Wodonga Council has overcharged ratepayers $18 million for waste management services in the past decade, according to the Victorian Ombudsman.
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An investigation into the city’s waste collection by Ombudsman Deborah Glass found that council was overcharging ratepayers to cover other services.
The report found in the decade from 2006 to 2016, council charged ratepayers $55.3 million for waste management services when, in fact, it should have only billed them $37.5 million.
Ms Glass found the council had maintained the practice to avoid “unnecessary negative public reaction”.
She said while rate capping had presented councils with challenges, that was only introduced in 2016 and didn’t excuse the council’s behaviour.
“Rate capping does put financial pressures on councils, especially rural councils with a smaller rate base and, often, ageing infrastructure,” Ms Glass said.
“But those financial pressures need to be faced head on, in partnership between councils and their communities, rather than buried in the financial fine print.”
The Ombudsman has recommended that Wodonga Council “reduce its waste management service charge to only recover the reasonable costs of the collection and disposal of refuse and to effect the above within three years from the finalisation of this investigation”.
She also recommended that section 162 of the Local Government Act 1989 (Vic) be amended to require that charges for the collection and disposal of refuse reflect the reasonable cost of providing that service.
A spokesperson for the Minister for Local Government Marlene Kairouz said “waste management charges are there to pay for the disposal of waste, not as a way to slug higher rates”.
"What Wodonga City Council did was wrong and the Ombudsman has concluded that,” the spokesperson said.
"We brought in rate capping to stop Victorian ratepayers from being taken for a ride and we’ll do everything we can to ensure that continues."
Wodonga mayor Anna Speedie held a press conference at midday on Wednesday.
“The Ombudsman’s report did not find any breaches of the Local Government Act and showed that the council had communicated and engaged the community in its budget and rates processes,” a council statement said.
“The council accepts the Ombudsman’s recommendation and concurs that the Local Government Act pertaining to the collection and disposal of refuse needs clarification.”
More to come