Strategic budget documents that set a plan to turnaround the systemic revenue issues of the past 20 years was the cornerstone of the adopted budget that will be underpinned by a community consultation process to support a proposed 50 percent Special Rate Variation (SRV).
In the 2022-23 financial year Armidale Regional Council (ARC) will go into deficit dipping into reserves to fund the budget. This approach has been on the assumption that ARC receives approval for an SRV and to allow the organisation to ready itself for the significant strategic work required to climb from the mire. While approval for the SRV is far from guaranteed and ARC will undertake extensive community consultation on the proposal from August, the decision to adopt a deficit budget provides council the time it needs to focus on the preparatory work required to ensure it can take full advantage of an SRV that will come into effect in the 2023-24 financial year.
If ARC continues on its current trajectory without addressing a $7.8 million funding shortfall for core operational and capital service levels and asset renewal requirements, ARC would continue to decline. In the 2021-2022 financial year just maintaining current services levels would require a 40% increase in general rate revenue. Now a year on it has increased to 50% in the 2022-2023 financial year. Every year that we don’t address the declining state of infrastructure assets it gets worse and becomes more expensive to correct.
Armidale Mayor Sam Coupland said the two options for ARC are clear; an SRV as part of the solution to restore the real cost of maintaining assets and providing services to grow and be sustainable or a managed decline where the state of our assets and infrastructure continue to worsen due to an inability to be able to afford to maintain them.
“Our region voted to make this a better place to live but this can only happen if we make the hard decisions now,” said Mayor Coupland
“Over the past 25 years we have drifted into a perfect storm of unsustainably low rates in both the old Armidale and Guyra council areas compounded by a stagnating population.
“The ever tightening financial position saw an accumulation of under investment leading to further asset deterioration and a lack of a viable plan to turn the situation around. We have two options, choose to do nothing and manage the further decline in assets and services or grasp the nettle and deliver a growth solution.
“If we don’t invest in asset renewal now the more costly it will become to address in the future.
“As a group of elected representatives we have chosen to make the hard decisions and not leave the problem to future generations. We have plans afoot to become a region of significance, growing jobs
