The proposed increase will raise council rate’s base by nine per cent in order to improve the council’s financial standing and increase the budget to spend on infrastructure. 

Council representatives say, however, the proposed variation will only appear as a 4.23 per cent increase on rates the year before, as Lithgow City Council applied a 4.77 increase to the rate base in 2009, which has remained ever since.

As the consent period for Lithgow’s 4.77 per cent special rate variation is expiring in 2019, council will apply to IPART for a changed special rate variation of nine per cent (or a further 4.23 per cent) to be incorporated in the rate base from the 2019/20 business year.

Councillors voted to proceed with the application at the council meeting on Monday, April 23.

“It’s not a nine percent increase, it’s actually going to be a 4.23 per cent increase because we already have the 4.77 per cent special variation that has been in place for the past 10 years,” Mayor Stephen Lesslie said. 

General manager Graeme Faulkner said the increase was proposed in an independent financial report by Morrison Low for two reasons. 

Firstly, the increase would allow council to fulfill the State Government’s ‘Fit for the Future’ benchmarks for financial sustainability, he said. 

Secondly, Mr Faulkner said the increase in general income would allow council to spend more on infrastructure maintenance and improvement. 

“One would hope that, depending on what the council and the community decide, it would be spent to redress some of the back log in road repairs and other infrastructure projects, like providing the Lidsdale community with a footpath to access the service station,” he said.

Mr Faulkner explained the application process for the special variation would take several months, and would necessarily involve community feedback. 

“The application would be subject to feedback from the community, as well as council considering whether residents can afford the increase. 

“We have to ask the community about their views on where the money will be spent.” 

He said that ideally the rate would be applied long-term. 

"SRVs have to be renewed every five years. And how that money would be spent would be monitored and reviewed by IPART and the Office of Local Government.”

In Morrison Low’s report it stated that one reason the council was deemed to be ‘not fit for the future’ was its reliance on SRVs. 

However, Mr Faulkner said it was unlikely Lithgow Council would operate without SRVs, as rate pegs have remained consistently low. 

“Last year it was just 1.8 per cent and of course that doesn’t keep up with CPIs (Consumer Price Index). Rate pegging hurts local government in NSW, and is restricting the renewal of infrastructure that is very, very decayed,” he said. 

“Special variations are not an unknown thing.”

IPART approved six SRV applications from NSW councils last year, the greatest increase of which was a temporary 13.2 per cent increase at Shoalhaven Council for one year only.

Thirteen councils have applied for SRVs for the coming business year. 

Lithgow ratepayers will see a 2.3 per cent rise in rates in the 2018/19 business year, reflecting IPART’s current rate peg.

The council’s draft operational plan is on public exhibition. An information session will be held on the operational plan at Cook Street Plaza on Thursday, May 3, between 11.30am-2.30pm.

This story was edited on April 30^th to reflect the fact that council’s current 4.77 per cent SRV was applied once in 2009 and has remained in the base rate since then.

A 4.77 per cent increase is not applied again to rates each year. Hence, the 2018/19 rates will increase only 2.3 per cent on last year’s, reflecting the rate peg.