Council could lift rates by 30 per cent to manage growing debt

Upper Hunter Shire Council (UHSC) expects to raise an extra $2 million with the special rate variation.

Recently the Newcastle Herald reported the council would operate with a deficit until 2032 and was managing a $32-million debt.

Documents reveal the council has returned an operating deficit for the past four years, and in 2023/24 collected $12.4m in rates against a $50m operating budget.

The council has reviewed its operating expenses which has "resulted in some relief", but without additional income UHSP will be "unable to address the present issue of negative results, whilst maintaining a satisfactory service to the community".

The council considered three models; a 7.5 per cent increase per year for four years, a 6 per cent increase per year for six years and a 10 per cent increase per year for three years.

"Each option generates approximately the same increase in revenue after the sixth year which is in the order of an additional $2 million," council documents stated.

"The modelling under the three scenarios increases the average residential rate for Scone from $1138 to between $1569 and $1638, which equates to $190 to $239 per property after six years."

If the rate raise is applied uniformly across all rate classes, farmland would see an average increase of almost $840 by the sixth year.

The council will now notify the Independent Pricing and Regulatory Tribunal (IPART) of its intention to apply for a special rate variation for the 2025/2026 financial year.

"Once this is done, community consultation on various options can be explored and then council can determine if it wishes to make an application to IPART for a rate variation," council documents stated.

Local Government Minister Ron Hoenig says he is "aware there have been some concerns raised" about the UHSC financial position, but he is reluctant to intervene.

Mr Hoenig said the Office of Local Government had been monitoring the council's financial position and he was "satisfied that council is receiving appropriate attention".