Council argues would be ‘insolvent’ without rise
Willoughby Council is planning to apply for a special rate variation of 15 to 20 per cent as it pursues an ambitious growth agenda in the next decade – despite a forecast $2.7 million deficit.
Council has released its draft operational plan and budget, with plans to spend $68.5 million on capital works, $27.6 million alone on the Willoughby Leisure Centre upgrade.
Like many councils, Willoughby was hit hard by the COVID-19 pandemic, saying it was still recovering from a $20.6 million loss in revenue.
It argues that without a rate rise, proposed for the 2024/5 financial year, there would be a ‘severe deterioration’ in its financial position,’ with cumulative losses over 10 years of $38.3 million. All councils are required by State laws to prepare a 10-year plan.
Mayor Tanya Taylor said its draft long term financial plan outlined council’s response to an ‘unprecedented and volatile economic climate which is challenging its current sound financial position.’
In particular, chief executive officer Debra Just said council would continue to face ‘significant headwinds in the form of inflation and the associated rising costs for materials’.
The report said council’s costs continued to grow at a higher rate than revenue due to the impact of high inflation, with revenue still down $3 million a year from pre-COVID levels, largely due to reduced car parking fees.
For this reason, council wants community feedback on the rate increase, but warns if no increase is applied, its current working capital would be progressively exhausted resulting in insolvency by 2025/26. This is because council still has an obligation to meet State Government benchmarks for asset renewals.
Planned capital works for 2023/4 include the Willoughby Leisure Centre pool upgrade, already commenced and scheduled for completion by July 2024. A $2 million indoor sports complex at Gore Hill is also planned, and a new synthetic turf will be installed at Thomson Oval in Artarmon for $1.4 million.
Rubbish collection will go up by 10 per cent, from $561 to $618, with council saying the increase in residents working from home was one factor in the rise.
“Council is committed to operating in a financially sustainable way to continue to deliver, reprioritise, improve or increase services that benefit the whole community,” Ms Taylor said.
Feedback is open until 15 June, to be considered by council on 26 June.