Impact of rates collection switch remains a mystery for some Bay of Plenty councils

Bay of Plenty Regional Council is planning on collecting its own rates. Photo / NZME

A regional council move to start collecting its own rates has alarmed one Bay council but others in the region aren't sure what the impact will be but don't expect issues.

The Bay of Plenty Regional Council plans to start collecting its own rates next year, rather than paying district and city councils in its area to collect on its behalf. It estimates this will save regional ratepayers money.

The Ōpōtiki District Council, however, sent a letter outlining its concerns its ratepayers will end up paying more for a worse service if Ōpōtiki loses the $120,000 a year it earned for carrying out the service.

The regional council resolved late last year to collect its own rates.

The move affects Tauranga City Council, Rotorua Lakes Council, and the district councils of Kawerau, Ōpōtiki, Whakatāne, Taupō and the Western Bay of Plenty.

A Tauranga City Council spokeswoman said the organisation was aware of the decision "and we are continuing to work with BOPRC to come up with a suitable solution for all ratepayers".

The full impact of what this will mean for ratepayers would only become clear during the next 12 months, she said.

Western Bay council group manager of finance and technology services Kumaren Perumal said the regional council's decision was no surprise as it had been signalled earlier this year.

"Bay of Plenty Regional Council's rates collection service represents a small subset of Western Bay of Plenty District Council's wider rating function and any financial/operational impact as a result of removing this service will be immaterial."

A Rotorua Lakes Council spokeswoman said the organisation charged a service fee of 2 per cent for rates collected for the regional council, which covered the cost for the service. This amounted to about $250,000.

Asked what impact this could have on ratepayers, she said: "If we were unable to reduce costs to totally offset the lost revenue, it could impact rates although we can't estimate today what that could be as the change is not yet in effect."

Whakatāne District Council chief financial officer and general manager of business partnering Rob Trass said the funding the council received for carrying out the service would stop.

"Over time, we expect enquiries regarding regional council rates will decrease, and this will likely reduce our cost base as a result."

At Kawerau District Council, the move will mean a likely loss of $40,260 excluding GST which was what the council was paid for the service in the last financial year.

A spokeswoman said once the regional council collects its own rates, there will likely be an additional cost to ratepayers. However, "the full impact on the council is yet to be quantified and there are still many unknowns".

A spokeswoman for Taupō District Council said the decision was a minor issue as the majority of its district sat within Waikato Regional Council and the "impact is negligible", only affecting 30 properties.

Regional council general manager corporate Mat Taylor told Local Democracy Reporting last week the decision would not cost regional council ratepayers more.

The regional council did not expect to open any new service centres for this.

"Instead, we will be looking at alternatives, such as using NZ Post as a payment agency, like many other councils already do."

The main drivers for the change were to ensure consistency, increase public awareness of what the regional council does, and to achieve cost efficiencies.

"We are currently defining detailed costs for in-house collection... We are also in the process of procuring the rates collection technology system.

"Nevertheless, the annual cost of in-house rates collection is expected to be significantly less than the current cost of approximately $2 million per annum."

Regional ratepayers are expected to receive their first invoice at the beginning of the 2022/23 year.