Subiaco ratepayers facing rates hike to reduce impact of City of Perth Act

CITY of Subiaco council will vote next month on a proposal to raise rates by 8.7 per cent in the 2016-17 budget to help reduce the impact of the City of Perth Act.

The City is set to lose $43 million over the next 10 years because of the Act, which comes into effect on July 1.

A 2.4 per cent rise is already forecast in the budget, with an additional 6.2 per cent rise proposed to cover a revenue shortfall caused by the transition.

The City has asked for financial assistance from the City of Perth, whose rates will only rise 1.6 per cent in the 2016-17 financial year, to help cover the deficit.

However, while City of Perth chief executive Martin Mileham said both councils were negotiating financials, he did not believe it was fair on City of Perth ratepayers.

“There is no reason, however, under the Guiding Principals for District Boundary Adjustments that would be fair to the former ratepayers of Subiaco and the current ratepayers of the City of Perth, that the City of Perth should pay monies to the City of Subiaco,” he said.

“Other than for bona-fide redundancies and in repayment of loans attributable to actual assets that will transfer to the City of Perth,” he said.

Councillors met at a special council meeting on Tuesday night to discuss the rate rise, but opted to defer the decision.

Minister for Local Government Tony Simpson said he failed to see the link between this year’s 8 per cent proposed increase and the City of Perth Act.

“According to the data on the State Government’s MyCouncil website, the City of Subiaco’s total rates revenue has increased on average by 8 per cent annually over the last three years to $21.6 million in 2014-15,” he said.

“Ratepayers may also be feeling the pinch with a 12 per cent increase in fees and charges – including parking fees and fines. Considering these year-on-year increases, I fail to see the link between this year’s 8 per cent proposed increase and the City of Perth Act.”

Mr Simpson said he was disappointed City of Subiaco was trying to seek money from City of Perth.

“I find the City of Subiaco’s claims about their tough economic position extraordinary when the MyCouncil website shows the City holds more than $31million in cash reserves alone; an increase of 32 per cent from last year. This is in addition to their extensive investment portfolio,” he said.

“I find it very disappointing that the City of Subiaco is not looking for efficiencies within their own administration and instead using the City of Perth Act as an excuse to slug their residents with an excessive rate increase well above the latest WA consumer price index of 1.1 per cent.”

However, City of Subiaco chief executive Don Burnett said the minister’s comments were incorrect.

“The information on the MyCouncil page about the City of Subiaco may show an average rate increase over the last three years of 8 per cent, however this is not the actual rate increase passed on to ratepayers,” he said.

“For Subiaco, the actual rate increase for 2013-14 was 6.25 per cent, 2014-15 5.5 per cent and 2015-16 2.96 per cent, giving the average rate increase to ratepayers of 4.9 per cent for the last three years.”

City of Subiaco Mayor Heather Henderson said the City of Perth Act had left the City in a tough financial position.

“The Minister seems intent on defending the flawed City of Perth Act, which clearly leaves the City of Subiaco with a significant financial black hole from July 1,” she said.

“Council has already cut $1 million from it 2016-17 draft budget, including making redundant 21.5 FTE positions, which is a saving of approximately $2 million from its wages bill. The City is looking at all avenues to further close the $1.3 million gap that is a direct result of the City of Perth Act.”

Shadow Minister for Local Government David Templeman said he believed the State Government should offer compensation to the City of Subiaco.

“This is why we attempted to have the City of Perth Act given to an Upper House Committee, to clarify the consequences of the transition,” he said.

“The State Government should look at compensation and re-examining the implications this is going to have on the City of Subiaco and ratepayers.”