Ashfield and Marrickville Special Rate Variations

INNER WEST LOCAL COUNCIL SPECIAL RATE VARIATIONS APPROVED

19 May 2015

The Independent Pricing and Regulatory Tribunal (IPART) has approved applications from Ashfield and Marrickville councils to increase general income by more than the rate peg amount of 2.4% from 1 July 2015.

Ashfield Council applied for 4 consecutive increases of 7.5% in 2015-16, 8.2% in 2016-17, 8.9% in 2017-18 and 9.3% in 2018-19, all including the annual rate peg, to be retained permanently in its rates base.

Marrickville Council applied for a permanent increase of 5.4% from 1 July 2015, including the rate peg.

In approving the councils’ applications, IPART has imposed conditions requiring that the additional income be used for the purposes outlined in the applications, and that the councils report to their communities in their annual reports each year until 2024-25 on the outcomes achieved.

Source: Media Release

Ashfield Council

Expenditures to be funded from the special
variation above the rate peg
Table A.1 and Table A.2 show Ashfield Council’s proposed expenditure of the
special variation funds over the next 10 years.
The council will use the special variation revenue above the rate peg of
$46.5 million over 10 years to fund: 8

• loan repayments of $18 million to bring forward the associated redevelopment
• of the Aquatic Centre
• $9.6 million for roads and streetscape
• $1.4 million for traffic facilities
• $1.0 million for stormwater
• $10.0 million for buildings, and
• $5.0 million for parks.

As a condition of IPART’s approval, the council will indicate in its Annual
Reports over the next 10 years how its actual expenditure compares with this

proposed program of expenditure.

Source: Special Variations & Minimum Rates 2015-16

Marrickville Special Rate Variation

IPART’s approval of Marrickville Council’s application for a special variation in 2015-16 is subject to the following conditions:

• The council uses the additional income from the special variation for the purposes of reducing infrastructure backlogs as outlined in the council’s application and listed in Appendix A.
• The council reports in its annual report for 2015-16 to 2024-25 on:– expenditure consistent with the council’s application and listed in Appendix A, and the reasons for any significant differences from the proposed expenditure, and – the outcomes achieved as a result of the actual program of expenditure.
• The council reports in its financial statements from 2015-16 to 2024-25 (currently in Special Schedule 9) on its compliance with the special variation and these conditions.

June 2020 Scenarios in Inner West Council Budget

Scenario 1 outlines the method of delivering business as usual whilst Scenario 2 outlines a method of dealing with the infrastructure renewal backlog.

Scenario 2:

The annual budget includes provisions for operations, maintenance, renewal, new and upgrade expenditure on infrastructure. When renewal funding is inadequate, any unfunded renewal demand is deferred, which
generates a backlog. The existing backlog is reduced by increasing renewal expenditure.

Council identified an infrastructure renewal backlog in its 2018/19 financial reports, estimated to be approximately $142m across its asset portfolio. In order to address this backlog additional funds are
required to be sourced.

The renewal funding planned in Scenario 2 is insufficient to reduce the backlog of deferred renewal demand, therefore a special rates variation of 6.5% would be require to the rate base. This will be sufficient to fund the emergent renewal demand over the coming decade.

Source: Attachment 4 - Long Term Financial Plan 2020-30.pdf via https://yoursay.innerwest.nsw.gov.au/council-strategic-documents-2020-2030