Horticulture rates: huge valuation increases prompt GDC to consider rate remissions policy

A109 Light Utility Helicopter flight with mayor Gisborne City from the air in November 2023.

Hundreds of horticultural ratepayers can expect letters from Gisborne District Council explaining how they will be affected by proposed changes to their permanent crop rate remission.

Councillors, sitting as Sustainable Tairawhiti, have approved for consultation the proposed rate remissions and postponement policies for inclusion in the 2021-2031 long-term plan (LTP).

The permanent crops remission caps the amount of remission at $7000 (with a minimum of $100) and applies it to the Subsidised Targeted Road rate which is set on capital value.

Six hundred properties receive permanent crop rate remissions now, ranging from $1 to $7400 — a total cost to the council of $159,000.

That will increase to $394,000 under the existing policy. (A total of 276 properties receive remission of less than $100.)

The agenda before councillors said the significant increase in remissions had led to the policy proposals which also include:

' That the remissions must now be applied for each year.

' That the remission will be in the first instance only applied to the subsidised targeted road rate set on a capital value. In some cases (such as financial hardship) it may also be applied on general rates that are based on capital value.

' In Year 2 and Year 3 of the LTP (2023 and 2024), the policy reduces the maximum limit by 30 percent over the previous year.

Councillor Tony Robinson said he could not understand the reduction in remission by 30 percent over the next years given what he described as a small increase in total remissions.

He expected “significant pushback”.

Chief financial officer Pauline Foreman said remissions were not meant to be permanent.

The proposed policy was an attempt to phase them out.

Mayor Rehette Stoltz said the matter had been discussed in detail during a workshop.

Ms Foreman said there had been significant changes in some valuations last year, particularly horticulture and mainly in kiwifruit, which saw the biggest increase in valuations..

The increases relate to the licence to grow certain kiwifruit varieties such as Gold3 and Zespri Red which led to an increase in land values.

The agenda gave the example where a 30-hectare annual crop farm (such as growing lettuces) paid much the same as before, but permanent crop growers (grapes, citrus or kiwifruit) paid nearly double in rates.

There had been valuation increases for kiwifruit orchards of between 200 and 300 percent compared to the average increase for the horticultural sector of 56 percent.

Replying to a query from Cr Debbie Gregory, Ms Foreman said the letter would be the first time horticultural ratepayers would learn of the proposed changes.

The changes had been driven by the high capital values which had been known of since late last year.

A preliminary meeting had been held with a group of affected kiwifruit growers.

Other proposed changes include allowing rates postponement to apply to non-residential rating units which had been impacted by Covid-19 lockdown and an inability to generate income, and simplification and amalgamation of some other policies.

Remissions and postponement policies will remain unchanged for Maori freehold land.

Reviewing the policy will coincide with the passing of the Local Government (rating of Whenua Maori) Amendment Bill.

The 2021-2031 long-term plan is scheduled to be adopted on June 30.

Rates for 2021-2022, including rate remissions for individual properties, will be set in July.

Maori land remission policies will be reviewed after that.

Cr Bill Burdett expressed concerns about aspects of Maori rating policy such as the issue of contiguous property.

Mayor Rehette Stoltz said that during the post- July review of Maori land remission polices, staff should involve Cr Burdett.

Cr Burdett had “knowledge on the ground” to assist staff, she said.