Meander Valley ratepayers are facing a 5 per cent rate rise to balance a $278,000 loss of dividends from TasWater into its upcoming budget.
On Tuesday, the Meander Valley Council will vote on a recommendation that proposes the rates increase.
In August 2016, the TasWater board determined it would reduce and freeze annual distributions to owner councils, which has reduced the amount the councils get from the organisation by about $300,000 each.
Meander Valley mayor Craig Perkins said the council’s financial plan strategy stated it would only increase rates in line with inflation.
“But, because of that decrease in revenue, the recommendation [for Tuesday’s budget] is inflation plus 3 per cent to cover the loss,” he said.
Cr Perkins said the council was aware of the loss of TasWater dividend funds, but is just now trying to figure out how to deal with it.
He said the council had two options to deal with the loss of funds: increase rates, or cut back on what the council offers to the community.
“Our council is one of the second or third most effective councils on the efficiency metrics,” Cr Perkins said.
“This means for us to save money, it becomes really tricky because we’re already a low-cost council and don’t have much fat to trim.”
He said the 5 per cent rate increase “probably looks worse than it is”.
“A 5 per cent increase for someone in the Meander Valley, in real terms, is less than a 5 per cent increase for someone in Launceston for example because our rates are about $450 cheaper,” he said.
Meander Valley Council general manager Martin Gill said council officers “continually reviewed” operations to ensure efficient services were delivered to meet community expectation.
He said if the rate increase was not addressed now, it could “exacerbate the underlying problem and require greater rate increases or more significant reduction of services” in the future.
West Tamar Council propose 2 per cent rate increase
The West Tamar Council is also proposing a 2 per cent rate increase.
The region’s mayor Christina Holmdahl said every council had been affected by the TasWater decision.
“But, we have always tried to make our rate increases as close to consumer price index as possible,” she said.
Cr Holmdahl believes the council would be able to continue to deliver its “high level” of service with the proposed increase and would not have to cut its services offered to the community.
“I think it demonstrates very responsible financial management by our senior management team that we’re able to do this,” she said.
“We’re very comfortable with that increase and we’ve certainly factored that loss into our thinking since that time.
The board’s decision to impose a freeze was not acknowledged in the recent Memorandum of Understanding between state government and TasWater, which was signed in May.
Meander Valley Council’s meeting will be held at Westbury Council Chambers from 1.30pm, June 12.
West Tamar Council will hold its meeting at the same time, at Beaconsfield.
Members of the public are welcome.