Dear Minister Hoenig, 

 

Opposition to Northern Beaches Council Proposed Rate Increase 

 

I am writing to express my deep concern over the Northern Beaches Council's recent decision on January 28, 2025, to approve a submission to IPART proposing a rate increase of 39.6% over three years. This proposal, which passed narrowly with 8 votes to 7, appears entirely disconnected from the financial realities facing local residents and businesses. I represent almost 2,500 people that have joined my group - the Northern Beaches People's Voice.

 

This decision - taken against the wishes of ratepayers who participated in a costly $170,000 survey rejecting the increase above the ‘peg rate’ - highlights a lack of regard for community sentiment. At a time when households are already burdened by rising cost of living pressures and escalating interest rates, such a substantial rate hike is unwarranted and deeply insensitive to the financial struggles faced by many in our community. 

 

Council should maintain expenditure within the rate peg. If costs grow in excess of the rate peg, Councils are supposed to seek a higher allowed increase - a higher ‘peg’ - in the following year. Requesting increases above the ‘peg’ indicates a failure of Council to ‘live within their means’. 

 

The survey was sent in late November, with many residents and businesses preoccupied by the upcoming Christmas period. It included a QR code to ‘have your say’ – a technology that many, especially older community members, do not know how to use. Despite this, approximately 6,000 responded and as stated previously, voted for no rate increase above the peg rate. 

 

Despite the survey results and the clear opinions of those who were able to attend the Council meeting on 28 January 2025, the Council have pushed for a 39.6% increase.

 

Further compounding this issue is the Council’s questionable use of resources in recent years. Residents have borne witness to unnecessary or poorly executed projects such as the installation of 3D footpaths, misaligned gates, and substandard roadworks in Avalon that have required multiple revisions, each at a substantial cost. There are a multitude of examples of substandard or unnecessary projects, and wasteful spending.

 

Equally concerning is the Council’s resistance to implementing internal cost-saving measures. Despite reportedly high levels of staff remuneration, including significant salaries for the CEO and other management positions, they fail to adequately address inefficiencies or explore avenues for cutting costs. 

 

The Northern Beaches Council reports an expenditure of $25m for 111 managers (therefore an average of over $225,000 per person) and $170M in staff salaries. In addition, they have approved a 4.5% pay rise and a six figure ‘awards’ allocation.

 

The Council’s CEO, who serves a population of 267,921 currently receives a similar salary to the NSW Premier, and the Prime Minister of Australia, who serves a population of over 26 million. 

 

To exacerbate matters, the council has even proposed potential reductions in essential local services, although they have failed to advise the community on what those are likely to be, while claiming there are no liquidity or audit concerns. This discrepancy between their financial condition and their proposed drastic rate increases raises serious questions about the true necessity of this measure and their capabilities as a council.

 

A critical review by an independent audit body should be conducted and questions must be asked about whether Council's have undertaken an internal expense review and cost cutting measures. To have not done so prior to their SRV submission is a dereliction of duty.  For example, numerous non-core activities, many that community service organisations have previously run, have been taken "in house" and Council staff have been paid to run them. In 2013 alone, the Arts, Culture and Events section of Council had a budget of more than $11 million and a staff allocation of 58.

 

An independent audit may be able to shed light on the following:

 

• Depreciation expenses shown on Council’s operating statement would increase as the value of assets increase in a revaluation exercise if the remaining life of the assets don’t increase. Depreciation and asset valuation are book entries only, they are non-cash flow items.

• Maintenance cost on assets is also an expense. So, adding this to depreciation makes it a double dip that inflates expenses. Properly maintained assets should have infinite utility. 

• The Council’s maintenance and asset renewal ratios tell the story that the Council is well above benchmark, despite depreciation expenses increasing year on year.

• The NSW Auditor General has certified Council's liquidity status. The NSW Office of Local Government has certified the great majority of requisite benchmarks have been met. Council has a cash and investment portfolio in excess of $200 million which made over $50 million in interest each year in the preceding years. Council has property, plant and equipment of over $5.6 billion and has had significant surpluses in each budget since amalgamation.

 

Motions have been raised at Council outlining potential cost-cutting (25 June 2024 and 28 January 2025). In each instance the motion was defeated. The Council is clearly unwilling to explore cost saving measures and have instead just defaulted to a rate variation solution. This is not in our community’s best interest, and nor does it bode well for Council or the parties they are affiliated with.

 

The community understands that rate increases may occasionally be required to sustain essential community services. However, such measures must be paired with fiscal responsibility and conducted with the backing and trust of the community. Under current economic conditions, it is clear this is not the appropriate time for such a dramatic increase, especially when alternative cost-cutting measures remain unexplored. 

 

I urge you, as our elected representative, and Minister for Local Government to stand up for your constituents by lobbying against this proposed rate increase. This decision cannot go unchallenged, as it risks displacing families, increasing rent for tenants, forcing businesses to close, and severely damaging our local economy. 

 

Please fight on our behalf by preparing a submission to IPART opposing these rate increases and advocating for a more prudent and financially responsible approach from the Council. Our community is counting on your leadership during this critical time. 

 

I look forward to your prompt response to this urgent issue. 

 

Yours sincerely,