Alpine Shire Council says it will rectify an “honest mistake” that resulted in a breach of the 2025/26 rate cap, with a 3.96% average rate increase applied to the 2025/26 financial year, rather than the approved 3% capped increase – equating to $168,304 in overcharges.
Newly-elected Mayor, Gareth Graham said Council will consider a recommendation to rectify the breach at this month’s Council Meeting.
“Although there is no statutory requirement to amend the error, and no associated penalty, Council will look at setting the 2026/27 rates and charges at least $168,304 lower than what they would be if we applied the full rate cap set by the Minister for Local Government,” Mayor Graham said.
The Council was identified through the Essential Services Commission (ESC) annual rate cap reconciliation that it was non-compliant to the rate cap for 2025/26.
The Fair Go Rates system limits the maximum amount a council can increase its average rates in a year without seeking approval for a higher cap, with the rate cap set at 3% for 2025/26.
Along with General Rates and Service Charges, Council had previously – until this financial year – raised a Special Rate for Dinner Plain properties, with special rate funding not considered a part of the Essential Services Commission calculated rate cap, the Council said in a statement.
“Council made the decision this year to no longer raise the Dinner Plain Special Rate, resulting in a reduction in income of approximately $167,000, and a small rate reduction over the rate base overall,” it stated.
Council’s Chief Executive Officer, Will Jeremy said the rate cap breach occurred due to a system error.
“Our rating system provider tested a classification change for us and then moved it into the live system,” he said.
“We had been told that this change wouldn’t take effect until 1 July 2025; however, that advice was wrong, and the change went live before the end of the financial year.
“This early change meant our average base rate increased earlier than planned, and when the 2025/26 rate cap was applied, it was calculated on this higher base rate by mistake.”
Mr Jeremy said staff checked the usual system reports on 30 June 2025 and 1 July 2025 to make sure Council was within the rate cap, as required.
“Because the change had actually been applied in 2024/25, however, the reports didn’t show that the cap might be exceeded,” he said.
“I want to reassure our ratepayers that we had absolutely no intention to go over the rate cap.”
The ESC has also requested a ‘statement of explanation’, to explain the reason for non-compliance to the rate cap, how the Council may rectify it, and any actions Council may take to prevent non-compliance in the future.
“The response provided is published in the ESC compliance report,” said Mayor Graham.
“This was an honest mistake, and we are committed to complete transparency with our ratepayers and community as we correct it.”
Hindmarsh Shire Council in the state’s north-west also failed to comply with the 3% rate cap set by the Minister for Local Government for this financial year, with an average rate increase of 3.05%.
The Council has attributed the non-compliance its unintentional use of an early set of estimates when it determined its 2025-26 rates.
It says the rate cap breach will be addressed by decreasing the total rates revenue in the next financial year to the tune of around $3,949 – less than a dollar per rateable property.
“As soon as we became aware of this error, councillors and council officers were committed to identifying a fair resolution for the community,” said Mayor, Ron Ismay.
