MEDIA RELEASE

9 November 2002

Rates Paper Issued

“Auckland City Council’s prudent financial management means it is possible to hold rates at a real level in 2003/2004,” says the chairperson of the Finance and Corporate Business Committee Councillor Douglas Armstrong.

Auckland City today released its 2003/2004 rating policy issues paper in preparation for the council’s annual plan direction setting meeting on Thursday, 14 November 2002.

“We want to keep any rates increase within the rate of inflation. Officers have prepared a paper on this basis and an estimate of 2 per cent has been used at this stage of the annual plan process.”

The paper recommends increasing the uniform annual charge (UAC) for waste management services from $47 to $95, as foreshadowed last year, to obtain the 2 per cent or $6.23 million estimated to be necessary to preserve the council’s current income level.

The paper also acknowledges that the residential sector’s rates will increase due to both the 2002 revaluation and the possible future Auckland Regional Council levy. For these reasons, officers have recommended that current differentials be retained for a further year rather than implementing the fifth step of the council’s 10-year commitment to decrease rate loadings for the business community.

The UAC represents a contribution from all ratepayers to the cost of operating the city’s waste management services. The revaluation has the effect of redistributing rates according to changes in annual value compared to the average. The relative differentials represent the rates paid by different groups compared to the residential group.

“Even if we decide to increase our rubbish charge to $95, Auckland City still charges less than the $121 per service it costs us to actually run the city’s waste management services, and considerably less than the annual charges levied by the other regional local authorities. (Please see UAC table attached). Increasing the rubbish charge would also mean that the impact of the 2002 revaluation will be evened out across residential ratepayers,” says Councillor Armstrong.

“The 2002 revaluation differential simply redistributes the rates between property owners. For every increase there will be a decrease and the council does not receive any additional income. If the annual value of your property increases more than the average, then it is only fair that your share of the rates pie increases.

“I wholeheartedly agree with the recommendation to delay the fifth step of increasing the residential rates loading. Residential property owners will have to pay more rates because of their greater than average increases in annual valuation. The council does not want to burden residential property owners with an additional fifth step increase.

“The key issues in this rates policy paper are restricting the rates increase to no more than the rate of inflation and managing the redistribution between different rating groups. Discussion and debate has already started and will continue from now until draft numbers are finalised in March 2003 and 1 July 2003 when the new rates are struck. The council will carefully consider the views of residents and ratepayers when it consults the public on the draft annual plan,” Councillor Armstrong concludes.

ENDS

Attachments: Table 1
Table 2

Ref: SL

Table 1: Impact of the key issues and rating options on ratepayer groups (these numbers are GST inclusive, and are all based on rates being held constant in real terms).

2002/03 2003/04
Rating category Total rates for Auckland City purposes1 Status Quo: rates differentials the same as for 2002/2003 – changes in rates due to the impact of the 2002 revaluation on general rates Impact of generating additional 2% revenue requirement by increasing the UAC for waste management to $95 Impact of implementing 5th step of phased differential strategy on general rates
Change from 2002/03 rates
$m $m % change $m % change $m % change
Residential 139.305 +4.459 3.2% +6.019 4.3% +1.764 1.3%
Non-Residential 94.078 -0.774 -0.8% +0.191 0.2% -0.305 -0.3%
CBD Non-Residential 70.340 -3.930 -5.6% +0.014 0.0% -1.479 -2.1%
GBI Non-Residential 0.085 +0.016 19.2% +0.002 2.1% +0.009 10.8%
Rural 1 0.587 +0.210 35.7% +0.004 0.6% +0.010 1.7%
Rural 2 0.050 +0.021 41.5% +0.000 0.9% +0.001 1.8%
Rural 3 0.000 +0.000 0.0% +0.000 0.0% +0.000 0.0%
Total 304.445 0.000 0.0% +6.230 2.0% 0.000 0.0%
Official rating differentials
Residential 100% 100% 100% 100%
Non-Residential 196.1% 196.1% 196.1% 193%
CBD Non-Residential 255.9% 255.9% 255.9% 247%
GBI Non-Residential 179% 179% 179% 193%
Rural 1 86% 86% 86% 86%
Rural 2 25% 25% 25% 25%
Rural 3 0% 0% 0% 0%

1. The 2002/03 rates revenue for Auckland City purposes excludes the portion generated to collect the ARC levy, rates received from those ratepayers receiving 50% mandatory remissions and other doubtful debts, to create a suitable baseline for comparison with the 2003/2004 rates estimates.

Table 2: Comparison of local authorities and the use of annual charges for 2002/03

Local authority Annual charges (excl water and sewerage) Amount (incl GST) Additional information
Auckland Region
Auckland Waste management charge $47 No additional charges for waste; the residual cost (not covered by the UAC) is currently covered by the general rate
Manukau Annual general charge $460
Waste/recycling charge $126 No additional charge for waste
North Shore Annual general charge $593.09
Waste recycling charge $26.16 Additional charge for waste bags – up to an annual figure of $135.20 for 120 litres per week collected
Waitakere Annual general charge $510
People’s Park charge $9
Waste collection charge $17 Additional charge for waste bags – up to an annual figure of $104 for 120 litres per week collected
Other major local authorities
Christchurch General charge $105
Hamilton None …
Wellington None …

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