Hawke’s Bay rates hikes: Havelock North property could pay $700 annually for public transport

Greg Reynolds does not use public transport, but he could pay $700 of his proposed $4000 rates bill towards it. Photo / Paul Taylor

About one-fifth of a Havelock North ratepayers’ proposed $4000 Hawke’s Bay Regional Council bill is for public transport - despite no public transport directly servicing his property.

Greg Reynolds said HBRC rates for his Te Mata Rd property will increase from $1575.27 to $4074 for the 2024/25 period with HBRC’s Three Year Plan proposals, a 159 per cent increase year on year.

Of that, $712.21 of their proposed rates would go towards Public Transport Hastings for the first time, despite his part of the road not being covered by a GoBay bus route or MyWay minivans, due to redrawn public transport boundaries.

Provisional HBRC data shows 2488 properties will see their rates more than double from 2023/2024 compared with 2024/2025 under potential changes in the Three Year Plan and 55 properties face hikes greater than 500 per cent.

Regional council rates are proposed to increase on average by 19.6 per cent in 2024, and 568 properties will have their rates more than halved under the proposed changes.

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.

Reynolds’ property includes his home and accommodation villas built on the land to provide retirement income. The most up-to-date LV is $3,200,000, while the CV is $6,700,000.

Seven years ago his HBRC rates were $300 in total, but since then he said the rates have increased on average 25 per cent every year.

“Anger does not really cover how I feel because I just know the council is going to do bugger all about it and just keep putting the rates up,” Reynolds said.

“Rates used to be a small fraction of the HDC rates, now they are going to be a third.”

HBRC increases are only going to contribute to the cost of living crisis, inflation and problems with affordable housing

Two of his biggest concerns, which he has included in a submission to the council, were the large targeted rates he now paid for public transport and the newly consolidated Karamū Drainage and Tributaries Scheme, which was proposed to increase from $74.72 to $451.58 for his property.

“We were fortunate enough to have our property in a location that did not flood, though the wind damaged a lot. Yet we are getting gouged with increases in rates to cover other areas of the region,” he wrote in his submission to HBRC.

HBRC chief financial officer Chris Comber said 5000 more properties would pay for passenger transport, up from 46,000 to 51,000.

“The footprint was extended to cover urban development and moved to full valuation rolls,” Comber said.

As for why Te Mata Rd properties pay the public transport rate, he said some buses travel around Havelock and there was a terminus in the centre of the town opposite Porters Hotel.

The bus route Comber refers to, Route 21, does travel part of Te Mata Rd but does not cover Reynolds’ property.

According to information in the HBRC consultation document, passenger transport is the single largest activity funded by HBRC and is subsided with funding from NZ Transport Agency Waka Kotahi.

“The total operating cost is $6.6M in 2023-2024, of which $3.09M is targeted rate funded [both totals GST exclusive],” the document said.

Dividing $3.09m by 51,000 comes to an average of $60.59 (rounded to the nearest cent) per property captured by targeted rates.

There had been no changes to the boundaries of drainage, pumping and flood protection schemes, the combined cost of which is $14.8m excluding GST according to the HBRC consultation document.

A proposed $4.79m would be general rate funded, while $9.38m would be targeted rate funded.

The high proposed increase in the Karamū scheme portion of Reynolds’ rates was related to the switch to using capital value (CV) instead of land value (LV) in calculating rates, similar to other parts of the rates.

Under a subheader for the Karamū Drainage and Tributaries Scheme, the HBRC consultation document explained that rates are currently calculated through a combination of land value and fixed charges.

“The Council considers the proposed change to capital value rating, is the appropriate method for allocation of rates, and simplifies the rating structure.”

Reynolds wrote in his submission that he refused to pay the new rates until there had been an independent review of rates calculations across the region.

Community consultation on the Three Year Plan closed on May 15. The regional council 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 the 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. james.pocock@nzme.co.nz