Waimakariri Rates & Debt – Both Low by National Standards

The Government’s Better Local Government reform programme contains a table listing all NZ’s councils with figures relating to their rates and debt.  There are 67 District and City Councils in New Zealand and in terms of population, Waimakariri is the 19th largest.

The figures relate to the financial year ending 30 June 2010.

The table shows Waimakariri’s rates-per-capita at that time  ($663) as the fifth-lowest in the country.  The average rate increase over the the period 2002-2010 was 7%, right on the national average.

The debt level per capita  was $485, which was 15th-lowest in the country.  The increase of debt, however, was 1115% – obviously that had started from a very low base.

During those ten years, the Council had built the ocean sewerage outfall for something like $35m, which impacted those ratepayers in Kaiapoi, Woodend, Rangiora, Waikuku Beach, Woodend Beach and Tuahiwi who are in the Eastern Districts Sewer Scheme.  The othe second-largest project was the new Rangiora water supply, of which some of the rates impact had had not finished by 2009-10.  This is a $16m project which affects only Rangiora ratepayers.

The effects of major projects, therefore, can affect some ratepayers considerably, and others not at all.  However, they do affect the Council’s overall debt level.

The Council is proposing a 5% increase in rates on average for the coming year.  Debt levels will double because of the major capital projects ahead of us, notably the Kaiapoi Library, Rangiora Town Hall and Ashley Bridge.

As implied above, Waimakariri has a lot of rates that are targeted to specific areas. This means that the impacts of increases in the total rate take vary considerably from area to area.

The Government programme can be found at http://www.dia.govt.nz/better-local-government

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10 Responses to “Waimakariri Rates & Debt – Both Low by National Standards”

  1. Trevor Court Says:

    Hi David,
    Re the 2010 figures it would be interesting to know the total rate haul and the nuber of ratepayers for that year.

  2. David Ayers Says:

    Hi Trevor
    The Government figures are based on rates revenue of $31,535,000 – the figure in the Annual Report. The rates per capita calculation appears to be based on an estimated population of 47,564. The number of ratepayers is a bit difficult. In that year, the Uniform Annual General Charge was calculated to be charged 20,679 properties, so that gives us the rateable properties, but because many ratepayers own more than one property and many properties have more than one ratepayer, the number of actual ratepayers is a bit more difficult to calculate.

  3. Mike Ducray Says:

    Hi David, are you able to advise projections for the expected rates per capita and debt level per capita after implementation of years 1-3 of the Ten Year Plan, including the additional $5.6m in financial provision for the Kaiapoi Library/Museum project and Rangiora Performing Arts Centre as per the Council decsiion on 22 May 2012? Whilst I realise you won’t have current rates or debt levels for other districts and councils, are you able to provide an indication of where you believe Waimakariri District’s rates and debt level will be positioned relative to other districts and councils in future. Thank you

    • David Ayers Says:

      Hi Mike. As you might have noticed, I have gone on holiday from the blog for a while. Back into it now!

      There is a bit of difficulty in answering your questions for a week or two because the Council has yet to sign off on final rates levels. They appear to be marginally higher than the projected smoothed 5% average for the first three years and then approximately 3.6% average for the ensuing seven years of the Long Term Plan. Note that thse are averages only.

      An inportant thing to remember about Waimakariri rates is that they vary from area to area for a number of reasons. There are, for instance, a lot of rates targeted to specific areas. The Rangiora water charge, by way of example, is much higher than that for Kaiapoi. Some areas have a higher proportion of their rates as uniform charges than others, and that also affects how much rates change for different propoerties. Most of the projected capital expenditure will be paid for by way of uniform charges, a notable exception being the Ashley Bridge which will come into the rate-in-the-dollar area. The 5%-ish average rise includes a significant rise for the Tuahiwi area for their new water scheme and the final rise for the Rangiora water scheme – neither of these affects anyone else in the District.

      Once the rate level is confirmed, I’ll try to give you the indications you are seeking.

      Regards
      David

    • David Ayers Says:

      Hi Mike again. The total Council debt (as at June 2012) is $48m. It is anticipated that it will rise to $103m by 2016-17. This will be 15.1% of rates revenue. Our policy guidelines and the Local Government Funding Agency set a maximum of 25% of rates revenue.

      The Local Government Funding Agency is a new body set up by councils NZ-wide with the encouragement of the Government to provide a source of finance at favourable rates.

      It is probably impossible to compare our future debt levels with other councils, because we don’t know what they are now in 2012, let alone in 2016. The published government figures were those for 2011.

      Another factor you might like to be aware of is the inflation of council-related costs. These are calculated annually by Berle as are anticipated future levels. Currently these are running at 3.1%, which is higher than the CPI. In our budgeting we have allowed for the likely inflation of construction costs as they will be in 2013-14, when most of the actual construction will be taking place (and these will be higher than 3.1%, given what is happening in Canterbury).

      Regards David.

      • Mike Ducray Says:

        Many thanks for the information and explanation David. I assume you meant “the interest on the” $103m will be 15.1% of rates revenue, otherwise the projected rates revenue will be $682m which is nearly 10 times the projected total operating fund for 2016-17 in the Ten Year Plan. I don’t think too many ratepayers would be happy with 1000% rate increases! LOL Kind regards, Mike

  4. Rick Caddick Says:

    Hello David – It may be comforting to be able to quote figures showing our position on the ladder as not being the worst, a position no doubt made to look better than it actually is by the truly shocking figures for Kaitaia, and certain others that form part of the calculation. But these figures are not showing our relative position on an overall favourable situation, it only shows us where we rate on a situation that a government minister has declared as being out of hand and unsustainable. That is why people like me do not approve of Council’s decision to spend $5million plus on the Town Hall extension at this time for the Performing Arts lobbyists’ benefit while the prevailing world economic situation is in dire straits, and the rate demands and local government debt overall is equally heading for a disaster. With all due respect, I think you and your councillors are missing the point. Emulating the Ostrich is not helpful.
    Rick Caddick.

    • David Ayers Says:

      Hi Rick. I think that the Minister has been critical of some Councils not all. Kaipara’s position makes no difference to Waimakariri’s (unless they were to suddenly become better than Waimakariri) because a position on a table relates to an order, not an average. It’s like the difference between a mean and a median.

      While one can say that the Council has bent to the “performing arts lobbyists,” the people who have submitted to the Council over a number of years (more than 20 years in some cases) are also residents and ratepayers and have, many of them, lived here a long time. The inadequacies of the Town Hall were being brought to the attention of the Rangiora District Council in the 1980s.

      The extension to the Town Hall will help hold it up in the event of a major earthquake. While we do not have to build the extension to improve its earthquake rating, to strengthen without the extension and then some years later extend it, will result in some double expenditure.

      Regards David.

      • Rick Caddick Says:

        Hello David, and thank you for your reply. I have no objection to the strengthening of the Town Hall, nor, in principle at least, to the building of a performing arts centre when the community can afford it. It seems strange to me that lobbying for this facility has been going on for years, without success, and yet now, in the worst economic situation we have faced since the 1930s, it suddenly becomes feasible and affordable? Bearing in mind that according to your ten year plan. the interest alone on proposed borrowing will amount to more than $64 million, now is not the time to indulge in such luxuries when there are so many more worthy, urgently needed projects on which to spend the ratepayers’ money.

  5. David Ayers Says:

    Hi Rick again. The extension to the Town Hall (and earthquake strengthening) was put into the Long Term Plan three years ago during the previous term of the Council. It has been brought forward one year because of its unexpected closure.

    The extension is part of the strengthening – it will help hold up the old building. Although we don’t have to extend it to strengthen it, to strengthen it now and extend at a later date would probably involve a level of double expenditure.

    We are undertaking earthquake repairs, rebuilding or strengthening major community buildings and facilities and putting a new bridge across the Ashley and still have projected average rate rises over the next 3 years of 5.1% and in the area of average 3.6% for the following seven years. Our debt level will remain within our policy guidelines and be about the median for NZ councils – all after by far the biggest natural disaster in terms of cost that NZ has ever experienced. For the record, Waimakariri has a greater proportion of its houses on red-zoned land than has Christchurch.

    Along with that, we are experiencing unprecedented residential growth (425 building consents issued in the first 5 months of this year) and we have the sewer and water infrastructure in place to cope.

    Regards David

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