Northern councils are blaming tough economic times for rates arrears that have left them more than $30million out of pocket.
The Far North District Council (FNDC) is carrying almost $25million in overdue rates bills, while the Kaipara District Council (KDC) and the Whangarei District Council (WDC) have seen their rates arrears rise since last year.
As of June 30 outstanding land rates owed to the WDC were at their highest level - $2.89million - most of that overdue for more than three months. Overdue water rates took the WDC's total rates arrears at the end of the last financial year to $3.24million.
At the same time the KDC was seeking $2.79million in rates.
All three councils say the depressed economic climate of recent years was the major factor affecting rates collection.
Unemployment, limited cashflow and a sluggish property market had all impinged on the ability of ratepayers to pay their rates.
All three councils continue to struggle collecting rates on Maori freehold land, which accounts for more than 50 per cent of total rates arrears at the FNDC and the KDC.
Collecting rates on Maori freehold land is problematic because the land often belongs to many owners and each owner has to be billed individually for his or her share. Some Maori freehold land has more than 1000 owners.
By law, council's cannot pursue the collection of unpaid rates through the courts after six years. As a result, outstanding rates more than six years old are written off at the end of each financial year.
KDC corporate services manager Barbara Ware said by the time overdue rates were finally written off, successive penalties added over the six years could comprise up to 65 per cent of the sum written off.
For the 2010/2011 year, the KDC wrote off $153,775 of overdue rates, while the WDC wrote off $258,000 and the FNDC wrote off $799,245.
With arrears at such levels, northern councils have been formulating new strategies to collect rates before they are written off.
FNDC revenue and collections manager Cheryl Gavin-Young said the council had formed a debt management team to do the rates arrears recovery work previously done by an external contractor.
"The team has found that phoning people with rate arrears (instead of just relying on written letters) and offering them affordable repayment options is an effective debt-recovery strategy, especially if staff monitor these arrangements and provide follow-up calls and support where necessary.
"Determined detective work by the team has also resulted in the council being able to identify owners of Maori freehold land through the Maori Land Court, helping the team to build relationships with parties responsible for paying rates."
WDC finance and support services manager Alan Adcock said the council endeavoured to work with people to formulate payment plans before the debts got out of hand.
Debt collection agencies were used to recover rates arrears in some cases, Mr Adcock said, while court action to force land sales to pay outstanding debt was an option being investigated.
Northland councils owed $30m rates
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