Council rates draft: up 1.5% despite surplus

p2343-Eli-MelkyBy KIERAN FINNANE

 

UPDATED 30 May 2017, 9.42am.

 

The Town Council is proposing a rate rise for 2017/18 of 1.5%, a minimum increase for residential properties of $19 pa. For commercial properties the minimum increase is $20 pa.

 

This comes despite what will likely be a healthy surplus at the end of this financial year.

 

Shouldn’t that mean there’s a case for no rate rise at all? Alice Springs News Online put this to outspoken councillor on financial matters, Cr Eli Melky (at right).

 

He says the likelihood of a budget surplus was his hard fought argument to keep the rate rise to “the lowest possible level, keeping us just in front of the CPI.”

 

“I’m pleased everyone came on board with this.”

 

Cr Jade Kudrenko, who at the last council committees meeting also expressed her concern regarding the size of council’s surplus,  says the rise was rigorously debated and the surplus was the reason for it being kept to 1.5%, “the lowest increase in the last six budgets”.

 

Although the final surplus will be nowhere near April’s year to date figure of $12m, Cr Melky says it will be substantial, as there’s no way before the end of the financial year to spend the budgeted employment costs, and all the materials and labour costs that haven’t been incurred.

 

The amount will be carried forward into council’s reserves for the coming year but the figure is not reflected in the draft municipal plan, he says. (The exact amount will not be known until the auditors have signed off on council’s accounts, some time after September.)

 

Cr Kudrenko says that council has had a surplus at the end of each of the last six financial years, allowing the build up of reserves.  This strong financial position is necessary to make provision for future expenses such as the eventual relocation of the landfill.

 

This point was also emphasised at last night’s meeting by Mayor Damien Ryan, who spoke to key aspects of the budget, using a powerpoint presentation, for the benefit of media representatives and the public. Those attending included Braitling MLA Dale Wakefield and Araluen MLA Robyn Lambley.

 

p2446 ASTC budget 420A new reserve of $162,000 is being established for the replacement of plant and equipment, in addition to a separate amount for future purchases of plant and equipment at the Regional Waste Management Facility (RWMF).

 

Left: 72% of council’s revenue come from rates and other charges; MLA Dale Wakefield taking note. 

 

A significant reserve of $3.5m has been built up to go towards a future landfill site. Mayor Ryan said council has done “a lot of work to get the longest life we can” out of the current site but eventually a new landfill will be required and council will also be liable for the ongoing management of the present landfill for some 40 years into the future.

 

“We couldn’t do all this in one year off such a small rates base,” he said.

 

Some of the future capital infrastructure reserve of $5.7m  will be used for the construction of a hazardous waste management facility at the RWMF, for which council has also received a grant of $800,000 from the NT Government.

 

$2.3m is reserved for redevelopment of the CBD.  There was no detail on how this money will be spent but the monthly Mayoral report revealed that he had met during the last month with Uniting Church representatives, described as a presentation on “The Meeting Place”. This is the project that would see the church and council go into partnership in the development of a residential and commercial complex as well as large open space (The Meeting Place)  on land behind Flynn Church and taking in part of the council-owned Hartley Street carpark.

 

Appeals to the NT Government to put money into the project, which would also require a commercial loan, have been previously unsuccessful. However now, as Mayor Ryan said, there are promised funds ($20m) from the NT Government for CBD redevelopment.

 

Council’s healthy capital infrastructure reserve was defended last night from a proposal by Cr Melky to pay off council’s only debt, which is the loan on the Civic Centre.

 

The fixed term loan was for $5m at 6.75% interest, due to be paid out by 2019.  By then council will have paid just under $3m in interest. Most of that is in the past and can’t be undone, but “we can learn from it”, said Cr Melky. He urged council to pay up in full now (a total of $1.263m), to become debt free and to potentially be able to borrow against their freehold asset.

 

However, the final figures on such a move, provided by Director of Finance Dinesh Pillay,  represented a saving of only $17,000.

 

Cr Kudrenko said she could not support drawing down on the reserve for such a meagre saving.  This argument won the support of the other councillors and Cr Melky’s motion lapsed for want of a seconder.

 

The rate increase and other key budget measures were released yesterday under embargo till 6.30pm. The following is drawn from that release.

 

Pensioner rebates are proposed to increase from $47 to $60.

 

Fees at Aquatic and Leisure Centre, the Regional Waste Management Facility, and Public Library will not be increased for the coming financial year. The annual waste charge for properties with a regular weekly waste collection service will go up by $5 for the year.

 

“We understand that the community have begun to feel the impact of tighter economic conditions,” Mayor Damien Ryan says in the release. “Council is focussed on efficiently delivering the services that our community needs.

 

“The draft budget is one that delivers minimum rate increases, drives confidence in our community, and stimulates our economy.”

 

$2.3 million is being held in reserve for the redevelopment of the Central Business District, with council welcoming the Northern Territory Government’s commitment to contribute $20 million to the same end.

 

Council is committing $600,000 to provide lighting at Albrecht Oval, match the NT Government’s commitment.

 

Council is working with the Commonwealth and NT Governments towards establishing a City Deal, under which significant infrastructure investments will be made in Alice Springs. Through City Deals, governments, industry and communities develop collective plans for growth. This requires commitment to actions, investments, reforms and governance. Council will set aside $854,798 toward a City Deals Project Reserve.

 

Further capital and maintenance works in the draft 2017/18 budget include:

$2,985,000 toward parks, gardens and ovals

$1,675,000 toward roads and roads maintenance

$609,000 toward footpaths and cycling tracks

$333,000 reserved to fund solar power initiatives for Council facilities

$100,000 toward public toilet refurbishment

 

 

These measures are in addition to funding for ongoing council services including:

$3,074,000 for Regional Waste Management Facility operations

$1,791,000 for Alice Springs Aquatic and Leisure Centre operations

$921,000 towards Alice Springs Public Library operations

$247,000 toward supporting community events

$159,000 to fund the Healthy Communities program

$102,000 supporting tourism initiatives

$89,000 for grants and ongoing community contributions including Araluen Community Access

Grants, Community Development Grants, Community Assistance Grants and Youth Development Grants

$56,000 to continue the Pop Up Gallery initiative

 

Council welcomes public comment on its draft Municipal Plan for 2017/18, available on council’s website from tomorrow morning, until 19 June.

 

 

 

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11 Comments (starting with the most recent)

NB: If you want to reply to a previous comment, start your comment with this notation: @n where n is the number of the comment you want to reply to.
  1. A Masonn
    Posted June 3, 2017 at 9:21 pm

    Apathy rules. OK.

    View Comment
  2. Cheesed off Alice Springs ratepayer
    Posted June 2, 2017 at 12:21 pm

    Here we go again, there is no need to increase rates by 1.5% considering there is an (unconfirmed) surplus from last year’s budget.
    About time for the Mayor to pack up and leave, as he’s been responsible for the last six years of excessive rises, but funny it’s an election year so now he wants to cut the rises down to get re-elected?
    Also, re the loan for the Civic Centre (Taj Mahal), this was actioned sneakily by the former Mayor prior to an election and should have been re-financed two or three years ago to reduce the interest and loan repayments.
    This would have saved far more than the $17,000 as stated in the article. Don’t forget it’s not the Council’s money, it’s the long suffering ratepayers.
    I urge all voters to take action at the ballot box in August and turf the lot of them out and get some fresh new blood who might actually listen to the people and consult with them for a change and get back to the basic rates, roads and rubbish core values they are supposed to operate in.
    There have been some very capable new candidates put their hands up already.
    What do you think ?

    View Comment
  3. What A Croc
    Posted June 1, 2017 at 11:21 am

    One thing that stands out in councils 16/17 budget is that expenditure on their IT department ($1,559,788) and library ($1,554,108) is more than what they spend on street lighting ($1,073,445), road maintenance ($440,509), footpaths ($715,782), parks and reserves ($1,312,225) or litter control ($859,912)!
    WTF? A real bureaucracy in the making!!

    View Comment
  4. James T Smerk
    Posted May 31, 2017 at 1:06 pm

    Eli can you please wake these people up? I want to hear them justify their decision against what you have said – if that’s even possible.
    Why aren’t they informing us? Secrets breed distrust and that’s what we all have for them.

    View Comment
  5. Michael Dean
    Posted May 31, 2017 at 12:51 pm

    Most financial planners and gurus will always tell you to pay off debt as soon as you can because it will save you money in the long run.
    $17,000 is a reasonable amount of rate payer cash to save I would have thought.

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  6. Evelyne Roullet
    Posted May 31, 2017 at 12:39 pm

    To the Councillors: Maybe with this surplus, you could ask that some footpath / walk paths be maintained a bit better.

    View Comment
  7. Posted May 31, 2017 at 9:34 am

    Arriving to Council on Monday night 29/5, I was quietly confident that I had worked hard enough and presented the facts to elected members as to why we should be able to keep the rate rise to 1.5%. Let me assure you this is much lower than what was being touted originally, and also paying out the loan on the civic centre was a smart thing to do. I have been asking for this over the past 6 years, after all Council has accumulated a large cash amount in reserves from consistent surpluses over the years and expecting another huge surplus again this year.
    However to fall short of having a seconder to the motion to pay out the loan was surprising and a huge letdown. The reason given seemed to be focused on the small $17,000 alleged savings, it was not enough for them. The debate totally ignored the fact that paying out the loan means that we stop making monthly payments to the bank of $44,000 which is $528,000.00 a year. The Loan repayments are allocated for in the current budget for 16/17 and are factored into the next 17/18 , 18/19, 19/20 municipal plan proposed budget as presented Monday night.
    What seemed lost on people was that the rate payer would no longer have to pay these repayments. Let me ask you Mr and Mrs rate payer, isn’t that a good thing? Apparently not, according to this lot. Apparently we are told by the Mayor that we are saving it for a rainy day. What does that mean exactly? A rainy day, is that when times are tough in the town, shops are empty, business is doing it tough, population growth is stagnant, Fed and NT Government funding reduced? Or when the town is being over run by unruly youth and breakins left right and centre, police helpless to do anything about it and a broken Justice system? Hmm…
    Oh wait the other reason given was that the new bunch of elected members may waste the surplus and spend the money. Well well, now we are planning on the basis of a crystal ball approach. Pity that the crystal ball doesn’t show what a great and responsible bunch the new members may be, there is that slim chance you know.

    I can tell you that today I will be reaching for my gum boots and umbrella, because I smell rain and lots of it. Might even build me an Ark.

    View Comment
  8. Local
    Posted May 30, 2017 at 2:48 pm

    Interesting that Ms. Kudrenko said that it was not worth paying off the debt as proposed by Mr Melky, because the saving was only $17000. Only? Wow, so an experienced financial planner trying to save ratepayers, has his idea shot down because it is only $17000. It is simply re-allocation of funds, cost neutral. I wonder what the repairs to the pool have been priced at? Surely saving the $17000 would significantly offset the repair bill for this public asset white elephant. Maybe it could buy some mobility access equipment that is being requested by Physiotherapists.
    Thanks for a common sense idea Eli.

    View Comment
  9. Lachlan
    Posted May 30, 2017 at 11:40 am

    Wouldn’t a 0% increase be lower than a 1.5% increase? If you want to get more life out of the current landfill, why not use our surplus to provide recycling bins for residential properties, you know, the same residential properties you have overcharged for the last six budgets?

    Also, correct me if I’m wrong but I feel like our aquatic centre is really expensive to run. Why does it bleed so much money?

    View Comment
  10. Braedon Earley
    Posted May 30, 2017 at 11:39 am

    No seconder, does that mean don’t want the details published to show a blatant waste of rate payers money?

    View Comment
  11. Greg Latency
    Posted May 29, 2017 at 7:16 pm

    These people forget who they are working for … lowest amount possible my hat …

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