Local councils caught in rate cap cash squeeze

RETIRING former Bass Coast Chief Financial Officer and, more recently, General Manager Innovation and Engagement, David Filmalter has hit out at the low-rate cap imposed on local government.

Nominating the Berninneit Cultural Centre in Cowes as one of his proudest achievements, Mr Filmalter said he was pleased to have delivered on Bass Coast’s ambitious capital works program despite escalating material costs.

Formerly working for Boroondara and Port Phillip City Councils, Mr Filmalter joined Bass Coast Shire Council in 2018 as Finance Manager and Chief Financial Officer.

“Every year there’s a regular cycle of working with councillors and stakeholders on preparing a good budget that delivers on capital works and council priorities.”

Acknowledging that red tape was part of the job Mr Filmalter nonetheless reflected on the time taken every year to comply with the state government-imposed rate cap and preparing returns for the Federal Grants Commission.

“There’s also procurement and major contract tenders,” said Mr Filmalter.

Bass Coast Shire Council’s capital works program has grown dramatically.

“Three to four-fold at minimum cost to ratepayers.”

Mr Filmalter said he was quite proud of Berninneit, which was made possible by working closely with the state government.

“We tried to deliver a capital works program that delivered infrastructure that the community could access; we always tried to keep costs low,” he said.

Questioned over a noticeable recent reduction in carryover funds and available revenue for Bass Coast Shire Council, Mr Filmalter explained that grant funds and developer contributions were often carried over from year to year for incomplete projects.

“At one stage we were only delivering 50 to 60 per cent of our capital works projects in any given year, in recent times that has been increased to 80 per cent,” said Mr Filmalter.

Mr Filmalter said there was no question that the rate cap introduced by the Victorian government in 2016 was set well below the rate of inflation.

“The rate cap next year will be 2.75 per cent with inflation forecast to be 3.6 per cent.”

Council costs have been rising faster than the inflation rate, according to Mr Filmalter.

“There were tremendous supply chain pressures of up to 30 and 40 per cent for some materials after COVID, and more recently, 5 to 10 per cent.

Settling into retirement this week, Mr Filmalter said he gained most satisfaction from seeing the development of the council’s finance team.

“I’m really proud of the landmark projects that have come to fruition. Our capital works have been delivered on time and on budget,” said Mr Filmalter.

“We have managed the balance sheet well,” he said.

“Getting the right balance between borrowings and investments.”

The Emergency Services levy had taken a big whack out of the community, according to Mr Filmalter and looking forward, he warned there could be sub-optimal rate outcomes.

“Local government is highly regulated, and sometimes the community doesn’t understand the things that are out of local government control.”

Roads and potholes are often a VicRoads responsibility, according to Mr Filmalter.

“There’s a lack of equity and disparity in local government between big metropolitan councils that are well funded by fines and fees and regional councils.”

According to Mr Filmalter, local rates are still a lot cheaper than rates in the big cities.