Ohakune abandons differential rates

Waimarino Bulletin, Volume 3, Issue 36, 18 February 1986, Page 1

Ohakune abandons differential rates

The Ohakune Barough Council has dropped its plan to introduce differential rating to the borough this year. The decision came after consideration of a letter from the Audit Office in an in-committee council meeting held on Monday 10 February. The council had originally decided to initiate the new rating system last October as "a response to an obvious imbalance in new valuations between residential and commercial properties, and an effort...to address the concerns of residential ratepayers at the level of their rates," according to a statement released at the time. The letter from the Audit Office pointed out that differential rating systems had been challenged in the courts on several occasions. "If you are in any doubt as to the legal aspects of your proposal, we suggest that you should seek competent legal advice," the letter stated. The letter went on to point out that particular care should be taken with the statement under. section 147A(l)(c) of the Local Government Act so as to fairly inform the public as to the nature of the proposals. "A council was investigated four years ago by the Ombudsman after a complaint had been made about the differential rates it imposed. "The Ombudsman was critical of the procedure adopted by the council under section 147A." The following statement was released by the Mayor, Bill Taylor after the meeting: "Council has decided not to proceed in introducing a form of differential rating within the Borough.

Close study of the present situation demonstrates that any radical change is not required. The balance between the three broad sectors of usage; residential, commercial and industrial and rural within the borough already provide a fair relativity. Properties with a present commercial and industrial usage provide and will continue to provide within the range of 25 to 30 per cent of borough rate revenue. Properties with a residential use provide approximately 65 per cent of borough revenue and the balance is provided by rural ratepayers. It is important to note that in the rating context usage does not equate wholly with zoning. An example in this regard would be commercial accommodation houses, not all of which are sited in commercial zones. The relevant rating sections of the Local Government Act 1974 require strict criteria to be met and the onus of proof is on the local authority to show that a form of differential rating is required to preserve relativities. While differential rating as such will not be introduced it is important to note that council fully intends to further explore the application of user-pay charges and uniform charges for borough services where warranted. The decision of council was reached after some six months of studying the rating system and close scrutiny of systems employed by other local authorities who have adopted forms of differential rating. Additional Audit Office and legal advice was also sought."