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Rating system up for discussion

13 December 2005

Rating system up for discussion

Waitakere City Council has decided to put its rating system up for public discussion during next year’s consultation on the Long Term Council Community Plan (LTCCP).

The Council’s Finance and Operational Performance Committee (FOP) voted to re-examine whether land value or capital value should be the basis on which rates are calculated. It voted separately to consider adopting a Uniform Annual Charge for wastewater (sewage).

“Under the existing system wastewater is charged as part of the rates based on the land value of a property and a lot of people see that as unfair because not only are people charged whether they use the service or not, but the more valuable their property, the more they are charged,” says Councillor Janet Clews, chair of the FOP Committee.

The Council will also open up for discussion whether to stick with using unimproved land value as the basis for calculating rates. This system calculates each property’s rates as so many cents for every dollar that the land is worth without buildings or other improvements.

The capital value system charges so many cents in the total value of land, buildings and other improvements. This doesn’t increase the rates that Council collects it is merely a different way of distributing the rate requirement.

“We are looking for a fairer system,” says Councillor Clews.

“The hardest thing will be explaining how the system works in the first place, so that we can have an objective discussion with ratepayers about which is the fairer system. Obviously people with more valuable properties will automatically expect that their rates will increase if we go to capital value, but that isn’t necessarily the case,” she says.

The Council cannot charge more in rates than it needs to help fund the costs of running the city each year. Under the Annual Plan it sets out the work programme for the year and the costs for carrying out that work.

It then deducts the value of income it expects to receive from sources, other than rates. The remaining cost is what has to be funded through rates.

Basically the remaining amount to be funded is divided into the value of the city’s properties, and this results in a rate of so many cents in the dollar.

ENDS

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