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« And On The Expenditure Side | Main | Stop Press! - Council Drops UAGC Increase, And Votes $2.5m to Coastal Hazard Assessment »
Wednesday
May162018

The Effect Of Changes On The Revenue Side

Today saw some deep ribbing of the Whitianga councillors over their definition of 'needs,' but to be honest I felt well inclined towards them following their magnanimity yesterday over the UAGC. Whether they (or any of the others) understood the ramifications of that decision is debateable.

Let it be stated right at the outset - the changes at the end of the day were significant - very significant.

Here are the rating facts:after all the adjustments (including the UAGC)

Mercury Bay increases local rates by $78 over 3 years, and together with the District the increase is 6% in year 1.

Coromandel increases loacal rates $41 over 3 years, and with the District rate it increases .55% in year 1.

Tairua/Pauanui increase local rates by $18 over 3 years and with the District rate it increases 6.52% in year 1.

Whangamata increases local rate $1 over three years, with the District rate it increases 9.69% in year 1

Thames decreases local rate $10.20 over 3 years ($5 in the first year), and with the District rate it increases .65% in year 1.

These are the effects averaged over each area - they do not represent what will happen in regard to any particular property. The District rate changes reflect the reversion to the UAGC status quo, and changes to major project funding. 

Now here is the rub - some  mill say (as did Sally Christie ad nauseum) that there are many in the other Board areas on fixed incomes who will be disadvantaged. What this overlooks is that while the UAGC remains at 22% as at present, these folk have the undoubted advantage over Thames and Coromandel residents of a dramatic increase in their land values on which rates are based - that is what is driving their rates.

Sally nevertheless voted for it, and she should perhaps remember that anyone occupying these high land-value properties can easily borrow against their asset if they need to, or seek relief under the Council's own rates relief scheme. Their beneficiaries in any case get the benefit in the long run. They should be thankful that our Council has eschewed Capital in favour of Land Value, to date!

This was a major achievement by council, but the Governance Manager - Angela Jane had a final 'sting in the tail' with a suggestion at the last moment today that Council could resolve to review the UAGC on an annual basis at the Annual Plan. This was adopted - I think illegally, as is it my understanding that the UAGC is a TYP matter, and should only be be reviewed on a three year cycle, but no-one demurred.

On another funding issue, Council resolved yesterday to maintain the status quo in regard to the Economic Development Rate paid by commercial and industrial properties of $8.35 per $10K of improvement value. This has long been resented by business generally, but was ostensibly used for the purpose of funding 'anchor projects' (Coromandel Harbour, Hauraki Rail Trail, and 'Leach's Heritage' Walk at Mercury Bay) The draft TYP indicated that there would now be a change to "focusing on facilitating engagement." Believe that or not, but yesterday they decided that this could not be justified.

Then at the end of the day, they were told that there may be "legal implications.' This generally indicates that staff have 'concerns' about the process. In the event, a 'decision on the decision' (already taken!) was postponed until today, and they went into a three quarter hour 'public excluded' session when I believe advice was given that related to whether or not the decision could be 'challenged' on the grounds that the charge could not be justified without a specific use being indicated in the Plan.

In the event, Council decided to stick with its decision. Business will not be happy, but it will, along with the UAGC decision have brought about the major changes to rate increases as set out above, and in regard to Thames, it may serve to offset the $80,000 that rate-payers are now to provide its newly formed 'Business Association' as 'seed capital' - but more of that later. 

My next post will cover the major expenditure items, including this little 'boondoggle.'

 

 

 

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