The forced merger between Bathurst Regional Council and Oberon Council will not go ahead, but not everyone is celebrating. Andrew McKibbin of Kildrummie Pastoral at Rockley says Oberon Council ratepayers, particularly farmers, will bear the cost of Oberon standing alone.
Oberon Council and many residents are celebrating the NSW Government’s decision not to proceed with an amalgamation with Bathurst or any other council.
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My concern is that the ratepayers of Oberon do not fully understand the financial implications of this decision.
There are only 3500 ratepayers who sustain Oberon Council. Approximately 55 per cent of the total rates income for Oberon each year is paid by farmers and graziers.
Oberon rates on farmland in 2015-16 were 39pc higher than in Bathurst. Oberon Council, under its approved special rate variation, will increase rates between 2015-16 and 2019-20 by 34.5pc. In the same period, Bathurst will only increase its rates by 9.97pc – less than projected inflation.
In 2019/20, the farmland rates for someone in the Oberon Council area with a valuation of $1 million will be $4046, as opposed to $2400 in the Bathurst Regional Council area.
Residential
The residential rate in Oberon in 2015-16 of 0.448711 was lower than Bathurst at 0.924277 but to the Oberon rate is added a Town Improvement Fund Levy of 0.378766. So in total, Oberon’s residential rate was 0.827477 compared with Bathurst at 0.924277.
In 2019-20, after Oberon’s 34.5pc increase, the Bathurst residential rate will be 56pc higher, but only if Oberon does not impose a Town Improvement levy.
In November 2016, Oberon Council obtained a conditional grant from the NSW Government of $4.95 million on the basis of a dollar-for-dollar contribution by Oberon Council.
On February 19, I requested advice on future Town Improvement Fund levies and on how the $4.95 million Oberon Council water and sewerage upgrade contribution was to be funded. No answers have been received from Oberon Council.
Business
In 2015-16, Oberon only derived $181,000 from business rates while Bathurst derived just over $5 million.
It is conceivable that the Oberon business rates would not even cover the Oberon acting general manager’s salary, let alone the total employee benefits and on costs of $5.788 million for the roughly 80 Oberon Council staff.
Even the total Oberon rates and annual charges of $4.856 million do not cover the total employee benefits and on costs.
Special rate variation
Oberon Council has stated the special rate variation (a 34.5pc increase over five years) was required in order to carry out further grading work on the unsealed rural roads and to improve the more heavily used rural freight transport routes.
If Oberon had amalgamated with Bathurst, such a special rate variation would not be required as the works would be amortised across 21,500 ratepayers, not just 3500. Oberon has provided no advice as to what is to occur at the end of 2020, but one assumes there will not be a reduction in rates once all this roadwork is completed.
Given all of the above, and the fact federal and state government grants of $6.5 million make up 36pc of the council’s revenue, I wonder whether ratepayers think Oberon Council is sustainable.
