Roger Gordon: Rating policy

I WAS DISAPPOINTED the Rotorua District Council voted to adopt the rating policy last Friday without mitigating the considerable increases to some ratepayers.

These rises are not limited solely to business ratepayers. Some residents and farmers are in for a big shock when they get their rates notifications for payment on August 20.

Business sector: Nearly 200 business ratepayers have had rating increases above 25 per cent, broken down as follows: above 100 per cent: 30; 90 to 100 per cent: 9; 80 to 90 per cent: 7; 70 to 80 per cent: 2; 60 to 70 per cent: 13; 50 to 60 per cent: 11; 40 to 50 per cent: 29; 30 to 40 per cent: 49, 25 to 30 per cent: 47.

After the Chamber of Commerce alerted councillors in the past two weeks to the level of these unreasonable rates rises, one councillor did ask for information relating to those most affected in other rating groups. This is the information he shared with me on June 28, the day before the vote on Friday.

Residential Urban:Most affected ratepayer: 284 per cent; 100th most affected: 27.41 per cent; 200th most affected: 21.67 per cent; 300th most affected: 18.97 per cent.

Residential Rural:Most affected ratepayer: 235 per cent; 100th most affected: 26.99 per cent; 200th most affected: 20.83 per cent.

Farming:Most affected ratepayer: 180 per cent; 100th most affected: 35.03 per cent; 200th most affected: -2.03 per cent.

I reckon close to 600 ratepayers will have rates rises above 20 per cent. My contention is the council had a responsibility to alert ALL ratepayers there could be rates increases in excess of 20 per cent.

Similarly, I believe council staff had a responsibility to advise councillors there could be rates increases of this magnitude.

Clearly they did not. Two councillors have said they had no idea some increases across the board could be this high. Do we not expect councillors representing us to ask those questions?

For the mayor to suggest supplying the chamber with the information in confidence was sufficient to alert ratepayers is alarming. I respect the relationships I have with council group managers and for the mayor and councillors to agree I should have shared this information with my business colleagues is unethical and not the kind of behaviour I would expect from our elected representatives.

Is there another solution? There may have been had councillors had the vision to see what Auckland did when faced with a similar dilemma.

The move to a Super City with a single capital value rates regime was to see many ratepayers facing huge increases. Auckland discussed a couple of solutions. One was to introduce a transition programme over three years.

How about this: Identify the total level of rates to be paid by the various sectors. (The chamber had advised a regime that would have equalised the increases in Rotorua over the three sectors).

Ring-fence those totals. A cap could be established for the maximum increase (say 10 per cent) that any ratepayer would be asked to pay. Also a cap set for the maximum decrease (say 5 per cent) that any ratepayer would enjoy. Obviously the fund created by not giving decreases could be used to offset the revenue lost by setting the maximum increase.

Any difference between the two could then be managed by a variation on rates between the two +/- caps to achieve the required total rates paid for that sector.

Makes a lot of sense!

Roger Gordon is chief executive of the Rotorua Chamber of Commerce.