The Rangitikei District Council will consult the community on a proposed rates postponement policy to help those experiencing financial hardship due to Covid-19.

The council considered the draft policy's conditions and criteria at its virtual council meeting on Thursday.

Under section 87 of the Local Government Act 2002 a rates postponement policy can be adopted in response to one or more specific events.

Rangitikei mayor Andy Watson said the council agreed that the policy will apply on a case-by-case basis and the organisation or individual will have to show how they have been affected by the event.

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This will include providing evidence of steps taken to claim allowances or other assistance from central government.

Initially, the criteria stated the policy would only apply to residential and small business ratepayers but some councillors objected.

Deputy mayor Nigel Belsham said farmers needed to be included in the criteria.

"It's a case-by-case basis that council would review these applications so I don't think we should be excluding any part of our ratepayer basis," Belsham said.

"We're predominantly an agricultural district and we need to take all facets of our district into account."

Rangitikei deputy mayor Nigel Belsham was one of the councillors who agreed farmers needed to be included in the policy's criteria. Photo / Bevan Conley
Rangitikei deputy mayor Nigel Belsham was one of the councillors who agreed farmers needed to be included in the policy's criteria. Photo / Bevan Conley

Councillor Angus Gordon agreed and asked councillors to reflect on the 2004 flood event which made some farms in the Turakina Valley and hill country almost non-functional, causing them to become non-economic for a time. This made it difficult for farmers to pay their rates.

Councillors agreed that the condition of rates postponement for residential and small businesses only should be removed from the criteria.

Another condition stipulating the rateable value of the property could not be more than $1.5 million, and the combined value of all properties in the district owned by the ratepayer could not be more than $3m, was also withdrawn.

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The criteria also included that the ratepayer must be the current owner of the property at the time the event was declared.

In the case of a closely-held company the director must sign the application form.

The criteria also states the ratepayer must make acceptable arrangements for payment of future rates and this could be done by committing to a regular payment plan.

There was also a proposal to charge an annual fee on postponed rates for the period between the due date and the date when they are paid.

But some councillors questioned the rationale for this fee.

Councillor Cath Ash said the condition seemed "slightly counter-intuitive".

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"If we're covering financial costs that the council will bear because the cashflow's not there with the rates not coming in, that could potentially be kind of financially painful for people taking the opportunity."

Councillor Gill Duncan asked if the fee would need to be paid annually or if it would be included in the postponed rates.

Watson said that when council identified an "event" it would need to set an administrative fee.

"We may decide when the event happens that we don't impose a fee at all but it gives an option to be able to do so."

Finance and business support group manager Jo Devine said staff were still working through the costs of the fee.

"Say there is a significant event in a rural area, where there are some of our significant ratepayers, the council may be forced into a financing cost so that we set an annual fee on a per-event basis so it would be a cost that they would have to bear while the rates are postponed," she said.

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The draft also provides options on how long the rates will remain postponed, including when the ratepayer ceases to be the owner of the property, one calendar year after the council resolves that the effects of the event are no longer felt in the community, or a date specified by the council.

Public submissions will be considered at the council's next meeting on June 25.