MEDIA RELEASE

15 November 2002

Council Approves Financial And Rates Framework

Auckland City Council has approved its financial parameters for 2003/2004 and will limit the total rate increase (excluding growth) to a figure within the rate of inflation - currently estimated to be 2%.

The council will also look at the possibility of using its uniform annual general charge rating system to help reduce the widely varying effects of the 2002 revaluation on some ratepayers.

The council has also endorsed the setting up of a capital fund and paying off all its debt if it decides to sell its airport shares.

The chairperson of the council’s Finance and Corporate Business Committee, Councillor Douglas Armstrong, says at the annual plan direction setting meeting yesterday the council agreed to make its 2003/2004 financial commitments mindful that:

- it will enjoy a net gain of $89 million over the next nine years, or $9.8 million per annum, if the airport share sale process goes ahead and the money is invested in perpetuity in a new Capital Fund.

The airport shares would only be sold if the council receives a good price.

The council has endorsed in principle the proposal to increase the Uniform Annual Charge (UAC) for waste management services from $47 to $95, as foreshadowed in last year’s rates policy, to obtain the 2 per cent or $6.23 million estimated to be necessary to preserve the council’s real income level. The council also decided not to pursue the idea of a “bed tax” in 2003/2004.

The council agreed it is necessary to reduce the impact of both the 2002 revaluation and the direct rating by the Auckland Regional Council on residential ratepayers, by deferring for one year the fifth step of its commitment to decrease the rates loadings for the business community. Significant varying impacts on a per property basis are expected to occur as a result of the revaluation.

Councillor Armstrong says council officers have also been asked to undertake work on how the uniform annual general rating charge (UAGC) system can be used to further help reduce the widely varying effects of the revaluation on some ratepayers.

This includes officers reporting on replacing part of the revenue collected from general rates with the introduction of a $50, $100 or $150 UAGCs and adjusting the current rates loadings to ensure the charge does not shift any additional rates from business to residential ratepayers.

“Yesterday’s meeting was the first stage of the Council’s draft annual plan process. We will carefully consider the interests and views of our ratepayers before the policies are finalised in March 2003,” Councillor Armstrong says.

ENDS

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