RATES will continue to rise in the City of Hume, despite the council registering a multi-million dollar profit.

Hume residents have been left baffled by the council’s decision to raise rates by four per cent this year, after the 2009-10 financial report was revealed last week.

Councillors gave the report a glowing review for its budget surplus of $8 million, as well as an additional $43.7 million in funds.

But Sonja Rutherford, secretary of the Broadmeadows Progress Association, said she was surprised council had a surplus when rates had risen this year and could increase by up to seven per cent next year.

Mrs Rutherford called for an investigation into the figures.

“How can they justify increasing rates when they’ve got a surplus?” Mrs Rutherford asked.

“We’ve had astronomical rate rises and it really is of great concern. Rates are an unfair form of tax, because they’re not related to income, they’re related to property. The rating system needs to be looked at.”

But mayor Geoff Porter said the council was under “great” management.

“Some of the rate increase was forced upon us this year from the State Government’s levy,” Cr Porter said.

The landfill levy increased by 1.78 per cent in July after amendments to the Environmental Protection Act.

Councillor Jack Ogilvie said the rate increase was reasonable due to the levy, as well as extra costs in staffing, fuel and operating expenses.

“Rates could be going up seven per cent next year,” he said

“But that levy has to be paid.”

Despite the expected rate increase, Cr Ogilvie defended the council’s $43.7 million in savings.

“It’s not a case of us having money just sitting there,” Cr Ogilvie said.

“The money is to pay for capital works.”

Cr Ogilvie said the council had cut buying down to its lowest ever figure of $21 million.

“Hume had a large debt of about $46 million in 1999,” he said.

“It has taken quite a while and a lot of hard work, but this is one of the most impressive financial reports I’ve seen.

“We’re not driving around in Mercedes, but we don’t have holes in our pants either.”

The council’s finances also received a boost from the Victorian Grants Commission, who chose to pay 25 per cent of next year’s grant allocation early.

But there was also unexpected expenditure because of staff and contractor fees.