How your rates are calculated

This section is the Rating Policy  extract from the Hawke's Bay Regional Council's Annual Plan for 2007/08.

Introduction

This expenditure will be funded from the following sources:

This Funding Impact Statement sets out the impact that Council's Revenue and Financing Policy has on ratepayers.

The Revenue and Financing Policy of Council is based on clearly identifiable beneficiaries of Council activities, paying for the cost of those activities by targeted rates or direct charges whichever is most efficient administratively.

Where a degree of public benefit exists then a combination of funding through investment income and general rates for the public benefit portion and targeted rates and/or direct charges are used for the private benefit portion.

At various points of this policy a level of rates or charges is specified. These indicative figures are included to give ratepayers an estimate of what their level of rates are likely to be in the current year. These figures may not be the actual level of rates that will be assessed in the coming year; the actual figure will not be known until Council's rating information database is finalised.

All the estimated rates and levels of rates are GST inclusive.

Council directly collects rates for all the rateable properties contained within Council boundaries.

GENERAL FUNDING RATES

(includes General Rate and Uniform Annual General Charge)

The General Funding Rates required for 2007/08 are $3,942,000.

Prior to the passing of the Local Government (Rating) Act 2002, Regional Councils were not allowed to use Uniform Annual General Charge (UAGC) for the collecting of their rates. Having joined with other councils to promote the use of UAGCs and other changes to the law, Council undertook to look at the application of UAGCs for the 2004-05 year. A review of the funding tool selection for each Group of Activity led to the rating levels detailed in the Revenue and Financing Policy contained in the LTCCP. In summary, the UAGC will fund:

• 100% of the residual cost of community representation;
• 100% of the residual cost of hazard management;
• 100% of the residual cost of transport administration;
• 93% of the residual cost of economic, cultural and social well-being;
• 70% of the residual cost of environmental management;
• 50% of the residual cost of rate collection costs;
• 30% of the residual cost of land drainage and river control;
• 13% of the residual cost of biosecurity.

(Residual cost means after targeted rates, fees, charges, investment income and any reserves transfers)

The UAGC is a fixed amount charged per separately used or inhabited part of a rating unit. Therefore, units in a rest home, retail shops in a shopping complex and additional farm houses are charged as separate UAGCs.

Where two or more rating units are contiguously joined, owned by the same ratepayer, and used for the same purpose, then only one UAGC will be payable.

The UAGC over each rateable property is $40.32 (including GST). The UAGC is calculated by dividing the amount to be funded by the number of rating units in the region (65,000 at the time of preparation of this plan).

This Council's contention is that this mix of rating bases better reflects the benefits delivered to the general community while addressing some of the rate level volatility suffered by those ratepayers in the community whose land values have increased by more than the average.

Set out below is a table which illustrates the proposed general funding rates for each part of the region, the UAGC being $40.32 incl.GST, charged on each separately used or inhabited part of a rating unit, and the remainder as a general rate based on Land Value equating to $8.30 incl.GST per $100,000 of Land Value based on estimate of projected valuation. No differential is applied to the general rate.

General Funding Rates

	2006/07 Total General Funding Rates $	General Rates Land Value Based $	2007/08 UAGC $	Total General Funding Rates $
Napier	1,256,574	367,888	992,759	1,360,647
Hastings	1,688,254	606,651	1,186,890	1,793,541
Central Hawke's Bay	441,163	223,139	240,226	463,365
Wairoa	289,571	114,280	199,987	314,267
Pt.Taupo	4,953	4,960	766	5,726
P.Rangitikei	2,858	4,212	242	4,454
Total:	3,684,373	1,321,130	2,620,870	3,942,000

The dates of rateable valuations carried out by Quotable Values differ between districts included within Council's rating boundaries. This requires that the general rate based on land value be allocated to districts on the basis of an adjusted land value. This district general rate allocation when stated in $ per $100,000 of actual land value will therefore differ between districts.

It is important to realise that if all districts had the same valuation date then each district would have the same $ per $100,000 of actual land value.

Land Value Information

District	Adjusted Land Value  $  1/09/2006	Actual Land Value  $  28/02/2007	Valuation Revision Date
Napier	4,439,318,000	4,208,157,000	1/09/2008
Hastings	7,320,478,000	5,763,502,550	1/09/2007
Central Hawke's Bay	2,692,620,000	2,695,381,400	1/09/2006
Wairoa	1,379,025,000	1,335,638,900	1/09/2006
Pt.Taupo	59,847,000	53,317,000	1/09/2007
P.Rangitikei	50,823,000	38,153,000	1/09/2006
Total:	15,942,111,000	14,094,149,850

General Funding Rates 2007/08

	General Rate on	Land Value	Uniform Annual	General Charges
District	Rates per $100,000 Actual Land Value  $	Assessed Rates  $	Number of UAGCs  $	UAGC Rates Assessed  $
Napier	8.70	367,888	24,621	992,759
Hastings	10.53	606,651	29,436	1,186,890
Central Hawke's Bay	8.28	223,139	5,958	240,226
Wairoa	8.56	114,280	4,960	199,987
Pt.Taupo	9.30	4,960	19	766
P.Rangitikei	11.04	4,212	6	242
	8.30	1,321,130	65,000	2,620,870

 

Utilisation of General Funding Rates in each Group of Activity: 2007/2008

 

Environmental Management
Policy Development	4.0%
Policy Implementation	13.1%
Resource Consent Processing	3.6%
Environmental Research	3.3%
Environmental Monitoring	14.6%
Compliance Monitoring	5.2%
Land Management	8.6%
Maritime Navigation & Safety	1.8%
Building Act Implementation	0.4%

 

	54.69%
Land Drainage & River Control	10.3%
Biosecurity	9.8%
Hazard Management	9.3%
Land Transport	0.9%
Economic, Cultural & Social Well-being	4.4%
Community Representation	8.0%
Other Activities	2.7%
	100%

Financial Information from the Annual Plan 2007-08 - PDF File - 144Kb

- Targeted Rates
- Resource Management Charges