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Rating Equity

RATING EQUITY FURTHER ERODED

We have continued to pursue a more equitable rating policy for rural (particularly lakes) residents as part of our submissions to this year’s round of Rotorua Lakes (District) Council’s Long Term Planning. Many will have noted that the Plan included a one-off overall ‘average’ increase of 7% for FY2016 (to allow for a ‘balanced budget’ following several years of underfunded capital spending) and increases which are more relative to the annual CPI in subsequent years.

So in this first year, the increase as detailed in the LTP essentially equated to averages of 8% for urban residential, 8% for rural residential, 11% for Business and 15% for Farming. The primary drivers for these variances were based around recent property revaluations, and proposed changes to the Uniform Annual General Charge (UAGC) and differentials. Much of the first year increase is related to a ‘correction’ to the level of funding required to meet more recent and ongoing capital expenditure for water, wastewater and refuse activities (intended to relieve increased debt levels).

Whilst the overall intent of these proposals may seem reasonable, the crux of our discontent continues to surround the equitable apportionment of rates across the sectors, particularly the significant difference between urban and rural residential general rates. This gap is due to widen with the planned gradual removal of the rural differential over the next 3 years. The latest proposal to reduce the UAGC from the present $540 to $500 contributes to the negative impact on many (lakes) ratepayers.

We accept the premise that rates are primarily a tax on property values, along with charges for services and benefits received via a combination of targeted and general rates. And most of us are happy to pay a fair share towards the costs required to meet essential maintenance along with improvements to infrastructure and amenities that have significant community support. What we do not accept is the continual erosion of equity that the rural differential has provided for a more balanced apportionment of the general rate given the constantly significant variance of 65-75% between average urban and rural residential property values coupled with the reduced availability and access to services and amenities for most rural residents.

It is our firm belief that RLC are failing to meet the requirements for fairness and equity as intended by the Local Government Rating Act in pursuing their present policy towards removal of differentials without apparent compensatory measures. Discussions around these concerns with Council representatives over an 18 month period leading up to the end of 2013 saw some promising options being put forward designed to rectify the imbalance. Disappointingly, we have been unable to gain any further traction since.

Many will recall that we encountered a very similar scenario in 1990 which triggered huge resistance from hundreds of lakes residents. This resulted in a Council retraction and a satisfactory and appropriate differential being negotiated. Current proposals mean this will turn full circle which are deemed to be as unacceptable now as they were then. We believe Council should seriously address these inequities by utilising the tools at their disposal, i.e. more comprehensive targeting and/or adjusting the UAGC and/or applying appropriate differentials. It may require your collective support once again in pursuance of these objectives.

We have recently initiated and held meetings amongst representatives of the Lakes Community Board member Associations (including Hamurana) to determine common strategies towards furthering the debate and will be meeting with Council in the near future to discuss the issues. We intend to keep members up to date via email and our website.