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Targeted rates possible for lakes, pests and buses

Targeted rates possible for lakes, pests and buses

Tuesday 4 October 2005

Environment Bay of Plenty may charge targeted rates for its Rotorua lakes, passenger transport and pest management work from next year.

A special council sub-committee has spent the past four months reviewing the council’s 35 activities to see how they would be funded best. The review suggested several areas of work suitable for targeted rating because they are impacted by or benefit a specific group of ratepayers more than the regional community generally.

If the proposals go ahead, the council will receive close to $6 million from new targeted rates next financial year. Chairman John Cronin says the general rate will be an equivalent amount lower, which will financially benefit many ratepayers.

“We want our rating system to be as fair and equitable as possible, and we feel that targeted rates are the way to do it,” Mr Cronin says. “We don’t think it’s right to expect all ratepayers to share the total cost of activities which benefit only some of them or where certain groups have contributed more to creating the issue in the first place.”

Mr Cronin says, because the change is so significant, the regional council will be asking for the community’s views on it later this year. The council will consider that feedback when drawing up the draft for its Long Term Council Community Plan, which it will formally consult on next year. The Plan will cover Environment Bay of Plenty’s activities for 10 years from July 2006.

At the moment, the regional council only charges targeted rates for its river and drainage schemes. All other costs are paid from a general rate based on land value, a Uniform Annual General Charge, and general investment income.

The areas of activity proposed for targeted rates are:

Pest plant and pest animal management

At the moment, the cost of pest management work falls disproportionately on urban areas, which form the greatest part of the general rating base. Because of this, the council wants to fund 55% of the operating expenses for its pest plant management work from a set rate charged to properties over one hectare in size. It also wants to use this method to fund 25% of its pest animal management activity. Next year, the total amount collected may be about $1.68 million.

Passenger Transport

Rotorua and Tauranga city residents have access to comprehensive bus services that are currently paid for by all regional residents. The council proposes funding 22% of its passenger transport operating expenditure (about $1.34 million next year) directly to these city residents. The rate would be for services above a baseline level, so would not apply to the less comprehensive services elsewhere in the region. It would add about $17 (excluding GST) to a Tauranga city ratepayer’s annual bill and about $25 to a Rotorua urban resident’s bill.

Rotorua lakes

Environment Bay of Plenty is spending several million dollars a year on improving the water quality of the Rotorua lakes. Deputy chief executive Sandy Lawrie says that Rotorua district residents will benefit most from this work because of their proximity to the lakes.

However, they also contribute to the problem, as nitrogen and phosphorus from land use activities (including sewage and farming) are the main reason for water quality degradation. The council proposes to fund 56% of Rotorua lakes operating expenditure (about $2.8 million next year) from a targeted rate on Rotorua district residents.

Mr Lawrie says the council has agreed on certain principals to guide the method for calculating targeted rates in the Rotorua lakes. Residential and commercial properties under four hectares would each be charged a set annual rate of about $80.

The charges for larger properties would depend on the size of the property, the type of land use and the level of nutrients that land use produces. Under this system, a more intensive land use such as a dairy farm would pay about $50 a hectare next year, a sheep and beef farm about $10 a hectare and forestry just over $1 per hectare.

“Implementing a targeted rate of this type for the Rotorua lakes is likely to be quite complicated. But we have come up with some general principals that we will be fine-tuning over the next few months. We will have greater precision by the time we go out to the community to get feedback on these proposals,” Mr Lawrie says.

ENDS

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