Council meeting agenda - 4 June 2012 - Clarence City Council

CLARENCE CITY COUNCIL – GOVERNANCE- 4 JUNE 2012 105
1.2. Council is required to adopt Estimates for each financial year.
2. REPORT IN DETAIL
2.1. The draft Estimates (refer Attachment 1) provide the high level financial
framework within which Council will operate for the 2012/2013 financial
year. They are presented on a programme basis and meet Council’s statutory
obligations under the Local Government Act, 1993. The draft Estimates are
consistent with the detailed programme budgets discussed by Council at its
series of Workshops on the issue, with minor adjustments made as definite
amounts (eg final rates growth) become known.
2.2. The draft Estimates require a net increase in rating income of 3.9% on
2011/2012 levels net of growth. Growth had been estimated at 2.1% during
Council’s budget deliberations, however, final supplementary valuations
received resulted in actual growth of 2.2%. This is a strong result when
compared to the long term average (1.6% over 15 years).
2.3. The net increase excludes the effects of the State Government’s Fire Services
Contribution, which had an increase of 1.4%. The relatively small movement
in this levy has the effect of reducing the overall percentage rate increase (ie
including Council’s requirements and the Fire Levy) so that the aggregate shift
is 3.4%. It is this lower amount which will be reflected on rate notices,
although clearly varying from property to property.
2.4. The increase in required total rating effort is above the March Consumer Price
Index (Hobart) of 2.1%, against which Council rate movements are frequently
compared. However, a range of issues needs to be taken into account in
considering this comparison. Most significantly, the CPI is predominantly
made up of goods and services which are irrelevant in considering Council’s
cost structure. In particular, the low CPI figure was driven by a 30% reduction
in fruit prices for the quarter.