Newcastle council says a submission it made about rate pegs leading to "excessive cuts in expenditure" and "a mounting infrastructure backlog" was about "councils in general, rather than City of Newcastle specifically".
The council made the comments in response to criticism from Liberal councillors about a submission City of Newcastle made to an inquiry on the ability of local governments to fund infrastructure, while defending itself as "one of the most financially sustainable councils in NSW".
The submission, written by council CEO Jeremy Bath, said any discrepancy between the rate peg and cost changes had "long and ongoing effects".
"It creates unwarranted political difficulties for councils that really can and should raise rates above the peg to meet genuine expenditure needs and ensure their long-term sustainability"," the submission said.
"This has led to excessive cuts in expenditure on infrastructure maintenance and renewal, leading to a mounting infrastructure backlog.",
Liberal councillors Jenny Barrie and Callum Pull put out a statement calling on the council to reveal "what infrastructure cuts have been implemented" as a result.
"The lord mayor loves to hold up her little sign and brag about how much she's spending, and yet this submission paints a much darker picture," Cr Pull said.
"This submission seems to indicate extensive hidden cuts to important infrastructure that the council hasn't been upfront about."
Cr Barrie said the submission came amid a new outdoor dining fee introduced by the council and after the council's staffing numbers had "ballooned" to more than 1300.
The Liberal councillors said they consistently opposed the removal of rate caps as advocated by the CEO in the council's submission.
Their statement comes after Cr Barrie voted for a lord mayoral minute supporting the council's submission to the inquiry on May 28. Cr Pull was absent for the meeting.
Cr Barrie declined to comment on why she was objected to the submission after previously supporting it.
A spokesperson for City of Newcastle said its submission to the state government inquiry noted "the longstanding and complex financial sustainability challenges faced by the local government sector"
"[It] clearly references the experiences of councils in general, rather than City of Newcastle specifically," the spokesperson said.
"It's incredibly disappointing that anyone would attempt to twist our words to claim that comments about councils in general were in fact specifically about City of Newcastle."
The spokesperson said the council had doubled its infrastructure program over the past 10 years while delivering balanced budgets, with surpluses forecast for the next decade.
"City of Newcastle is one of the most financially sustainable councils in NSW, with a track record of prudent financial decisions and setting aside funds for future capital works," the council spokesperson said.
"We have worked extremely hard to make ourselves financially sustainable despite being the only council in NSW to pay the NSW government more than we receive in grants."
Lord mayor Nuatali Nelmes also addressed the inquiry where she spoke about evolving service delivery obligations and the impact of cost shifting.
She said Newcastle was a financially sustainable council that exceeded its current benchmark, but other councils could not say the same.
"Many of them do not have rate bases or even the ability to fund everyday services," she said.
"It is for this reason that the current systems are untenable as they do not provide for equal opportunity or for councils to have different needs and the funding to suit their local communities needs which is the beauty of local government."
