Kiama Municipal Council will seek the feedback of the local community before finalising how it will resolve its financial situation in line with the requirements of the NSW Government's Performance Improvement Order (PIO).
Council voted on Tuesday night to adopt the Revenue Improvement Strategy and Strategic Asset Review, which were recently developed as part of the varied PIO issued on 30 June.
The documents were placed on public exhibition from 18 September to 16 October and community feedback indicated strong preference for visitor-funded revenue initiatives, operational efficiencies and alternative income sources.
The Revenue Improvement Strategy, which establishes a sustainable framework for growing and diversifying revenue over the next three years, recommends the introduction of paid parking for non-residents, an increase of Council's fees and charges, and a Special Rate Variation (SRV) of up to 20% as potential revenue opportunities.
The Strategic Asset Review identifies property optimisation, such as commercialisation of rates for our assets and Public-Private Partnerships or property sales for Council's catalyst sites like Havilah Place and the administration building.
An SRV of 20% equates to a $4 million annual revenue boost. For a residential ratepayer currently paying rates of $2000, this would mean an increase of $400.
Kiama Mayor Cameron McDonald said the Councillors would consider all options before finalising a plan to address Council's ongoing structural deficit.
"We will be looking at every avenue," he said.
"The option of an SRV will be presented to the community as one of the choices we have and depending on our financial modelling into the future, we may go down that pathway if the community supports it.
"We're just starting the process and we'll have the community with us along the way to see how that process is determined."
Mayor McDonald added the community was vocal earlier in the year in opposing reductions to services when they were floated in the draft budget.
"The Performance Improvement Order clearly states that we can't consider cutting staff until we have explored all other options," he said.
"There are a limited number of choices available to us as Councillors.
"We don't want to end up in a situation where we have to pay a state government-appointed financial advisor (again) or an administrator because then decisions will be taken out of the hands of us as Council and the community, and when we have already come so far and we know what the extent, cause and long-term problems are.
"We have good monthly accounting and a clean set of audited financial statements but we're faced with a structural deficit which simply means that if we keep the status quo, we continue spending more money than we bring in every year into the future.
"We've done more with less for the past four years. We have found tens of millions of dollars of savings every year by holding back on filling roles when staff members have left Council or by being more efficient and running our services and staffing well.
"We've slowed expenditure to the bare minimum. Our community knows that we've stripped our finances right back already. We simply have to get on with the job of finding a workable long-term solution."
If Council adopts an SRV, it would address the $3.8m deficit, which is one of the remaining requirements of the PIO.
Council has resolved to begin the community consultation process on the possibility of introducing an SRV to decide whether an application will be submitted to the Independent Pricing and Regulatory Tribunal (IPART) in February.
As part of the process, Council will need to demonstrate that it meets the IPART criteria, which includes:
The need for, and purpose of, a different revenue path for the council's General Fund (as requested through the special variation) is clearly articulated and identified in the council's IP&R documents.
Evidence that the community is aware of the need for and extent of a rate rise.
The impact on affected ratepayers must be reasonable.
The relevant IP&R documents must be exhibited (where required), approved and adopted by the council before it applies to IPART for a special variation to its general income.
The IP&R documents or the council's application must explain and quantify the productivity improvements and cost containment strategies the council has realised in past years and plans to realise over the proposed special variation period.
Any other matter that IPART considers relevant. The criteria for all types of special variation are the same. However, the magnitude or extent of evidence required for assessment of the criteria is a matter for IPART.
IPART would then undertake community consultation before the finalisation of Council's 2027-2028 budget in June.
Council will also investigate the feasibility of a paid parking scheme, following the Pay Parking Guidelines legislative framework implemented by Transport for NSW.
Initial conservative modelling indicates that Kiama would generate over $1 million of profit annually from paid parking.
Council will prepare a Parking Strategy, including a paid parking feasibility study, that will be placed on public exhibition before being considered for adoption within the next 24 months.
