rates path that applied to former council areas”.
Mayor Abb McAlister said due to the merger – rates couldn’t be raised past the rate peg, which for the next financial year is 2.3 per cent.
Cr McAlister said the 2.3 per cent increase wouldn’t cover increases for running costs, “like electricity for swimming pools, street lights and other services.”
“We’re behind the eight-ball because we’ve merging two organisations and then also due to the special rate variation rejection,” he said.
He said the original rate variation was to help cover maintenance costs.
It will mean Gundagai residents will see their rates fall, however Cootamundra residents are likely to pick up the tab because services around the entire area will need to be examined for savings.
Cr McAlister estimated not continuing the special rate variation would cost at least $1 million over four years.
He argues that continuing the special rate variation isn’t an “increase” as it’s already been in place for 10 years.
CGRC staff estimate the loss will see roads miss out on maintenance work and fewer roads receive a bitumen seal.
Cr McAlister said councillors would be taking a closer look at the budget ahead to determine where the savings would have to be made.
Cr McAlister describes it as an “impossible situation” and means councillors are forced to decide between vital maintenance and providing services.
“We would like to think [the state government] appreciate what we’re going to have to adjust in our budget,” he said.
“Perhaps the state government can see its way to approving some of our grants we applied for.”
Cr McAlister said revenue from council rates only covered around 40 per cent of expenses and unlike city councils, there weren’t other revenue streams.
“If you had to charge ratepayers 100 per cent of expenses rates would have to at least double,” he said.
“We rely on special rate variations and grants.”