Tamworth council reveals it's budget secrets while seeking rate hike

In response, Tamworth Regional Council (TRC) points to a list of 189 cost-saving initiatives detailed in its Organisation Sustainability Improvement Plan.

The Leader poured over that list, which includes some items that save less than $1,000 each year and others that save more than $1.6 million.

For context, TRC is expected to raise $42,262,010 in revenue from residential, business, farm, and mining rates this year (this doesn't include annual charges i.e. water, waste, and sewage bills).

Here's a deep dive into a few of the biggest ways your local council has been tightening its budget:

According to a TRC spokesperson, council has been conducting reviews to improve efficiency of its plant and fleet holdings since 2006.

Plant refers to buildings, machinery, land, office equipment, or furniture TRC uses regularly.

"As a result of the initial review, 25 items were sold outright, including tractors, graders, tipper trucks, excavators, trucks and backhoes that were being underutilised," the spokesperson said.

By scheduling projects to allow vehicles and equipment to be shared across multiple teams of TRC staff, a report from consultancy firm Morrison Low says council is saving about $500,000 per year.

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On top of that, the report found TRC's regular reviews to maximise the efficiency of its equipment save council about $1,161,000 per year, by far the most savings of any initiative on the 189-item list.

"Due to improvements in work practices and efficiency over the years, the hiring of external equipment such as graders, excavators, trucks and backhoes has been reduced. We continue to monitor the value for money of utilising Council-owned plant as opposed to leased equipment and make changes accordingly," the TRC spokesperson said.

Combined, these plant-pooling and review initiatives save TRC more than $1.6 million each year.

An interesting 'cost saver' for TRC in recent years has been a "reduction in rates charged on council-owned properties" which takes advantage of a loophole in the 1993 Local Government Act.

Basically, council has a limit on how much it can charge in rates each year, and up until recently, part of this limit was being filled by council paying itself.

In recent years, TRC has reclassified 195 of its own properties as "non-rateable," which allows it to "increase its rate income recouped from external ratepayers," a TRC spokesperson said.

This means by not charging itself rates on administration buildings, waste depots, water purification plants and sewage treatment plants, TRC has been allowed to marginally increase everyone else's rates.

"On average, the annual impact of this for individual property owners equates to less than $20," the spokesperson said.

The additional rates income adds up to an additional $600,000 for TRC each year.

Of council's 189 cost-saving initiatives, nine are listed as "one-off" savings, with the biggest being a $1.4 million grant from the state government for the development of Arcadia Estate in Hillvue, a new neighbourhood set to ease housing pressure in the region with the construction of up to 2350 homes.

Work on the estate was fast-tracked after the grant's announcement last year, and stage one of the project is expected to be completed by Christmas.

The grant makes up a big chunk of the $3.2 million in one-off savings TRC says it has achieved, with another $2.2 million in on-offs coming down the pipeline.

The council spokesperson said council is continually looking for ways to make efficiency gains and operational savings as part of its ongoing business improvement efforts.

Through these efforts, TRC is saving $7.9 million per year, and says it has plans to implement a further 24 actions in the coming years to secure an additional $1.6 million in savings per year.

"It is a continual part of what we do - it's not simply something we have done because an application for Special Rate Variation is now being proposed," the spokesperson said.

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