8 August, 2006

Media statement

Council to intensively study three rating options

Waitakere City Council has outlined its intention to study three different rating systems over the next year before deciding on which is best for the city.

The Finance and Operational Performance Committee (FOP) has endorsed a recommendation that the council should study the relative merits and likely impacts, of the three different systems available to councils under New Zealand law.

“As we go into this process the council has absolutely no preference for which system is used,” says Councillor Janet Clews, chair of the FOP committee.

One is the land value system – the current system that uses the value of a property’s land, only, as a basis for calculating rates.

The second is capital value, which uses the full value of a property (land and improvements such as buildings, drives etc). The third is annual value which uses the property’s annual rentable value as the basis for calculation.

“We will do detailed economic modelling of all three systems to assess their impacts on large businesses, small businesses, and residential properties of different values,” says Councillor Clews.

“Within the three systems, there is also opportunity for variations. For example, we could make more or less use of uniform annual charges and other user pays options, so there is a lot to understand.”

“The most important thing, however, is getting an end result that is most fair to most people,” she says.

“The council cannot raise any more money than it needs for each year’s work, no matter what system it adopts. However, the system does affect how much each property pays towards that total amount. In some cases businesses pay more, in others higher value properties pay more,” she says.

The council expects to receive the report of the study towards the end of the year and will then make a decision on the timing for public consultation.

“Year’s end is a target, not a fixed date. If it takes longer to do the work thoroughly, so be it. We want to be certain we have the best information to evaluate what is the fairest system before making final decisions,” Cr Clews says.

“With the current widespread interest in rates we hope people will be really keen to support the work being done and then to help us make a decision based on sound information rather than preconceived ideas.”

ENDS

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