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$400 rates hike plan for Newcastle

IT’S the big sting that Newcastle council warned was coming and was unavoidable.
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Despite recording a major turnaround in its finances over the past year, the council will next week take the covers off draft plans to finish the job – lifting the city’s average residential rates bill by almost $400 a year by 2020.

‘‘We know that in some places this will create some pain,’’ the council’s general manager Ken Gouldthorp said.

‘‘We have done the hard yards [internally] to address the council’s cost base and productivity – more than any other council that I know of – but to get ourselves over the line, we need the community’s assistance.’’

Without the rates hike, the council would remain stuck in a financial black hole and on track to be insolvent in two years, he said.

The council will formally table its draft financial rescue mission on Tuesday with a 300-page report on its current finances and a five-year plan for rates and charges that will start from July 1 next year.

Among the key proposals:

● residential rates will rise 6.8per cent in 2015-16 (including the state-determined cap), 6.8per cent in 2016-17, 6.6per cent in 2017-18, 6.5per cent in 2018-19 and the same in 2019-20 before returning to an estimated cap of 3.2per cent in 2020-21;

● service delivery will remain much the same as it is now;

● other fees and charges will rise only marginally in line with inflation; while

● parking meter fees, despite being slated for a massive increase, will remain mostly stagnant.

The proposed rise means the average residential rate in Newcastle will climb to $319 more a year between 2015 and 2020. With existing and approved rises taken into account, the average rates bill rise by $457 between now and 2021.

While the rise is steep, it is less than was feared in some quarters and substantially less than those already approved in neighbouring Lake Macquarie and Maitland.

Lord mayor Jeff McCloy said Newcastle ‘‘is at a critical point in its transformation’’ and the tough decisions needed to be made to secure the city’s future.

He and Mr Gouldthorp said dipping into the pockets of ratepayers is ‘‘always difficult and the easy way out for a lot of councils’’, but was ‘‘a last resort’’ for Newcastle.

‘‘Cost shifting and rate capping from state and federal governments has hurt us badly – the increases in award wages alone are going up faster than the rate increases.

‘‘This [planned increase] is a pain that we need to accept because the alternative is to cut more services.’’

The council’s latest financial figures show it has made a significant turnaround, fuelled largely by decisions to cut expenditure by 10per cent and lay off close to 100 staff.

The staff reduction was planned to happen over two years but was almost completed in three months.

‘‘We had a job to do,’’ Cr McCloy said. ‘‘You can take poison slowly or you can take it quick.’’

The council entered the current financial year with a forecast deficit of $29.9million but it appears certain the deficit will be less than $20million.

Its forecast deficit for 2014-15 is $11.9million. While it is expecting its funding to be in surplus in 2015-16, a year earlier than expected, it is also hoping the bottom line of its entire operations budget hits surplus in 2018-19.

The draft five-year plan will go before the elected council on Tuesday night where a decision to put it on public exhibition is expected. Once on exhibition, the community will have 28 days to comment on the plan.

By JASON GORDON

NEWCASTLE council has moved quickly to hose down fears the cost of on-street parking in the city was about to skyrocket to $6 an hour.

The council’s draft schedule for proposed fees and charges, obtained by the Newcastle Herald, shows the cost of parking in any ticketed area in the city will rise from a maximum of $4 an hour to a maximum of $6 an hour from July 1, 2015.

But council general manager Ken Gouldthorp has promised ‘‘it won’t happen’’.

‘‘I don’t know how that got in there, but it shouldn’t be in there,’’ he said. ‘‘I wasn’t aware that figure was in there – it is not council’s intention to proceed with that.’’

Quizzed further, he revealed somewhat better news for city workers and shoppers.

‘‘The parking fees are largely where we want them to be,’’ he said.

‘‘Actually, we’re in the process of doing a parking study with Newcastle Now to come up with a better parking fee structure – I think we’re currently overcharging in some areas we’ve been looking at.

‘‘We’re looking at an overall management approach to parking and it [will be completed] this financial year.’’

Will parking anywhere cost $6 an hour? ‘‘Definitely not,’’ he said. ‘‘Not happening.’’

Despite moves to raise residential rates, the council’s fees and charges will remain fairly stagnant over the same five-year period and will be kept largely in line with inflation.

The full draft fee schedule will be tabled at Tuesday’s council meeting with a 28-day public exhibition period likely to follow in the coming weeks.

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