Inverell council general manager Paul Henry said the rate rise was necessary to maintain roads sufficiently.
INVERELL is in the black, but rates will rise to keep roads in order.
Inverell Shire Council reported a $5.5 million profit for 2014-15, 4.7 million more than predicted in the 2015 budget.
However, the three-year indexation freeze of the federal Financial Assistance Grants (FAGS) will contribute to a 14 per cent rate rise for Inverell residents over three to four years.
Council will apply for the rate rise later this year to begin during the 2017-18 financial year at the earliest to meet benchmarks under the NSW Fit for the Future (FFF) program.
The Australian government announced the FAGS freeze in the 2014 budget.
The grants are critical to road maintenance, and provide untied funding to local government environment, health, infrastructure, recreation and employment projects.
Council began planning to meet the FFF benchmarks of generational sustainability, scale and capacity, effective infrastructure and service management in January, 2014.
Inverell council general manager Paul Henry said council strategized to keep the road maintenance backlog in check, while dealing with the grants indexation and meeting FFF obligations.
Mr Henry said, though unappealing, the rate rise was necessary “to ensure sufficient funds are spent on maintaining roads to ensure they are in satisfactory condition”.
“Which is to go for a 14 per cent rate increase over three years, and what that will do is generate enough income so as that we can spend sufficient money on maintaining our road network so that the backlog doesn’t rear its head again,” he said.
Additionally, Mr Henry said council decided to borrow for capital projects rather than draw from long-term reserves.
“And what we’ll do, we’ll take money out of those reserves and use them to pay the loan repayments so as that it doesn’t impact our operating results,” Mr Henry said.
“We’re going to take money out of reserves and spend on addressing the backlog in our roadwork so we’ll reduce that down.”
Inverell Shire completed the financial year with a 15 per cent growth in total assets, a total equity increase of $83.6 million from the 2013-14 financial year.
Council recorded $11.8 million in total liabilities, up $1.98 million over last year.
This story Administrator ready to work first appeared on Nanjing Night Net.