Woodlands Retirees: “We Will Be Forced From Our Homes”

Thursday, 4 June 2020, 11:07 am
Article: Charlotte Jones - Local Democracy Reporter

Woodlands residents fear proposed council rate rises of between 8 to 13 percent may force them from their homes.

Elderly people in the area say money is already tight on the pension and a rate rise would see them reach breaking point.

“Surely they can’t do that to us,” said a Woodlands resident aged in her 70s.

The woman and her husband moved to Opotiki from Auckland to retire, but she said it would now be impossible for her to stop working and move to the pension.

“If we were both on a pension it would be impossible for us to live here; we would have to move,” she said.

“These rate rises were a shock, a hell of a shock.”

The Hukutaia and Woodlands suburbs are two of the more affluent areas in Opotiki and property values have risen more 50 percent there in the last three years.

The proposed rate rises for the coming financial year would see residents paying an extra $145 to $407 a year.

The woman said the community saw little value for their rates and the Opotiki District Council needed to be “realistic” about how much it charged its community.

Her home was on a septic tank and the footpath, which was only on one side of the road, needed urgent repairs. In her opinion, rates would be better spent on a youth centre.

The couple choose to live in Woodlands, rather than the Opotiki township where property is less expensive, due to their concerns about burglaries, muggings, and home invasions.

“The first year we moved here a man in his 90s was beaten in his home by teenagers and died,” she said.

“Maybe we should look at moving to Whakatane.”

These concerns were echoed by another elderly resident who said she too would need to move but wasn’t sure where she could go.

She is worried about moving into a home in the Opotiki township due to the “ongoing crime” she hears about there.

“I know people who get their windows smashed all the time,” she said.

“There are good people there, but a lot of bad ones too.”

Younger Woodlands residents said they could pay the new rates, but it would be a stretch.

“It is what it is,” said one. “You can’t do anything about it.”

Another said rates funded the future of the town so it was important to pay no matter the cost.

Tony Gebert said he didn’t see why rates should go up when the community wasn’t getting any extra services.

“We’re on a sceptic tank here, we don’t get much for our rates,” he said.

“Services haven’t improved so why do they need more money.”

Farmers and orchardists seething at rates rises

Famers and orchardists say they are disproportionately affected by Opotiki’s proposed rate rise and they are not the cash cows they may appear to be.

Federated Farmers senior policy analyst Nigel Billings said the rural community is disappointed in the council’s lack of consultation on the steep rate rises and are worrying how they will find the money.

Opotiki District was revalued late last year, the average capital value increase across the district was 34 percent however some rural properties had an exponential jump in value.

Dairy grew 16 percent in value, pastoral grew 18 percent in value and horticultural had a 70 percent increase in value.

This saw mid-range rural properties facing a 29 percent increase in rates or $1,472, and higher value kiwifruit properties facing a 55 percent increase or $11,002.

Mr Billings said profits from rural land have not grown in the same way and said some farmers are “lucky to break even”.

Mr Billings said the council may say that rates have grown in line with property values, however he said if that were true residential properties should be facing the same increase when in reality they were not.

Residential properties in the Opotiki township have increased in value between 34 and 42 percent yet are only facing a four to five percent increase in rates. Rural residential properties have increased in value by 18 to 36 percent yet will be experiencing rate decreases of between nine and six percent.

Once rural people became aware of the rate increases through local news, they visited the Opotiki District Council website to find further information.

Mr Billings said this information was not readily available and they had to do a “deep dive” into the website to find it.

“We found the info paper and it said a lot about Covid-19 and the like but there was no indication of a big rating change until you get to the very back page,” he said.

“The last page is the rating scenario and a couple of lines and that’s it.”

Mr Billings said the rural community is upset the council did not consult with them on the plans.

“I find that mildly extraordinary when you are proposing increases of this sort remembering farmers have had a lot to deal with in regard to Covid-19 also and we are going through a historic whole of North Island drought.

“We would have thought council would have got in touch to say they were making the change and they would like to speak to us. We have a real feeling it is being done by stealth.

“They have a responsibility to engage with us when making a large increase like this and they haven’t.”

Mr Billings said the council has not considered the dollar cost which will have a considerable impact on farming families and the collective is now trying to get council to hold off on its proposed plans and speak with them first.

He said farming families have not seen an increase in profit to keep up with the increases and said many families are likely to break even “if that”.

“Farmers work very hard and don’t make huge profits but because their land is worth more than residential, they face unending problems with the rating system,” said Mr Billings.

“This is one thing after another, we face hefty compliance costs, we’ve been through a big crisis, we’re a a part of the district’s economy and we’re a part of the community too.

“We want to know why council wants to make it so hard for us. If they want to make the changes, talk to us, talk to your people and do it transparently. This is shock and awe for us, and council has made a mess of it.”

Former Opotiki District councillor, orchardist and sheep and beef farmer Adrian Gault said this was the single largest rate rise he had ever seen for kiwifruit growers.

“These are serious increases because these property owners are already paying an incredible amount,” he said.

Mr Gault said he already pays around $50,000 in rates each year and these rate increases will see him easily paying another $12,000 on top of that. Because of drought and Covid-19, Mr Gault’s income is down around 70 percent.

He said he does not believe council is able to ascertain who can afford what and basing that assumption on someone’s capital value is ineffective and outdated.

“Because I have land and a high capital value, they think I can afford to pay more, but some of these assumptions are completely wrong,” said Mr Gault.

“Council’s around the country are struggling with the current rating system and providing that fairness and equity. Central Government is pushing a lot of costs onto local government and they are struggling to carry out their functions without incurring a huge rating increase. This system of basing it on capital value is no longer fit for purpose.”

Mr Gault is pleased that council has agreed to have a meeting with concerned ratepayers next week, but he remains concerned that the deadline for setting the rates is coming up soon.

He said council now does not have enough time to undertake a comprehensive review of its rating policy.

“There issue is about being disciplined financially and the big questions around affordability and fairness and equity need to be examined closely.”

An example of unnecessary spending put forward by Mr Gault was the street party held following the announcement of Provincial Growth Fund funding for the harbour project.

This party cost ratepayers several thousand dollars.

“I feel sorry for the councillors, there is a lot to learn and a lot of them have only been in for six months,” said Mr Gault.

“Rating is one of the biggest things they will do, they need to set it fairly and maybe they haven’t been given the support by council management to do their job properly.

“In fairness they have responded and said they want to meet. To their credit they are taking heed, listening and wanting to meet, that’s positive.”

Council to review proposed rate rises

Opotiki mayor Lyn Riesterer said her council was trying to work out ways it can make savings after hearing the community’s concerns loud and clear.

Ms Riesterer said the proposed rate rises were part of a draft plan that could still be reviewed by council.

Councillors will be attending a rating workshop next week to discuss the matter further.

“We are trying to work out where we can make savings and drop rates, but we need to get the balance right,” she said.

“We will be having discussions about how we can make those savings and will be working through the responses from the public.”

Ms Riesterer said the council had received many angry letters and phone calls after the proposed rates were publicised.

Councillors will also be having a meeting with representatives from the rural community.

“It is not us against them, we all pay rates,” she said.

“But we do need to have a discussion in order to make the best decision about what we need to do to go forward as a district.”

Ms Riesterer Opotiki District Council charges the lowest rates in the North Island but said often people are confused about what the district council is charging and what the Bay of Plenty Regional Council is charging as the rates bills are collected together.

She said the Opotiki township pays some of the highest targeted rates for its flood protection scheme in the bay and the district council is continuously raising concerns about affordability for its community.

The Opotiki council is paid by the regional council to collect its rates.

“Maybe it’s time we collected them on separate pieces of paper,” said Ms Riesterer.

“We have recently been speaking with our region’s representatives, Bill Clark and Toi Iti about this too.”

Opotiki District Council finance and corporate services group manager Bevan Gray said the rates increase isn’t uniform because there are several factors that influence individual rate rises.

For many years, the kiwifruit industry was hit hard by PSA and that very real loss in productivity impacted the valuation of their properties for many years,” he said.

“Over recent years, the value of their properties as certainly rebounded as the industry as found its feet again. That increase in valuation is reflected in their QV which in turn is reflected the rates increase felt specifically with those properties. These came out last year and there was an opportunity to challenge those valuations at that time.”

Mr Gray said the council is still looking for additional savings and it is likely staff will find more as affordability and challenges faced by the community are top of mind.

Council has already reviewed its proposed projects and removed some from the 2020/21 year in light of Covid-19. This reduced the average rate down to 4.25 percent.

It also received advice that those in the primary sector would be less affected by the lockdown than those living in urban areas who may lose their jobs. Considering this advice, council reduced the Uniform Annual General Charge to provide relief to low income households in the district.

“It was also thought that over the course of April the council would see what unfolded in terms of potential impacts on the district and those in the community,” said Mr Gray.

“Council at every opportunity with the public asked for those that were experiencing any financial difficult in paying their rates to make contact with us so that we could look at possible remissions or postponements.”

Mr Gray said during this time only one person rung the council to discuss arrangements for their rates, although it is expected that the financial impact of Covid-19 may not be felt until the 2020/21.

If “Shovel Ready” projects put forward to Government during the lockdown are approved for funding, Mr Gray said rates increases could then be lowered in the future.

“So, in summary when council put out the information document it gave consideration to the following; removing projects that it considered it may not be able to complete, immediate financial hardship and asking those that are experiencing it to contact Council, ensuring remission and postponement policies are appropriate, consideration that the financial impact of Covid may not be experienced until the 2020/21 rating year, considering which ratepayers in the district might be likely affected, looking for further possible savings, and submitting significant infrastructure projects to Crown Infrastructure Partners for funding,” said Mr Gray.

“Because this Annual Plan is consistent with our LTP, we are not carrying out a full public consultation process, we are still happy to have informal feedback from the community.”

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