Council explains rating problems

Ruapehu Bulletin, 10 August 1990, Page 4

Council explains rating problems

The following is an explanation from Ruapehu District Council General Manager Cliff Houston on the current situation facing the council with regard to striking of rates.

At the July Council meeting the budget for the current financial year was considered and the Annual Plan is currently being publicly notified and submissions called for. The budget calls for a total increase of rates of 5.7% over the level for the 1989/90 financial year. This increase is not in addition to that

already imposed in the Transition Quarter and incorporates the 4% real annual increase made on the transitional instalment. Thus the 5.7% increase represents the increase over a 15 month period rather than for just one year. Although the Council's rate requirement of a total of 5.7% more than

the last complete financial year it does not. follow that all rates within the District will rise by that amount. In fact, regardless of the rating system that will be adopted, some will rise to a much greater extent and some to a much lesser extent because for the first time all land valuations in the Ruapehu District have been equalised to a uniform date and because the former councils had different rating systems which are not entirely

compatible with each other and thus require modification. The Council has adopted a general philosophy towards the collection of rates which may be implemented now or moved towards over a period of time. This can be summarised as follows: • Firstly each rating assessment in the District will have imposed upon what is known as a uniform annual general charge to cover general infrastructural and amenity costs of the District. Some areas of the previous Councils already had these charges imposed upon them in varying amounts. Realistically in current circumstances a charge of some $200$250 is being looked at. • A general rate on the land value of all rateable properties in the District. The Council considers, as a matter of general principle that all District expenses with the exception of user charges such as water supply, sewerage disposal, refuse collection (but not refuse disposal facilities) and signifi-

cant stormwater drainage schemes should be a charge on the general rates of the District. • The uniform annual general charge and the general rates together finance all District expenses. It follows that the higher the uniform annual general charge the lower will be the rate in the dollar on the land value of individual properties as between the two components sufficient revenue has to be generated to fund the expenditure involved. • In communities that benefit from the service a uniform annual charge is proposed for water, sewerage disposal and refuse collection. This simply means that the total cost of these services is divided by the number of properties in the area of benefit and a sum arrived at which is a uniform charge to be applied against all properties in the area of benefit. It is also possible that for these services there could be a mixture of a land value rate in the dollar on the property and a uniform charge rather than recovering all costs by uniform

charge but in that event the sum of the two would not exceed the total amount required. For example a sewerage charge could be levied of $T00 per property or. alternatively a charge of $50 levied per property plus a rate on the land value. Having defined a general philosophy the Council has considerable practical difficulties in the first year of implementation. Those difficulties in the main revolve around the previous rating levels of the former councils. General rates were not collected at the same rate in the dollar throughout the District and any proposal to standardise to a uniform rate will result in some ratepayers paying a lot more and some a lot less. Likewise any change in the level of the uniform annual general charge will reflect in the overall incidence of rating.