'Reasonable' Ruapehu rate rise resolution not unanimous

Ruapehu Bulletin, Volume 14, Issue 676, 4 March 1997, Page 1

'Reasonable' Ruapehu rate rise resolution not unanimous

Ruapehu District councillors were forced to make an unpalatable 'Hobson's Choice' decision last Friday when they met to determine a rating policy for the 1997/98 financial year. There was no unanimous agreement as to which of the two options put before them would best suit the needs of both council and ratepayers and the split vote was a reflection of the difficulties they had in resolving the problem. The council passed a resolution to "instruct the chief executi ve to prepare the 1997-98 draft annual plan on the basis that a reasonable rate.increase is required to sustain the Ievel of activity .that the council sees as desirable. They rejected a resolution that would have seen

an annual plan developed aiming at a nil-rate increase. Before cOuncillors were invited by the mayor, Weston Kirton to debate the options they were addressed by two spokesmen, one a local farmer and one a businessman from Taumarunui. The spokesman for the farming community said that farmers were facing a ridiculouS situation where land values in the north of the Ruapehu district were being increased by as much as 20-30 per cent while, a't the same time, productivity from the land was decreasing in dollar terms. He appealed for a nil increase. The spokesman for the business community (who had come to ask the council not to postpone Taumarunui' s Mainstreet programme, in order to

restore business confidence, said that "businesses in Taumarunui were hurting even more than the farming community" and could not afford a rate increase. He suggested the council could avoid having to levy extra rates by selling off some of its less profitable assets and operations to get out of debt. Mr Kirton invited councillors to debate the issue saying that he had got a "fairly clear signal" from councillors that they wanted rates to be set "at about the same level" for the next financial year given the downtum in the rural economy combined with the problems experienced by the business community following the eruptions of Mt Ruapehu. Chief executive Cliff Houston reminded coun-

cillors that the present rates were set in 1994/95 and they had voted for a nil increase in the 1 995/96 year thinking it might have been a one-off measure to meet the rural economy and eruption problems in 1995/96. Executive despair He said the council would not be able to sustain its present level of activity if, for a second year, councillors voted for another nil increase. "A nil increase will be very hard to live with and it will cut deeply into the community affecting the futures of recreation grounds, sporting facilities, libraries, information centres, marketing and Ruapehu District Council service centres". "I despair of the future of this district with its Tuni to Page 2

Reasonable rates rise for Ruapehu

From Page 1 small (and decreasing) population and its large area and, because of this, we cannot achieve any economies of scale". "Our ratepayers don't have the ability to pay more but the reality of a nil increase will mean that some of our proj ects will go backwards". Government costs "We are faced with more and more costs to meet gov-ernment-imposed regulations regarding treatment of water, disposal of effluent, rubbish dumps etc which have to be complied with under the Resource Management Act and the Local Authority's Act and, while the Ruapehu district is not unique in New Zealand, it does have a very difficult fiscal problem because of its small population base". Cr Bob Peck said that ratepayers should not blame the Council (if it was decided to increase the rates) but rather central government.

Replying to a suggestion that a solution might be found by raising further loans until the economy is restored, Mr Houston said that the problem with increasing debts too far is the perception of lending organisations towards the borrower ... "they might increase interests rates" (for added security). Mr Kirton warned that "alarm bells are ringing if we carry on as we have done to satisfy community boards 'wish lists' without an increase in rates. We will not be able to afford some of the things we are historically accustomed to". Mr Houston presented councillors with a summary of the current fiscal position together with the options confronting council. In.the year ending 1995 revenue derived from rates amounted to $7.26 1 mi llion. In 1996 rates revenue totaled $7.903m. The forecast for 1997 is $8.39 lm. Because the level of last year's rates had been set in

1 994/95 a number of unexpected events had occurred which left a shortfall of $720,000 between what was collected and what was expended. Events effects These 'events' which impacted on the revenue stream included Ruapehu District Council' s contributionto the Ruapehu 'Bounce Back' campaign (following the 1996 emptions), legal fees associated with the Pipiriki Road, a reduction

in trade refiise collection (as a result of the reduced business following the eruption) and a sum of $300,000 in unpaid dividends. Mr Houston said that the district' s economy had been very "flat'-' but the council still had to meet ever-in-creasing costs in order to comply with its statutory obligations under the Local Authority Act and RMA. He outlined four options in order of priority: (a) operation of essential services;

(b) compliance with statutory obligations; (c) continue work on non-essen-tial projects (such as new sealing, footpaths etc) and; (d) start new initiatives. Councillors voted to reject the first of the two resolutions for a nil rates increase by a vote of nine to four, but voted for a 'reasonable' increase with three councillors (Peck, Compton and Shaw) requesting that their dissenting votes be recorded.