Lose services or face another sharp rates rise.
That is the ultimatum issued to residents by mayor Jon Raven, who last week started preparing residents for what is expected to be another expensive city budget.
“The rates will always go up by something,” Cr Raven said.
“The question is: how much do they go up by?”
Last year’s rates rise of 4.61% was the biggest percentage increase in charges in almost 15 years.
Coming out at an average increase of $139.10 per household per year, ratepayers had not been slugged with a rates rise of more than 4% since 2010.
This meant back-to-back hikes in 2023 and 2024 totalled 8.7%, or more than $250 a year.
Cr Raven blamed the continued rises on three factors, which he called “the perfect storm”: asset depreciation, hyper-inflation, and infrastructure charges.
So far this year, two councils in New South Wales have voted to hike rates by 40% and 87% – the latter increasing over two years.
Cr Raven said an increase of that magnitude was not on the cards for Logan, but the council’s struggles were similar.
To prevent “the perfect storm” from hitting the pockets of ratepayers again, the mayor has asked residents which council-run services they would be willing to lose.
While some residents have suggested losing libraries and free school holiday programs, Cr Raven said there were more expendable services where ratepayers could save.
He said services like mowing, which is rising in cost year on year, were essential and not something people wanted to lose.
Instead, services like curbside cleanup could be replaced by an extra tip voucher.
The Logan Ratepayers Association believes Logan should get rid of councillors altogether, which president Rod Shaw said would save ratepayers $2 million a year.
“We don’t need them,” he said.
“That was proven when Tamara O’Shea was the administrator when all the councillors were stood down (in 2019).
“Council had never been more efficient or cost effective… and the staff were never happier.”
The mayor said councillors’ pay was a barely noticeble dent in a budget more than $1b.
The best way to save ratepayers from another slug, Cr Raven said, was for the federal government to introduce changes to asset depreciation.
For businesses, Cr Raven said depreciation meant a tax break. But for council, which doesn’t pay tax, it means setting aside money for later on.
“The money doesn’t get used now, it gets used later on for renewal and replacement of that asset,” he said.
“Two-thirds of last year’s rate increase got put into the depreciation reserve… that we don’t get to touch for 10 years.”
The most recent projected operational surplus for council this year was $23.1m.
Cr Raven said if that money was still there at the end of the year, it could be used to deliver things for the community, like building a new clubhouse.
“It’s like savings,” he said.
“The problem is that the $23.1m is now $6m after the budget amendment – $16m of that went to depreciation.
“If a new accounting standard gets brought in that treats depreciation fairly, we could keep rates significantly low.”
Inflation is also taking it’s toll on ratepayers, according to council.
“Construction prices are absolutely killing us, and that is for council’s everywhere,” Cr Raven said.
In Logan, up to 75% of the budget goes towards infrastructure, such as $141.6m on roads, $192.7m on water and sewerage, and $122.5m on things like parks and sports facilities in the 2024/25 budget.
“That’s $750m that we’re spending on infrastructure, either through planning it, designing it, delivering it, or maintaining it,” Cr Raven said.
“Inflation on construction costs is between 15% and 25%, depending on the service and type of construction.”
The third and final slap to ratepayers comes in the form of capped infrastructure charges, which council has fought against since the previous mayor Darren Power.
Currently, the amount council can charge developers to build essential shared infrastructure – such as roads, water and sewerage – is capped by the state government at around 50% the actual cost.
This means ratepayers are subsidising developers around $30,000 per block.
According to council, the city will need about $2 billion worth of this infrastructure by 2035 to keep up with Logan’s current rate of growth.
But due to the capped charges, developers will only pay $1.29 billion of that, leaving ratepayers to fund the remaining $730m.
Yes ; rate increases seem like the right choice if it wasn’t for the drastic poor usage and waste of the money they receive. The absolute poor road conditions; poorly designed suburbs and the fact many suburbs are in flood areas( not just Logan Council Area ) I am not sure who overseas suburb and infrastructure but in my street it was clearly done by or overseen by someone with a drastic lack of brains or a lack luster attitude for their Job ! The sewerage drainage was poorly done and one year as my Wife sat on the loo she received a blast of sewerage water and sewerage water went everywhere! Apparently Council or a contractor working for council were working on the system in my street but never gave us a warning. It was explained to me by a plumber that many sewerage systems in the area were poorly constructed and laid incorrectly ! Something that could have been easily avoided by someone who knew what they were doing !
Then you got ridiculous large Trees along streets , out in front of people’s houses alongside footpaths causing continued damage to footpaths ; kerbs and roads ! I know this as I had to have one such tree removed out front of my place where the root system of this Stupidly placed tree had cause the road to lift and buckle and also push the kerb out and away from my house storm water drainage. Yeah it was fixed but at what Cost to us the providers of said money to fix it ! I got told ; don’t worry it won’t cost you anything its on Council land ! Excuse me ; where do you think the money came from in the first place ;COUNCIL RATES which everyone who owns a property pays ; the same bloody rates Council has increased and continues to waste ! You keep raising the Rates perhaps we need to do an independent investigation into Every Council and every one on the Council to look into how the money is being spent and see where cut backs can be made !
I am not giving you my full details as I don’t trust Council at All ! The amount of corruption I seen in local councils and councillors is shocking.