'Fairer' rating system diluted

The Far North District Council's controversial 'fairer' rating system, that would have seen forest owners hit with rates increases averaging 200 per cent and quarries more than 1200 per cent, has been drastically watered down.

The council met on Wednesday to discuss the 1100-odd submissions made to its 2013-14 draft annual plan, most of those submissions focusing on the proposed new rating system and requests for an indoor heated swimming pool in Kaitaia.

The proposal included a targeted roading rate designed to make the sectors which the council claims cause the greatest damage to roads, namely forestry and quarries, pay a bigger share of road repair costs. It was also designed to reduce the burden on the struggling commercial sector.

One of the consequences, however, was an average 200 per cent rates increase for forest owners. Big quarries and mines would have paid up to 1260 per cent more and smaller quarries 940 per cent. Quarry owners said the increase would put many out of business and increase the cost of road maintenance.

A fresh proposal was adopted at Wednesday's meeting, combining the status quo with a targeted road rate and a small decrease in the commercial differential.

The effect was to iron out the biggest increases in the original proposal so forest and big quarry owners will now pay on average 20 and 60 per cent more respectively. Residential properties will pay an average increase of less than one per cent (not including increases to water and sewerage charges, which vary greatly around the district), while the commercial sector will see its rates drop by six per cent.

Strategic policy manager Chris Ellington said the "fairer" rating proposal sparked a large number of submissions from forest and mine owners, but the council had also received a lot of feedback from business owners who were struggling with the economic downturn and a three-times commercial differential.

The new rating model combined elements of the current system with a targeted roading rate and a commercial differential reduced to 2.75, to shift some of the rating burden from the commercial sector to those having the greatest impact on roads.

"Staying with the status quo wouldn't have achieved that ... Councillors felt this [combined proposal] kept faith with the concept they want to introduce but without the extremes," Mr Ellington said.

In another change, the ward rate had been kept separate from the general rate, rather than being combined as proposed.

Mr Ellington said the council's legal advice was that it did not have to consult again on the new rating system, because the draft annual plan had signalled a combination of the status quo and the proposed "fairer" rating system was a possibility. It could still be challenged by a judicial review in the High Court however.

In the meantime the council was working with Land Transport NZ to develop a targeted road rating system based on tonnage and distance travelled.

The combined option was unanimously backed by councillors in an unusually harmonious meeting. The new proposal still has to be formally adopted at a follow-up meeting later this month.

The Kaitaia pool issue will be considered once a feasibility study is complete.

The targeted roading rate will recover about 10 per cent of total road costs, as a first step towards what the council sees as a user-pays system.