PROPOSALS for rate relief from former South Gippsland Shire councillors threaten the financial health of the council, according to the municipality’s acting finance manager.
Ex-councillors Don Hill and Matt Sherry have launched separate change.org petitions in recent weeks.
Mr Hill’s petition called for an $800 refund on all 2020/21 rate notices, arguing the cost to this year’s budget would be a one-off charge of between $10 million and $16 million.
“Since the normal rate levels are not changed by this one-off refund there is no flow on effect to future years,” he said.
Mr Hill also argued last year’s budget approved additional expenditure of $48 million for no defined projects and “therefore, $16 million can be returned with no loss of services or cuts to existing services”.
“Reductions in expenditure without service delivery cuts could be made by removing some of the $30 million allocated last year for un-allocated and unspecified future capital expenditure,” Mr Hill said.
South Gippsland Shire Council acting finance manager Allan Williams agreed with the $10 million to $16 million cost of Mr Hill’s proposal but said council was “unsure where Mr Hill believes an additional $48 million of expenditure has been added to the budget in 2019/20”.
Mr Williams said the budgeted expenditure was actually a decrease of $4.63 million from forecast expenditure of the previous year, 2018/19.
He also categorically rejected Mr Hill’s claim that money was on hand to fund the $800 rate refund proposal with no loss of service or cuts to existing services.
“This is simply not true,” Mr Williams said.
“Spending a further $16 million during the year (or reducing revenue by $16 million) would not only deplete council’s entire cash reserves, but it would in fact put council into a negative cash balance.
“It has taken council some 15 years of careful financial management to get into the current responsible and sustainable financial position that would be devastated by this proposal.”
Mr Williams said the best way council could serve the South Gippsland community was to keep the local economy moving through reinvestment which “keeps the region growing and benefits everyone both now and in the long term”.
An earlier petition started by Mr Sherry called for a zero per cent rate rise instead of the two per cent rise proposed in the draft council budget.
Mr Williams previously said a zero per cent rate rise would have a cumulative cost of $22.4 million over 15 years.
A two per cent rate rise would see an average increase of $40.58 per household. The actual amount would be higher for properties valued above the average and lower for those valued less than the shire average.
Council’s proposed 2020/21 budget has been released for comment. Public submissions close on Thursday, May 28 and the administrators will vote on the budget at the ordinary council meeting on Wednesday, June 24.