The Essential Services Commission has released a list of 21 Victorian councils who plan to apply for exemptions before the cap is introduced in July.

The Essential Services Commission has released a list of 21 Victorian councils who have submitted expressions of interest for exemptions to the cap, due to be introduced in July.

Horsham Rural City, Hindmarsh, Yarriambiack and Buloke councils have submitted expressions of interest.

The cap, announced in December, is based on the Melbourne Consumer Price Index for the next financial year, as forecast by the Victorian Treasury. 

Victoria’s 79 councils have until March 31 to apply to the commission for a higher rate increase.

Councils do not have to specify the rate increase they are seeking in their applications.

Horsham Rural City councillors voted on Monday night to apply for a one per cent increase on the 2016-17 rate cap.

Since 2008, council has increased its capital renewal spend to address an infrastructure renewal gap.

The gap is the difference between spending on asset renewal and the declining condition of council assets. 

In the past four years, council has set the gap at one per cent of its rates increase.

Council’s general rates increase last year was four per cent.

Cr Pam Clarke said even with the infrastructure renewal gap at one per cent, assets including rural roads were going backwards at a rapid rate.

“We continually have to go to our community and ask for more money, and that is really hard on them,” she said. “It’s also really hard on them if they can’t get to their homes because of roads deteriorating.

“If we decide not to put that one per cent increase forward, then where do we get the money from? 

“We then have to look at what services we’re not going to provide.

“Is it going to be money for sporting grounds, will it be crossing attendance at schools – what it is we cut out?”

Cr Clarke said council had to strive for a one per cent increase to the cap.

”A 1.5 per cent rate rise, which is what it is if we take out one per cent for infrastructure, won’t work,” she said. 

“It will be interesting to see how we go, but it’s too important an issue not to move forward with it.”

Cr David Grimble said he understood why the government wanted to cap rates.

​“But it’s more complicated than just doing that across local government,” he said.

“What we have is an unsustainable environment in the way we’re funded.

“If we continue down the same line, all rural councils are in the same boat in that they can’t rate their community high enough to maintain assets in the way they should do.

“I think the answer is more funding from other tiers of government.”

Cr Sue Exell said rate capping could sound beneficial to residents, but the long-term repercussions were concerning.

Cr Mark Radford said a one size fits all model was flawed.

“It takes away the uniqueness of a council and the fact we all have different issues,” he said.

“I fully support this council putting it’s hand up and saying ‘Mr Premier, things are different over here’.”

Mayor Heather Phillips was the only councillor to vote against applying for the increase.

“I have a slightly different take on this. Sometimes there needs to be an external factor to limit the amount of rate increases,” she said.

“I don’t think we should be applying to the commission for an extra one per cent. One per cent of rates is about $200,000.

“I think we should be using the 2.5 per cent the government has imposed, then say to government, ‘You’ve imposed this without looking at what our individual needs are’.

“It is a case of telling the government that we need more funding around our roads, bridges and infrastructure, and I think we should do that internally.”