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Governing Body
25 June 2015
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Rates setting
2015/2016
File No.: CP2015/10800
Purpose
1. To recommend to the Governing
Body the setting of rates for 2015/2016.
Executive
Summary
2. The Local Government (Rating)
Act 2002 (LG(R)A) requires that rates are set by resolution of the council
after the adoption of the Long-term Plan. This report contains the
recommendations necessary to set the rates for 2015/2016 which are in
accordance with the Revenue and Financing Policy and Funding Impact Statement
in the Long-term Plan 2015-2025 to be considered by the Governing Body in
separate preceding report on this agenda.
3. The
recommendations include the following agreed rates related changes for
2015/2016:
· a Uniform Annual General Charge
(UAGC) of $385
· setting the overall share of general
rates from business at 33.0 per cent
· no further rates transition, same
rates for same value property
· the Interim Transport Levy (targeted
rate) to fund the accelerated transport programme
· the introduction of a new City
Centre targeted rate for residents
· an increase in the Mangere-Otahuhu
swimming pool targeted rate to fund free adult entry to the new Otahuhu
swimming pool
· the
creation of a new general rate differential category for properties with no
road access.
4. Ballots in May 2015 for the
extension of the boundaries for the Dominion Road and Parnell Business
Improvement Districts (BIDs) were successful. The targeted rates recommended
for these BIDs are based on the extended BID boundaries.
5. The recommendations in this
report will also set the instalment dates, early payment discount, and
penalties to be applied for late payment for 2015/2016.
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Recommendations
That the Governing Body:
a) resolve under the Local
Government (Rating) Act 2002 to set rates for the 2015/2016 financial year
and to authorise the addition of penalties as follows:
i) that a Uniform Annual
General Charge be set, for all rateable land, at $385.00 (including GST) per
separately used or inhabited part of a rating unit.
ii) that a general rate be set
for all rateable land based on the capital value of the land and at different
rates in the dollar for different categories of land as set out in the table
below:
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Category
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Rate in the
dollar of capital value (including GST)
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Urban business
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0.00680685
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Franklin urban
business
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0.00660375
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Urban
residential
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0.00246777
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Rural business
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0.00612007
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Franklin rural
business
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0.00594733
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Rural
residential
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0.00222099
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Farm/lifestyle
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0.00197422
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No road access
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0.00061694
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Uninhabitable
islands
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0
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iii) that a transport targeted
rate be set for all rateable land except land in the Uninhabitable Islands
category, per separately used or inhabited part of a rating unit (SUIP) and
differentially for different categories of land, as follows:
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Categories
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Amount of rate per SUIP ($) (including GST)
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Urban business, Franklin
urban business, rural business and Franklin rural business
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182.85
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Urban residential, rural
residential, farm/lifestyle and no road access
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113.85
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iv) that waste management targeted
rates be set differentially for different categories of land at different
fixed amounts as set out in the table below:
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Category
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Type of
waste management targeted rate
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Amount of rate
($ including GST)
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Basis for charging
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Rating units in the former Auckland City
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Waste management – full service
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225.56
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Per available service
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Waste management – where refuse opt out applies
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96.74
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Per available service
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Waste management – where recycling opt out applies
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155.43
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Per available service
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Waste management – where both refuse and recycling opt out
applies
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26.61
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Per available service
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Waste management – additional recycling charge
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70.13
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Per service provided
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Rating units in the former Franklin District where a service
is provided or available
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Waste management – refuse collection
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31,34
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Per SUIP
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Rating units in the former Franklin District where a service
is provided or available
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Waste management – recycling collection
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70.13
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Per SUIP
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Rating units in the former Manukau City where a service is
provided or available
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Waste management
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225.56
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Per SUIP
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Rating units in the former North Shore City where a service
is provided or available
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Waste management
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88.68
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Per SUIP
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Rating units in the former Papakura District where a service
is provided or available
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Waste management
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101.47
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Per SUIP
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Rating units in the former Rodney District where a service
is provided or available
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Waste management
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103.23
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Per SUIP
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Rating units in the former Waitākere City where a
service is provided or available
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Waste management
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88.68
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Per SUIP
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For these purposes the
various waste services are as set out in the Auckland Waste Management and
Minimisation Plan.
v) that a city centre targeted
rate be set differentially for all rateable land in the urban business and
urban residential differential categories, as defined for the purposes of the
general rate, in the central area, of an amount of $0.00182181 (including
GST) per dollar of the capital value of the rating unit for urban business
rating units and of a fixed amount of $57.50 (including GST) per separately
used or inhabited part of a rating unit for urban residential rating units.
vi) that Business Improvement
District targeted rates be set for all rateable land in the business
differential categories, as defined for the purposes of the general rate,
within the defined Business Improvement District area, of a fixed amount per
rating unit and a rate in the dollar of capital value, as set out in the
table below:
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BID area
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Fixed amount per rating unit ($)
(including GST)
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Rate in the dollar of capital value
(including GST)
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Avondale
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0.00
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0.00152465
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Birkenhead
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0.00
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0.00124851
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Blockhouse Bay
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0.00
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0.00184429
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Browns Bay
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0.00
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0.00063987
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Devonport
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250.00
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0.00084190
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Dominion Road
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0.00
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0.00083876
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Ellerslie
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0.00
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0.00263181
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Glen Eden
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0.00
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0.00116236
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Glen Innes
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0.00
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0.00164001
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Greater East Tamaki
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195.00
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0.00004468
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Heart of the City
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0.00
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0.00059540
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Howick
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0.00
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0.00111573
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Hunters Corner
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0.00
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0.00098380
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Karangahape Road
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0.00
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0.00061580
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Kingsland
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0.00
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0.00060708
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Mairangi Bay
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250.00
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0.00126159
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Mangere Bridge
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0.00
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0.00197382
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Mangere East Village
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0.00
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0.00053772
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Mangere Town
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0.00
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0.00516031
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Manukau Central
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0.00
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0.00051556
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Manurewa
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0.00
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0.00117726
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Milford
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0.00
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0.00089015
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Mt Eden Village
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0.00
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0.00079356
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New Lynn
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0.00
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0.00059889
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Newmarket
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0.00
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0.00087618
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North Harbour
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150.00
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0.00009551
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North West District
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250.00
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0.00034993
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Northcote
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0.00
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0.00345761
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Old Papatoetoe
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0.00
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0.00171669
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Onehunga
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0.00
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0.00166140
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Orewa
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0.00
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0.00096823
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Otahuhu
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0.00
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0.00097338
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Otara
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0.00
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0.00159309
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Panmure
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0.00
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0.00211238
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Papakura
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0.00
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0.00087494
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Parnell
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0.00
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0.00067649
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Ponsonby
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0.00
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0.00071513
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Pukekohe
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0.00
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0.00061139
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Remuera
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0.00
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0.00144962
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Rosebank
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0.00
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0.00048053
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South Harbour
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0.00
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0.00059125
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St Heliers
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0.00
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0.00143753
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Takapuna
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0.00
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0.00049150
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Te Atatu
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0.00
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0.00179763
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Torbay
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0.00
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0.00101267
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Uptown
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0.00
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0.00017494
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Waiuku
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0.00
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0.00112851
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Wiri
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0.00
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0.00046182
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vii) that the Ōtara-Papatoetoe
and Māngere-Ōtāhuhu swimming pool targeted rates be set for
all rateable land in the residential differential categories, as defined for
the purposes of the general rate, located in the respective
Māngere–Ōtāhuhu Local Board and Ōtara-Papatoetoe Local
Board areas as set out in the table below:
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Local board
area
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Fixed
amount per SUIP ($) (including GST)
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Māngere–Ōtāhuhu
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30.51
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Ōtara-Papatoetoe
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28.85
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viii) that the Riverhaven
Drive targeted rate be set on land in Riverhaven Drive, Rodney, in respect of
which the council has provided financial assistance for the construction of a
road that gives access to the properties, of an amount of $10,317.02
(including GST) per rating unit
ix) that the Glorit Flood Gate
Restoration targeted rate be set of an amount of $166.0784 (including GST)
per hectare of land in the three properties below benefiting from the
facility (as assessed by the council), as follows:
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Valuation
number
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Legal
description (abbreviated)
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Area of
benefit (Ha)
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Amount of
rate ($) (including GST)
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00910-00102
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Sec 27 SO
59120
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245
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40,689.21
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00910-00502
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Lot 5 DP
127940
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2
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322.16
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00910-00400
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Sec 2 SO 69274
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17.5
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2,906.37
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x) that the Waitakere Rural
Sewerage targeted rate be set for all land in the district of the former
Waitakere City Council which has an on-site waste management system and in
respect of which the council has available the service of pumping out the
system and which is scheduled to take place within the 3-year period
commencing 1 July 2015, of an amount of $185.13 (including GST) for each such
on-site waste management system.
xi) that the Retro-fit Your
Home targeted rate be set on land in respect of which the council has
provided financial assistance under the Retro-fit your home scheme, at
different levels for each year that the ratepayer has started repaying the
financial assistance by this targeted rate, of an amount set out in the table
below:
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Year of
repayment
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Rate in the
dollar of value outstanding as at 1 July 2015 (including GST)
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1
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0.17027353
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2
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0.18597249
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3
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0.20627096
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4
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0.23346952
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xii) that the Kumeu Huapai
Riverhead Wastewater targeted rate be set on land in respect of which the
council has provided financial assistance to connect to the Kumeu Huapai
Riverhead pressurised wastewater scheme, at different levels for each year
that the ratepayer has started repaying the financial assistance by this
targeted rate, of an amount set out in the table below:
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Year of
repayment
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Rate in the
dollar of value outstanding as at 1 July 2015 (including GST)
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1
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0.12113080
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3
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0.13223477
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xiii) that the Point Wells
Wastewater targeted rate be set on land in respect of which the council has
provided financial assistance to connect to a pressure wastewater collection
system in Point Wells, of an amount per separately used or inhabited part of
a rating unit based on the extent of the financial assistance as shown in the
following table:
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Total
assistance provided
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Amount of
fixed rate ($) (including GST)
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$ 8,000
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674.60
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$ 8,500
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716.76
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$ 9,000
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758.92
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$ 9,500
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801.08
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$10,000
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843.25
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xiv) that the Jackson Crescent
Wastewater targeted rate be set on land in respect of which the council has
provided financial assistance to connect to a wastewater collection scheme in
the Jackson Crescent, Martins Bay areas, of an amount of $608.88 (including
GST) per rating unit.
xv) that for the purposes of the
above rates, the definitions of the differential categories, the central
area, the various Business Improvement Districts and the expression
"separately used or inhabited part of a rating unit" are as set out
in the Funding Impact Statement in the Council's Long-term Plan 2015-2025.
xvi) that in 2015/2016, the rates be
due in four instalments as set out in the table below:
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Instalment
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Due Date
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1
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31 August 2015
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2
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27 November
2015
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3
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26 February
2016
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4
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27 May 2016
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xvii) that a penalty of 10 per cent
will be added to so much of any instalment of rates assessed in the 2015/2016
rating year that remains unpaid on the day after the due date.
xviii) that further penalties of 10
per cent will be added to rates assessed in previous financial years that are
unpaid on 3 July 2015; and then again on 3 January 2016.
xix) That the discount for the early
payment of rates be set at 1.4 per cent of the 2015/2016 rates, if those
rates, together with any outstanding prior years’ rates and penalties, are
paid in full on or before the due date of the first instalment (31 August
2015).
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Comments
Background
6. On 8 May 2015, the Governing
Body agreed the rates related policy changes recommended from the Budget
Committee for inclusion in the Long-term Plan 2015-2025. These included:
· Uniform
Annual General Charge (UAGC) of $385
· overall
share of general rates from business at 33.0 per cent
· no
further rates transition, same rates for same value property
· Interim
Transport Levy (targeted rate) to fund the accelerated transport programme
· new
City Centre targeted rate for residents
· increase
in the Māngere-Ōtāhuhu swimming pool targeted rate to fund free
adult entry to the new Ōtāhuhu swimming pool
· creation
of a new general rate differential category for properties with no road access.
Decision Making
Rates resolution
7. For the council to assess rates
for the 2015/2016 financial period, section 23 of the Local Government (Rating)
Act 2002 (LG(R)A) requires the council to set the rates by resolution. The
resolutions contained in this report are consistent with the relevant
legislation and the Long-term Plan 2015-2025.
8. The budget is set based on the
assumption that rates will be invoiced on time. A delay in setting the rates
may cause issues in delivery of the rates assessment/invoice in time for the
first instalment due date. It will also cause delays to when the arrears
penalty can be applied. Delaying the setting of rates may result in increased
administrative costs to the council.
9. A copy of the rates resolution
must be sent to the Secretary of Local Government within 20 working days of
adopting the rates resolution.
10. The LG(R)A requires that the
instalment due dates must also be set in the same resolution as those used to
set the rates. The resolutions necessary for the Governing Body to set the
rates and instalment due dates for the 2015/2016 financial period are included
in the recommendations in this report.
Business Improvement District targeted rates
11. The council uses targeted rates
to fund Business Improvement District (BID) programmes where businesses have
agreed to work together, with the support of the council to improve their
business environment.
12. Consultation on the Long-term
Plan 2015-2025 included possible extensions to the existing BID programmes in
Dominion Road, North Harbour and Parnell BID boundaries. Successful ballots
for the extension of the Dominion Road and Parnell BID’s were undertaken in
May. The North Harbour BID extension will not be proceeding for 2015/2016.
13. The resolutions necessary for the
Governing Body to set the BID rates for 2015/2016 are included in
recommendations of this report.
Early payment discount, late payment penalties and
instalment dates
14. Consultation on the Long-term
Plan 2015-2025 proposed that rates will be payable in four equal instalments
on:
· instalment 1: 31 August 2015
· instalment 2: 27 November 2015
· instalment 3: 26 February 2016
· instalment
4: 27 May 2016
Ratepayers can pay more regularly if they wish.
15. Consultation on the Long-term
Plan 2015-2025 also proposed a 10 per cent penalty for late payment of rates
for each rates instalment due date, and that a 10 per cent penalty on the
previous years’ rates arrears be added at the beginning of the financial year
(or five days after the rates resolution, whichever is the later) and then
again six months later. It is necessary to set the penalty rate at 10 per cent,
as used by all the previous councils, to discourage the use of the council as a
bank by ratepayers. Costs incurred by the council from the late payment of
rates must inevitably be met by those ratepayers that pay on time. Most
councils use a 10 per cent penalty.
16. The early payment discount policy
is available to ratepayers who pay their full year’s rates before the due date
of the first rates instalment. The policy sets out that the council will
provide a discount based on the council’s short term borrowing cost. This
returns the interest cost saving to the council to those ratepayers who pay
early. Consultation on the Long-term Plan 2015-2025 proposed an early payment
discount of 1.4 per cent. For the early payment discount to remain cost neutral
the discount amount should remain at 1.4 per cent.
17. The resolutions necessary for the
Governing Body set the early payment discount, late payment penalty, and
instalment dates are included in the recommendations of this report.
Consideration
Local
Board views and implications
18. The Governing Body has decision
making authority for setting rates.
19. Local boards views on the rating
policy proposals were considered alongside feedback from consultation on the
Long-term Plan in May 2015.
Māori
impact statement
20. The council does not hold
information on the ethnicity of ratepayers, so is not able to identify the
exact impact of the policy options on Māori. The recommendations in this
report will have a similar impact on Māori as it will on other ratepayers.
Implementation
21. There are no implementation
issues. The recommendations in this report have been checked by the legal
department for legislative compliance.
Attachments
There are no attachments for
this report.
Signatories
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Authors
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Aaron Matich - Principal Advisor Modelling
Andrew Duncan - Manager Financial Policy
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Authorisers
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Matthew Walker - General Manager Financial Plan Policy
& Budgeting
Sue Tindal - Chief Financial Officer
Stephen Town - Chief Executive
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