Mayor Ron Bellingham has described the process of hammering out the budget so far as “hellish”.
Mayor Ron Bellingham has described the process of hammering out the budget so far as “hellish”.

Services set to face axe

RATEPAYERS across the Southern Downs could be slugged with a double-digit rates increase in the new council budget in July, the Daily News can reveal.

Mayor Ron Bellingham this week foreshadowed major financial pain thanks to cuts in State funding and the impact of new land valuations on both Warwick and Stanthorpe.

He has described the process of hammering out the budget so far as “hellish” and the introduction of rating reforms as the “toughest” challenge of his 10-and-a-half-year local government career.

The Southern Downs Regional Council will come into line with more than 90 per cent of other Queensland councils by introducing differential rating in the new financial year, which means a different rate in the dollar will be struck for different categories of land.

But it is understood tensions are running high behind closed doors, with Stanthorpe-based councillors understood to be demanding concessions for their former council area due to a massive spike in land valuations.

Cr Bellingham declined to be drawn on the nature of the budget deliberations or the likely percentage rise in rates, but conceded the increase would be “significant”.

He confirmed that land owners who had experienced large spikes in their unimproved land valuations – issued by the State Government in March – were likely to be slapped with a rates increase in line with the rise.

“Yes, there are people whose valuation has substantially increased whose rates will increase but it depends where you’re situated and what category you’re in,” Cr Bellingham said.

“One of the difficulties has been the great variations and spikes within our region in certain geographical areas.”

“COUNCILLORS and officers have spent hundreds of hours with a consultant to get some equity in the system,” he said.

Councillors will this month decide the finer details of the 2010 budget – due to be handed down on July 7 – and the intricacies of the new rating system and will be forced to grapple with the prospect of cutting services thanks to hugely-reduced State Government funding.

They are also going to have to contend with the fact the State Government only paid a bit more than $2 million in amalgamation costs – nowhere near the more than $5.3m for which council asked.

Cr Bellingham said the final form of the new differential rating system was a week or more away from being announced but hinted at a range of land categories, particularly in the rural sector.

“The challenge is how do you fairly rate operations with the diversity we have on the Southern Downs – there are orchards, grazing, cropping, intensive animal industries and the rest,” he said.

“We are trying to get a model that will be fair and equitable.

“Across all land types the real difficulty is that some landowners will be affected significantly and a few will be really happy. We are likely to finalise the model in this coming week, I would hope.”

Rates in Stanthorpe are likely to go up more than in Warwick in relative terms, with land on the Granite Belt last valued by the State in 2004.

This year’s new round of valuations saw a staggering 102 per cent rise in Stanthorpe as a result, while the average increase in Warwick – last revalued in 2006 – was 24 per cent.

Valuations are used to calculate general council rates, with valuation “spikes” smoothed out in the past through averaging valuations over three years.

But Cr Bellingham said the averaging method would not be feasible in the new budget given the lag in valuations between the former Warwick and Stanthorpe council areas, making a fair calculation and comparison “impossible”.

Stanthorpe was not alone in experiencing a valuation spike, with some Warwick properties – including the commercial strip along the northern highway approach to town – notching up a 500 per cent increase this year.

The State Government uses recent property sales as the main factor in calculating land valuations.

Service cuts loom

COUNCIL could be forced to reduce services in the upcoming budget as a way to minimise what is expected to be a hefty average rating increase, with officers believed to be working furiously to cut more than $1m from the bottom line.

“Reducing services is an option,” Cr Bellingham said.

“I don’t think that the community would find that terribly acceptable and I hope services would not be reduced but I can’t say they won’t be.”

One of the big-ticket items in the new budget was tipped to be a new dam for Stanthorpe, estimated conservatively to cost between $60m and $80m, with the lion’s share being met by the State Government.

But Cr Bellingham said there was “not a chance in the world” of finding a solution to Stanthorpe’s water woes before the July budget, with a final decision on a site for a new dam on the Granite Belt a long way off.

Cheaper options such as a weir have also been looked at but would still require funding from the State.

Stanthorpe almost ran out of urban water in 2007 with the option of carting water from Leslie Dam in Warwick having loomed during that year.

Both the former Stanthorpe Shire Council and the amalgamated Southern Downs Regional Council have together spent more than $1.3m on reports and engineering studies on a new dam for Stanthorpe, with the mayor saying he was “very loathe” to spend any more.

“What we need to do now is get political support at a higher level in terms of the cost of this project,” Cr Bellingham said.

The mayor said whichever of the options the SDRC decided on would need “major” support from the State and Federal Governments.

The council has so far spent just over $31,000 on a consultant to conduct its review of the rates system.

Mayor Ron Bellingham will write a weekly column exclusively for the Daily News in the lead-up to the budget on July 7. Keep an eye out for his first column in next Friday’s edition.

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