28 April 2019
Rates : is 2.1% enough?
You might remember that our Mayor campaigned on a rate increase of CPI plus 1%. Council subsequently endorsed this earlier this year. It is my understanding that CPI for the last 12 months was 1.6% so the 2.1% is well within this guideline. My concern is that I have never sat on Council when we have had to borrow quite so much money. At the end on the next financial year our borrowings will be at 70% (of one years rates) and we have set ourselves a maximum of 80%.
We need to borrow money, in particular, to do the necessary replacement and redevelopment of the failing and ailing King William Road. Of the $8 million that we will need to borrow to do this the repayments on the loan are approx $400,000 each year for at least the next 20 years. A 1% rate rise would achieve the necessary amount to repay this loan. My problem with not doing this is that there will be little room in subsequent budgets to undertake new initiatives. Things like the clubrooms for the Millswood Croquet will be in jeopardy until the debt has been substantially paid down. This could be achieved, within the CPI plus 1% if Council chose to add .5% this year and a further .5% next year.