SA council issues 12pc rate hike amid questions over 'missing' $4.5m

A South Australian council is facing questions after it "redirected" $4.5 million meant for wastewater management while it pushes ahead to raising rates, making them the highest in the state for the second year in a row.The District Council of Peterborough moved to hike rates by a further 12 per cent this week, which followed a 10 per cent increase for the area's approximately 1,500 residents last year.The latest rise is four times the rate of inflation.The council has been accused of misusing $4.5 million that was set aside to repair the wastewater system, and has faced scrutiny for recording a more than $500,000 operating deficit for the last financial year and losing its fifth chief executive officer in two years.The latest budget forecast has the council's deficit sitting at $240,000 deficit. It also needs to pay back a leaking wastewater management fund.The District Council of Peterborough forecast that the operating ratio for the 2026/27 financial year would be at -4 per cent, even with the 12 per cent rate hike that was announced last night.The council passed the 2026/27 annual business plan on Wednesday night. (ABC North & West: George Yankovich)Acting chief executive Henry Inat confirmed that the $4.5 million from the Community Wastewater Management Systems (CWMS) had been used by the previous management on "other council expenses"."As a consequence, we're now in a [situation] where the CWMS account has little if any funds," he said."It's a practice in the sector that councils can borrow from one account to another. However, those borrowings need to be accounted for."The CWMS account was meant to fund building and maintaining the community wastewater.Water and power are costly to deliver in Peterborough, which is 250 kilometres north of Adelaide in the southern Flinders Ranges.Peterborough's rates are the highest in South Australia. (ABC News: Will Hunter)Wastewater is treated locally and residents are charged an annual rate for that service.In 2025/26 that amounted to $678. Now it is $712.Mr Inat said those funds were redirected to cover operating expenses across "a raft of areas" and that repayments to the CWMS would have interest applied."We need to work through a process to recoup funds so we have the capital to then invest back into the CWMS system," he said."It's a challenge on several fronts. We've got a whole raft of other priorities in terms of service delivery, roads and so on."Over the last two years 10 council staff have been laid off. Mr Inat said revenue would not be raised by staff cuts."We're not looking for a government bailout," he said."We're looking to continue prudent financial management and rebuild that capacity."Peterborough resident Molly Moate (left), says real questions need to be asked about what ratepayers' money is going towards. (ABC North and West SA: George Yankovich)'What's the real picture?'Peterborough resident Molly Moate left last night's meeting with questions unanswered."Will the ongoing money raised by the CWMS be used in general revenue? If they need to rely on that CWMS money to go back into the budget line, what's the real picture for Peterborough?" she said."If the CWMS money wasn't there, could they pay the bills, could they pay their wages?"Where's the money coming from to replace the missing money?"The state government has been engaging with the council to extend the deadline to achieve a surplus in 2027/28.The council's annual business plan, which was adopted at last night's meeting, said there would be a focus on achieving "financial sustainability, sound governance and practical service delivery" over the next two years.The Essential Services Commission of SA said cost "overruns and implementation issues" had exacerbated Peterborough council's financial position and contributed to the failure CWMS failure.The Local Government Association of SA was contacted but deferred to the District Council of Peterborough for comment.The Local Government minister was also contacted for comment.