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RATINGS POLICY

WRITTEN SUBMISSIONS FOR PEOPLE

SPEAKING AT THE HEARINGS

PORIRUA ECONOMIC DEVELOPMENT GROUP (PEDG) SUBMISSION TO PORIRUA CITY COUNCIL (PCC) ON:

1. Amendments to Proposed changes to the Rating Policy for Long-Term Plan 2018-38

2. Proposed Changes to Rating Policy 3. Proposed Funding Impact Statement (2018-38 Long-Term Plan)

Context PCC is seeking to discharge its obligations as an integral part of the process of updating for the Long-Term Plan 2018-38. In this context the papers address proposed options for changing the existing rating policy and outline indications of how this would impact on certain groups of ratepayers. The major areas targeted for change are:

the shopping plaza differential: a 11.1% increase over three years;

the business differential: a 11.4% decrease over three years; and

the rural differential: a 14.3% increase over three years. Given the Council’s past track record in respect of PEDG submissions, we are pursuing a change of approach this year and will concentrate our thoughts on three areas:

the adequacy/legality of the overall process;

the business differential; and

the rural differential. The Underlying Message Some years ago, the Hon Winston Peters, in his capacity as junior coalition partner, was appointed Minister of Foreign Affairs. Prior to visiting an overseas post, it was the tradition of the Ministry of Foreign Affairs and Trade to provide the Minister with a comprehensive briefing. This covered in-country background and every topic possibly relevant to the visit. It was a classic bureaucratic document running to well over 100 pages: simply a “paving slab” covering officials’ backs. The Minister’s office requested a two-page paper from the Embassy covering the major issues that he had to address. That concise summary was provided and the visit went well, with New Zealand’s interests ultimately being well served. The moral of this story is that it is essential provide the readers with what they need to make informed decisions and not to bury them in a confusing and an insufficiently focused welter of detail!

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Critique of the Overall Process Local authorities have broad capacity and powers under sections 10 to 12 of the Local Government Act 2002 (the Act) to deliver cost-effective services to their communities. These general powers are balanced by requirements to take into account principles set out in section 14, including operating in a transparent, accountable efficient and effective manner, and weighing up the views, diversity and interests of their community. This provision also requires a council to ensure prudent stewardship and effective and efficient use of its resources in the interests of its district or region. The Act further prescribes a series of decision-making principles: a: The consultation principles The prime purpose of consultation is to enable the effective participation of individuals and communities in the decision-making of councils. This enables elected representatives to make better-informed decisions on behalf of those they represent. The principles guiding consultation processes set out in section 82 of the Act are designed to ensure individuals and their communities have information about decisions, and the opportunity to engage with their councils and make their views known. These guiding principles include the following:

A council must provide anyone who will or may be affected by the decision, or anyone who has an interest in the decision, with reasonable access to relevant information.

A council should provide people presenting their views with information relevant to decisions and the reasons for them.

From these principles, it would seem mandatory for there to be full disclosure to communities about the proposed changes in papers made available through the consultation process. Some may argue that PCC has complied in the currently proposed changes to the rating policy and the revenue and financing policy. PEDG’s review of the papers incorporates the experience of a former Minister of the Crown and former senior bureaucrats and businessmen amongst our members. Their consensus opinion can be summarised as follows:

The papers were overly voluminous and repetitive, and tended to disguise/bury issues of real importance: many of the issues were discoverable but only with

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substantial effort. They lacked analytical clarity, substantive rationale and conciseness of expression.

There is very little relevant financial support for the proposed changes.

It was inappropriate to focus exclusively on revenue required to fund levels of expenditure that are assumed as a “given”. A budget is supposed to allocate or ration scarce resources, not to merely levy funds indiscriminately to meet predetermined and desired spending levels.

The allusion to a movement towards “user pays” may be justified in principle – if consistent with the Auditor-General’s guidance on charging fees – but it was unclear in practice whether this was necessarily appropriate and/or fair. See later notes on the rural differential.

Given the community audience, the form and style of presentation was not user-friendly, lacking relevant data and most likely contrary to the spirit of the Act.

Despite the Council’s obligation to operate in an efficient and effective manner, PEDG was struck by a total silence in the policy documents of efforts by officers and councillors to achieve better value for money for ratepayers (in itself and in terms of cost-effectiveness reviews required by section 17A of the Act).

In short, we consider that the discussion documents are unsuitable for purpose vis-à-vis the target audience, and that should a legal challenge be made over the process, it would stand a good chance of success. b: The financial management principles Section 101 of the Act sets out obligations for councils, the effect of which is that:

A council must act prudently and in a manner that promotes the current and future interests of its community.

Adequate and effective provision for expenditure needs must be provided for in LTPs and the annual plan.

Expenditure needs must be met from those mechanisms the council considers appropriate after considering the promotion of community outcomes, intergenerational equity and other factors next noted.

Under this provision the funding needs for each council activity should be based on a three-step approach:

1. Current activities should be identified.

2. Councils are obligated to consider the following when selecting funding mechanisms:

the distribution of benefits from each activity to the community as a whole;

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the period over which the activity's benefits can be expected;

the extent to which particular individuals contribute to the need to undertake each activity; and

the costs and benefits of separate funding, including consequences for transparency and accountability.

3. Thirdly, the impact on communities must be considered. This recognises that revenue and funding decisions do not occur in a vacuum.

PEDG’s reading of the financial management principles suggests that there are two areas for Porirua councillors to be concerned:

1. Any form of cross-subsidisation between activities seems to be contrary to the spirit of the principles.

2. The notion of “user pays” appears to require a proper cost/benefit analysis when charges are applied. Such analysis would also be appropriate for scrutiny of a significant number of the Council’s other activities.

The Business Differential Further to discussion with other interested parties, such as the Porirua Chamber of Commerce, we are confident that strong and appropriate advice will be brought to councillor’s attention in this area. PEDG simply wishes to record our support for any equitable mechanism impacting on rates that enhances Porirua’s competitiveness (or reduces existing disadvantages) compared with neighbouring Councils. We were delighted to see the transparency of the Wellington equivalents in the discussion documents. The Rural Differential After failing in its attempt to increase the rural differential for 2017/18, PCC is proposing for consultation that the differential increase from 0.70 to 0.80 over the next three years. This represents an increase of 14.3% (4.76% annually) before any additional increases in the wider general rate or those associated with changes in capital values. The substance of the argument in support of an increase in the rural rate hinges on the very high estimated costs of roading maintenance. It is suggested that the annual cost will be of the order of $880,000. When divided by the number of rural ratepayers, represents $1,440 per rating unit. The key question is whether these proposed changes are fair and reasonable. In the event that the roads under review were materially or only for the use of the rural residents, and that the estimated costs were both reasonable and rising, then there could be little argument over increasing charge: namely, the user pays. However, there are two extenuating circumstances that suggest that the major users of these roads are NOT exclusively or materially the rural ratepayers:

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In the last year, major works on the Transmission Gully development have resulted

in large numbers of very heavy vehicles using these rural roads. They were never built or designed for such high usage or such heavy transport.

Several of the so-called rural roads are in reality alternative routes to the State Highways, such as Grays Road and Paekakariki Hill Road, where it would seem most unlikely that as much as even 25% of the road usage is by the rural ratepayers.

In addition, it is unfortunate that the Council is seeking to extract additional funds from the rural ratepayer at a time when its past performance in roading maintenance has been most unsatisfactory. For example, some months ago, the part of Grays Road leading to Motukaraka Point from the east was resurfaced: spray and chip only. Within a week, the previous potholes were again evident and one can only describe the surface of the twisting part of the road as an absolute disgrace. The potholes remain unaddressed. Notably, the policy documents are silent in terms of how PCC compares with its neighbours. That was hardly surprising as Kapiti, for instance, has a differential of 38%! PEDG urges councillors to reject the changes to the rural differential on the basis proposed. PCC is already considerably more expensive than its neighbouring Councils. With a view merely to equity and fairness, we cannot see a case to charge the 611 rural ratepayers for maintenance of roads that are being perpetually damaged by both high volumes of through traffic and high numbers of heavy construction vehicles. We also believe that should the Council elect to go ahead with these proposals, there is every likelihood that a legal challenge would succeed. Transparent Support from Councillors In the past, councillors have made strong statements and commitments about seeking to represent the best interests of their constituents. PEDG, together with other interested parties, will be closely following representations and voting by the Northern and Western Ward councillors over these issues. PEDG Recommendations In conclusion, PEDG recommends that the Council:

1. note the contents of this submission; 2. note that there is a considerable risk that flawed decisions by the Council are likely

to be subject to strong legal challenge; 3. note PEDG support for making business rates more competitive in our region; 4. agree to reject the increase in the rural differential, as proposed, on the basis of

equity and fairness; and 5. agree that future documents circulated for consultation be both comprehensive in

their disclosure, including financial impacts, and presented in a manner that can be readily comprehended and assimilated by the target audiences: namely, the rate-paying community.

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I would like to make an oral presentation at the Council’s hearing of submissions on 30 November. Andrew Weeks Chairman, PEDG 31 Motukaraka Point Pauatahanui Porirua 5381 Phone: 233-2490 10 November 2017

Submitter Details

First Name: ReneLast Name: ConradieStreet: 266 Murphys RoadSuburb:City: JudgefordCountry: New ZealandPostCode: 5381Daytime Phone: 0272020514Mobile: 0272020514eMail: [email protected]

Resident or Ratepayer:Ratepayer Resident Non-resident ratepayer Other

Which Community Board Area is your property in?Aotea Ascot Park Camborne Cannons CreekColonial Knob Elsdon Hongoeka JudgefordKenepuru Mana Island Paekakariki Hill PapakowhaiParemata Pauatahanui Plimmerton Porirua City CentrePukerua Bay Ranui Takapuwahia Titahi BayWaitangirua Whitby

Wishes to be heard:YesI do NOT wish to speak in support of my submission and ask that the following submission be

fully considered.

Correspondence to:SubmitterAgentBoth

Submission

After considering the Statement of Proposal outlining the options for changes to the Rating Policy,that is:

Option 1: status quo - no changes to the Rating Policy

Option 2: equalise the shopping plaza differential with the commercial differential over a three-yearperiod

Option 3(i): combines option 2 with lowering the business and motel differentials and aligning theshopping plaza differential with the business differential over three years, and the introduction of aCity Development Rate over all the properties in Business Group13, Motels Group15 and ShoppingPlazas Group16 differential groups.

Option 3(ii): lowering the business differential and introducing a City Development Rate only overthe properties in Business Group13.

Option 4: increasing the rural differential from 0.7 to 0.8 over a three-year period

Option 5: combination of 3(i) and 4

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Which option do you support?

Option 1Option 2Option 3(i)Option 3(ii)Option 4Option 5 (options 3(i) and 4)

Please tell us a little of the reasons for your answer.I don't support the increase in rate for Murphys Road in particular due to the lack of services wereceive. In recognition that some rural areas, and roads, do receive all of the available services, Iwish to propose a system where each road/area is assessed individually. To specifically addressmy own area, on Murphys Road, I would like to point out that we have a barely normal Porirua cityroad due to a lack of safety keeping. We have pot holes, ditches, limited line of sight, and few areasof our road where we can give way for on coming traffic, it is a farm road that has been paved overwith minimal quality or foresight into the residents that will travel on it regularly. We have hadseveral crashes, accidents, and mishaps, that have endangered both residents and visitors livesdue to the lack of services and maintenance of our road. However we have received road sidegrass mowing, electrical and emergency services, and minor fixes for some pot holes, which we doappreciate. In an attempt to provide quality services we have received storm water maintenance bydigging out a trench for at least 40% of the road, which hasn't added safety value to the road rathertaken it away. Which leads to my next point: what we do receive does not help us in the longterm.The trenches dug out for storm water causes the drivers, who do decide to give way, to run into thetrouble of getting stuck in these trenches. Potholes damaging the underside of residents cars, areonly ever fixed by the time we make mud holes learning, and getting used to getting around them.Our road is very narrow, where only one car fits in most places, the frequent scenario of runninginto company means the few drivers who can reverse back up legally without getting stuck need togo to the trouble of stabilising their cars on a mound of pine needles leading to the cliffside, orreversing up 25m to 30m to get into a drive way - which most new drivers do. The road sidemowing only allows us to see where we can get off the road for others incapable of doing so topass us, an extremely temporary fix to a huge problem. We dont receive the service we are payingfor, our suburban/rural neighbours receive them for us. What we do need is a bigger road wheretwo cars can pass each other at any time, in any spot. I believe we have the slowest internet inPorirua here in Judgeford, that could be a longterm fix. Checking all areas for the maintenance theyneed regularly enough for services to be applied to even the smallest roads would make theincrease acceptable. But we don't get the services we need, when we need them. We don't receivewater, gas, or waste management services, and we dont have public transportation servicesseparate from the school bus systems. We are not equal to each other, much less the suburbanand urban areas of Porirua City, so why do you expect those of us who receive the minimal to paymore/

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Submitter Details

First Name: MargaretLast Name: JiangOrganisation: RetiredOn behalf of: Eberhard deussStreet: 462 Paekakariki Hill RoadSuburb: PauatahanuiCity: Paekakariki HillCountry: New zealandPostCode: 5381Daytime Phone: 04-2375085eMail: [email protected]




fully considered.


Submission







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Please tell us a little of the reasons for your answer.I think the rates are already too high. Increase the rural rates because it costs to upgrade the road,laughable. The roads should be private then and not rented out to a car race and resident notallowed to leave their homes.tranmission gulley trucks and traffic increase cause most of thepotholes and then it is a temporary fix. The road is not safe to walk along let alone ride along. I can'tdrive because of my eyesight and am forced to stay home or rely on kindness of friends. Where dothe rates go- not into providing services.

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Submitter Details

First Name: AndrewLast Name: FrazerOrganisation: StellascapesStreet:Suburb: PoriruaCity: PoriruaCountry: New ZealandPostCode: 5381Daytime Phone: +6421494834Mobile: +6421494834eMail: [email protected]




fully considered.


Submission







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Please tell us a little of the reasons for your answer.I dont' really support any of the options that have been proposed. Until proper cost and revenueanalysis is done and it is verifiied as correct, there is no basis to make that claims that supportOption 4. The PCC claims that rural rate payers do not pay their share of the citys costs, with thebig ticket cost being the costs of providing 'rural' roads. - The Councils calculations of 'costs' arebased on a rural km of roads / total km of roads percentage figure. ( 18% ) , with some 'best'guess's made as some line items. There is no evidence to support that these figures are correct, oreven near correct. They are simple a total times a ratio which can not be supported to calculate acost. This information was only made available late in the process by an Offical InformationRequest to council. It was very dissapointing that Council did not be up front with how it came to itsfigures. Council needs to actually know what the real costs are. not just make bad assumptions. -Option 4 looks to treat rural roads as something that should only be paid for by rural rate payers. Ifit was only rural rate payers who used these roads, this may be correct, but this is far from thecase. The major rural roads, carry considerable through traffic ( for example Paekakariki HIll Roadthrough the village ) is approximately 9000 movements per day, just over 2000 over PaekakarikiHill, and some 7000 on greys road ). It is not possible to easily determine the actual split of use, butit does not seem likely that each rural ratepayer is making nearly 15 trips daily through the village.Option 4 also fails to recognise that rural rate payers will use the urban roads. The important pointhere is that the roads in the city are a 'network' of roads, and the costs can not be sensiblyassigned to specific areas. The total roading costs for the entire city should be treated as a wholeand evenly apportioned across all rate payers. The proposal would be similar to attributing all thecosts of a park to the streets that are immediately around it. Or the costs of the library to just thosepeople who have library cards. This is NOT and never has been the basis for calculating generalrates. General rates are to cover the costs of the services that the city uses as a whole, Based onthis The projected budgetary figures of $8,539,889 should be spread across the total rating base. (approximately 26,000 rate payers ). This would suggest an average cost of $328 per rate payeracross the city. This suggests that the residental rate payers are actually not contributing enough totheir rates, ( they are paying an average of $299, $29 short ). . The flip side of that is that rural ratepayers are being charged far too much. ( currently about $1094 cost average ). Using the 'fair andequitable' model that PCC has suggested a new option needs to be looked at. Increasingresidential rates by 0.98% ( $29 ) to cover this cost, and reducing rural rates by $766 ( 26% ) Ifcouncil is about being fair and equitable, then it needs to 'fairly' and equitably do its calculationscorrectly and not make poorly constructed proposals, based on ratios that have no actual basisother than a km ratio. For the sake of a tiny adjustment, Council has wasted considerable time andexpense on this Option. It is dissaspointing. As a rate payer I expect a higher level of confidence inproposals that are presented. Please take this back to the drawing board, actually work out whatthings are REALLY costing, and WHO is using them. The city is clearly under financial stress, andwe can't change the past, but we can change the future, and we MUST work to a higher standardthan what is being delivered right now.

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SUBMISSION ON PORIRUA CITY COUNCIL'S REVENUE AND FINANCING POLICY AND RATING POLICY

To: Porirua City Council ("Council")

Submission on: Proposed Changes to Revenue & Financing Policy ("Proposed Revenue Policy") and Proposed Changes to the Rating Policy ("Proposed Rating Policy").

Name: Kiwi Property Holdings Limited and Plaza Porirua Limited ("Kiwi Property")

Address: C/- Russell McVeagh, at the address for service specified below.

1. EXECUTIVE SUMMARY

1.1 This submission focuses on the Council's proposed changes to its Revenue Policy and Rating Policy, specifically:

(a) the increase in the Shopping Plazas Group differential to align with the Business Group differential over a three year period; and

(b) the introduction of a targeted City Development Rate ("CDR") to fund a portion of economic development activities, village planning and stormwater.

1.2 The Council has set out five options for the Rating Policy consultation, and is advocating for Option 5, which includes changes (a) and (b) above.1 These changes will have a significant and unreasonable impact on shopping plazas. In particular, Kiwi Property stands to be significantly adversely affected. The combination of increasing the differential and adding the CDR will, over the course of three years, add over $250,000 to Kiwi Property's already high rates bill for North City Shopping Centre ("North City").2

1.3 In summary, the Council has:

(a) failed to consider the significant implication on businesses, including North City and its tenants;

(b) failed to demonstrate how the CDR appropriately corresponds to any benefits / services provided; and

(c) not undertaken a balanced cost / benefit analysis that considers the reality of implementing the increased Shopping Plazas Group differential and the CDR.

1.4 The Council's operative differential factors of 2.79 for the Shopping Plazas Group and 3.50 for the Business Group are very high compared to other councils in New Zealand. The Council's proposed increase of the Shopping Plazas Group differential in the Proposed Rating Policy disproportionately and unfairly penalises shopping plazas. Such an approach fails to take into account the vital community services and amenities that shopping plazas provide, which set them apart from other businesses, as well as the contribution shopping centres already make to Porirua City ("City").

1 Statement of Proposal: Proposed Changes to Rating Policy, page 17. 2 $184,215 for 2 Titahi Bay Road and $75,396 for 1 Lyttleton Avenue according to Council figures provided to Kiwi Property.

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1.5 In addition, the two shopping plazas in Porirua (Mega Centre and North City) will be subject to two types of rate increases, with the introduction of a new targeted CDR. In June of this year, the Council considered a CDR and this was unanimously rejected as "the Council considered it important the commercial sector has confidence that Porirua is a great place to do business, as they are important for the growth and development of the city".3 It is absurd that the Council is proposing this exact same measure again less than 4 months later. Kiwi Property also has serious concerns with the insufficient link between who will be charged the CDR and the benefit to be derived from the activities proposed to be funded by the CDR.

1.6 The Council has failed to consider how these two increases in rates will have an impact on Kiwi Property's tenants who are directly affected by the rates increases being passed on through increased rent. Many of these businesses may no longer be able to operate, which will detrimentally affect Porirua's city centre, wider community and economy.

1.7 Kiwi Property strongly opposes the increased Shopping Plazas Group differential and the introduction of the CDR and seeks the retention of the status quo (Option 1).4

2. STRUCTURE OF SUBMISSION

2.1 This submission will address:

(a) The background and operations of Kiwi Property's North City Shopping Centre.

(b) The proposed increase in rates through the CDR and increased Shopping Plazas Group differential.

(c) Reasons for opposition to the Proposed Revenue Policy and Proposed Rating Policy, specifically the:

(i) implications of increasing rates;

(ii) insufficient link between cost and benefit; and

(iii) inadequate cost / benefit analysis.

3. BACKGROUND

3.1 Kiwi Property owns and manages some of New Zealand's best and largest shopping centres, large format retail and office buildings. In Porirua's town centre, Kiwi Property owns and manages a number of properties, including North City. North City consists of two properties: 2 Titahi Bay Road and 1 Lyttelton Avenue, Porirua City Centre.

3.2 Shopping centres form an important part of the commercial infrastructure of a modern society, and are crucially important to the success and vitality of wider city centres. Beyond commercial opportunities, shopping centres are also a community space for local residents, families and youth alike to meet.

3 https://poriruacity.govt.nz/your-council/city-planning-and-reporting/annual-plan/ 4 Consultation Document, page 9.

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3.3 North City is a well-designed regional shopping centre with over 100 specialty retail stores. For over 25 years, the shopping centre has provided a wide range of goods and services to the community in a convenient central location.

3.4 Over the years, Kiwi Property has invested in the growth and refurbishment of North City to provide a vibrant, safe and secure shopping environment for the people of Porirua. Kiwi Property has invested well in excess of $11 million in North City in the last 13 years alone. Part of this investment includes a playground, parents' room, and bathrooms. Tenants have also made substantial investments with millions invested into store fit-outs. Kiwi Property is consistently updating and innovating the North City spaces to best cater to tenants and the community, and to attract visitors to the City. North City disposes all of its own rubbish and recycling, which alleviates its dependence on Council resources.

3.5 As well, North City generates approximately 760 retail / service full-time and part-time jobs, which is a significant proportion of the employment opportunities in the City.

3.6 Through the rates charged for North City alone, Kiwi Property pays the highest level of rates in Porirua, which was over $1.1 million for the 2017/2018 year (excluding water charges).

4. IMPACT OF INCREASING RATES

4.1 Of the five options proposed, the Council prefers Option 5 (which combines Options 3(i) and 4) as follows:5

- Lowering the Business differential from 3.5 to 3.1 and the Motels differential from 1.72 to 1.42 over 3 years and aligning the Shopping Plazas and the Business differential

- Adding a City Development rate to fund $590k of the City Development costs (mainly Economic Development costs) in year 1 increasing to $695k in year 2 and $1.04m of City Development costs in year 3

- Stopping the City Centre Development rate currently charged on 56 properties in the CBD (the only commercial properties in the city currently paying a separate targeted rate for some Economic Development costs)

- Increasing the Rural differential from 0.7 to 0.8 over 3 years

4.2 According to Council, the indicative impact of Option 5 on the rates charged for North City is:6

Property Proposed increase for 2018/2019 rates due to CDR

Proposed increase for 2019/20 rates due to CDR

Proposed increase for 2020/2021 rates due to CDR

2 Titahi Bay Road

$46,810.00 Overall rates increase: 6.96%



1 Lyttelton Avenue




Total $65,968.00 $77,667.00 $115,976.00

5 Statement of Proposal: Proposed Changes to Rating Policy, pages 10 – 12. 6 Document supplied to Holly Lynn (Kiwi Property) from Porirua City Council on 11 October 2017.

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4.4 Overall, the proposed rates for North City will increase by approximately $65,968.00 for 2018/2019, $77,667.00 for 2019/2020 and $115,976.00 for 2020/2021. That is an increase of over $259,000.00 across three years.

4.5 This is a totally unreasonable increase to rates, which are already disproportionately high compared to other districts in the Wellington Region and across New Zealand. This increase will negatively affect Kiwi Property and its tenants.

5. REASONS FOR OPPOSITION

5.1 The Council's discretion to adopt rating policy is not unlimited. The Council must act within the statutory powers conferred on it and in a reasonable manner. The Council's Revenue and Financing Policy must show how the Council has, in relation to the sources of funding identified in the policy, complied with section 101(3) of the Local Government Act 2002 ("LGA"). Section 101(3) has been described as the "critical filter" through which funding decisions must be made.7 It provides that:

s 101 Financial management ... (3) The funding needs of the local authority must be met from those sources that the local

authority determines to be appropriate, following consideration of,— (a) in relation to each activity to be funded,—

(i) the community outcomes to which the activity primarily contributes; and (ii) the distribution of benefits between the community as a whole, any

identifiable part of the community, and individuals; and (iii) the period in or over which those benefits are expected to occur; and (iv) the extent to which the actions or inaction of particular individuals or a group

contribute to the need to undertake the activity; and (v) the costs and benefits, including consequences for transparency and

accountability, of funding the activity distinctly from other activities; and (b) the overall impact of any allocation of liability for revenue needs on the

community.

5.2 In our view, the Council has not appropriately considered the impact on North City of increasing its rates through the Proposed Rating, and Financing and Revenue Policies.

Implications of increasing rates

5.3 The Council considers that the Shopping Plazas differential group should be paying the same differential as the rest of the Business sector on "a fairness and equity basis" to create a "more level playing field for Commercial sector within Porirua".8

5.4 Kiwi Property is willing to pay its fair share towards Council services in terms of business rates, local government contributions and service charges, provided these are fair and reasonable. However, in this case, the proposed differential increase and CDR disproportionately and unfairly targets shopping plazas over other ratepayer sectors and fails to consider "the overall impact of any allocation of liability for revenue needs on the community", as is required by section 101(3)(b).

5.5 In Kiwi Property's experience, councils often think it is acceptable for big business to subsidise residents and smaller businesses and justify this on the basis that a big business has a better "ability to pay" and by reference to section 101(3)(b) of the LGA. However, this ignores the economic reality faced by shopping plazas who pass these costs on to their retailer tenants.

7 Neil Construction v North Shore City WCC [2008] NZRMA 275 at [214]; affirmed in Tacon Holdings v Hastings District

Council [2013] NZHC 1078; [2014] NZAR 49 at [41]. 8 Statement of Proposal: Proposed Changes to Rating Policy, page 10.

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Section 101(3)(b) is not a licence to load rates on big businesses to the benefit of the residential sector and smaller businesses in an attempt to appear "fairer".

5.6 As rates for North City are passed on to tenants, any increase in rates represents a direct burden on each of the 104 individual retailers operating from North City (many of which are in fact small to medium sized businesses). While North City currently has a high occupancy for in-line tenancies, a change in rates as significant as is being proposed here could change this. Retailers may leave, which will discourage investment in North City, a vital hub in Porirua's city centre. Kiwi Property works hard to keep costs down for its tenants to maintain occupancy and attract a good range of retail offerings for the people of Porirua. Kiwi Property does not want to end up like Johnsonville Shopping Centre (part of the Wellington City Council), which is struggling to retain tenants and provide the type of shopping centre that the community is calling for.9

5.7 Porirua CBD already has many vacant buildings. While there is a growing residential population in Porirua, the City struggles to attract businesses due to the high rates already charged. The rates Kiwi Property is charged for North City are approximately 1% of the property's capital valuation. This is around double the rates charged (as a percentage of capital valuation) compared to Kiwi Property's other shopping centres around New Zealand.10

5.8 The Council already charges some of the highest rates for business in New Zealand through its business differentials. This issue has been somewhat acknowledged in the Proposed Rating Policy, but is concluded to be a matter of perception:11

The Council has been criticised for appearing to have one of the highest commercial differentials compared to other Councils. The Council needs to change this perception by lowering its Business differential.

5.9 It is not perception, it is reality. Although the Council proposes to decrease the Business Group differential, the introduction of the CDR will mean that businesses are still effectively charged the same rates overall, just under a different name. Shopping Plazas will pay more overall as their differential will increase and they will be subject to the CDR.

5.10 The Proposed Rating Policy states that after three years, Porirua would have a business differential of 3.1 (including the Uniform Annual General Charge, which the Council is not proposing to remove) and a CDR funding 26% of the City Development costs, which would compare favourably with Wellington City Council's business differential of 2.8 (also with a targeted rate).12 This is still a high differential factor. While retailers in Wellington's CBD might be able to sustain such rates, retail offerings in places such as Johnsonville (as mentioned above) find it hard to attract quality long-term tenants. Hutt City, which currently has a business differential of 3.0, has committed to lowering its business differential to 2.3.13 Kiwi Property urges the Council to do the same.

9 The deteriorating Johnsonville Shopping Centre has been highlighted in the media several times recently.

https://www.stuff.co.nz/dominion-post/business/commercial-property/93951972/fears-for-future-of-johnsonville-mall-as-mcdonalds-and-opsm-become-latest-to-leave;http://www.stuff.co.nz/business/80360674/Fears-for-the-future-of-Wellingtons-Johnsonville-mall-as-retailers-pack-up.

10 Average rates over the last five years for Sylvia Park and Lynn Mall in Auckland were 0.5% of the capital valuations, rates for The Plaza in Palmerston North were 0.3% of capital valuation, and rates for Northlands in Christchurch were 0.6% of the capital valuation.

11 Statement of Proposal: Proposed Changes to Rating Policy, page 4. 12 Statement of Proposal: Proposed Changes to Rating Policy, pages 4 – 5. 13 Hutt City Council Annual Plan Funding Impact Statement shows a decrease in business differential factor to 2.30 in 2021/22 at 98.

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Insufficient link to "benefits" / "demand"

5.11 The starting point of any rate levied should be a rate that corresponds appropriately with the services and benefits provided. Under section 101(3) of the LGA, the Council must consider:

(a) the extent to which shopping centres will benefit from the activities to be funded by the increased differential and CDR;14 and

(b) the extent to which shopping centres contribute to the need to undertake the activities to be funded by the increased differential and CDR.15

5.12 The Proposed Revenue and Finance Policy for the Economic Development (Group of Activity) and Stormwater and Village Planning Activities sets out the activities to be funded by general rates and the CDR.16

5.13 In Kiwi Property's view, the proposed activities to be funded by the new CDR will provide limited benefits to North City, and are not a result of the demand North City places on Council services.

5.14 In addition, the "benefit and funding rationale" under each proposed activity essentially restates the description of the activity, rather than providing any real analysis of how each activity will provide a benefit to the commercial properties that will partially fund the activity through the CDR. This is unreasonable.

5.15 The activities proposed to be funded by the proposed CDR are:17

(a) Economic Development (City Growth, City Centre & Strategic Property): While Kiwi Property supports city growth and revitalising the CBD to attract, retain and grow business investment, the Revenue Policy provides no context as to what the Council's proposed "city growth" actually includes or how it will be done. Furthermore, the Council has been budgeting for this through its general rates for many years, and a targeted rate is unnecessary. Kiwi Property and its tenants already spend significant funds marketing North City, which not only attracts people to the shopping centre, but also benefits the City as a whole as North City is one of the main attractions in the City.

(b) Village Planning: Kiwi Property and its North City tenants do not derive any benefit from funding suburban commercial areas. On the contrary, such activities encourage growth away from the CBD where North City is located. There is no justification for Kiwi Property to pay a targeted rate to fund this activity.

(c) Stormwater Management: Kiwi Property acknowledges that stormwater management has become an increasing problem in the City in the last two years. However, this should be funded through development levies from the large number of recent residential developments that place an increased strain on infrastructure. While the proposed percentage of funding from CDR is low and this activity will largely be funded from the general rate, there is no analysis of any additional demand shopping centres place on stormwater management to justify the use of a targeted rate over and above the general rates shopping centres already pay.

5.16 In short, there is little justification for the proposed activities to be funded by the new CDR.

14 LGA, s101(3)(a)(ii). 15 LGA, s101(3)(a)(iv). 16 Porirua City Proposed changes to Revenue and Financing Policy, pages 12, 13, 16. 17 Porirua City Proposed changes to Revenue and Financing Policy, pages 12, 13, 16.

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Cost / benefit analysis

5.17 Councils must consider the costs and benefits of how activities are funded.18

5.18 The Statement of Proposal for the Rating Policy recognises that equalising the Shopping Plazas Group differential:19

(a) will increase the operating costs of the Shopping Plazas differential group;

(b) may lead to less investment; and

(c) may lead to less of a competitive advantage with other malls.

5.19 It lists the benefits as:

(a) increased fairness and equity with the rest of the commercial sector; and

(b) increased competitiveness of retail and commercial outside of the Shopping Plazas Group.

5.20 Increasing competitiveness with retail outside of Shopping Plazas is unlikely to occur as North City in fact attracts people to Porirua's City Centre, which is advantageous to other businesses in the area.

5.21 In terms of fairness and equity, aligning the Business and Shopping Plaza Group differentials fails to take into account the numerous benefits shopping plazas provide to the community, which sets them apart from other businesses:

(a) North City provides significant public amenity, such as various public common spaces for public events and shows to occur. All public amenities are well serviced and looked after by North City and benefit the Porirua community.

(b) North City has one thousand car parks in downtown Porirua, which while primarily provide convenient access to North City, also tend to be used by a large portion of the community for other errands in the City.

(c) North City also facilitates community groups, including Kiwibubs and NC Club. Kiwibubs is a free club launched by North City to provide parents and caregivers with a safe and supportive forum to discuss ideas and experiences on parenting. NC Club organises fun activities for kids aged 5-12 years old, and is a "base" for competitions and other educational events. North City also provides a parents' room to further support the family friendly environment.

(d) North City disposes all of its own rubbish and recycling, and pays additional water charges on top of the rates.

5.22 The provision of these services, which benefit the community and Council, should be reflected in a rates differential.

5.23 Kiwi Property seeks that the Council maintains the status quo by rejecting the proposed CDR and retaining the Shopping Plazas Group differential at 2.79.

18 LGA, s 101(3)(b). 19 Statement of Proposal: Proposed changes to Rating Policy, page 10.

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5.24 Kiwi Property wishes to be heard in support of this submission. Kiwi Property seeks 30 minutes to make its presentation to Council.

Signature: KIWI PROPERTY HOLDINGS LIMITED and PLAZA PORIRUA LIMITED by its solicitors and authorised agents Russell McVeagh:

Allison Arthur-Young | Kate Mackintosh

Date: 16 November 2017

Address for Service: C/- Kate Mackintosh Russell McVeagh Vero Centre 48 Shortland Street PO Box 8 DX CX10085 AUCKLAND

Telephone: (09) 367 8000

Submission Form - Proposed Rating Policy

Option 1 - no change only as concerns the rural sector

Option 2

Option 3(i)

Option 3(ii)

Option 4

Option 5 (options 3(i) and 4)

Road Name Start Name End Name Length Hierarchy

MOONSHINE ROAD STATE HIGHWAY NO 58 UPPER HUTT BOUNDARY 4498 DISTRIBUTOR

AIRLIE RD FIRTH ROAD STATE HIGHWAY NO 1 2821 DISTRIBUTOR

GRAYS ROAD POPE STREET PAEKAKARIKI HILL RD 4934 ARTERIAL

PAEKAKARIKI HILL ROAD GRAYS ROAD KAPITI BOUNDARY 13160 ARTERIAL

Road Name Start Name End Name Length Hierarchy

BRADEY ROAD STATE HIGHWAY 58 END 1070 LOCAL

MOTUKARAKA POINT GRAYS ROAD EAST (1 WAY) GRAYS ROAD WEST 1100 LOCAL

FLIGHTYS ROAD STATE HIGHWAY NO.58 END OF ROAD 3200 LOCAL

FERNHILL DRIVE FLIGHTYS ROAD END OF ROAD 1340 LOCAL

HARRIS ROAD SH 58 WILLOW BANK FARM GATE 1435 LOCAL

BELMONT ROAD STATE HIGHWAY 58 END OF SEAL 3124 LOCAL

AHOROA ROAD MOONSHINE RD END (GATE) 184 LOCAL

MURPHYS ROAD STATE HIGHWAY NO.58 END OF ROAD 3065 LOCAL

COROGLEN RISE AIRLIE ROAD END 1027 LOCAL

JONES DEVIATION PAEKAKARIKI HILL ROAD END 713 LOCAL

MULHERN ROAD STATE HIGHWAY NO.58 LOCKED GATE 1567 LOCAL

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Rating Policy Porirua City Council PO Box 50218 PORIRUA 5240 Alan Gray & Christine Stanley 325 Grays Road Pāuatahanui Porirua 5381 Phone 04 2331148 Email [email protected] SUBMISSION ON PROPOSED RURAL RATING POLICY WE DO NOT SUPPORT Options 4 or 5: both of which include increasing the rural differential. SOME COMMENTS ON YOUR PROPOSAL

1. Estimated Rural Roading Costs (after 50% subsidy) (page 8) shows an annual average roading cost per rural ratepayer of $1440. How this is arrived at is perplexing. Rural roads include Grays, Paekakariki Hill, Flightys, Murphys, Mulhern, Belmont, Bradey, Harris, and Moonshine roads. Of these Grays and Paekakariki Hill Roads are classified by PCC in its District Plan as Minor Arterial Routes. Of these two, Grays Road currently has traffic volumes of over 13,000 vehicles per day. Given that there are only 46 houses (excluding the urban area) on Grays Road and even including a 50% subsidy, there is no way that rural ratepayers should be subsidising this road further, based on the calculations being used in this proposal. They are the very small minority of users. The traffic on Grays Road can expect to increase until Transmission Gully is completed. It is a minor arterial route which should be subsidised by other users. All rural roads are used by non-resident users.

2. There are some 15 bridges in the Porirua rural area which have NZTA weight restrictions on them. Residents observe these restrictions being ignored – in some cases, daily. These heavy vehicles must add to the maintenance costs on these roads and bridges. They are not resident’s vehicles. This sort of abuse of the rural roads should not be subsidised by the rural ratepayers.

3. Emergency works. Is it proposed that all emergency works are to be paid for by the

local inhabitants? Then why is there not a special rate on those areas which have consistently flooded and for which extensive repair works are being done? These areas according to PCC reports are Titahi Bay, parts of Eastern Porirua and Whitby.

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4. The Proposal lists 609 ratepayers when in fact in the rural area there are many farms/entities which cover multiple titles. Therefore, the number of ratepayers is somewhat lower. Some of these ratepayers receive several individual rates bills. So, one cannot assume that each rate paying unit has equal use or demands.

OUR STORY

1. We run a farm on the eastern shores of the Pāuatahanui Inlet on Grays Road. 2. The farm covers 3 separate titles and we receive 3 rates bills, so we would be equal

in your analysis to 3 ratepayers. 3. The farm has been deemed to be an important part of the proposed Porirua City

Landscape Management Plan with limits placed on it in terms of subdivision and development.

4. We lie outside the proposed 1-2ha subdivision zone. 5. That Landscape Management Plan mainly affects the large farms as opposed to the

lifestyle and rural residential blocks. 6. If the Council wants to retain its rural backdrop to its harbour – its jewel in the crown

– then there needs to be an understanding of the costs of maintaining that view. 7. It is commonly believed that the entire green area on the northern/eastern sides of

the inlet on Grays Road belong to one owner. It is owned by three separate owners of which we are one. We have 55 hectares.

8. We are aware of the importance of that view to the City. 9. We are determined to maintain the stability of the land, control sediment and

stormwater run-off, and revegetate as much as we can. We try to maintain good stewardship of the land.

10. We therefore farm sheep – a light animal which does not damage the soil and vegetation as much as cattle/goats/pigs can do. However, they do not earn as much as cattle might.

11. We have had 60+ years of sheep farming experience on this land. The area has been farmed by this family for 165 years, so we know its capabilities and fragilities well and we know how to farm it as efficiently as possible.

12. We have two covenanted areas with QEII which cost us a considerable amount to continually plant and maintain (an average of $3000 per year).

13. The farm is severed by gas mains and by 2 sets of high voltage electricity lines, placing further restrictions on the use of the land.

14. Because of these utilities which provide a public good there is an expectation that we will provide, at our own cost, reasonable access roads to these national/regional facilities for maintenance and repair.

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OUR INFRASTRUCTURE COSTS Internal roading Our internal road/track system which serves the national network utilities (power and gas) has cost us annually, averaged over the past 4 years, $1400 p.a. Water We provide our own water supply for the farm from a deep well bore. The cost of maintaining the bore and piped water supply is (averaged over the last 4 years) $2600 pa. Sewage We dispose of our own sewage at an annual cost (averaged over the last 4 years) of $1000 pa. The total for these 3 infrastructure items = $5,000. Obviously, there are other considerable repair and maintenance costs; fencing etc. OUR OVERALL INCOME For the 2 years 2014 & 2015, the farming activity ran at a loss averaging $17,000. At that time the high rates accounted for 50% of that loss ($8,600). The rest of the loss was because we pay for our own storm repairs and these were considerable over that period – and not insurable. Over the last 2 years the farming activity loss increased to $20,000 mainly due to the rates (increased to $12,300), and low stock yields due to the extreme wet weather plus further storm and earthquake damage. WHAT WE DON’T HAVE Access to ultra-fast broadband at our gate; cell phone coverage in many areas; electricity in all road-front areas; public transport; town water supply or sewerage system. We also do not have easy access to good competitive rural services. For example good stock-proof fencing in the Porirua area requires fencers travelling from Levin or similar areas.

IN SUMMARY Your proposal spreadsheet indicates that we pay $0 for solid waste, water, and wastewater but we are supplying a public good in providing these ourselves, at a considerable cost and to a high standard. We do not discharge our stormwater directly out to the Inlet. We practise stormwater neutrality to the best of our ability. We also practise, at our own cost, responsible land management, sediment control, revegetation, all of which are not required

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by law but which we choose to do for ourselves, the health of the harbour and the public good. CLIMATE CHANGE The costs for storm damage throughout the city will continue to be ongoing and it is unreasonable to expect various ratepayers to be held responsible for problems in their specific areas. The costs of repair and works to mitigate possible damage will be on-going and changing with increasing cost for individuals and Councils throughout New Zealand. Central government has already warned local councils to plan for climate change.

http://www.mfe.govt.nz/climate-change http://www.pce.parliament.nz/publications/preparing-new-zealand-for-rising-seas-

certainty-and-uncertainty http://www.lgnz.co.nz/assets/Uploads/44591-LGNZ-Climate-Change-wraparound-4-

FINAL.pdf A recent statement in the media stated that Porirua City centre is the most at-risk city in New Zealand due to its flood and earthquake risk and under-lying reclamation. Using the same argument in your proposal then every ratepayer who occupies ‘at-risk’ land should also be paying more rates. Every coastal property should be doing the same. Perhaps the rural area is the most sustainable area in the city? When using examples of past storm events the Council should not use phrases such as ‘1 in 100-year event’. The Parliamentary Commissioner for the environment and others have long acknowledged that this sort of definition is meaningless. Using retrospective statistics for climate events to plan for or to describe storm events is now meaningless and dangerous. SOME SUGGESTIONS a. Property types The Proposal treats all rural property the same, when in fact there are several distinctly different types, each with different needs and requirements and different land use.

1. Greenbelt: with development strictly controlled 2. Lifestyle (around 10ha) 3. Rural residential (around 1000sq metres or 0.1 hectare) 4. Small village (Pāuatahanui) 5. Business

Within the Kapiti Coast Rating system rates are calculated based on land use. They have 3 different rural rating units;

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R1 Rural rating units less than 50 hectares R2 Rural rating units equal to or greater than 50 hectares plus (rating units less than 50 hectares where a combination of these properties total greater than 50 hectares and form one farming operation) R3 Rural village

Something similar could be used in Porirua City. b. Infrastructure and its increasing costs spread over a small rating base If the Council is really having trouble balancing its books to pay for infrastructure – roads, sewerage, stormwater, etc. then perhaps it should also consider approaching David Cull, the President of Local Government New Zealand who is very familiar with the difficulties councils are facing to cover rising costs due to failing infrastructure systems and pressures caused by storms and non-resident users. http://www.lgnz.co.nz/news-and-media/2017-media-releases/councils-highlight-growth-infrastructure-as-urgent-issue/ c. Lack of understanding of the rural area The recent presentation to the public about this proposal was followed up by a ‘clarification’ letter from R.M.Baker General Manager of Corporate Services and CFO. This letter suggested that given the existing favouritism shown to the rural sector, that there could be a case to increase the true rural differential to .8 to .96. This all signals a total lack of knowledge of the rural area by the Council. Only 1 out of 10 councillors lives rurally. To our knowledge there are very few council officers who have knowledge of the rural sector, particularly with farming experience. In contrast, 80% of the land administered by Porirua City Council is rural. Much time and energy is spent on pointing out misunderstandings of ‘things rural’. This rating proposal shows that lack of knowledge. The Council should address this. Just as it has a Joint Harbour Committee, perhaps it needs a Joint Rural Committee. CONFLICTING EXPECTATIONS AND SILO THINKING

The whole council needs to decide exactly what it wants with the rural area. The various sectors of the council ask us for submissions on their own “silo” proposals, none of which ‘talk to’, or are cognisant, of the other. This system of silo thinking and operation causes repetition. It is exhausting for the community to be continuously submitting on the various proposals. The Porirua City Council comes across as disorganised and confused. Rural people go through the same process with the Greater Wellington Regional Council with much duplication between the two councils.

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To improve the quality of water in the inlet the rural area is required to revegetate,

retire land from pastoral use, fence streams – a public good improvement we are being asked individually to pay for.

Any improvements such as fencing or vegetation are added to our valuations as

improvements, and therefore increase our rates.

Porirua City Council is also currently engaged with Te Awarua-o-Porirua Whaitua exercise. A recent workshop by this group identified the high costs of rates in rural Porirua and the effects these will have in any mitigation measures that the Whaitua Committee is able to suggest. The Whaitua consultants noted the average national cost of rural rates/hectare is less than $48 for large farms. In Porirua, we are currently paying $219/hectare.

The Whaitua Committee has scenarios for the rural area ranging from increased fencing, revegetation, retirement of land from all farming. Reduced grazing = reduced income. Revegetation = increased costs. This does not equate with increased rates.

The council planning group wants us to not subdivide or to consider industrial development, but on the other hand they want to maintain a view and ‘aesthetic values’ – preferably of bare land. How is this funded?

The rural area provides the backdrop for the whole harbour and any development or change of use is limited by the Landscape Management Plan while the rates are disproportionally increased. We are looking forward to the Council rethinking this proposal whilst taking into consideration all the other Council wishes. The Council can’t have it all ways. Farming is a business. Porirua says it is a Great Place to do Business. Help that happen in the rural area. WE WISH TO SPEAK TO OUR SUBMISSION AT A COUNCIL HEARING. Christine Stanley & Alan Gray

Submission Form - Proposed Rating PolicySubmissions are a public record (submission information will be placed on the public record via a report to the Council).

Contact details (submissions must include your contact details).

Name: (and organisation

if necessary)

Dr Lesley Frederikson

Address: (optional)

Phone number: 04 234 1978

Email: [email protected]

Do you wish to speak to your submission at a Council hearing? Yes No

After considering the Statement of Proposal outlining the options for changes to the Rating Policy, that is:


Option 2: equalise the shopping plaza differential with the commercial differential over a three-year period

Option 3(i): combines option 2 with lowering the business and motel differentials and aligning the shopping plaza differential with the business differential over three years, and the introduction of a City Development Rate over all the properties in Business Group13, Motels Group15 and Shopping Plazas Group16 differential groups.

Option 3(ii): lowering the business differential and introducing a City Development Rate only over the properties in Business Group13.




Option 1

Option 2

Option 3(i) Oppose

Option 3(ii) Oppose

Option 4 Strongly Oppose

Option 5 (options 3(i) and 4)

Oppose option 3(i) and 3(ii)

As noted in the Statement of Proposal, commercial, shopping plaza, and business ratepayers obtain the majority of benefit from Council spending on Economic Development activities. Given that the UAGC is levied on all ratepayers the reduction of the differential represents a rate cut for only this sector of the community. The addition of a targeted rate equivalent to only 26% of the Economic development costs still leaves the remainder of the ratepayers shouldering the lion’s share of spending that particularly benefits the commercial sector. It is noted that rates, generally, in Wellington are lower for all ratepayers and in the scenario of a 2.8 differential for businesses in Wellington the Wellington City Council also charges an 80% contribution to Economic Development activities as a targeted rate levied only on the commercial sector. For Porirua City Council to be truly fair and equitable a reduction of 11.5% in commercial rates would need to be offset by a far greater contribution to the Economic Development activities of Council with less of this charge being passed on to other ratepayers.

For general ratepayers, Porirua is already becoming an unaffordable place to live.

Activities aimed at increasing resident numbers and attracting visitors directly benefits businesses but not existing ratepayers. Increasing the population means greater demand for services such as storm water networks, sewerage networks and treatment, and water at a time when these resources are already stretched. Increased capital expenditure will result with the concomitant increase in rates needed to service debt and capex. The bulk of costs for these activities should be charged to business and commercial ratepayers.

Oppose options 4 and 5

Having read the PCC proposal to increase the Rural Rating Differential, the Council’s Prospective Funding Impact Statement, and its Revenue and Financing Policy I am extremely concerned that the Council is acting contrary to its stated principles of affordability and benefits.

For rural ratepayers the rate burden is already unaffordable and for many is becoming unsustainable. Porirua rates are among the highest in the country for comparative rating values and have had enormous increases in recent years. The incomes of rural residents have not kept pace with the increased rate demands for rural property and for those who are on low incomes, including retired folk, it is fast becoming a choice between rates and food. The already high level of rural rates compared to other places is a disincentive to buyers and will continue to make it difficult for older people to quit lifestyle and farming properties.

Section 101(3) of the Local Government Act (2002) requires an indication of the funding sources that might be appropriate for activities and also consideration of the impact of the liability created from the funding sources selected on the community. In this instance PCC is proposing to increase general rating revenue by targeting only 611 of the approximate 18,000 ratepayers in the city. If the increase were spread over all ratepayers in the city the average increase would be less than $50 per year. The impact of $50 across all ratepayers is massively more affordable than the $1440 being charged to only 0.033% of ratepayers; especially since the benefits of the increase are intended to be generally available to all ratepayers and not for the exclusive benefit of any.

The use of a rating differential for rural ratepayers is common among local government rating authorities. The current rural differential of 70% exists to recognise that rural properties receive a lower level of direct services provided from general rates than do residential properties. This goes further than simply a dichotomy of services provided to one and not the other but extends to recognition of the fact that many of the benefits of expenditure in general rates are proportionally more available to residential ratepayers than their rural counterparts.

The table on page 7 of the PCC rates proposal simply demonstrates that total costs divided by total number of ratepayers is the same regardless of location or capital value – costs are costs. How these costs are recovered by Council is what is at issue.

Roads are funded from general rates because they deliver a general benefit in the same way that Council has represented all the other cost items as delivering a general benefit. There are a number of issues arising from the isolating of roads for an assessment of cost and benefit, particularly in assessing a large and exclusive increase in rates for a very small percentage of the ratepayers (one third of one percent of all ratepayers in fact). In this proposal there has been no analysis of other costs and benefits presented to see if there is a case for rural ratepayers to contribute less to other categories of costs for services which, in general, they have less opportunity to derive benefit.

Nor is there any analysis of the benefit that residential ratepayers enjoy from using rural roads.

Council states its core services include: Network infrastructure Public Transport, Avoidance or mitigation of natural hazards Having a growing, prosperous and regionally connected city is also a strategic priority of Council

But for the 611 ratepayers in the rural region of Porirua, Council is suggesting these services and benefits are no longer to be core services or general benefits; they are to be extra services paid for by a targeted local tax that is being levied over the few to provide a benefit to the entire community. The worst aspect of the proposal is that instead of spending the additional $1m being raised from rural ratepayers on rural roads, specifically, Council intends pouring the funds into the general rates pot to be spent at will across all the general benefits. In effect, increasing the rating differential to 80% means rural ratepayers will be paying more for all the services of Council – with no increase in the already lower level of direct services that the rural ratepayers receive compared to residential properties. One has to consider the actual benefit that rural ratepayers derive from contributing even 70% of the general rate for the following Council expenditure categories compared to residential ratepayers Youth engagement and Participation, City Promotion, City Centre Revitalisation, Visitor Information Service, City Roading and Safety (apparently not rural roads), Transport Facilities, City Cleaning, or Sister Cities

The greater benefit to residential ratepayers from all these areas of expenditure is evidenced by the fact their property values have increased by twice as much as those of rural ratepayers. Making Porirua more attractive for people to live and work in the city by spending general rates on civic amenities has yielded nearly 50% more average increase in capital values for residential ratepayers than for rural ratepayers. The irony is that Council promotes access to the natural resources provided in the countryside surrounding the city as a drawcard for new residents, to grow the city and to attract businesses. So why should the costs of maintaining this access be entirely funded by rural ratepayers? Not only has Council spending on city services and amenities resulted in residential ratepayers enjoying a greater increase in the value of their capital assets than have rural ratepayers, but these same services and amenities are more readily available to residential ratepayers than to the more remote rural ratepayers. Residential ratepayers have many more local services provided directly by Council using the general rates income it receives than do rural ratepayers: libraries, playgrounds, sportsgrounds, community centres, meeting rooms. How are rural ratepayers to access even 70% of the value from these services if Council does not also provide for all local roads from general rates. The rural roads are an integral part of access and of having a growing, prosperous and regionally connected city. As required by the Local Government Act, Council has identified the community outcomes it aims to achieve as “meeting the current and future needs of communities for good-quality local infrastructure, local public services, and performance of regulatory functions”. However, in the proposal for increasing the rural rates differential Council is picking and choosing how it defines local. For the purposes of roading infrastructure, local means rural roads paid for by local rural ratepayers. But when Council wishes to define local public services it appears to adopt a city wide vision of local. Where are the rural libraries, where are the rural sports grounds, where are the rural community halls and meeting rooms. It seems Council feels rural ratepayers do not need them so they are not provided or disposed of. Looking more specifically at the activity expense for City Roading and Safety, which includes management of public roads (except State Highways 1 and 58); non-recreational footpaths and cycleways, parking, footbridges, underpasses, traffic and street lighting, and community road safety activities; Council states there are considerable individual and wider community benefits from this activity. Council states categorically that as the benefit is shared between individuals and the wider community and general rates contribute towards the cost of the activity. But in terms of the totality of roads in the city, curbing, pavements, lighting, underpasses, footbridges, etc., rural ratepayers as a group get considerably less of all these amenities than do residential ratepayers. From a community-wide perspective there is no fairness or equity in a decision to hold 611 rural ratepayers responsible for contributing a targeted amount of almost $1m per year extra as a contribution to an activity defined as being funded from general rates because it has wider community benefit.

It is not as though rural ratepayers are the only users of rural roads. In the case of Paekakariki Hill Road and Grays Road there are vehicle counts of up to 10,000 per day so it is simply not possible that only the 611 rural ratepayers are creating all the traffic movements and maintenance demand on those roads.

Which raises the issue of which ratepayers will be required to make additional contribution to the maintenance and upkeep of the portions of highways 1 and 58 once they become the responsibility of PCC? These roads will be mainly in the residential areas of the city but will the Council target specific residential ratepayers along these routes? The proposal is in itself unfair and inequitable and is even more so because it targets rural ratepayers for an ongoing general rate increase when a large part of the additional rural roads cost noted in the proposal is for one-off adverse events which Council already has a general obligation to avoid or mitigate. The 2016 event has already been accounted for in the annual financial statements. Given that it is a past event there is no case for a permanent rates increase for only 611 ratepayers.

Future adverse events may affect any part of the city and the developments on steeper land, including parts of Whitby, are particularly susceptible to slips and other damage such as to stormwater or roading infrastructure. Funding for Council to meet its general obligation of avoidance or mitigation of natural hazards should be charged within the general rating factor not by increasing rural rates. Given the figures provided in the consultation paper, a $50 annual increase across all ratepayers would be a more fair and equitable solution. Implementation of the proposal to target costs on particular segments of the community, particularly for adverse events, sets a dangerous precedent. This year we have seen that seeping drainage, three broken stormwater pipes at the northern end of Albatross Close and the installation of a temporary road around Porirua's 'sinking street' have cost ratepayers about $100,000. To be fair these costs would need to be added into the ongoing rates bill of the ratepayers in that street – in perpetuity – but will that happen? It seems that costs to ‘ratepayers’ in respect of residential adverse events means all ratepayers (residential and rural) not just some of them. So why target rural ratepayers for costs of specific events. Finally, it should be noted that for the year ended 30 June 2016, Council had a surplus of operating funding of $14,169,000 and Council is budgeting for an increased surplus in 2017-2018 of $15,480,000. There would seem no real need to increase the rural rating differential.

All submissions are due by 16 November 2017.

Please hand this form in at the Council’s Front Counter Administration Building or libraries; or post to Porirua City Council, PO Box 50 218, Porirua City 5240; or email to [email protected] with “Draft Rating Policy” in the subject line.

Submitter Details

First Name: ChrisLast Name: Kirk-BurnnandOrganisation: HomeOn behalf of: Chris Kirk-Burnnand and Helen Kirk-BurnnandStreet: 35 Motukaraka PointSuburb: PauatahanuiCity: PauatahanuiCountry: New ZealandPostCode: 5381Daytime Phone: 04 233 9388Mobile: 021 658 237eMail: [email protected]




fully considered.


Submission







25




Please tell us a little of the reasons for your answer.I do not support any of the options. Council needs to manage rate increases to CPI inflation or lessand should review the private public balance across all ratepayers.

Attached Documents

File

Rating Policy

25

Submitter Details

First Name: KarenaLast Name: FellowesOrganisation: NoOn behalf of: NoStreet: 37A Flightys RoadSuburb: PauatahanuiCity: JudgefordCountry: New ZealandPostCode: 5381Mobile: 0211026490eMail: [email protected]




fully considered.


Submission







18




Please tell us a little of the reasons for your answer.Unfair policy targeting Rural property owner based on roading costs Council expecting Ruralproperties to pay for rural roads when many of these are used by non rural users as link roads/ ratruns for commuters from within Porirua and outside districts such as kapiti and Hutt users andnational The assumption is only Rural users use rural roads hence Rural users should pay for theirupkeep. Rural owners use urban roads and urban owners use rural roads. The cost of upkeep ofroads within Porirua should be shared equally amongs all Porirua rate payers irrespective of wetheryou have a Rural or urban property. This shares the costs evenly and fairly across the communityany policy targeting Rural property owners is unfair and would cause divisions between Poriruaresidents and affect community relations. Understand the council is trying to make all propertyowners pay same amount if urban or rural this roading should be same charge to both. HoweverRural property owners should not be expected to pay for services not received such as water andwaste etc, as they already pay for this themselves. Consequently the rates contributed should beless as services not provided. Also the council needs to recognise the $100 fee Rural propertiespay every year on completion of inspections. Increasing commercial rates is likely to cause furtherhardship to businesses and services in Porirua resulting in less investment and less services. Thecouncil should be reducing commercial rates and spending ratepayers money more wisely, after allthe council received significant increases in rate contributions last year as rates were increaseddue to revaluations

Attached Documents

File

Rating Policy

18

Alan Gray

325 Grays Road Tel: 64 (04) 2331148

R.D. 1 Mobile: 027 649 9590

Porirua 5381 E-mail: [email protected]

1. I live on Grays Road and the idea that the maintenance of Grays Road by 609 rural ratepayers must be a joke by Council, when in the region of 13,000 cars and heavy trucks a day are using the road, nearly all of whom are through traffic.

2. Whatever has happened to the concept of pooling resources to build a Community? One of the PCC slogans is "Together we're making Porirua Amazing". This proposal certainly is, to propose increasing the rural rates by 10% over 3 years to maintain rural roads when roading maintenance is a core public function of the Councils responsibilities.

3. We are already said to be the second most highly rated local body in the country and the 70% rural differential is long standing, recognising the extra costs in infrastructure residents provide to live rurally and the reduced services provided by Council.

4. In return we provide (at our own expense) a rural character to the City which it likes to promote. 5. Whoever thought this proposal up must be working in a silo in PCC. I attended the Judgeford meeting

called by PCC, and they did not even have the foresight, or maybe the cooperation, to have a roading engineer present to inform us of the detailed issues involved that provoked this outburst of financial zeal. And so soon after a previous proposal to increase the rural differential to 75% was vigorously defeated only a few months before.

6. I strongly object to this proposal. If extra funds are needed to maintain the streets and roads of the City which are publicly used. It should be ‘pooled’ through the general rates.

Submission 56 is not Mr Alan Gray’s as indicated below. Mr Gray’s submission is number 47. We apologise for any confusion.

DELETED

1

Submission Form - Proposed Rating Policy

You can have your say in several ways (online, email, post, by hand). This brief form may help.

Submissions are a public record (submission information will be placed on the public record via a

report to the Council).

Contact details (submissions must include your contact details).

Name: (and

organisation if

necessary)

John Carrad Paul Nation

Andrew Gray Alan Gray

Address: (optional) c/-Alan Gray. 325 Grays Road, RD 1, Porirua 5381

Phone number: 027 649 9590

Email: [email protected]

Do you wish to speak to your submission at a Council hearing? Yes

After considering the Statement of Proposal outlining the options for changes to the Rating Policy,

that is:


Option 2: equalise the shopping plaza differential with the commercial differential over a three-year

period

Option 3(i): combines option 2 with lowering the business and motel differentials and aligning the

shopping plaza differential with the business differential over three years, and the introduction of a

City Development Rate over all the properties in Business Group13, Motels Group15 and Shopping

Plazas Group16 differential groups.

Option 3(ii): lowering the business differential and introducing a City Development Rate only over

the properties in Business Group13.




(Please choose one)

Option 1 The status quo for option 4 and 5 only. We are not familiar enough with the other

issues 2 & 3 to give an informed opinion on them

2

Submission on Proposed Rural Rates.

1. This is a joint submission representing 4 farms in the rural area of Porirua City

totalling 1784 hectares in total.

2. Firstly we are in total support of the excellent submission by Dr Lesley Frederickson

on the issues and problems with the proposal. We agree entirely with her conclusion

that a small annual increase for all ratepayers to solve any shortfall in funding for

PCC’s road maintenance programme would be a more fair and equitable solution.

3. We would add to her comments a few facts from adjacent local Councils on their rural

differential rates, as well as comments on how the proposal applies to the farming

sector.

4. The following is a comparison of rural differential rates from adjacent local bodies-

Wellington City Council 2017-18. Rural differential = 67.12%

Upper Hutt City Council. Rural differential over 30 Hectares = 73%

Kapiti Coast District Council. Rural differential varies from 22 to 70% as

follows-

- Units less than 50 hectares =38%

-Units greater than 50 hectares =22%

-Rural Village areas = 70%

(For references for the above see appendix 1.)

So there are well established precedents locally for a rural differential of

approximately 70% to allow for the reduced services and increased costs of living

outside the urban area. “The differential system has been applied to rural areas to

reflect their lower population density and demand for services.” (Reference: Kapiti

Coast District Council)

5. PCC is proposing to increase the rural differential from 0.7 to 0.8 over a three-year

period to reflect the increase in rural roading costs. Below is a map of Porirua with the

area shaded grey representing the Pauatahanui/Paekakariki Hill area representing

most (but not all) of the rural area.

3

6. PCC is talking about a rural area which is larger than the rest of the city combined;

55% in total (10,094 hectares out of the total of 18,251 hectares), which contains

2.2% of the Councils total population (1227 people out of a total of 55,400 people )

according to the 2013 census and contains 18% of PCC’s roading network. . PCC

has the same responsibilities to these people and their roads as it has to its urban

population.

Rural Roads.

1. Grays Road opened in 1913 to provide vehicle access to the developing villages of

Plimmerton and Pukerua Bay previously only served by railway. After the opening of

the Paremata Bridge in 1936, it reverted to a quiet rural road. It is now a significant

arterial route Graded “Minor Rural Arterial” in PCC’s district plan but with up to 13,000

cars per day, mostly using it as a shortcut to and from the Hutt Valley via SH 1, rather

than using SH 58 from Paremata. Daily heavy truck movements are significant

despite its unsuitability for these vehicles. It is prone to frequent flooding and closure

from storm events, and the combination of high tides and strong north-westerly winds

preventing water exiting Porirua Harbour. The combination of all three, storm, tide,

and wind, provides the most spectacular floods and while more common in recent

years with the rising sea level, and helped by poor engineering of the roads bridges,

it has always been a feature of the road.

2. Paekakariki Hill Road opened in 1849 as the main road to the Manawatu until the

Centennial Highway opened in 1940. It serves as an alternative to the Centennial

Highway (SH1) in times of emergency; and is a favourite rat- run for commuters from

Kapiti Coast to and from the Hutt Valley. It is not infrequently subject to storm damage

because of the steep terrain in its upper part. It is also Graded as “Minor Rural

Arterial” road in PCC’s district plan because of its significant through traffic.

4

3. Moonshine Road was once the main route from the upper Hutt Valley to Porirua (it

used to be called Pauatahanui Road) and is still used as a through road for residents

and traffic to and from the Upper Hutt City Council district. It has still been used as a

bypass route if Haywards Hill (SH58) gets blocked despite its unsuitability for heavy

traffic loads.

4. Belmont Road. Originally a through road from the lower Hutt Valley to Porirua. Where

it ends the road provides access for visitors to Belmont Park from the Porirua District.

It serves lifestyle blocks, as well as farms and forestry contributing to Porirua’s

economy.

5. Flightys Road. It serves lifestyle blocks, as well as farms and major forestry blocks

contributing to Porirua’s economy. It is heavily used by logging trucks and currently by

TGM vehicles.

6. Mulhern Road; Murphy’s Road: and Harris Road. They serve lifestyle blocks, as well

as farms and forestry blocks contributing to Porirua’s economy.

7. Bradey Road Serves lifestyle blocks, as well as farms and forestry blocks and

currently TGM vehicles. It will be the access road to a ‘cluster housing’ group of 42

houses which has been consented by PCC.

8. Airlie Road Originally the only route providing vehicular access to Pukerua Bay until

the opening of Centennial Highway in 1940. It can serve as an alternative access

route to and from Plimmerton to SH1 in emergencies (It is one of only 2 roads

accessing Plimmerton).

9. Locals are only a small % of the traffic on some of the key rural roads and all of these

roads have multiple uses and provide a public benefit. Since July 2015 PCC has been

collecting contributions from the developer to pay for growth related roading

infrastructure projects. It is difficult to understand why PCC would want to ‘slice and

dice’ the cost of maintaining these roads to a local community when they are public

roads available to all. The risks to each of the Councils roads differ but such risks are

normally shared by the whole community. What has changed? To the extent the

increase was precipitated by the damage caused to Moonshine Road last year, a

Council representative at a recent meeting claimed that the rate increase needed to

reflect that this would be ongoing with the change in climate. Personally we would

want further data before making the 2016 or 17 weather the basis of rural rate

increases. The following point was not made at the meeting or in the proposal, that

the damage in November 2016 was made worse from land being unstable from the

major Kaikoura earthquake to the Wellington Region the day before a very major

flood, a combination of events which was certainly a one-off. One farm alone suffered

in the region of $100,000 worth of damage to repair its fences because of the slips it

caused (None of it capable of being covered by insurance). One of the major benefits

of local government is surely the ‘pooling’ of risk. If an adverse weather event

happened in an urban area that materially damaged infrastructure (as it has) would

5

the Council require adjacent residents to pick up the bill? Below is a picture of the

Warspite Avenue flooding in May 2016. The previous Mayor commented to the media

at the time-“today’s flooding was not as serious as those which hit the City last April.”

10. Below is a picture of the flooding in Takapuwahia in May 2015-

11. Are local urban residents going to be ‘pinged’ with an increased rating differential to

pay for these events?

12. The Wellington Regional Strategy (WRS) has been jointly developed by the Greater

Wellington Regional Council (Greater Wellington) and the territorial local authorities of

the region to develop a sustainable economic growth strategy. WRS suggests that

Pauatahanui is one of eight ‘change areas’ in the region, which are said to be

particularly important to the successful implementation of the strategy. This suggests

that these roads are not going to remain ‘rural’ for very long! They performed a

6

different public function in the past, they still form a public function now, and they will

perform a different public function in the future as the area changes with the

completion of TGM motorway in two and a half years.

13. The damage to Moonshine Road which forms the basis of PCC’s proposal was

indeed disastrous to the road and its users. It was expensive to PCC and also to the

residents of that road, disrupting farming activity as well as residents commuting to

work and school etc. The situation on Moonshine Road was unique, occurring at a

‘choke’ point for both the road and the river in a steep gorge. While it is a through road

to SH2, its far end is in Upper Hutt City district, and that section has a limited capacity

for heavy traffic. But unlike the floods that affected Porirua City, it was a one-off event

due to the combination of the earthquake and flooding on a poorly maintained rural

road. Now that the appropriate repairs have been completed it should not readily

happen again with future floods. Normally the rural area has considerable inbuilt

resilience to such events (Grays Road with its high traffic load is flooded frequently,

and tomorrow the sun still shines). The same cannot be said for the urban area with

its multiple streets and dense population. It should also be noted that only 2 Porirua

City residents lived beyond the Moonshine road slip. Beyond that the road and the

residents are under the jurisdiction of Upper Hutt City Council.

Are PCC’s Proposed Rural Rating Changes a Targeted Rate dressed up in disguise?

1. The PCC website for 2017 does not give a specific definition for Targeted Rates

other than they are different from the General Rate. Wellington City Council on its

website describes targeted rates as follows-“Targeted rates are paid by a specific

group of ratepayers who receive a specific service.” Auckland City Council- ‘Uses

targeted rates where there is a clearly identifiable group benefiting from a specific

Council activity.” Maintaining urban streets and rural roads is a ‘core’ function and

hardly a specific Council activity.

2. The Local Government (Rating) Act 2002 (2.620) defines them as –

a. -Targeted rates are similar to separate rates under the Rating Powers Act

1988, but provide a greater range of factors for setting differential targeted

rates. Section 16 of the Rating Act provides that:

b. -A local authority may set a targeted rate for 1 or more activities or groups of

activities if those activities or groups of activities are identified in its funding

impact statement as the activities or groups of activities for which the targeted

rate is to be set.

3. This proposal has all the appearances of a targeted rate as a specific activity

targeted at a specific (rural) group, for what is actually a core function. Instead it is

represented as a localized change in the general rate in the Councils most recent

Proposed Funding Impact Statement.

4. Is Council being disingenuous here? An example is the water and sewage system

specifically designed for Pauatahanui Village, accepted by the involved ratepayers as

a targeted rate in return for a service which Council could/would not otherwise

provide-

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5. The overall impression is that Councils agenda is to do away with differential rates in

the Rural area rather than dealing with what they consider a localized problem

benefiting a local group, which we consider unproven. PCC has discussed in the

distant past the question of removing the Rural Differential. However as the other

local bodies in the region show, PCC’s rural differential of 70% seems to be an

appropriate ballpark. Any change in the differential is unlikely to be reversed. A

Targeted Rate, if it could be justified, could be more flexible but would need

notifying in the Proposed Funding Impact Statement which would allow for more

scrutiny than this rushed process.

What are the core criteria for this proposed Rate change?

1. We suggest the following-

Connection between who would pay the rate and who is receiving benefits from the

services to be funded.

Affordability - impact of the rate on those paying it.

Administrative practicality, administrative costs and legality.( We will not discuss this

as they are PCC issues, and we hope that PCC has done its homework on them)

Connection between who would pay the rate and who is receiving benefits from the

services to be funded.

1. This has been referred to previously under the section about discussing roads. All of

the roads have a public function. In the case of Grays Road and Paekakariki Hill

Road, by far their main use is by the public in general. This will still continue in a

reduced state once Transmission Gully Motorway is open. Other roads serve

commercial activities in particular farming and forestry that benefit the local economy

as well as residents and occasional local industry.

2. The rural area and its ratepayers are not a homogenous group e.g.

Rural residential with small lots approximately 1000 m² on Motukaraka Point

and Pauatahanui Village.

Lifestylers throughout the area usually on 5 ha or more

Very limited industrial development

Working farms

8

3. Lifestylers’ in general invest heavily in improving their rural landscapes.

4. Farms provide the rural vista to the City generally, complementing the water views

by the landscape of contoured hills mixed with native vegetation, particularly to the

North of the urban areas. This is well recognized in the Councils own proposed

Porirua Landscape Management Strategy for Rural and Open Space Areas; part of

the District Plan Review due to be finished by 2020. The Landscape Management

Strategy was developed over several years by PCC planners working closely with

local landholders to reach agreement on preserving significant landscapes from

undue development.

View to the North from Whitby across the inlet to the rural landscape.

5. The rural landscape is not self-sustaining. It involves animal husbandry and the

infrastructure they require of fences, water supplies, weed control, revegetation to

prevent slips and provide animal shade, grass seed and fertilizer. The alternative is

commercialization with a monoculture of pine trees and their ritual harvest, or gorse

for 50 years or more.

6. We fail to see how the ‘benefits’ to local users and residents is any different from the

urban situation. Does PCC exclude rural ratepayers from the costs of flood damage

in the urban area? The costs of providing our own rural infrastructure are substantial

which is one reason why the rural rates differential exists.

https://www.google.co.nz/imgres?imgurl=http://l7.alamy.com/zooms/f6e37f4a5b3e4065b8506a1dc07292c7/evening-light-on-hills-beside-pauatahanui-inlet-porirua-harbour-wellington-bp4k3e.jpg&imgrefurl=http://www.alamy.com/stock-photo/pauatahanui-inlet-porirua-harbour-wellington.html&docid=PzZa864cxZcPTM&tbnid=HjN7GdFMJj6TWM:&vet=10ahUKEwiKrLngzrfXAhWHkZQKHZ3GD60QMwiZAShRMFE..i&w=640&h=449&bih=465&biw=960&q=Landscape photos of Porirua&ved=0ahUKEwiKrLngzrfXAhWHkZQKHZ3GD60QMwiZAShRMFE&iact=mrc&uact=8

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Affordability - impact of the rate on those paying it.

1. Most of the lower fertile land in Pauatahanui is now occupied by lifestylers and

working farms are mostly confined to the hard hill country; where maintenance costs

are much higher and stock units per hectare are lower. These farms are barely

economically viable and much of the land being farmed is unsuitable for subdivision.

In spite of this, this land attracts a high capital value simply because of its periurban

situation.

2. Beef & Lamb New Zealand’s economic service have provided the following data for

Local Government rates on a stock unit basis for the 2015 to 2016 financial year for

hard hill country units only, by region (Porirua District is mostly hard hill country for

farming). We have added the same data for 3 large local hill country farms requiring

a full time farmer assisted by local contractors for specific tasks e.g. shearing,

fencing cropping etc. :

Cost of Local Government rates on per stock unit basis

Canterbury $1.80/su.

Gisborne-Hawks Bay $2.09/su

Waikato-North Auckland $2.60/su

Taranaki-Manawatu-Kapiti $2.30/su

Wairaka Farm of 408 Hectares (Pukerua Bay rural area) $3.60/su (It is now over $4

and that is on rates postponement.)

Willowbank Farm of 650 Hectares (Judgeford rural area) $11.66/su (The

650 hectares includes 110 hectares of unproductive but rated land in trees including

regenerating natives, so 530 hectares effectively farmed)

Kakaho Farm of 670 Ha (Pauatahanui Rural area) $6.85/su

3. PCC proposes to increase the rating differential from 0.7 to 0.8 over a three-year

period and PCC’s CFO thinks it should be even higher to as much as 0.96. Earlier this

year PCC proposed raising the rural differential to 75%. This did not proceed and

PCC’s Annual Plan for 2017-18 states: “The Council decided to continue with the

‘status quo’ so that ratepayers can have confidence that our decisions are based on

robust principles and that we consider the costs versus the benefits for all ratepayers.”

This is an about-face in a very short time and we have yet to see evidence of the

‘robust principles’ involved.

4. Page 56 of the current annual plan for 2017-2018 contains the Funding Impact

Statement with the following statistics:

General rates Revenue sought

Residential (group 01-residential and other-17,173 ratepayers) $26,479,000

Rural (group 18-rural- 609 ratepayers) $1,329,000

Total for these two groups $27,808,000

% of the total general rate paid by these two groups by rural ratepayers = 4.78%.

The population of the rural area is 2.2% of the Councils total population (1227 people

out of a total of 55,400 people) according to the 2013 census.

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Conclusions:

For groups 01 and 18 which PCC has chosen to study for this proposal, 2.2%

of the population is paying 4.78% of the general rate.

This can be confirmed with the Figures used in the proposal of:

Average residential capital value equals = $470,000

Average rural capital value = $982,000

We can calculate the average residential ratepayers payment for the general

rate using PCC’s factor of 0.0036226 and the capital value of $470,000 =

$1702 (100% of the general rate)

Using the factor of 0.0025358 and the capital value of $992,000 for rural

ratepayers their general rate payments = $2490 (146% of the general rate).

So on average each Rural ratepayer (609 of them) pays 146% of the general

rate compared to each residential ratepayer at 100%. (This is using figures

from the current annual plan for 2017-2018).

Obviously this figure of 146% is because of the difference in capital value. It

should not be assumed that rural ratepayers all drive around in BMWs (as

quoted by a PCC Councillor long gone trying to remove the rural differential

many years ago). Farms large and small are capital intensive, and being

‘asset rich’ is not the same as being ‘cash rich.’ Rates are a regressive tax that

only has a crude relationship to income. It was interesting to see that Kapiti

District Council significantly differentiates between different types of rural

ratepayer (see Appendix 1).

5. The present rating system is already a burden to the local community and particularly

to the farming community. We do not accept the argument that the 2016 combination

of storm and earthquake damage is an excuse for a localized rate increase, but

rather it is a ‘pooled’ risk for an unforeseen event. Rural roads have a variety of uses

as do urban streets, and their maintenance and risk should remain shared through

the general rate by all ratepayers.

J Carrad (Trustee of Wairaka Farm)

P Nation. (Manager of Willowbank Farm)

AC Gray. (Trustee of Kakaho Farm)

AJ Gray. (Trustee of Barrowside Farm)

All submissions are due by 16 November 2017. Please hand this form in at the

Council’s Front Counter Administration Building or libraries; or post to Porirua City

Council, PO Box 50 218, Porirua City 5240; or email to [email protected] with

“Draft Rating Policy” in the subject line.

Attached: Appendix 1.

mailto:[email protected]

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Appendix 1.

Wellington City Council Rate Differential 2017-18. Rural differential 67.12%

Rates - Differential rating system - Wellington City Council

https://wellington.govt.nz › ... › Rates › Rates explained › How rates are calculated

Base A1 Property with both sewerage and water connection/s and storm water

collection and disposal charged through a rate in the dollar . Cents in the $= 0.431475

Base D1,

D5, F1

Property within the rural area without sewerage, water connection/s and

storm water collection and disposal. Cents in the $= 0.289606

0.289606/0.431475 = 67.12%

---------------------------------------------------------------------------------------------------------

Upper Hutt City Council Differential Rates. Rural differential over 30 Hectares

73%.

Funding and Remission Policies - Upper Hutt City Council

https://upperhuttcity.com/rates-payment/funding-and-policy/

---------------------------------------------------------------------------------------------------------------------------

Kapiti Coast District Council . Rural differential 22 to 70%

A differential system has been applied to the rural area to reflect its lower population density

and demand for services. The differential is:

Urban Rating Area Percentage of

Urban Rate

U1 All rating units. 100%

Rural Rating Area Percentage of

https://www.google.co.nz/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&cad=rja&uact=8&ved=0ahUKEwiax7b-ka7XAhXHHZQKHdahAmIQFgglMAA&url=https%3A%2F%2Fwellington.govt.nz%2Fservices%2Frates-and-property%2Frates%2Frates-explained%2Fhow-rates-are-calculated%2Fdifferential-rating-system&usg=AOvVaw3L3z5bH0wEwqWElNqa9AdC

https://www.google.co.nz/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&cad=rja&uact=8&ved=0ahUKEwjxyf-wsK7XAhWJxrwKHcG8A-sQFgglMAA&url=https%3A%2F%2Fupperhuttcity.com%2Frates-payment%2Ffunding-and-policy%2F&usg=AOvVaw2xjIyD86Ic2Gxwi0HEBK7B

https://upperhuttcity.com/rates-payment/funding-and-policy/

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Urban Rate

R1 Rural Rating Units less than 50 hectares. 38%

R2 Rural Rating Units equal to or greater than 50 hectares plus (Rating

Units less than 50 hectares where a combination of these properties total

greater than 50 hectares and form part of one farming operation).

22%

R3 Rural Village Rating Differential Units as identified in the Rural Village

Differential Rating Area maps. 70%

These differentials will be applied to the General Rate, the Regulatory Services Rate and

each Local Community Rates

Rates - Kapiti Coast District Council

www.kapiticoast.govt.nz/services/A---Z-Council-Services-and-Facilities/rates/

http://www.google.co.nz/url?sa=t&rct=j&q=&esrc=s&source=web&cd=2&cad=rja&uact=8&ved=0ahUKEwjx2Z_wt67XAhUJe7wKHXRpAb8QFggrMAE&url=http%3A%2F%2Fwww.kapiticoast.govt.nz%2Fservices%2FA---Z-Council-Services-and-Facilities%2Frates%2F&usg=AOvVaw2_JwiRCINTbo57SiqfjoLx

http://www.kapiticoast.govt.nz/services/A---Z-Council-Services-and-Facilities/rates/

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