In a document posted on its website last night “Council’s plan for our healthy future”, the council says the annual rises could be costly for the careers of some aldermen.

“The first thing to note is that these rates increases are not something either elected member (Aldermen) or officers would ideally want to be in place,” the council’s document says.

“The decision is often made at the sacrifice of votes or future career, but it is out of a sense of responsibility and leadership that the decision was made to do this.

“We would have much preferred to keep the rates low and keep everyone happy.

“Council is here for our town’s future, not necessarily to be popular, but to do the right thing – which is what we believe leaders should do.

“Council have committed to a Master Plan and 10 year financial plan that will achieve all the above community enrichment goals and to reduce rates to a lower level over this time. At the same time we are trying to build a future that will be sustainable and enriching for us all.”

The document appears to be responding to a social media storm which followed the leaking of documents recently to the Katherine Times detailing a succession of rate rises.

A resident came to the Katherine Times with the documents saying he was alarmed to discover Katherine Town Council is holding talks on more rate rises.

For three years Katherine has had a succession of nine per cent rises followed by 7.5 per cent this year.

According to this latest document, council is projecting the rate rises necessary modeled on likely outcomes for the replacement of the town’s rubbish tip, project to cost about $40 million.

The “number one” scenario, proposing they would need to find the money within eight years, continues the recent trend of high rate rises.

It lists two more years at 7.5 per cent, followed by five years at 6.5 per cent increases in each year and then three years of five per cent rises.

The resident said he was stunned to learn of plans for hefty rate rises to continue.

Rate bills arrived in many Katherine letterboxes last week for the latest 7.5 per cent rise.

In a formal response to the Katherine Times on the leaked documents, council also responded late yesterday.

Council’s chief operations officer Claire Johansson said council’s long term financial plan follows best practice in integrated asset management and overall council planning.

Ms Johansson’s full response follows.

This active management of infrastructure assets involves projecting the cost of service delivery and planning the maintenance of council facilities. This approach developed from Council’s three pillars approach to financial sustainability:

Pillar 1:    Maximise efficiency and effective savings. 

Example: The financial cost of streetlights has been handed over to council, with Operational costs funded from rates. Instead of passing on the maintenance costs of streetlights through rates increases, Council installed LED lighting to gain savings in power costs.

Pillar 2:    Leverage funding grants to supplement Council projects. 

Example: Council has been proactive in sourcing alternative funds of $10m to avoid greater increases in rates.

Pillar 3:    Reduce operating and maintenance costs of facilities.

Example: Council is currently undertaking major rehabilitation of the sportsgrounds and showgrounds using grant funding rather than rates revenue.

Example: Council is addressing major road reconstruction costs as alternative funding sources are obtained.

Council has adopted the view that intergenerational equity requires existing users to pay for their asset consumption, rather than passing their costs on to future generations. This socially responsible approach requires strong leadership from council and an understanding community. It needs to take into account the full cost of each asset’s lifecycle. Council has assets of $146m, which need to be replaced as they age and deteriorate.

Council is required by the Local Government Act to operate a surplus budget, in order to put aside $2.7m annually in reserve to meet the costs of the future renewal and upgrade of assets.

The impact on council's cash flow depends on which assets need to be replaced the most.

Council's long term financial planning attempts to find a balance between meeting current service demand and ensuring the capacity to deliver services into the future.

Council officers are constantly looking for efficiencies in our operations and seeking feedback from the community to foster a value for money approach.

There are a number of major expenses in the next decade, including the closure of the existing waste management facility ($20m) an alternative waste management facility/methodology, renewal of sportsgrounds and showgrounds, and revitalisation of the CBD.

However, most assets are aged and in need of upgrade. The proposed increase in rates is necessary to continue moving into a better position to sustain all assets.

Yet, it will be a very gradual process given the condition of council infrastructure.

Even so, council has actively minimised the burden of rate rises to the community.

Council has worked in partnership with the NT Government to source grant funding of $10m to enable an upgrade of the sportsground, showground, and the CBD.

The cost of the waste management facility is yet to attract a grant.

Yet, the work of council has significantly reduced the reliance on rates revenue to maintain important assets and provide services to the community.

Prior to 2015, council did not have a long term financial plan or asset management plan.

This resulted in aging facilities and a backlog of infrastructure works, without any viable financial means to address them.

The first 10 year Long Term Financial Plan was presented at an open Council meeting on 28 April 2015, as part of the Annual Municipal Plan to commence in the 2015/16 financial year.

The long term financial plan is regularly reviewed and updated, to reflect community priorities, as well as attend to the deterioration of assets.  Example: The draft 2019 -2028 long term financial plan was recently amended to include a public toilets strategy, to reflect the community's priorities.

The updated long term financial plan is circulated to the public and elected members, before being adopted at an open council meeting.

There is no attempt to hide the council's long term financial planning. That is why it is publicly available on council’s website and included in the Annual Municipal Plan.