By Karen Buck
DENMARK ratepayers need to brace themselves for the possibility of many years of rate rises in the vicinity of this year’s unpopular four percent hike, to overcome years of neglect in the maintenance of the shire’s assets.
A two-and-a-half-year asset condition audit by the shire administration has found that about $23-million dollars worth of the assets – about 16% – are in poor or very poor condition.
Council chief executive officer Bill Parker addressed the Denmark Ratepayers and Residents Association in a special briefing on July 25, just days before council formally adopted its 2019-20 budget. He told the meeting that council assets had been poorly maintained over the past 10-15 years. It was unacceptable for any assets to be in a very poor condition, because that meant they were essentially unusable, potentially unsafe and a public liability risk, Mr Parker said. More than $4m worth of assets, including the John Clark Memorial Bandstand were in the very poor condition category. The civic centre was an example of an asset in poor condition, and though not unsafe at present was in danger of tipping into the very poor category.
The recently completed audit was the first time in more than a century that council had compiled such a document, Mr Parker said. “The focus of what we’ve been doing these past two-and-a-half years is to understand exactly what our assets are, what condition they’re in and what they’re worth, and to present that information as part of what will certainly be a long-term asset management plan.”
The next step in the process would be to decide which assets should be tackled first, the cost, and how best to sustain the rest.
Where to from here?
It was going to take many years to clear the maintenance backlog, while ensuring that other assets didn’t fall into poor or very poor condition along the way.
Mr Parker said that council had considered many options to address the issue, including a huge, one-off rate rise to tackle the problem head-on, but had decided that such a move would be unpalatable in the current economic climate. Council had instead gone for a long-term strategic approach, and this year’s rate rise of four percent was the result. It represented two percent for ongoing capital expenditure, and two percent of extra funds to begin tackling the serious maintenance deficit.
“The results of council’s recent community satisfaction survey indicated that people were reasonably satisfied with the shire’s assets and services,” Mr Parker said. “On that basis we thought that people might be happy with going backwards just a little bit – chipping away at the problem in a more moderate way – as opposed to hitting it really hard over one or two years.”
Over the next 12 months council would need to have serious discussions, including essential consultations with the community, about how best to achieve the program’s goals. “There are various ways that the issue can be tackled – raise the rates every year, factoring in two percent for asset maintenance – or do it in one big hit and raise rates by 13 or 14 percent, as Esperance did,” he explained. “You could reduce services, or sell off assets, or raise a big loan to do it all at once – but those things need to be part of a community discussion.”
Changing perceptions Mr Parker went on to say that there seemed to be a general attitude that a separate building was needed for every community group and its activities. “But if smaller rate rises are what the community wants, then you just can’t have that – we’re going to have to utilise things differently, share buildings, and accept that the way things were done in the past just can’t continue,” he said.
While Mr Parker and his executive team’s briefing was praised for its thoroughness by the DRRA meeting, several members nevertheless urged them team to be more proactive in discussing budget decisions and their background with the community in advance of the formal budget adoption.
DRRA member Geoff Bowley said that council can and should do better with its community communication and consultation during the budget development stage, because it would give people the opportunity to be more involved. His comments were echoed by member Julie Marsh. “The news about the rate increase came without the information you’ve just given us – and that’s when the rumours and the trolling start,” Ms Marsh said. “Would it not be possible to have done this in a bigger forum, and have the detail out well before the budget announcement?”
Mr Parker agreed that in an ideal world the information would have been out in the community well before budget deliberations loomed. “However, this is the first time that this information has been gathered, and we didn’t want to put it out in the community till it was right,” he said. “Even then the truth, regardless of whether it’s right or wrong, is still going to divide the community. “There are some people who will think all this stuff is rubbish, and some who will think it’s great. “There is always going to be debate about what is the best and most sustainable approach.
“Over the next couple of months, the asset management plan, the long-term financial strategy and the workforce plan will all be finalised, and people will be able to see what we’ve been talking about. “We’ve had to move mountains to get it this far.”