Whanganui District Council wrestles rates issues at Long Term Plan workshop

Whanganui District Councillors during deliberations on rates in June. Photo / Bevan Conley

The issue of rates has again reared its head in the Whanganui District Council chambers, as work gets under way on its Long Term Plan.

During a recent council workshop, chief financial officer Mike Fermor said there “had been some thinking” around whether rates should be allocated based on land value or capital value, or a combination.

Capital value refers to what a property might sell for at the date of a valuation.

At present, Whanganui’s general rates - for services benefiting the entire community, such as parks, reserves and libraries - are based on land value.

Some ratepayers in Aramoho, Castlecliff and Gonville experienced a large rates jump this year as a result of sizeable increases in land value.

“While, in theory, you could potentially subdivide, for some properties, that could be quite difficult,” Fermor said.

He said there had been good uptake on the one-off rates remission of up to $500 for the 2023/24 financial year, but that was effectively a rates increase of $500 for next year.

To be eligible for the remission, ratepayers need to have an increase of more than $700 and to have brought in a gross household income of no more than $90,000 from April 1, 2022 to March 31, 2023.

For 2023/24, general rates account for around 37 per cent of an average residential property’s charges.

Also tabled at the workshops was whether there should be targeted rates for kerbside recycling and an increase in rating for exotic forestry.

A report from council transport manager Damien Wood said forestry’s impact on rural roads continued to result in very high sealed pavement repair costs, with Longacre Rd deteriorating rapidly.

Fermor said the current targeted rate for exotic forestry was set six years ago and it was a good time to review it.

No rate had yet been set for kerbside recycling, and that would be consulted on through the consultation process, he said.

That service is due to begin mid-2024.

Councillor Rob Vinsen said there was inequity between urban and rural areas in terms of rubbish collection services.

An element of “user pays” had to be put into the rural service, he said.

“At the moment, urban people pay a contractor to have their rubbish collected.

“In the rural sector, there are 13 bins costing $117,000 a year, I think it is, and that’s basically a transfer station out there.

“It’s charged back to the general rate, so [rural residents] are paying a share, but nowhere near what the urban people are paying for their service.”

Vinsen said it would not be hard to implement a targeted rate for that service if there was a will for it.

Councillor Kate Joblin disagreed, saying she didn’t understand how Vinsen knew it wouldn’t be difficult to do.

Targeted rates are for services benefitting only a specific group of ratepayers.

Rural rubbish sites weren’t exclusively used by people in those areas and it would be “a fairly massive exercise” to undertake targeted rates, Fermor said.

He said the best way to reduce rates was to reduce levels of service.

“If you decide one sector is in pain through rates and you take rates away from that sector, all you’re doing is putting it to another sector.

“When we change a rating model, we need to take cognisance of unintended consequences.”

Further workshop discussions on rates were held behind closed doors.

Mike Tweed is an assistant news director and multimedia journalist at the Whanganui Chronicle. Since starting in March 2020, he has dabbled in everything from sport to music. At present his focus is local government, primarily the Whanganui District Council.