Waitakere Council listens to the people

Capital Value rating and Pan Charges on the back burner for this year

Waitakere City Councillors have “listened to the people” and today decided not to introduce Capital Value rating and “pan charges” for schools, this year.

The Council will, however, continue to work on analysing various rating systems to find the one most equitable to all ratepayers.

“We had very robust debate during this year’s LTCCP (Long Term Council Community Plan) and Annual Plan meetings with more than 530 submissions on Capital Value alone, 428 against and 102 for. After listening to those submissions we have decided that we will stay with the Land Value system we already use, for now,” says Councillor Janet Clews who chairs the hearings process.

“However, Land Value is not the most equitable system for the city and we need to continue to do the work to find the system that is,” she says.

The Council will spend the year analysing the relative merits of the three systems available to the council: Land Value, Capital Value and Annual Value. The first levies rates only on the value of the land belonging to a property. Capital Value rates on the full value of land and improvements. Annual Value rates on the rentable value of properties or capital value.

“If we had chosen Capital Value, 32% of our ratepayers would have had a decrease in their rates and a further 17% would have had an increase of less than the average of 6.5% But many of those facing an increase, were facing very large increases and they spoke very clearly in opposition to introducing Capital Value next year,” Cr Clews says.

“On the basis of that consultation, we will stick with what we have got. That is what consultation is about; putting proposals in front of people and then weighing up their views before making a decision,” she says.

“However, we note that many of the submitters were not actually opposed to Capital Value. They didn’t want Capital Value being introduced next year because that gave them insufficient time to adjust their budgets to cope with what were, in many cases, very substantial increases.

“That’s not to say that they weren’t concerned about the size of the increase as well but, the over-riding impression we got was that they could live with a system change if we had worked through the issues first,” she says.

“So, we will spend the next year analysing the three options to find the best system for the city. During that time we will also consult with the public and business on this issue, to arrive at a system that most people can agree on,” Cr Clews says.

The Council has also deferred Pan Charges for now because while it believes the Government should be paying the charges - not the schools - Government is not doing so.

”The Government has actually created a formula that allows Councils to make these charges,” says Councillor Clews.

“Under that formula we would have charged schools for just under half of their pans. Unfortunately, having provided the formula that enables pan charges to be made, the Government has not provided the schools with the money they need to pay the charge,” says Councillor Clews.

“We think the Government should pay the costs. They own the schools and tax us for the money to run them. However, they don’t pay and rather than make schools into a political football, we have decided not to proceed with the pan charges, this year,” she says.

Councillors will spend the rest of the week deliberating all aspects of the draft budgets, before adopting the LTCCP 2006 – 2016 incorporating the Annual Plan for 2006/2007. These draft budgets show a Council-controlled rate increase of 6.85% for the coming financial year. The major drivers of that increase are depreciation and interest charges which alone account for over half of the proposed increases.

In the next financial year the Council will spend the bulk of its money (78%) on stormwater, wastewater, parks and roading.
Councillor Clews says that all areas of income and expenditure were carefully scrutinised during the hours of debate and deliberation.

“The city is growing rapidly and will continue to do so for many years to come. There are literally thousands more residents in Waitakere every year and as the city gets more and more attractive, it will continue to be popular. But, that all comes at a cost which we have to meet to the best of our ability while keeping the city affordable for all,” she says.

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