The council’s acting Chief Operating Officer Anthony Spartalis told last night’s City Finance Committee that “if council wants to get back to a 100 per cent level of funding our renewals in the first year, it is a 10.5 per cent rate increase.”

To avoid the hit to ratepayers, the council administration has modelled a transition to reach a 100 per cent renewal funding ratio over eight years, in a long-term financial plan under discussion.

Spartalis said that asset renewal meant rebuilding, not day-to-day maintenance. Asset renewals include upgrading buildings, water infrastructure, lighting and park lands and open space.

“There is already an agreed principle that we will not use borrowings to fund renewals,” Spartalis said.

“The transition is designed to alleviate the impact on ratepayers of a 10.5 per cent increase in year one, and spread that over time.

“We are looking at what assets we can reasonably delay to achieve the ARFR [asset renewal funding ratio] we’re looking for, without detrimentally impacting the assets across the city, so there’s no intention to take on debt.”

The long-term financial plan presentation states a general rate increase for 2025-26 is projected to be three per cent, in line with CPI.

Debate about staggering asset upgrades to alleviate rate pressure is a strong theme of early discussions about the council’s long-term financial plan, which will be drafted and released for public consultation at the end of September.

Spartalis’ comments were in response to Councillor Henry Davis, who opposes the council “passing on the problem” of asset renewals.

“It’s the ratepayers who are going to have to pay to fix that problem when the debt comes up, so I want them to be aware of it,” Davis said.

“If you don’t fix it now, it’s just more expensive next year and it’s more expensive the year after that.”

Currently, the council is at a 92.5 per cent asset renewal ratio, and Councillor David Elliott said it was sensible to take eight years to slowly move towards 100 per cent.

“This is not a dire economic situation for us or a dire financial situation to have less than 10 per cent of our assets up for renewal, considering we already maintain at such a high standard,” he said.

Councillor Davis has consistently asked the council about rate increases needed to accommodate the council’s capital spending and asset renewals.

“My understanding, as per the questions I asked, is that we require an increase in rates of 10.5 per cent this year to be sustainable,” he said.

“Just drawing that out over multiple years doesn’t help the situation, it just means it can be a higher rate increase in future.”

After this debate in last night’s City Finance Committee workshop, councillors voted in the council meeting on the assumptions they’d use for their long-term financial plan.

Most councillors opted to transition to 100 per cent asset renewal over eight years to mitigate pressure on ratepayers.

Councillors Henry Davis, Mary Couros and Simon Hou voted against rate revenue assumptions which would increase rates by CPI, and to stick with the eight year plan.

Davis told InDaily he is “advocating for the council to be open and honest about its self-made spending problems”.

“The council last night voted to let the city degrade over the next eight years,” he said.

“The funding problem has been caused by spending in other worthy areas, like new trees, heritage support packages for owners and more EV charging stations in the city.

“Whilst there are many worthy causes, money is limited. Rather than look at cuts to spending, the council has voted to underfund renewals in the city.

“The nice-to-haves is what we should look to cut back on, not city renewals which simply maintain the current standards.

“Eventually the ratepayers will have to pay for the neglect.”