Council adopted the Annual Business Plan and Budget (ABP&B) for 2024/2025, the Long Term Financial Plan (LTFP) for 2025/2034 and the Asset Management Plan (AMP) for 2025/2034 at a special Council meeting held on Tuesday, 25th June 2024.
The Annual Business Plan and Budget outlines the Council's proposed services, projects, objectives and key performance indicators for 2024/2025 and includes an evaluation strategy, assessment policy and annual budget.
City of Mount Gambier Mayor Lynette Martin thanked the community for the feedback received during the consultation process for the proposed 2024/2025 Business Plan and Budget.
“We received 11 written comments via Mount Gambier's Have Your Say website and held two drop-in sessions, one in the afternoon and one in the evening, at the library to engage with residents and help them better understand the process,” Mayor Martin said.
The formal community suggestions were considered at a special council meeting held on Tuesday, June 18, 2024. Three community members made verbal suggestions at the meeting and community members asked questions. Council held a workshop after the June council meeting to consider the feedback received.
Elected members finalised the budget for the impending financial year this week after months of intensive discussions aimed at balancing the council's priorities amid a tough financial climate.
This year’s budget deliberations have been particularly challenging as we struggle to balance our priorities while being mindful of cost of living pressures, meeting community expectations and delivering the services necessary to ensure the Council’s long-term financial sustainability. – Mayor Lynette Martin
“Elected members have engaged in the most vigorous budget discussions I have participated in during my six years as Mayor and I can assure you we have done everything we can to balance the Council’s short-term and long-term financial obligations to create the capacity to deliver what the community expects in 2024/2025.”
To create capacity for the organisation and achieve all financial targets by 2026/2027, there will be a rate increase of 10.13% of general rate revenues (excluding the 1.11% increase; including the increase, the total rate increase is 11.24%). The average residential ratepayer will pay $1,342 (excluding waste disposal charges) in 2024/2025, which equates to an increase of $119 per year, or $4 per week.
“Like everyone in the community, the council is feeling the pressure of rising costs and for several years has sought to minimise the impact of rising costs on ratepayers. Previously we have been able to absorb the impact of growth and set rates below CPI, but we are now unable to continue to absorb the true additional service and waste costs and have no choice but to increase rates,” the Mayor said.
“This is a responsible, strategic budget with a view to creating a great future for Mount Gambier and it's year one towards developing our 2035 vision for Mount Gambier – it's about doing even better at what we already do well and creating the capacity to deliver what our community wants for the future.”
Key impacts and considerations for the 2024/2025 business planning and budget process:
- Council is operating in a deficit. Council's operating deficit for 2024/2025 is $1.7 million. Council has a financial target to achieve a surplus in 2026/2027.
- Asset Management – Council is the custodian of $400 million worth of community assets that require ongoing maintenance. Condition audits and assessments of major asset classes have been carried out throughout the past two financial years, which has resulted in a significant increase in depreciation ($1.1 million more than the adopted LTFP, or 4.83% of the 2024/2025 rate). Council has also seen increases in construction costs which have resulted in increases to the capital works budget and future works programme based on the condition audit.
- Inflation – Over the past few years, Council fees have not kept pace with inflation, with rates falling below the Consumer Price Index (CPI) for the 2023/2024 financial year.
- Growth – Over the past few years, the Council has not increased the budget to reflect the unprecedented growth in our community. Over the past few years, the Council has sought to minimize the impact of increased costs on taxpayers. The Council is currently absorbing as much of that growth as possible.
- Federal government funding is falling – Federal government financial support grants to local governments have been halved over the past 25 years, meaning communities are missing out on billions of dollars in funding and councils are constantly trying to play catch up. Councils are facing workforce shortages, infrastructure challenges and delivery obligations. It's not just Mount Gambier City – all councils across the country are facing similar challenges.
- Capacity building – Councils need additional capacity to provide budgets and LTFPs that deliver the level of services communities expect, and to build the organisational infrastructure that supports efficient and effective service delivery.
- Council's Financial Management Policy Objectives – The policy outlines financial targets for 2026/2027 (in line with Local Government Finance Authority loan terms), operating surplus ratio (a positive operating surplus ratio by 2027) and net financial debt ratio (achieving a target of less than 100% of total operating revenue by 2027). The 2024/2025 budget will ensure these targets are met.
- Project delivery – Council has listened to the community through consultations on strategies such as the Sport, Recreation and Open Space Strategy (SROSS), the Shared Path Master Plan, the CBD Accessibility Audit and the Mount Gambier 2035 Community Vision Project. Council needs the financial capacity to deliver the outcomes highlighted in these strategic plans.
The council vote, recorded in the ABP&B and LTFP meeting minutes, was split 6-1, with Councillors Josh Rina, Jason Vargo, Frank Morello, Max Bruins, Paul Jenner and Sonia Mezineck voting in favour and Councillor Kate Amoroso voting against. Councillor Mark Lovett apologized for being absent from the meeting.
Each councillor was given the opportunity to weigh in on their decision at the council meeting, with Councillor Max Bruins asking local residents to understand the careful balancing act council is making as part of the process.
“The challenge with preparing a budget each year is that no matter what the outcome is or what the tax increase is, the feedback we receive is almost always negative and burdensome. No one enjoys raising taxes, but we have a responsibility to the broader community to manage the city's assets, infrastructure, services and planned growth in a thoughtful and fiscally responsible manner,” said Councilman Bruins.
“The reality is that council costs have risen, just as ordinary household costs have risen. But with 230 kilometres of roads to maintain, footpaths to build and maintain, countless parks to maintain, and the costs of other construction, maintenance, service commitments and resources to facilitate this, our costs have risen, just as ordinary household costs have risen. We cannot avoid being affected by the economic situation and must manage our budget accordingly.”
Councilwoman Sonia Mezinek said this year's budget drafting process was the most difficult of the 10 budget discussions she has participated in during her term as a city elected official.
“Elected members were very conscious of the three-year 6.2% rating decision in the 2023/2024 Budget and the potential community reaction to the proposed changes. We did not want to be seen to be ignoring previous decisions or the potential impact a larger rate increase would have on the community. As a result, we considered and discussed a number of different scenarios to ensure the long-term financial sustainability of the council, maintain service levels and maintenance requirements, meet financial targets in accordance with the Local Government Finance Department loan agreement and explore how we can continue to meet community aspirations through the identified projects,” Councillor Mezineck said.
“The final recommendation on rate increases was a tough decision but a necessary one. Despite past promises, we needed to address the current situation and future impacts. To fail to do so would be a dereliction of our duties and responsibilities as an elected councillor for the City of Mount Gambier.”
Rep. Jason Vargo highlighted the impact of high inflation and the tough economic times in which the Legislature is currently operating.
“We've reached a point where we have to start increasing rates to protect the council's ability to provide the services the community needs,” Councillor Vargo said.
Councilman Frank Morello urged the community to think big, saying he wants the city to be a vibrant, progressive and sustainable place to live where people can live full and meaningful lives.
“Our job as a City Council is to make decisions that support our diverse residents and ensure our city thrives for this generation and, importantly, the next. We may differ on priorities or how much we should invest in certain areas, but that doesn't mean someone is wrong or someone is right — it's simply a difference of opinion or perspective,” said Councillor Morello.
“Yes, we had to reconsider the 6.2% rate increase we predicted last year, but circumstances have changed and so has our thinking. That should and must change. But that doesn't mean we're liars or cheats, incompetent clowns who should be fired, or worse. We've heard it all. It just means we've had to make difficult decisions that will impact some people, particularly those who are already suffering, and that's the sad reality and we deeply regret it.”
“We also know that if we do not invest in all the things that define and shape our city – our services, assets, waste management, parks and gardens, sports facilities, events, arts, culture and heritage – we risk putting our identity at risk and chipping away at the unique things that make us who we are as individuals and as a community. This is a heavy price to pay. Weighing the individual costs against the community benefits is a difficult no-win game, open to interpretation and debate.”
Councilors Paul Jenner and Josh Linag echoed the sentiments of other elected officials, emphasizing the complexity of this year's budget-writing process.
“The budget is based on what is known at the time, and during this year's budget process, lawmakers have carefully considered the affordability and delivery of the budget,” Jenner said.
“Many of us are ratepayers and we don't want to raise our rates, but we're in a situation where we have to and our rates are still below the local and state averages,” said Councilman Josh Linag.
Mount Gambier City's average housing rates have historically and currently been significantly lower than the state's rural average: Council's average housing rates were $1,223 in 2023/2024, compared to the South Australian rural average of $1,725.
Relief options, such as alternative payment plans, are available to taxpayers experiencing financial hardship. For support, contact the Tax Office on 08 8721 2561 or email city@mountgambier.sa.gov.au.
The Waste Handling Charge (WSC), which highlights the cost of providing waste handling services, will increase from $217.70 to $311.00 per property per year in 2024/2025.
“We have heard from the community about the importance of careful waste management and protecting the environment, and the importance of looking after all our assets for the long term. As the community has noted, waste continues to be a key element in Council's planning and delivery. The waste disposal charge has been increased following a review of waste recognition, operating costs and cost estimates for the capital costs of the construction and capping cell at Caroline Landfill,” Councillor Paul Jenner said.
“Waste is a significant cost to the whole community and the WSC will make costs more transparent to the community. The council will continue to talk to residents about the role we all play to reduce waste going to landfill by reducing, recycling and reusing,” CEO Sarah Philpott said.
All elected members present at the meeting voted in favour of the Asset Management Plan 2024/2025.