There are significant areas of publicly owned or Crown land, which either benefit from maintenance of scheme assets or which contribute towards the costs of scheme maintenance, that cannot be rated under current law.
At the present time Council has no arrangement to recover costs from the Roading Authority (Utility). As these costs relate to benefit within the local community, Council policy therefore is to fund these costs from the local community. However, until such time as the local community is able to recover a share of these costs from the Roading Authority, these costs are funded equally from the local community (zone) and Regional community.
Council has a Regional general rate, based on capital value, for collecting revenue to meet the costs of activities that are of public benefit. Council considered that the Regional benefit should be funded from the Regional general rate.
The RPA provides Council with a specific mechanism for rating drainage and river protection, including the only mechanism regional councils currently have for differential rating. Council considers that this differential rating mechanism is appropriate to achieve the funding of Project Watershed.
The RPA gives Council the ability to levy works and services rates. Council considered that works and services rates should be levied for the following:
Council considers that levying the contribution allocation over the whole catchment is, in the circumstances, more practical than levying it on a zone basis or combination of zone and catchment.
In determining the most appropriate basis for each rate Council considered the most appropriate mechanisms from three perspectives. Firstly, the incidence of the rate and the charge to a property owner. Secondly, the analysis of beneficiary and contributor and how best that analysis can be achieved. Finally, the need to ensure a balance between the cost and administration of any rating system and the amount being collected from each ratepayer.
With the proposed rates Council has in general achieved an appropriate balance to all of the above considerations and each ratepayer is being rated at least in an equitable manner given that rates are a tax. In most territorial local authorities (TLA’s) there is some smoothing and the general rate and catchment and zone differentials provide for some of that smoothing.
In determining the base for levying the contributor differential Council considered capital value, capital value with urban/rural differentials, land area or land value as options. In brief the options have the following features:
The RPA gives Council the power to levy or negotiate direct charges. For Project Watershed this particularly relates to charges for soil conservation work in accordance with Land Improvement Agreements. Council considered it appropriate to levy direct charges for:
Within the Project Watershed differential rating system Council considers it appropriate to have specific differential rating systems for river management and flood protection direct benefit allocations for:
Council considered the options available for the basis of the differential rates (capital value, land value, annual value and land area) and adopted an area based rating system for Lower Waikato, rather than a value based system. This eliminates the distortions and inequities that can result from fluctuating rural land values, and promotes simplicity and ease of administration.
For Huntly (Lower Waikato) and Otorohanga (Waipa) flood protection Council considered uniform targeted rates to ensure that properties pay the same amount for effectively the same level of service provided, and to remove the effects associated with rating on a capital value basis. These rates will be effective from 1 July 2003.
For Tauranga-Taupo and Tongariro Council considered capital value as the appropriate basis, given the generally urban nature of the area, protection provided to improvements (rather than rural land) and the notion that higher value property receives greater benefit.
Council considered that it is not practical to establish a differential rating system for Eastern and South Western River Management (Lake Taupo zone) and that the allocation to River Management and Flood Protection direct benefit should be funded from the Lake Taupo zone.
Council considered that it is not practical to establish a differential rating system for the allocation to Flood Protection for the Mangapu investigations (Waipa zone) and that this allocation should be funded from the Waipa zone.
Council considered that in terms of section 122H(a) of LGAA the rating mechanisms set out in section 16.4.5 below will be used.