Frequently Asked Questions: 2021/22 Rates

These are answers to some of the questions asked of the Council in recent weeks. We will update this page as we receive more questions of relevance. Please read the explanation published by Council on 3 September for more information.

Please see here for an explanation of the rates examples used

Why have my rates increased so much this year?

In 2020 Council wanted to start addressing the historic underspend that has seen a decline in the condition of many of our assets, including water, roading, buildings and amenities.

It undertook a one-off borrowing of $1.5M in 2020 Council to ease the burden of rates on residents during the Covid-19 outbreak and was able to continue with its proposed programme of work. It used these funds to reduce
the amount required to be collected from ratepayers. The loan was used to fund the revenue shortfall, reducing the average rates increase for all ratepayers last year.

This was in effect a rates holiday for ratepayers for one year, and the borrowing would need to be repaid in the following years. This year Council needs to collect $22.9M incl. GST from ratepayers to continue to fund necessary work. Last year we collected $17.7M incl. GST from ratepayers. This is an increase of $5.2M or 29% and includes the
revenue shortfall from last year.

What has contributed to the rates increase this year?

There are several factors that contributed to the rates increases this year:

  • The increasing costs to maintain our assets and deliver Council services
  • In 2020 there was a partial rates holiday, made possible by borrowing. There is no rates holiday this year, so ratepayers feel a greater impact from the full increase to fund Council services.
  • Increased rates charges from GWRC.
  • The revaluation of properties, which affects the distribution of rates collected.

What have ratepayers been told about how much their rates will increase by?

All ratepayers have been issued with their rates statements. This sets out the rates payable for this year. For some, this has been higher than expected.

We now know the Long Term Plan consultation document did not fully explain the impact of the 2020 loan on this year’s rates. After listening to the community and considering the matter further, we understand that we made a mistake by not communicating the full impact of the 2020 loan. It is a one- off loan that won’t happen again.

Can we have a public meeting to talk about all this?

For individual situations, we have found that one-on-one meetings are most effective. You can make an appointment and call in to our offices.

Council is also planning a public meeting. Please check our meetings pages for details.

What went wrong?

The information we provided in the LTP Consultation Document focused on the increase in Council costs (17.9%), rather than the increase in rates revenue compared to last year (29%). This didn’t highlight the impact of the previous year’s rates holiday. The increase of 29% is because we need to collect all of the costs of Council this year, unlike 2020/21 where we borrowed part of it.

It is important to note that the Council has adopted the Long Term Plan and set rates as it is required to do. The rates have been assessed and are payable. The rates revenue is essential to fund the activities of Council that was committed to through the Long Term Planning process.

The rates increase was quoted as 15.3% in the Consultation Document. What was that?

We gave a number of examples of rates increases based on land value for different types of ratepayers in the LTP consultation document. The example of the $350,000 urban land value was used to estimate the likely increase for properties of that nature. This example led to a likely increase in the rates payable for such a property of 15.3% when compared to a property with the same land value last year.

Due to changes made to budgets following consultation the rates increase for that example ended up being 14.3% and this is what is included in the LTP.

Why does my Land Value matter?

Council uses the latest land values to calculate the General Rate. In September 2020 Quotable Value NZ carried out revaluations on all properties. These new values are what we have used to calculate this year’s General Rate.

As some land values have changed disproportionately to others, the distribution of the General Rate has changed. To calculate the General Rate we take the total amount of land for urban and rural and divide it by the amount we need to collect for this rate type. That gives us the factor we apply against your new land value.

If your land value has increased more than the average, your proportion of total land value will be higher, and you will need to pay a larger proportion than you may have in previous years.

Where is the extra money going?

Council does not collect more than it needs to deliver the services and activities outlined in the Long Term Plan or Annual Plan. This year that was $22.9M (including GST). Last year Council needed $17.7M. Any extra money is going on additional costs to provide services.

What happens to the funds collected through other fees and charges? Where does that fit in?

Revenue that Council collects from developers (financial contributions) is transferred into special reserves (Infrastructure and Restricted Reserve) and used to fund activities as a result of growth in our district (for example if we need to put in a new water pipe because the existing one is not large enough to cope with the amount of people using it).

Council also receives funds from leases, hire of halls and rooms, building and resource consents. This revenue brings down the amount of money that we need to collect in rates to cover the costs of delivering Council services. This is the amount we need to collect from our ratepayers.

Do I have to pay the extra rates?

It is important to note that the Council has adopted the LTP and set rates as it is required to do. The rates have been assessed and are payable. The rates revenue is essential to fund the activities of Council that was committed to through the LTP planning process.

I have no footpath, little or no road maintenance. What am I getting for my rates?

Council rates pay for the delivery of all our services. This ranges from maintaining roads and footpaths, providing clean drinking water, disposing of stormwater and wastewater, managing all the bylaws, providing libraries and swimming pools, as well as the upkeep of all our parks, reserves, buildings, and public facilities, to name a few.

Rates are charged for the services you have access to and benefit from.

Council aims to provide at least a basic level of service to all our ratepayers, which is constrained by the significant volume of ageing infrastructure which has been underfunded for many years.

I don’t receive rubbish collection services. What is this money I am expected to pay actually being spent on?

Rural ratepayers do not get their rubbish collected. Although you do not get your rubbish collected, there is still a need to contribute towards the cost of removing waste and transporting it to the landfill, and the cost of recycling. You benefit from living in a district that manages its rubbish efficiently and effectively.

What happens if I can’t pay my rates this year?

We understand the impact of this year’s rates increase on our ratepayers, and wish to help anyone that needs our support in meeting their rates payments:

  • Rates payments can be spread over a longer period.
  • You can apply for the rates rebate available from Government to low-income families. The criteria include:
    • You must be the person living in your home, and
    • the person paying the rates for that home.
      If eligible, you can get up to $665 off your rates. It’s really easy to apply – for an application form, please call our office and we can post one out to you, or visit our website for one.
  • Rates postponement is also an option.

Please call us to discuss the above. You’re welcome to visit the Council office when we are open to discuss your specific situation.

What can you do to help me afford these new, higher rates?

There are a number of options available to low-income households.

  • Apply for a Rates Rebate provided by DIA and administered through the Council
  • We are happy to set up a payment plan that allows payments to be spread out longer.
  • We can also discuss a rates postponement plan.

Please call us to discuss.

What are you doing about the high rates?

As Council didn’t provide the full picture on the rates increase, we want to consider options to ease the rates burden on ratepayers by considering ways to reduce the budget and rates this year.
We need to continue to deliver our essential services and so there is not much scope for substantial changes. Potential options include:

  1. Council could review to see whether anything could be done differently in providing essential infrastructure, as this consumes the bulk of costs.
  2. Council could review the budget to identify any possible savings. In other words, we could decide to do less than currently planned or defer some work.
  3. Council could consider alternative ways of funding services, such as through use of reserves, but needs to be mindful this could reduce our reserves for even leaner times.

If sufficient savings or changes to rates funding can be identified, the Council could consider setting rates again using a procedure available for this purpose in the Local Government (Rating) Act 2002. This will enable some reduction in rates assessed in the current year. The reductions are estimated to be minimal, so this may not be an effective option.

Why are the figures in the report to Council on 2 June different to those on 30 June?

The $20,083,313 in the report on 2 June was GST exclusive.  The rates adopted on 30 June as part of the rates resolution are GST inclusive.  When we adopt the rates we always use the GST inclusive figure as most ratepayers cannot claim back GST.  There are slight variations in amounts due to minor changes made up to the adoption date.

What is the Council’s rating model based on?

The Council’s rating model is based on:

  • Rating units (i.e. one fixed charge per property or connection to a service)
    • Uniform Annual General Charge (UAGC)
    • Reserves & Amenities
    • Water Supply (only applied to connected properties)
    • Wastewater (only applied to connected properties)
    • Refuse (only applied to urban and rural serviced properties)
  • Land values (independently valued by Quotable Value (QV) every three years)
    • General

For the General rate, a ‘differential’ is applied to each dollar of rateable land value to determine the share for that rating unit. This is where an above average increase in land value would result in an above average increase in the General Rate applied.

What is the planned rating review?

The Council has, for some time, planned to review the rating model in the 2021-22 year. This review will be a comprehensive examination of how the cost of council services and facilities are funded by ratepayers, including whether land value is the most appropriate method of levying the General rate. We encourage our communities to engage with this process to have their views heard.

Page Reader Press Enter to Read Page Content Out Loud Press Enter to Pause or Restart Reading Page Content Out Loud Press Enter to Stop Reading Page Content Out Loud Screen Reader Support