Wollongong ratepayers will be able to put off paying their rates for the next six months, under a new COVID-19 relief policy proposed by the council.
In a motion to be debated at the city's first online council meeting next Monday, the council is proposing to remove all penalty interest on overdue rates and annual charges until August 31.
This, the council says will provide additional financial relief options to residential and commercial ratepayers who "may be suffering financial hardship in these unprecedented times during the COVID-19 outbreak and recovery".
However - if all ratepayers choose to take up the policy and not pay their rates on time - it could affect the council's cash flow by up to $43 million, a report by the council's Chief Financial Officer Brian Jenkins says.
As businesses have been forced to close and residents have lost their jobs in recent weeks due to the worsening coronavirus outbreak, the could has been advising those affected the access its existing Debt Recovery and Hardship Assistance Policy.
However, in recognition that the effects of COVID-19 are "broadly spread", the council now says "more universally available measures are warranted".
"It is proposed that council consider a temporary relief package to ratepayers by ensuring those who cannot pay their current rates and annual charges next instalment are not charged a penalty through interest rates," Mr Jenkins said in his report.
The next round of rates will be due to be paid on May 31, and rate notices will be sent out as normal but the council will not require payment or enforce any legal recovery actions until the end of August.
"Effectively, this would allow ratepayers to self-assess their capacity to pay ... up until the end of the rate free period," Mr Jenkins siad.
"The financial impact on cash holdings could be in the order of $43M, which will substantially reduce Council's cash holdings and will reduce interest earned on investments for the period (approximately $0.05M)."
"This reduction in cash will be in addition to other service and revenue adjustments that will also have a substantial impact on cash holdings."
Lord Mayor Gordon Bradbery said the proposed rate relief policy was the best way the council could support ratepayers going through financial hardship within the confines of the NSW Local Government Act.
"There won't be interest charged on a delay in payment, which in effect means people can postpone payment until August 30," he said.
"But it's not an opt out - it's about delay. And if you can pay and pay them on time, you should keep paying them as normal."
He said the council's cash flow would take a significant hit and pointed out that the council was dependent on rates for well over half its annual income. He said it was vital for the council to continue to have an income, as it was a "big spender" with a capital expenditure of $100 million dollars a year, and a turn over of $330 million.
"We need to make sure we can continue to deliver our services and infrastructure," he said.
"We are a sizeable employer and spender in the local economy, so it's important that we can keep operating at this time," he said.
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