Long Term Financial Plan

One key element in the suite of documents is the draft Long Term Financial Plan (LTFP). The Plan includes projected income and expenditure and cash flow statements for the ten years to 2031/32. A key aim of the Plan is to bring Council’s operating budget deficit back into balance over time. The Plan includes four financial scenarios relating to how Council can secure increased annual income through land rates to eliminate its operating deficits:

Scenario One: An annual ordinary rate increase from FY 2023/24 to FY 2031/32 in line with the annual IPART approved rate peg, assumed to be 2.3%;

Scenario Two: An annual ordinary rate increase from FY 2023/24 of 9.347% each year for 8 years;

Scenario Three: A one off ordinary rate increase of 18.4% in FY 2023/24, followed by annual rate increases in line with the approved IPART annual rate peg;

Scenario Four: A 5% special rate increase each year over the 8 year period commencing in FY 2023/24.

To aid the community in being able to see the impacts of each of these different scenarios, we have created the below tables. These tables use sample land values to show what the underlying impact of the percentage increases would be.

It is important to note that there are a number of assumptions made and caveats with these tables and that they are indicative only. It should not be assumed that these amounts will be the exact amounts of your rates in any given year as the yearly calculation of rates have a number of variables.

Assumptions/caveats are:

1. The increase for each scenario is based on the percentage increase to the base and ad valorem (land value portion) rates;

2. There will new land valuations made by the Valuer General for rates in 2023/24, 2026/27 and 2029/30 financial years. There is no way to calculate what an individual property's land value will be in these years or the following years. Each property will receive notification of the land value for the above financial years some time at the end of the previous year. Rates for the consecutive three years will be based on those new valuations;

3. These calculations do not take into account the supplementary land values made by the Valuer General throughout the financial years. These supplementary valuations affect those properties that have been bought/sold throughout the financial year before the year the rates are payable. Supplementary valuations also provide an increase to Councils overall total ordinary rate revenue and this has not been factored into the calculations;

4. These calculations do not take into account any increase, or decrease, to the number of rateable properties within the local government area. If the number of rateable properties increase, the amount of the base rate and ad valorem will decrease; if the number of rateable properties decrease (can occur if properties are consolidated/merged), the amount of the base rate and ad valorem will increase;

5. These calculations only work if Council continue to use the current method to calculate rates. If they change rate categories to add in more sub-categories, these calculations do not work. A change also means that an individual is unable to calculate what their rates may be in the future, or even for the next year following a land valuation.

Calculating ordinary rates payable per property

Ordinary rates are calculated in the following way:

Ordinary Rates = Base Rate ($) + (Land Value ($) x Ad Valorem (cents in the dollar)

So for the current financial year, as an example using a land value of $150,000, the calculation is:

Ordinary Rates = Base Rate ($475) + ( Land Value ($150,000) x Ad Valorem (00.33568)

Ordinary Rates = $978.52

How to read the tables below

Along the side of each table for the four different scenarios is the financial year. The Long Term Financial Plan is a plan for the next 10 years, through to 2031/32. Also included in each table are the rates for 2021/22 (this financial year) and rates for 2022/23 (next financial year).

The amounts included the tables under the heading of "Ordinary Rates" (columns two, three and four) are the base rate (the amount each property pays as a flat amount) and the ad valorem. The ad valorem is the amount that is payable calculated from the individual rateable property. The land value is set by the NSW Valuer General.

On the right side of the tables are the sample land values (columns four through thirteen). These land values cover off on the majority of the rateable properties within the LGA. If your property has a land value higher than what is included in the table, use the calculation above to work out what your rates would be under each scenario by using the base rate and ad valorem amounts from each of the tables.

The three rows at the bottom of each table provide the variance between next financial year (2022/23) and the final year of the Long Term Financial Plan. Also provided is the increased amount per week (annual amount divided by 52). The percentage increase is based on the increase between 2021/22 and 2031/32.