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Rate rises, spending cuts, project delays and cost blowouts. That's what South Australian councils say they are grappling with as they prepare their budgets for next financial year. The higher cost of fuel is adding thousands of dollars of week in costs to local government, meaning residents could be hit with council rate hikes above inflation.

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00:02Construction projects, rubbish collection and road maintenance.
00:05All things carried out by local councils and all things with soaring costs.
00:10From our operations budget, we're looking at an increase of $40,000 to $50,000 a month.
00:15With diesel prices through the roof and uncertainty over bitumen supplies,
00:19Mount Barker Council says it may have to delay some of its road projects to save money.
00:24We probably can't commit longer term to those bitumen projects.
00:27We're very cognisant about starting projects that we can't commit to finishing.
00:31There's certainly a risk to any project across the board at the moment
00:35because of the rapid escalation of cost.
00:37The council says some of its projects could blow their budgets by up to 50%.
00:42But it's trying to keep residential rate hikes in line with inflation.
00:45We're looking for efficiencies to try and deliver to that strategy of maintaining CPI rather than increasing rates.
00:52Adelaide City Council is also searching for savings.
00:54We can't increase our income to cover the extra costs of everything we need to do.
00:59Town Hall's debating a 5.6% rate hike, around 2 percentage points above CPI.
01:05Nobody wants to impose unnecessary costs on any of our rate payers.
01:11But the local government association says the fuel crisis has left councils with limited options.
01:16They can either increase rates, they can decrease or change their service levels or they can even take out debt.
01:23The LGA says rubbish collection is an essential service that will not be cut back during the fuel crisis.
01:29But other services like library opening hours and facilities maintenance could be trimmed.
01:34The state's 68 councils will finalise their budgets in June.
01:39The California Review
01:39The Southland Fair
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