Budgeting error cost Coorong ratepayers $350,000, investigation reveals
A report has vindicated ratepayers who had long claimed their property rates bills were higher than the council had forecast.
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It is “completely understandable” that Coorong ratepayers should feel misled after a budgeting error cost them $350,000, CEO Bridget Mather says.
An independent investigation of its budgeting process has vindicated the hundreds of ratepayers who raged at the council in 2017, and swept most of its councillors out of office at the 2018 election.
Back in 2017, the council had said it would pursue property rate increases of around 3-4 per cent each year.
But residents’ rates bills had since gone up by an average of 7.8% in each of the past three years, consulting investigator John Comrie found.
Most significantly, ratepayers were accidentally double-charged for the NRM levy in 2017-18 – the $350,000 figure.
However, Mr Comrie said the council had not acted illegally, because it had collected rates in line with the dollar figures in its draft budget.
The problem was that those dollar figures had not lined up with the percentage increases quoted in the same document.
“Simply put, the average increase per ratepayer was higher than calculated,” he said in his report.
“It needs to be stressed ... that ratepayers were not overcharged.
“They were charged consistent with what was proposed in the budget.”
Council will not repay the money, CEO says
Ms Mather – who started as the council’s chief executive officer in January – said it was fair that ratepayers should feel misled.
“Council ... offers its sincerest apologies for any confusion caused by the way the information was presented,” she said.
“The recommendations from the (Comrie) report will be implemented in the 2021-22 budget-setting process, thereby preventing this situation from ever occurring again.”
Extra financial information will be provided in future drafts of the council’s annual business plan and budget, and more information about the way rate increases are calculated will be made available to councillors throughout the year.
However, the council’s lawyers had advised that the money did not need to be repaid, Ms Mather said.
“Should the money be repaid, or taken out of a future budget, then it will likely (leave) council operating in a deficit situation that is not financially sustainable,” she said.
“Accordingly ... a reduction in the service range and level provided by council would be required.”
The council’s current financial position was otherwise good, she said.
Ratepayers’ group has been vindicated, spokeswoman says
Coorong Ratepayers Action Group spokeswoman Sandra Douglas said the council’s admission proved ratepayers had been right to criticise the council.
“CRAG knew about this error and questioned the rates increase at our first round of meetings back in 2017,” she said.
“We were totally ignored.”
She alleged that members of the previous council, and its audit committee, had shown “a total lack of diligence”.
The current council had worked extremely hard to sort things out, she said, forming a finance committee and reining in spending.
But she still had “zero confidence” in the councillors who had been elected prior to 2018, she said.