Wollongong City Council is set to impose a 6.63 per cent annual rate rise until 2017, after councillors last night voted to reject a slightly higher rate rise recommended by council staff.
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The council will now apply to the Independent Pricing and Regulatory Tribunal for approval to slug residents and most commercial property owners with a cumulative rate rise of about 21 per cent over three years.
The plan was endorsed 11-2 by councillors with independents Vicki Curran and Greg Petty voting against.
Along with a rate rise, the endorsed budget option includes $1.5 million in service cuts - most of which will come from a $1 million saving by extending the life of existing footpaths - and a minimum of $500,000 in fee increases.
The revenue raised from "efficiencies" within the council has been bumped up to $4.5 million - which is $500,000 more than the budget option recommended by council staff.
Efficiencies could include outsourcing, changes to staffing at council services and reviewing workers' industrial agreements.
Speaking in favour of the lower rate rise option, Cr Michelle Blicavs said it would be a show of good faith to residents and would respond to community requests to make the council more efficient.
However, Labor's Chris Connor urged councillors to endorse the budget option recommended by staff, saying he was not in favour of higher efficiency targets as he did not want to see the council reduced to "an administration node that hands out contracts".
He said the council had a responsibility, as one of the region's biggest employers, to provide training and careers for Wollongong residents.
Despite losing his motion, Cr Connor commended his fellow councillors for choosing to "take the flak" over the difficult decision to raise rates and make the council more financial sustainable.
Independent councillor Greg Petty did not support either budget option, instead suggesting the council suspend any requests for a rate rise.
He also said the council should also immediately stop capital expenditure and employ independent consultants to investigate the council's finances before raising rates and cutting services.
The councillors' decision to raise rates and implement targets for service cuts was made despite pressure from the public gallery, United Services Union and Illawarra Business Chamber not to do so.
About 15 members of the residents' group Save Our Services staged a rally outside the council chambers before the meeting, holding signs urging the council to start again and "do this properly".
The group declined to nominate a member to speak at the meeting's public access forum after its convener Stephen Spencer was told he had already addressed the council over the financial review late last year.
Council policy stipulates nobody is allowed to address the council on the same matter more than once, and its refusal to budge from this stance caused outcry from the public gallery.
Through the public access forum, Illawarra Business Chamber chief Debra Murphy urged councillors to exclude all businesses from the special rate increase, saying Wollongong business confidence was low and unemployment rates remained above average.
She suggested exploring outsourcing and further efficiencies before increasing rates.
During the council's public consultation process, 178 residents supported a "minimal" rate rise, 184 people supported a "moderate" rate rise and about 80 people indicated they would prefer the highest suggested rise over any cuts to services.
Only 70 respondents did not support any increase.
The council has until February 24 to apply to the Independent Pricing and Regulatory Tribunal, before a final decision will be made by the regulator in June.
