Another shot at 'fairer' rates

Rural sector heavy traffic significant target of revised system

The Far North District Council is making another attempt at introducing what it believes would be a fairer rating system. The proposal proved controversial last year, and was abandoned by a split council vote, but is now among the key issues for public consultation in the council's draft annual plan 2013/14.

The draft plan, which will be released this week and will be open to public submissions for five weeks from yesterday, highlights some significant changes to the long-term plan 2012-22, including a proposed 3.49 per cent ($2.6 million) increase in rates revenue and a revised version of the 'fairer' rating system the council consulted on last year.

Commercial and industrial ratepayers will receive significant rate decreases if the proposed system is adopted, the average commercial property rates reducing by 19.3 per cent and the average industrial property's by 30.2 per cent. Those sectors will face average increases of 4.2 per cent and 3.5 per cent respectively if the current rating system is retained.

Residential rates won't change much whatever happens, facing an increase of 6.5 per cent under the proposed system and 6.8 per cent under the status quo, to fund water and sewerage capital works included in the long-term plan. The average increase for properties not connected to those services will be less than 1 per cent. Other sectors will face bigger rates increases if Council adopts the proposed system, which includes a land value-based targeted road rate with differentials for different land uses, designed as a means of shifting the burden of roading costs from residential ratepayers to sectors that generate the heavy traffic that damages roads.

Councillors elected last year to defer the introduction of the rate to allow more time to talk to forestry and farming groups about perceived anomalies. They have now modified the rate to satisfy some of the concerns raised.

The council says the average dairy farmer will now face a 15.2 per cent increase in rates if the targeted road rate is adopted, compared with an increase of 32.6 per cent under the original version. The average forest owner will face a 167.2 per cent increase, compared with 234 per cent.

The average increase for dairy farmers and forest owners will be less than one per cent if the council keeps the current rating system and continues to fund road maintenance from the general rate and a uniform annual roading charge.

The biggest proposed change is for mining and quarry properties, which were previously treated as commercial or industrial. The average mine or quarry will face an increase of more than $28,000 under the targeted road rate, to recover about $900,000 of road maintenance costs generated by that sector.

However, as there are only about 32 properties in that class in the Far North, some will pay much bigger increases than that.

A spokesman said last week that while the council was committed to recovering road maintenance costs generated by heavy traffic movements, and that a targeted rate was the preferred option, there may be alternative ways in which that could be achieved. If heavy traffic users had alternative, practical collection methods that met the council's statutory obligations to offer, it would listen to them. It was also investigating other practical solutions using available technology.

The council has also resolved to proceed with a change to the way that the uniform annual general charge is calculated and the removal of the ward rate, as were outlined in last year's long-term plan. That will see the total paid by uniform rates fall from the maximum allowed of 30 per cent to around 24 per cent.

The plan will be finalised on June 20, and the council is encouraging the making of submissions. A summary of the draft plan and submission forms were sent to households last week, and the full plan is now available at www.fndc.govt.nz