NOTICE OF Council (Development) MEETING
Late Items
The Meeting of Parramatta City Council will be held in the Council Chamber, Fourth Floor, 2 Civic Place, Parramatta on Tuesday, 10 April 2012 at 6:45pm.
Dr. Robert Lang
Chief Executive Officer
Parramatta – the leading city at the heart of Sydney
30 Darcy Street Parramatta NSW 2150
PO Box 32 Parramatta
Phone 02 9806 5050 Fax 02 9806 5917 DX 8279 Parramatta
ABN 49 907 174 773 www.parracity.nsw.gov.au
“Think Before You Print”
Council (Development) 10 April 2012
GOVERNANCE AND CORPORATE
ITEM NUMBER 0.0
SUBJECT Department of Local Government Addemdum to Guidelines for Special Variation
REFERENCE F2011/01565 - D02314928
PURPOSE: To seek Council’s approval for amendment of the Draft Amended Delivery Program 2010/11 to 2013/14 & Draft Operational Plan 2012/13 and Long Term Financial Plan, to reflect the recent IPART decision to now make available the Carbon Advance to all Councils that have an existing special variation to rates approved for future years.
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1. That Council approves the amendment of the Draft Amended Delivery Program 2010/11 to 2013/14 & Draft Operational Plan 2012/13, and Council’s Long Term Financial Plan to reflect IPART’s recent decision in relation to the Carbon Price Advance (to reflect equitable treatment to all councils) to allow modifications to the Council’s previously approved special variation percentages by an additional 0.4% in 2012/13 and a reduction of 0.1% in 2013/14 2. That Council approve the application to IPART in the form of a letter from the CEO requesting the variations noted in (1) above.
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BACKGROUND
1. Following the adoption by Council of the Draft amended Delivery Program 2010/11 to 2013/14 and Draft Operational Plan 2012/13, we have now received advice from the DLG in the form of an addendum to the guidelines for special variation to rates, that IPART have now made a decision to allow modifications to Council’s previously approved special variation percentages by:
ISSUES/OPTIONS/CONSEQUENCES
2. The 2012/13 rate peg of 3.6% determined by IPART includes a carbon price advance (CPA) of 0.4%. The CPA will be withdrawn over the following 2 years to ensure that the effects of the carbon price on local government costs are not double-counted, as the impact of the carbon price will be included in the calculation of the local government cost index from the September 2012 quarter. The local government cost index is the major factor used by IPART in determining the rate-peg. The CPA will be reversed as follows:
3. Following our special variation to rates application last year, our rate increase for 2012/13 was already predetermined at 4.3%. Initially when we contacted IPART in this regard, we were advised that as we already have a special variation in place, we would need to
submit a full special variation application if we wished to have the extra 0.4% related to Carbon Tax.
4. IPART have now decided to allow all 18 councils with existing special variations to modify their approved special variations to allow for the CPA in 2012/13 and its reversal in future years.
5. IPART has made this decision, as it has realised that Councils with previously approved special variations will not receive the CPA and some will also face a lower rate peg when the CPA is withdrawn. If Council chooses not to seek the CPA in 2012/13, then it will lose out in the long run, as the rate-peg for 2013/14 and 2014/15 will be adjusted downward by IPART when it reverse the CPA in those years.
6. Council would be eligible to apply for a variation to increase our existing approved percentage by 0.4% for the year 2012/13, with a decrease in our existing approved percentage by 0.1% for the year 2013/14. We would receive the reduced rate peg in 2014/15 as already noted by IPART.
7. The table below provides a summary of the existing special variation to rates along with the adjustments now being allowed by IPART
Description |
2012/13 |
2013/14 |
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% already approved |
% after adjustment |
% already approved |
% after adjustment |
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Rate change over previous year |
4.3 |
4.7 |
9.2* |
9.1* |
* This figure includes previously expiring special rates
8. A 0.4% increase in 2012/13 would equate to approximately $375,000
9. To apply under 508A(9) for a variation to our existing special variation, Council must send a letter to IPART outlining the following:
10. Applications in letter form must be certified by the council’s General Manager / CEO and submitted to IPART in written or electronic form by 20 April 2012. IPART will inform councils of its decisions by 6th June 2012.
Alistair Cochrane
Manger Finance
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REFERENCE MATERIAL