Council approves rates rise in line with Long Term Plan
Greater Wellington Regional Council today voted to confine its increase to 2019/20 regional rates to an average of 5.9%, the amount forecast in its Long Term Plan 2018-28.
The decision was made after careful consideration of the impact of unprecedented increases in residential property valuations in some parts of the region last year.
Property values rose faster in some parts of the region than others, and these spikes mean that those districts will have a greater regional rate increase compared with other districts. For Wellington City, this was exacerbated by the impact of the Kaikōura earthquake, which has reduced the overall value of commercial property in the CBD.
"It is clear that the difference across the region in rising house prices and the reduction in commercial valuations has had a big impact on our rating systems and we needed to take this into consideration when setting rates for the next financial year," says Greater Wellington Chair Chris Laidlaw.
"Council had originally considered a 6.5% average rates rise for our 2019/20 Annual Plan, but we were all concerned about the impact on particular areas and property types and we have taken the time to reconsider this to reduce the impact on communities.
"This is a problem that our territorial authorities are also facing, with Wellington City Council recently announcing a plan to change their differential allocations between residents and businesses to reduce pressure on rate payers.
"We don't have the option of increasing user charges apart from Public Transport fares and this year we have resolved to freeze bus and train fares."
To keep the rates rise at 5.9% Council will make up to $800,000 of reductions in the overall budget, including reducing the contingency held for legal processes as part of the Natural Resources Plan and using additional amounts from reserves.
"We have had a good look at our organisation and while the reduction in funding isn't ideal, we are confident we can continue with our key work programmes as set out in the Long Term Plan and build better infrastructure and ensure greater resilience and wellbeing for the Greater Wellington region," says Cr Laidlaw.
The Council also decided to apply a business differential to Wellington City general rate to provide a fair and equitable balance between residential and business rates. This will require a specific amendment to the Revenue and Financing Policy and Annual Plan 2019/20, both of which will be formally consulted upon during April and May this year.
Councillors will be getting out into the community and meeting with a wide range of stakeholder groups over the coming weeks during the formal consultation period from 24 April to 24 May.
Council would be looking at long term options to address the issue of uneven rises in property values and the impact they had on regional rates, including how to ensure rates are allocated equitably across the region. It expected that this would form a change to the Revenue and Financing Policy in 2020/21.
"This issue is affecting councils throughout the country. We really need to have a good look and understand the implications swiftly changing property values can have on the rating system and structure."
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