14/10/2014 W hat do your rates fund ? Proportional Share of Council - PDF document

14/10/2014 W hat do your rates fund ? Proportional Share of Council Our average annual rate bill is $1,756 Operating Costs per year. This equates to $4.90 per day. This amount funds: Rubbish & Recycling Drinking Water Civil Defence Water Sewerage Treatment Parks & Reserves Regulatory Services Refuse & Recycling Recreation (libraries, theatre) Sewer & Stormwater Roading & Footpaths Stormwater Systems and much more Amenities & Reserves Compare this to average household Community Services expenses on a cost per day basis: Governance & Admin Electricity ($180 pm) $ 5.91 Digital TV ($80 pm) $ 2.63 Roading Telephone & Internet ($100 pm)$ 3.29 Insurances ($160 pm) $ 5.26 Rates Overhaul : Finding the right balance Rates Overhaul : Finding the right balance History W hat w ill w e cover this evening? • What do our rates pay for? • Proposal for a review of rates was included in the Long Term Plan for 2006, 2009 and 2012. • History of the Rates Overhaul Project. • Previous Council started to look at this in 2011 • Work done to date. through to 2012. • Some of the issues so far. • Project not completed. • Interesting facts and figures about our properties and our rates. • In 2013 your new Council agreed on a Rates • Timeline. Review Committee. • Your questions and feedback. Rates Overhaul : Finding the right balance Rates Overhaul : Finding the right balance W hat has the Council been up to W hat do your rates pay for? behind closed doors ? There have been four key workshops held for Councillors covering the following : Netw ork I nfrastructure roads and public transport, water supply, waste water – Legislation and stormwater plus solid waste disposal; and Process BDC must follow, and our current rates model. Com m unity I nfrastructure – How equitable is our current system? cultural and recreational facilities as well as a range of How do we measure benefits ratepayers receive in regulatory activities. exchange for rates. – Rating mechanisms Local Governm ent expenditure accounts What type of rates can we have and how can we set rates, and affordability issues. for som ew here less than 5 % of national – Principles of good rating policy and a good rating system expenditure every year Rates Overhaul : Finding the right balance Rates Overhaul : Finding the right balance 1

14/10/2014 Som e of the issues talked about… W hat com es next? I nform ation pack 2 If we had a clean sheet of paper • There is some really interesting discussion about rates being a tax versus a user and started again, charge. w hat could our rates system look like? • Following on from this there is the argument that ability to pay should not be factored into local government taxes. Rates Overhaul : Finding the right balance Rates Overhaul : Finding the right balance Som e of the issues talked about… The three inform ation packs I nform ation pack 3 Starting with a clean sheet of paper ask • there are lots of thoughts asking what do you think about : three fundamental questions – Sourcing more of the rates take from progressive rating mechanisms. • Why do we need a Rates Overhaul? – Setting a simple system. – Should we have more targeted rates ? • What are the principles of a good rating system? – Should we use Annual Value or Land Value or Capital Value to strike rates? • Rating system options? – Are rates really a tax or should they be a flat charge for everyone? Rates Overhaul : Finding the right balance Rates Overhaul : Finding the right balance Som e of the issues talked about… Som e interesting facts I nform ation pack 1 The three houses Rates Overhaul : Finding the right balance Rates Overhaul : Finding the right balance 2

14/10/2014 Timeline Som e interesting facts • From now until November Council will develop a proposed model(s) for you to consider. • December through to January will be the formal consultation period. • February will have Council deciding if any changes to our rating system will go ahead. If so they will be included with our Long Term Plan. • We want your feedback ratesoverhaul@bdc.govt.nz and go to our website www.bullerdc.govt.nz. Rates Overhaul : Finding the right balance Rates Overhaul : Finding the right balance Som e interesting facts Consultants costs to date $ 0 Rates Overhaul : Finding the right balance Rates Overhaul : Finding the right balance Your Questions and Feedback Why are we having a Rates Overhaul? All of your feedback is being recorded to help • To ensure that everyone pays a fair share. Council make it’s proposed new model. • The present system is not “fit for purpose”. Rates Overhaul : Finding the right balance Rates Overhaul : Finding the right balance 3

14/10/2014 What is wrong with the present system? The present system is:  Com plex  I nconsistent  Difficult to understand  Not equitable  Costly  Regressive Rates Overhaul : Finding the right balance Rates Overhaul : Finding the right balance What is complex about the present system? Westport Residential ‐ Total Rates compared to Land Value 4,000 3,783 Total Rates (GST Inclusive) 3,397 3,500 3,011 3,000 2,625 2,500 Fixed Charges ‐ $ 2,239 2,000 1,500 1,000 500 0 ‐ 50,000 100,000 150,000 200,000 250,000 Land value Total Rates Rates Overhaul : Finding the right balance Rates Overhaul : Finding the right balance Rates Overhaul : Finding the right balance Rates Overhaul : Finding the right balance 4

14/10/2014 Rates have to be some form of What do we need to do? Property Tax • Start again based on a good set of principles. • No choices here. • We set these principles out in detail in the • We cannot have a citizens tax, or a local sales second Information pack. tax. • We identified eight principles. • We have to use property as the base. • Liable ratepayers will be the owners of any rateable property. Rates Overhaul : Finding the right balance Rates Overhaul : Finding the right balance Councils can only assess three kinds of Eight Principles Rates • Simple. • General rates. • Easy to understand. • Uniform Annual General Charge. • Consistent. • Target Rates. • Need to recognise “ability to pay”. • Equitable • Right balance between Benefits available and requirement to pay. • Rates are a tax not a user charge. • Low cost to administer. Rates Overhaul : Finding the right balance Rates Overhaul : Finding the right balance So what are the Options available for a General Rates can calculated on either: principled rating system? • The “Annual Value ” of Land. • The Capital Value of Property. • We tried to cover the options available in the third information pack. • The Land Value of the Property. Rates Overhaul : Finding the right balance Rates Overhaul : Finding the right balance 5

14/10/2014 Important Point Important points • For General Rates it is not possible to have any • Optional. hybrid or combinations. • 30% cap. • You have to pick one of the three Value options. Rates Overhaul : Finding the right balance Rates Overhaul : Finding the right balance Next Step for General Rates ‐ Decide Target Rates either… Can be set in numerous ways • A Uniform rate in the dollar of rateable Value • Any single service or function. for all rateable property. • Can cover several functions. • Different rates in the dollar of rateable value • Can be set as several target rates for one function. for different categories of property. • Can be set in respect of all property or just selected property. • Can be set on a uniform basis or a differential basis. • Can be set for water as a fixed charge or a “unit” charge or as a metered rate. Rates Overhaul : Finding the right balance Rates Overhaul : Finding the right balance Uniform Annual General Charge If we know what the Problems are, • Fixed dollar amount. and we have established a set of good • Same for every property irrespective of property value. Principles, and we know what the available Options are, what do we do now? Rates Overhaul : Finding the right balance Rates Overhaul : Finding the right balance 6