Every three years the council must review various policies including its Revenue and Financing Policy, as it goes about its review of the 10-Year Plan (LTCCP).
So what is a Revenue and Financing Policy?
It is an important policy that sets out how we fund different activities and how we will gather rates. It does not cover how much we should spend, but rather sets out who pays for what and how they pay (e.g. Should you pay a user charge for a particular service? Should all ratepayers cover the cost of this service through their rates? Or should some ratepayers cover more of the cost than others through their rates?).
There are some significant changes being proposed.
Our existing policy levies rates based on your property's land value. Changes proposed will see rates levied according to your property's capital value.
There will be other changes that may influence how much you pay in rates. We’ll explain more about these changes later, but to view a hypothetical rates notice showing you how your rates could be affected if these changes are made, please click here.
Important: The figures in this tool are not what you will be charged in the upcoming 2008-09 year. They are merely an indication of rates you would face under the existing policy (land value) and proposed policy (capital value).
The change likely to have the biggest impact on your rates is the proposal to go from crediting interest and dividends from the General Rate to the Uniform Annual General Charge. This significantly redistributes how the rating burden is spread across our district with higher value properties paying more.
So what are the significant changes proposed?
- Changing from land value rating to capital value rating - The council is proposing to change to capital value of land for assessing the General Rate portion of your rates bill. Currently this is based on land value. Capital value takes into account the value of improvements such as houses and garages. The local works and services charge would also be based on the capital value of your property rather than land value. This is because evidence in the Shand Report points to capital value being a better indicator of ability to pay.
- Removing the 0.6 differential for farming and horticultural rating categories for the General Rate. This removes a lesser rating charge on the General Rate for farming and horticultural properties. This change would only go ahead if capital value rating was adopted because the council believes the two policies together would help ensure a fairer distribution of the rating burden. This is supported by Federated Farmers.
- Crediting interest and dividends from investments to the Uniform Annual General Charge (UAGC) account rather than the General Rate account – This change means everyone benefits to the same degree rather than just high-value properties when the council earns interest on its internal and external investments. The current policy favours higher value properties.
- Changing the funding structure for the council’s stormwater activity – Buildings that are larger tend to increase the flow of stormwater into council’s infrastructure, and council wants to move closer to a “user pays” type of funding policy.
How do I make comment on this policy and find out more?
You can let your local councillor know your views, or fill in a submission form here. Or get a form from a council office or e-mail your views to revandfin@tcdc.govt.nz. Make sure you get your submissions in by 4pm Wednesday July 2, 2008.
Tip! If you make a written submission, you can also give your views in person at a hearing of submissions by the full council on August 7, 2008.
There are also three key activities that the council would really like your feedback on regarding fees and charges.
Cemeteries – The council would like to know your views on whether you think the ratepayer should continue to subsidise burial costs. The council is proposing changing the funding structure for cemeteries, from a ratepayer subsidy of 55% to 40%. This means burial fees will increase. Please let us know your views.
Boat ramps – The council would also like your views on how it pays for harbour facilities like boat ramps. At present it is not proposed to make any change to how we fund this activity but we have had submissions in the past suggesting that some of this funding should come from user pays. Please let us know your views.
Building consent fees and charges – The council is proposing to reduce the amount of ratepayer funds that are used to fund the building consent process, and increase the fees charged. The proposal is to move to 90% of the cost of delivering building consent to be covered by fees, and 10% by rates. Previously only 70% was recovered through fees.
Full Policy
A full 140-page copy of the policy is available at the link at the top of this page and also from any council office. It sets out how we will fund all our activities. Go to page 3 of the summary brochure for a table summarising this information or click here to download this table and comparative information on what's in place now.
Who worked on this draft policy?
The council set up a community focus group to make recommendations on the review of this policy. Members of that focus group included the Mayor, two councillors and representatives from ratepayer and resident groups, Federated Farmers and community boards. The focus group reviewed the policy and made recommendations which the council considered before it finalised this draft policy for consultation.
Glossary
The Shand Report
The Shand Report or Rates Inquiry Report, is available at www.ratesinquiry.govt.nz
Uniform Annual General Charge – a fixed charge that is applied to each separately used or inhabited part of each rating unit in the district, and helps fund activities that benefit the whole district.
General Rate – a rate based on property value that helps fund activities that benefit the whole district.