One of the most significant changes to how rates were calculated was the council switching to using capital value (CV) instead of land value (LV) to calculate each property’s proportion of rates.
Homeowners, horticultural ratepayers or others with highly developed land “lose” and farmers or people with a lot of minimally developed land “win” under the new system, as CV accounts for the value of any buildings or infrastructure on the land, unlike LV.
The change was adopted in February, despite opposition from 90 per cent of submitters.
The council spokesman said rates had not been reviewed in their entirety for about 20 years.
Most properties facing 500 per cent increases have an average proposed rate of under $600 and 40 per cent will have an average total rates bill of $230.
“While the scale of change between years is a consideration, so is fairness and equity of who pays for what,” the spokesman said.
“Rates vary according to the distribution of services and how the rates are apportioned. For example, if you benefit from flood control scheme or are within an area covered by passenger transport.”
He said the outliers with very large percentage changes were generally properties with very high capital values, such as rateable units on the utilities.
“Most of these have network infrastructure either underground, overhead or along an existing structure (like bridges), and these are generally not on land they own.”
“This means that most rating units on utilities have a capital value but no land value.”
The council had proposed a new rates remission policy to deal with outliers like councils and utilities.
“[HBRC] anticipated that there might be some outliers as a result of both revenue and financing policy and the LTP changes and have remissions policies in place.”
HBRC deputy chairman Will Foley said he felt “caught out” because the variability of the rates changes were much greater than he expected.
Foley said people at LTP drop-in sessions he attended in Central Hawke’s Bay had been “very upset and angry” about proposed rate rises.
He believes the impact of rate increases and the cost of living crisis had left no one in a position to talk about the rest of the content of the proposed Long-Term Plan.
“We need to look long and hard at our cost structures and what we can do to help our ratepayers. It’s not just rates [increasing], it’s insurance, it’s food, it’s fuel, it’s mortgage rates,” Foley said.
“As Hawke’s Bay Regional Council, we need to be doing everything we can to ensure that we are efficient and effective and cutting costs where we can to get through this period.”
Consultation on the Three-Year Plan will remain open until 8pm on Wednesday.
HBRC plans to adopt the Three-Year Plan on June 26 after public consultation, hearings and deliberation.
James Pocock joined Hawke’s Bay Today in 2021 and writes breaking news and features, with a focus on environment, local government and post-cyclone issues in the region. He has a keen interest in finding the bigger picture in research and making it more accessible to audiences. He lives in Napier. You can contact him at james.pocock@nzme.co.nz.
