NEW ZEALAND—Rural councils are struggling to provide basic services as the recession knocks down the income they receive from rateable properties and development contributions.
Some councils are deferring projected works rather than placing another cost on homeowners by increasing rates.
“We have cut and cut and cut into our operational budget,” says Alison Lees, Communication Manager.
A “huge” number of capital projects will be cut from the rating area—community facilities projects, roading, street lighting, footpaths and water facilities have all been affected, says the Council.
“The cost is beyond us. We said to people, ‘What do you want to do about it? What do you want to pay?’”
The Far North District Council has consulted with its ratepayers over the level of rate increases they would be prepared to accept in order to have work carried out in key areas by the Council.
The cost of government requirements “for higher and higher standards” in service delivery has added to the burden of local governments.
Councils are expected to promote the “the four community wellbeings” — economic, environmental, cultural and social development under the amendment to the Local Government Act in 2002.
“A lot of it, in my opinion, has broadened our core business,” Ms. Lees said. “It is a huge undertaking and takes a lot of time and money.”
It’s “way outside” what used to be Council core business—services such as roading and rubbish collection.
Last week, Local Government Minister, Rodney Hide, told councils from Auckland and the Far North that they “should ensure that the core activities are properly identified and funded before spending money on more discretionary activities.”
He also proposed that councils should seek a “citizens’ mandate”—probably through referenda—for discretionary activities.
“The [Rotorua] Council takes the view that any service that is supported by our community and endorsed through our Ten Year Plan process becomes a core service of Council. In that way we believe we have a ‘citizen mandate’.”
Recent revaluation of land values and changes to rating policy have made it difficult for the Rotorua District Council to say exactly how Council income has been affected by the recession.
In some areas, rates have doubled and trebled, while in other areas they have gone down by 15 to 30 percent.
“Fed Farmers have been in and highlighted to councils the pain felt by farmers,” Mr Gaston said.
There has been “anecdotal feedback” particularly from the rural sector, with people feeling “under pressure.”
Total rates arrears have jumped from $1.3 million to $1.7 million for the 12 month period from June 2008.
Nearly one tenth of all rateable properties is in arrears.
A large proportion of the rating arrears in the Gisborne district as well as the Far North are from Maori land properties largely because it is difficult for the Council to determine who is the actual landowner.
The Council has “severely curtailed” spending planned for the next two years in order to keep rates down.
“We collect extra rates from everybody to cover the bad debt rates that we expect in any one year,” Miss Lexmond said.
Some councils are deferring projected works rather than placing another cost on homeowners by increasing rates.
The Far North District Council
A “dramatic” drop in development contributions in the Far North District has seen a $6 million to $8 million drop in income over the last year. On top of that, rates arrears were around $4 million above what they were the previous year.“We have cut and cut and cut into our operational budget,” says Alison Lees, Communication Manager.
A “huge” number of capital projects will be cut from the rating area—community facilities projects, roading, street lighting, footpaths and water facilities have all been affected, says the Council.
“The cost is beyond us. We said to people, ‘What do you want to do about it? What do you want to pay?’”
The Far North District Council has consulted with its ratepayers over the level of rate increases they would be prepared to accept in order to have work carried out in key areas by the Council.
The cost of government requirements “for higher and higher standards” in service delivery has added to the burden of local governments.
Councils are expected to promote the “the four community wellbeings” — economic, environmental, cultural and social development under the amendment to the Local Government Act in 2002.
“A lot of it, in my opinion, has broadened our core business,” Ms. Lees said. “It is a huge undertaking and takes a lot of time and money.”
It’s “way outside” what used to be Council core business—services such as roading and rubbish collection.
Last week, Local Government Minister, Rodney Hide, told councils from Auckland and the Far North that they “should ensure that the core activities are properly identified and funded before spending money on more discretionary activities.”
He also proposed that councils should seek a “citizens’ mandate”—probably through referenda—for discretionary activities.
Rotorua District Council
“We are waiting with interest to see what is defined as core services, says Jean-Paul Gaston, Director of Corporate Services, Rotorua District Council.“The [Rotorua] Council takes the view that any service that is supported by our community and endorsed through our Ten Year Plan process becomes a core service of Council. In that way we believe we have a ‘citizen mandate’.”
Recent revaluation of land values and changes to rating policy have made it difficult for the Rotorua District Council to say exactly how Council income has been affected by the recession.
In some areas, rates have doubled and trebled, while in other areas they have gone down by 15 to 30 percent.
“Fed Farmers have been in and highlighted to councils the pain felt by farmers,” Mr Gaston said.
There has been “anecdotal feedback” particularly from the rural sector, with people feeling “under pressure.”
Gisborne District Council
“Gisborne district has suffered several effects of the recession, such as a downturn in wine producing contracts, closing of several commercial operations, and laying off of staff,” says Toni Lexmond, Community Relations Adviser to the Gisborne District Council.Total rates arrears have jumped from $1.3 million to $1.7 million for the 12 month period from June 2008.
Nearly one tenth of all rateable properties is in arrears.
A large proportion of the rating arrears in the Gisborne district as well as the Far North are from Maori land properties largely because it is difficult for the Council to determine who is the actual landowner.
The Council has “severely curtailed” spending planned for the next two years in order to keep rates down.
“We collect extra rates from everybody to cover the bad debt rates that we expect in any one year,” Miss Lexmond said.
