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Council unveils “future-proofing” plans at a cost to residents

Friday, 8th May, 2015

By By Andrew Robertson

City Council says it’s on track to achieve a break-even budget in five years, as it yesterday revealed plans to continue to shift more mine rates over to residents.

One per cent of mine rates would be re-distributed to residential ratepayers every year for the next eight under a proposal going to councillors next week to cap mine rates at 10 per cent of total rate income. 

Council’s General manager Therese Manns said yesterday the gradual rate shifting - which would be on top of annual rate increases - was about “future-proofing” the city against unforeseen events, such as a sudden mine closure. 

“We do think it’s affordable...I guess that’s an insurance for the future over what could happen if we didn’t have that (mine rate) income coming in.”

Council has already shifted eight per cent of mine rates over to business and residential ratepayers in the last two years in an effort to reduce its reliance on the mines. 

Ms Manns said the amount of rates Broken Hill levied on the mines also continued to be much higher than other NSW mining councils, and needed to be reduced. 

“But as a community it’s all about future-proofing, so we need to ensure that we don’t have the reliance that we currently have on the mines and to address that we’ll be looking at a strategy over eight years to reduce that mining reliance. 

“Because if the mines did close at some point the community’s not going to be able to be in a position to afford a significant increase in rates at that time and we want to avoid that.”

Council yesterday also released its draft operational plan for 2015/16 which shows a budgeted deficit of $3.3 million - a 44 per cent decrease on the previous year’s budget deficit of $7.6m.

Ms Manns said in the last 12 months the council had managed to achieve around $1.5 million in so-called productivity savings on the back of a major workforce restructure.

She told media at a briefing that the savings were greater than anticipated, and the council was on target to achieve a break-even deficit by 2020, five years ahead of the original plan. 

That means it will not be seeking to increase rates above the 2.4 per cent rate peg limit this coming financial year, as had been flagged last year, instead waiting until 2016/17 to introduce the first of its planned above-rate peg rises.

Ms Manns said the number of above-rate peg rises anticipated in the future had also been reduced following the past year’s better-than-expected performance. 

“When you look our long-term financial plan we’re now in a position where we will break even five years ahead of what we had planned for last year, and certainly any rate increases above rate peg have dropped from a nine-year period to a four-year period,” she said.

“Last year ... we went out and said we were going to become more efficient and effective before we started talking about rate increases above rate pegging and that’s exactly what we’re doing.”

Ms Manns said there were no plans for more job cuts following last year’s restructure, which saw the loss of dozens of jobs across council and sparked industrial action by employees.

“There should be no more major restructuring, I wouldn’t imagine, in the next 10 years.” 

However, assets will be a key focus, according to Ms Manns, who said Council could not afford to maintain and renew the $370 million worth of infrastructure it owns.  

“Council and community really need to look where we would like to see our facilities in the next 20 years and how we get to that point,” she said.

The draft operational plan and long term financial plan will be discussed at an extraordinary meeting of Council next Wednesday. 

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