MEDIA RELEASE

Regional council makes drastic rates changes

For immediate release: Thursday 23 July 2005

Environment Bay of Plenty has cut its overall rate take and changed the way it charges rates to give a fairer deal to residents, especially those with high-value land.

At a full council meeting on Thursday 23 July, regional councillors adopted the council’s rates for the next financial year 2005/2006, which starts on July 1.

However, before doing so, they made a number of quite drastic changes to the draft annual plan - a direct result of submissions from the community, explains chairman John Cronin.

The council cut its overall proposed rate take for the next financial year by $1.2 million. It mostly did this by deciding to borrow $1 million to put towards Rotorua lakes restoration work rather than funding it from the general rates. “The work still needs to be done but, by taking out a loan, it takes some of the immediate pressure off the regional community as a whole,” Mr Cronin says.

It was also clear from submissions that people were worried about the financial impact of rapid rises in land value, Mr Cronin explains. Environment Bay of Plenty’s general rates are based on land value but “all ratepayers essentially receive the same level of service for their dollars”.

Because of this, the council has decided to increase its Uniform Annual General Charge from $11.50 (exc GST) for every rateable property last year to $39 this year. It had earlier proposed increasing the charge to $25 a year. “We decided to bump it up further so that we could reduce the amount collected under the land value system. We wanted to try and spread the load as fairly and evenly as possible.”

The set charge will now contribute $4.3 million to the general rating pool, while $6 million will be collected from rates based on land value. This adds up to $10.3 million, which is 17% more than the general rate in 2004/2005 but still significantly less than proposed in the draft annual plan.

Environment Bay of Plenty will need a total of $43 million for its work in the next financial year. As usual, a significant portion (44%) of operating costs are covered by investment income, mostly through Environment Bay of Plenty’s shareholding in Port of Tauranga Ltd. User fees and charges and other income, such as passenger transport subsidies, will make up 19% of the total. Targeted rates, such as river scheme rates, are 10% of the overall costs.

Other changes resulting from submissions include an increase in the cost of council’s contribution to the Civil Defence Emergency Management Group, more money for SmartGrowth implementation and regional economic development, and the development of a management strategy for the Kaituna River.

Environment Bay of Plenty has begun a rating review to establish the fairest way of levying rates over the whole region. As part of the review, Environment Bay of Plenty will look at increasing the percentage of the regional rate that goes towards river schemes in the Bay of Plenty. At the moment, the regional community pays 10% of the net general funding requirement because of the overall benefit of the schemes to the region as a whole.

ENDS

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