24°C | Wednesday December 4, 2024 
26 November 2024
North Sydney Council has voted to proceed with a public consultation on a Special Rate Variation that proposes steep rate increases for residents and businesses. The consultation, which begins on 27 November and runs through 10 January, will outline increases of around 80% on minimum rates and between 65% and 111% over three years overall.
Despite extensive debate, the council rejected an amendment from Councillor James Spenceley to include alternative, more moderate rate rise options in the consultation. Spenceley’s proposal, supported only by Councillor Jessica Keen, suggested phased rate increases of 10%, 15%, and 20% over three years combined with debt financing to ease the immediate financial burden on ratepayers.
Under the council’s SRV proposal, the minimum residential rate—currently $715, paid by 77% of residents—would rise to $1,300 in 2025/26, an 81% increase. Minimum business rates would increase from $715 to $1,400, an 84% rise.
Overall proposed increases range across 50%, 60% or 75% next year and 65%, 75%, 87.5% or 111% over three years.
A Council financial report described its current position as “very weak,” citing a $147 million infrastructure backlog and the $122 million redevelopment cost of the North Sydney Olympic Pool as key drivers of the proposed rate increases.
Councillor Spenceley criticised the council’s approach, arguing that the proposed consultation offered residents no meaningful choice. He proposed spreading costs over a longer period using debt financing and including more moderate rate rise options.
“Why are we not looking for consultation from our community rather than force-feeding them outcomes of 65% to 111%?” Spenceley asked. He defended the use of debt as a practical solution, stating, “Debt in a council is much more serviceable. We have ratepayers. Someone moves out, someone moves in, they still pay the rates. Debt isn’t a scary thing.”
Spenceley also argued that a phased approach would give residents more time to adjust to rate increases. “We can manage this better, councillors. We can, as I said, spread our asset renewal program over a longer period. It doesn’t have to be urgently done in a short period.”
Several residents spoke against the proposed rate hikes, raising concerns about financial transparency, fairness, and the burden on households and businesses.
Cremorne resident George Loiterton, the MD of a data analysis firm, delivered a comprehensive critique of the rate proposal. He began by questioning the council’s delay in addressing the financial crisis caused by the North Sydney Olympic Pool redevelopment. In April 2023, a council report detailed the project cost was increasing to $90 million. “Why has it taken over 18 months for any action to occur?” he asked. “Just five months ago in June, the 24-25 operational budget was released. In that plan there was no mention of a financial crisis requiring structural reform. How is it now in November, we are staring at a second (pool) budget blowout to $122 million?”
He also challenged the council’s justification for the SRV, pointing to significant discrepancies in its financial reporting. “The SRV report cites deficits of $6.4 to $11.8 million annually over the next decade, but these numbers include depreciation and amortisation,” he said. “When you examine the actual cash position in Table 3 of the SRV, North Sydney Council is projected to maintain a surplus of $6.5 to $8.5 million every year for the next 10 years, adding $67 million to its reserves.”
Loiterton criticised the council’s rate comparisons, calling them incomplete. “The SRV compares residential rates across 14 metro councils but excludes the City of Sydney and Parramatta, which are vital comparisons due to their commercial mix and population size. At the same time, it compares North Sydney to Hunters Hill—a council with a population that’s only 20% of ours and no significant commercial sector. What’s detailed on the chart is way too simplistic to draw an accurate conclusion.”
Finally, Loiterton called on the council to explore alternative solutions. “The SRV does not consider asset sales, additional government grants, or robust expenditure reduction plans. Proposals should not move forward without these inputs. Costs need to be reviewed urgently”
Local business owner Kate Branch raised concerns about the impact of the rate increases on small businesses, describing the proposal as “shocking.” She also questioned the council’s financial priorities, pointing to millions spent on legal disputes as an avoidable cost. “If our rates are going up, which I don’t want them to … then I really don’t see that as a positive … We need to focus on the annual spend of what this council’s spending.”
Resident Davy McDonald called the proposed rate hikes “absolutely appalling,” especially during a cost-of-living crisis. He urged the council to delay the increases until the pool becomes operational and generates revenue. “We’re in a financial crisis with people, the costs of living, et cetera,” he said.
WHY THE RATE INCREASES ARE JUSTIFIED: But in the subsequent debate on Spenceley’s amendment, Councillor MaryAnn Beregi strongly opposed reliance on debt financing, calling it “reckless.”
“Debt isn’t free—it’s the ratepayers who service it,” she said. “Spreading these costs over decades is irresponsible and only defers the problem. The financial situation is critical, and this council needs to act now.”
Councillor Nicole Antonini echoed this sentiment, attributing the council’s financial challenges to years of mismanagement. “We’ve inherited a decade of poor choices. This is not about pushing the burden onto future generations—it’s about fixing the mess we’ve been left with,” Antonini said.
Mayor Zoe Baker also dismissed Spenceley’s amendment, emphasising the importance of addressing the council’s financial challenges immediately. “This is about addressing years of mismanagement and ensuring long-term sustainability,” she said. “Proposing alternatives on the fly undermines the careful work that has gone into this process.”
Councillor Chris Holding criticised the timing of Spenceley’s amendment, describing it as poorly planned. “If you’re going to propose alternatives, they need to be backed by proper modelling and presented well in advance—not introduced at the last minute. That’s not how we handle serious financial matters,” he said.
Councillor Jessica Keen, the only councillor to support Spenceley’s amendment, argued that the council had an obligation to present residents with a full range of options. “We need to ask our community what they would like. We are putting forward a recommendation for extremely high rate rises … we need to think about asking our community for the lower levels that Councillor Spenceley has put forward,” she said.
Keen also criticised the timing of the consultation, which will run through the Christmas and New Year period, calling it “unacceptable.” She urged the council to explore alternative revenue strategies, including adjustments to business rates and potential asset sales.
The council voted 7-2 to proceed with the consultation as originally proposed. Community feedback will be sought between 27 November 2024 and 10 January 2025. A final decision on whether to proceed with the SRV application will be made at a council meeting on 10 February 2025.
If approved, the rate increases will require authorisation from the NSW Independent Pricing and Regulatory Tribunal, which will evaluate the application and invite public submissions in early 2025.
Despite his amendment being rejected, Spenceley maintained that the council had missed an opportunity to engage meaningfully with residents. “We’re not giving residents a real choice. Including lower rate increases in the consultation would provide transparency and allow residents to weigh in on the balance between rates and services,” he said.
Others were questioning why plans for a rate increase were only being circulated now and not before the September election, even though the financial situation was a known quantity at that stage.
Head of the Community First ticket in Cammeraygal at the last poll, Peter Noble, told the Sun: “It is concerning to me as a candidate for Council at the last election that the financial position of Council was not made part of the election background or that it wasn’t made generally known among the electorate. Incoming councillors should not have to be confronted by this disaster at the first meeting. With the Real Independents having spent some 28 years in aggregate on Council you would think that this was well understood to them. Would the electorate been so keen to elect them and two more to Council if this were well known? Did the outgoing Council know this was in the offing? This issue requires close examination now.”
Another member of this ticket, Joan Street, told the Sun: “During the last election, the Real Independents claimed to have strengthened governance and financial accountability. Presumably they were aware of the state of Council’s finances. Yet they failed to advise the community or to take steps towards establishing the necessary sinking funds to fulfill Council’s responsibilities for infrastructure, services, and maintenance. This is disturbing.”
Councillor Keen has also launched a petition on Change.org to collect signatures against the proposed SRV.