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Superannuitants will be hit hardest by rates rises

Hundreds of existing residents will be superannuitants by the time Horowhenua District Council introduces proposed average rates increases of $2000 annually in five areas targeted for new water and wastewater systems.

The council's preferred option, included in the consultation 20 year Long Term Plan (LTP), to install new essential infrastructure in Waitarere, Hokio, Ohau, Manakau and Waikawa due to projected land and property development will hit ratepayers hard in the pocket between the years 2027 and 2036.

If council votes in favour of this option ratepayers born between 1962 and 1971 who own property in the five areas targeted for new water and waste water systems will face massive rates increases at a time they are arguably least able to absorb the projected annual increases which equate to an average minimum of $85 a week.

This total does not include regional rates or house insurance premiums which would push up the essential outgoings from households for the average superannuitant to a minimum of $123 per week. Current weekly superannuitant rates after tax are $390.20 for singles and $600.30 for couples. Excluding retirement savings, if council proceeds with its intention this would mean elderly living in Horowhenua would be left with about a maximum of about $267 per week for singles and $477 for couples to pay for everything else.

Council's intention to hit the elderly, those on low and fixed wages and the farming business community in the targeted areas hardest appears to be a deliberate strategy designed to free up more land for land and property development as people unable to afford the rates rises are forced to move from communities many have lived in their entire lives including Maori with whakapapa links to the land.

The extent of council's land and property development agenda is explained in more detail in the 2040 draft Growth Strategy. Potential land developers stated "deterrents" to land and property development development included uncertainty around, "The intention to continue to farm the land until they choose to cease farming or such time as it is uneconomic to do so relative to the benefits of land development" and "The costs to undertake subdivision and provide for infrastructure such as roads, services reticulation and its connection to the existing system."

Presently all the targeted areas are serviced by a mix of water tanks, bore water and septic tanks which anecdotally many people say they prefer to being connected to a council run reticulated service that will primarily benefit land and property developers selling new builds in the targeted areas. Waitarere is the only exception with an existing waste water system but even this will not save residents there from predicted average rates bill of $3376 annually from 2033.

The table supplied by the council only included projected increases in water and waste water supply charges which will affect all residents in the district. General and other targeted rates push the actual increased rates bill even higher.

The areas least impacted by projected rates rises are urban businesses and urban residential that will see average rates increases of $500 annually.

The exact rates rises are likely to be higher as the only indicative rates table included in the consultation LTP end at Year 2020-2021.

In a section on crunching the numbers council states, "To reduce the need to borrow we intend to progressively pay for more asset renewals from rates and operating surpluses, with loans being used to fund capital expenditure."

Which is why council has indicated an intention in the LTP to raise debt levels from 175 percent of operating revenue by 20 percent to $171 million or 195 percent.

Despite a council resolution passed at a November 27 council meeting last year, "That in light of the District’s current and potential growth, discussion on the reintroduction of Development and/or Financial Contributions commences through the Strategy Committee at its December 2017 meeting" no discussion took place because the 20 December 2017 strategy council meeting was cancelled, "due to a lack of business" stated the council website.

Most council's collect development contributions from land developers towards essential infrastructure costs but HDC is strongly indicating in it's LTP consultation document a preference to continue charging ALL ratepayers and increase debt levels to fund essential infrastructure costs largely created by land and property development.

Not only is the council resolution to discuss the reintroduction of development contributions in a timely manner being ignored but council also states in the LTP that any intention to reintroduce development contributions will not take place until 2019-2020 after the next local body elections.

© Scoop Media

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