The cost of the City Council’s recycling collection and rubbish disposal is reflected in an increase in the price of rubbish bags.

From August 1 the cost of a bag will rise from $1.00 ($10 for a pack of 10 – GST inclusive) to $1.25 ($12.50 for a pack of 10). The increase was confirmed in the City Council’s Annual Plan which is year two of its 10 Year Plan.

The Council’s Water and Waste Services Manager, Chris Pepper, says the Council is progressively moving towards a full user pays policy for its kerbside rubbish collection.

Councillors and staff had a full day workshop on 8th February, to discuss the Draft Annual Plan. This Annual Plan is Year 2 of the LTCCP (Long Term Council Community Plan). At the beginning of the workshop, the councillors and Mayor were faced with an unpalatable truth - the decisions made throughout the first nine months of the ten year plan, many of which incurred expenditure that was not budgeted for, had resulted in a likely rates increase of 17.8%.

Elected members were warned that while we insist that management and staff stick to budgets, working within tight budgets means that the Mayor and councillors also have to be disciplined with their spending.

The City Council has estimated that between 2,000 and 3,000 ratepayers could qualify for some remission of rates and, so far, just over 1,100 applications have been processed with the majority of ratepayers receiving the maximum rebate of $500.

Following the government announcement that, from July 1, 2006, it was raising the thresholds to allow more people to qualify, the Council established a dedicated team to handle inquiries. For the last month the team has been meeting ratepayers and processing applications and is encouraging ratepayers to take advantage of the service as quickly as they can.

Local Government New Zealand to work with the Government on the independent rates inquiry

Local Government New Zealand’s President Basil Morrison has welcomed the Government’s intention to conduct a principled and comprehensive inquiry into rates.

"I am reassured by the independent nature of the proposed inquiry, free from some of the more extreme solutions expressed recently, such as rate-capping", he says.

"An independent inquiry provides an opportunity to fully investigate the funding issues affecting local government and it allows us to represent the views of our member councils. The issues surrounding rates and various rating systems are complex and require a comprehensive evaluation free of political influence."

There is the old saying that a week can be a long time in politics. The events of this week in our National Government certainly seem to add truth to that saying. First, we had Rodney Hide, the leader of the ACT party, promoting his Local Government (Rating Cap) Amendment Bill, which would have put a cap on rates increases. Along with this, we had the Greens and the National Party calling for a select committee inquiry into rates. They had met to discuss a draft Terms of Reference for this parliamentary enquiry, which was due to be before Parliament tomorrow. Rodney Hide’s Bill was defeated on its first reading and the Government moved quickly to announce an independent (ie. not Select Committee) inquiry before National and the Greens could do anything.

In information provided by Local Government New Zealand, the Council has been informed that from next year’s budget the rates rebate income level will increase from $7,400 a year to $20,000.

The City Council, along with Local Government New Zealand (LGNZ), has made several submissions to the government seeking to have the limit raised, the last time during the previous term of Council.

At present people whose income is less than $7,400 can qualify for up to $200 off their rates.

Strategy Manager - Finance, Steve Paterson, says the low income level is “totally inadequate and we have argued to increase it to an appropriate level.”

There has been a lot of publicity lately about the raising of the Uniform Annual General Charge part of the rates from $200 to $400. The Palmerston North Residents Association has been very outspoken against the increased charge and claims it is unfair and inequitable.

Councillors spent several months investigating the impact of the city-wide revaluation of property and the implications of this. We are charged with setting rates ” in a manner which is fair and equatable as between various ratepayers…” (see page 30 of the LTCCP for our rating objectives). Due to the variations in the 2003 property revaluation leaving the UAGC as it was would have resulted in some sections of the city, most notably Ashhurst, having an across-the-board decrease in rates from the previous year, while other areas of the city would have had the greater burden. This would not have been fair or equitable.

Total Rates of $47.9 million will be required to provide City services for the year.
This chart shows the key services provided and the net amount that would be funded (rounded) per annum by the average ratepayer. An average residential property has land value of $61,000. All properties pay a uniform annual general charge of $400 plus fixed charges for water supply ($179), wastewater disposal ($123), and waste management ($55). In addition each property is charged a general rate of 0.86224 cents for each dollar of land value.
Compare these sums for Council’s functions with estimates of other common outgoings:
Telecom Line Charge ($500)
Electricity ($1200+)
Newspaper ($200)
Sky TV ($400)

I had a telephone call which went like this…

Caller: “Do you support a rates review?” (I answered in the affirmative) Caller: “So, what are you going to do about it?”

It transpires that some candidates in this election are telling folk that should they be elected they will initiate a review of the current rating system. My caller had been informed by certain sitting councillors that this Council did not intend to review the rating system.

All I can say to this is - they cannot have been awake at council meetings over the last year, or read the Long Term Council Community Plan (LTCCP).

During the 2002 election campaign I stated that I was opposed to “any further increase in rates beyond the rate of inflation”.

I was, and my vote during the 2003 Annual Plan process reflected that. This is a matter of public record.

However, there have been changes at the national government level which have serious implications for local government. Central government is thrusting more and more responsibility onto councils and while they are doing so they are not providing funding to local authorities for the new work we are now legally obliged to undertake.