Under the Local Government Act 1993 (Act), councils are able to apply for additional increases in general income beyond the annual rate peg amount. This is referred to as a ‘special rate variation’. Under the Act, councils may apply for a single year increase under section 508(2), or a multi-year increase (of between two and seven years) under section 508A. IPART has been delegated responsibility for assessing and determining special rate variations, however the NSW Government has retained responsibility for setting the policy framework under which applications will be assessed. This is reflected in the Government’s Special Rate Variation Application Guidelines, which sets out the assessment criteria that IPART must use when assessing applications.
Councils may seek a special rate variation in order to undertake environmental works, fund town improvements, redevelop community and civic facilities, address maintenance backlogs and maintain or improve existing service provision. Local councils that are seeking special variations to general income above the rate peg amount are required to submit applications to IPART for review and assessment. The council must include details of its intention to apply for a special variation in its draft delivery program and operational plan and must consider any submissions received from the public. If a council’s application is approved, IPART will specify the percentage by which the council may increase its general income.