Agenda of Ordinary Te Puna Kōrero - 7 May 2020 · Remission and Postponement Policy to enable a...

ORDINARY TE PUNA KŌRERO MEETING AGENDA 7 MAY 2020

Item 6.1 0

6 REPORTS

6.1 RATES REMISSION AND POSTPONEMENT POLICY: PROPOSED COMMERCIAL RATES DEFERRAL AMENDMENT

Author: Roy Baker, Principal Advisor Pandemic Response

Authoriser: Wendy Walker, Chief Executive Tumuaki

PURPOSE

The purpose of the paper is to outline a proposed amendment to the Council’s 2018 Rates Remission and Postponement Policy to enable a deferment of rates for the 13 Business, 15 Motels, and 16 Shopping Plaza business sectors for consultation with the community between 8 May and 7 June 2020.

RECOMMENDATIONS

That Te Puna Kōrero:

1. Receive the report.

2. Adopt the Statement of Proposal for the proposed amendment to the Rates Remission and Postponement Policy for public consultation between 8 May and 7 June 2020.

3. Delegate to the Chief Executive the authority to make minor editorial changes to the Consultation Document and supporting information prior to publication.

Reports contain recommendations only. Refer to the meeting minutes for the final decision.

BACKGROUND

1. The current Rates Remission and Postponement Policy provides for remission or postponement of rates under certain circumstances.

2. When the Policy was developed and during its various updates, it did not anticipate the sort of event that Covid-19 has presented, and it therefore provides few options to respond to the financial challenges being presented.

3. The introduction of a commercial rates deferral to the Policy is therefore being proposed to be consulted on in accordance with Section 83 (Special Consultative Procedure) of the Local Government Act.

DISCUSSION AND OPTIONS

Introduction

4. Covid-19 has impacted significantly on all sectors within the Porirua community. Operating in a lockdown environment has seen most businesses either closed or with significant financial challenges.

5. It is clear that the economy over the next 24 months will be challenging for all with flow on effects into our community.

6. The most significant government short-term support package in response to Covid-19 has been the business 12-week wage subsidy package. This has enabled businesses with lost revenue to keep their workers employed. Approximately 60% of New Zealand’s workforce is covered by the wage subsidy.


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7. In Porirua we want the business sector to recover as quickly as possible because a vibrant and strong business community creates employment and other benefits for all residents in Porirua (for example sponsorships, reducing the rates burden, consumer choice).

8. As we start to move out of level 4 and ultimately to levels 2 and 1, cash flow and liquidity will become important factors for many business. Most are experiencing a customer and revenue collapse while their fixed costs remain the same. Revenue streams will take some time to return to pre Covid-19 levels and a number of businesses may not survive.

9. Treasury forecasts of the impact of Covid-19 under the most optimistic scenario is set out below.

20/21 (June) 21/22 22/23 23/24

GDP -4½% -2½% 10% 5½%

Unemployment 13½ % 8½% 6% 5%

(1a) GDP -4½% -½% 8% 4½%

(1a) Unemployment 8½% 5½% 5% 5%

10. It is clear that the economics over the next 12 months will be challenging for all, but especially for the business sector (note: business sector for this paper means the three rating groups – 13 Business, 15 Motels and 16 Shopping Plazas).

11. While the wage support package has enabled many businesses to keep their workers employed, it does not address other costs that businesses face. Most have seen revenue collapse and fixed costs remain payable.

12. The Council can play a role in helping businesses to navigate cashflow headwinds over the coming year by providing a deferred commercial property rate which is recovered over the following three years, as the economy recovers and we begin to move towards pre-Covid-19 levels.

13. Those ratepayers that own or pay the rates on commercial property can be immediate beneficiaries of this scheme. In those cases where the landlord pays rates directly we are hoping to create more leniency between the landlord and tenant if there are business survival issues.

14. For Porirua it is critical that the business sector recovers as quickly as possible. A vibrant and strong business community will benefit all residents of Porirua.

15. If the business sector shrinks, its overall capital value will reduce and it is inevitable that a greater share of the rate burden will shift to the residential and rural sectors. The effect will replicate what we have seen with the last two revaluation cycles.

16. The Council is actively working on a number of fronts with the business sector as part of our recovery plan. Commercial rates relief is one of a broader suite of initiatives being implemented, developed or explored as part of recovery planning. The recovery plan covers both the economy and community welfare and a draft will be presented to the Council in mid-May.


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17. A significant cost for most business at this time is rates. While the recent QV property revaluation will see lower rate increases than the residential sector, the rates burden will come when they are looking to rebuild their business revenues from what for most will be a non-trading position as a result of the lockdown.

18. The current rates remission or postponement policy does not enable Council to provide any relief to business at this stage.

19. This paper proposes that the Council amend its policy to enable some relief to be made available to this important sector.

20. The objective of the proposed policy change is to support the business sector’s recovery from the impact of Covid-19 by enabling them, if they so elect, to defer their 2020/21 rate payment for 6 or 12 months and spread the deferred payment equally over 3 years commencing 2021/22.

21. This deferment option only relates to the 2020/21 rates and is a clear recognition of the importance that the business sector is to Porirua as a whole and that a strong and vibrant business sector provides benefits to all residents and ratepayers of Porirua.

22. The proposal will be fully self-contained and will not put any cost on non business ratepayers, any other ratepayer sectors, or any ratepayers who do not apply for it and therefore will be rate neutral due to the ability to recover the interest and administrative costs.

23. The principles of the proposed deferment scheme are as follows:

a. The ratepayer can elect to defer their 2020/21 rates for 6 or 12 months.

b. The Council will add a postponement fee which will be the financial costs to the Council of the postponement (calculated as the average interest rate of 3.58%).

c. The deferred 20/21 rate amount will be recovered equally over 3 years from 1 July 2021/22.

d. The interest on the deferred balances will be recovered also over the subsequent 3 years.

e. Council will register a charge over the property until the deferred rates are cleared.

f. There will be a one-off establishment charge of $250 plus GST to cover the cost of the registered charge and the annual administrative costs of Council to operate the scheme.

g. While Council would not look to enforce it, we would expect that property owners (that had tenants who paid “rates” as part of their operating costs) would pass on the benefit of deferral.

24. The proposal will provide deferral of Council rates, however those electing to avail themselves of the scheme may still be required to pay the GWRC rates each quarter.

25. We are in discussion with GWRC to see if it could support receiving its 2020/21 rates on a deferral basis. At the time of writing we are not in a position to advise on this. For planning purposes we will assume that business will still be required to pay GWRC quarterly.

26. Under the scheme the amount of rates deferred would be replaced by increased borrowing, but as mentioned above, as the cost of deferred rate will attract interest charges over the period of the scheme it will be fiscally neutral and rate neutral.

Options

Option one

27. Provide options to all in the business community to defer their 20/21 rates for a 6 or 12 month period, and spread the amount deferred over the subsequent 3 years.


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Option two

28. Look to exclude those businesses that were deemed essential services under Covid-19 Alert Level 4 from the scheme e.g. Supermarkets, 4 Squares, unless they could prove they were financially impacted and had received some formal government assistance package.

Option three

29. Limit the scheme availability to only those business (non-residential) ratepayers, that can show evidence of:

• a 30% reduction in revenue; or

• qualification for a Government emergency financial support package (for example the

wage subsidy scheme); or

• qualification for a mortgage “holiday” from the bank

Option four

30. Status quo, that is provide no support/relief to the commercial sector. The status quo would see the Council not assisting the business sector with any rate relief option that could assist with their recovery. This option is not considered appropriate given the extraordinary financial situation created by Covid-19.

Recommended option and reason

31. Under a restricted approach, there is the assumption that those businesses excluded have not experienced financial challenges to date, and that as we move forward into a recovery phase that their business would be immune from such financial pressures. As the proposal is financially neutral, it may be inequitable to limit the availability of the scheme.

32. As the proposed policy is financially neutral to existing ratepayers over the period of its implementation, there is no financial difference to Council for options 1-3. While the proposal would be available to businesses, not all will take up the option.

33. Clearly those who would benefit most from it will. To restrict its application under options two and three will require more work for both the applicant and also Council to administer. As the proposal will not impact the residential or rural ratepayer, there is little advantage in restricting its application and therefore option one is the recommended option and approach.

Statement of Proposal and proposed Rates Remission and Postponement Policy

34. The Statement of Proposal has been included as attachment 1 outlining the above information. For fullness, the current and proposed Rates Remission and Postponement policies have been included as attachments 2 and 3 and will be available alongside the Statement of Proposal.


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SUPPORTING INFORMATION

CONTRIBUTUING TO COUNCIL’S STRATEGIC DIRECTION

35. Supporting the business sector from the financial challenges it now faces as a result of Covid-19 will provide long term benefits to the community at large and as a result will contribute to all of the Council’s strategic priorities and direction.

FINANCIAL CONSIDERATIONS

Cost

36. The business sector’s total estimated rates for 2020/21 is $16.7m. In addition they also pay rates to GWRC of $1.6m. Both amounts include GST.

37. Should 100% of those eligible apply for the deferral then Council would need to debt fund the amount to run its operations.

38. The additional debt would incur interest at 3.58% - our 2020/21 budgeted interest cost. This interest charge would increase our deficit and would be recovered from the applicants.

39. The Council would still raise the rate invoice and we would be liable to IRD for the GST component as per normal.

Financial implications

40. The proposal would recover the deferred rates over subsequent years, the Councils debt levels would increase in 2020/21 but reduce over the following three years and return to a neutral position at June 2023/24.

41. By its nature, the proposal is rates neutral for both residential and rural ratepayers as the interest costs of the initial debt is fully recovered from those taking up the proposal.

42. The following tabular form demonstrates how this will operate over the three-year period for the Council as a whole and an example of the impact on an individual business:


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Ongoing Cost

43. The annual interest of the higher debt is passed onto the users of the scheme.

44. The annual cost of administering the scheme and the cost of registering the charge over the applicant’s property is covered by the one-off upfront fee of $250 plus GST.

Financial Prudence Benchmarks

45. The proposal, while increasing the Council’s debt initially, will not breach any of our borrowing limit benchmarks/requirements.

STATUTORY REQUIREMENTS

46. Section 83 of the Local Government Act outlines the requirements for undertaking a Special Consultative Procedure that includes preparing and adopting a Statement of Proposal, a description of how people interested in the proposal will be able to present their views, a statement of the period for which views may be provided (no less than 20 working days), an opportunity for persons to present their views with reasonable opportunity and information on how to take up the opportunity.

47. Sections 82 and 82A outline the principles of consultation and the information requirements for consultation required under the Act that includes the need to make available the proposal and reasons for the proposal, options and the recommended option and the draft proposed policy.

48. Section 80 of the Local Government Act 2002 provides that if a decision of the Council is significantly inconsistent with or is anticipated to have consequences that are significantly inconsistent with, any Council policy, the Council must clearly identify the inconsistency, the reasons for the inconsistency and any intention to amend the policy to accommodate the decision.


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49. The decision to adopt a commercial rates postponement as described in this report may be inconsistent with the Council’s Revenue and Financing Policy (RFP). Officers are of the view that the inconsistency is unlikely to be “significant”, but the RFP does not expressly contemplate the Council borrowing in order to fund a potentially large-scale commercial rates postponement scheme. Officers recommend that section 80 be complied with even though the inconsistency may not be “significant”.

50. To the extent that the decision is “significantly” inconsistent with the Council’s RFP, that inconsistency would be that the RFP provides (at page 2) that, in relation to operating expenditure, “the Council sets operating revenue to meet its projected annual operating expenditure” and in relation to borrowing as a funding mechanism, the RFP notes that “the Council borrows money to fund capital works and may also enter into short term borrowing arrangements for the management of cash flows” (page 4).

51. The reason for the inconsistency is that it would be fundamental to the proposed commercial rates postponement scheme that it involve borrowing to fund operating expenditure (rather than capital works).

52. If the decision is ultimately made, the Council intends to amend its RFP as part of the Long-term Plan 2021-51 to accommodate the decision to adopt the commercial rates postponement scheme.

53. The Council will address section 80 of the LGA if and when it makes a decision about the rates postponement scheme.

TREATY CONSIDERATION

54. Ngāti Toa will be consulted on this proposal.

ENGAGEMENT AND COMMUNICATIONS

55. Subject to Council approving the proposal, the following are key dates:

a. Submissions open 8 May

b. Submissions close 7 June

c. Submitters present to Council 18 June

d. Council deliberates and determines 18 June

e. Amended Rates Remission and Postponement Policy adopted 24 June

56. This proposal will be publicly notified in the Monday 11 May 2020 Dominion Post in addition to a press release and a radio advert. The documents and ways to have your say will be accessible through the Porirua City public website.

57. During Alert Level 3 and Alert Level 2 we will provide submitters with the option to make a phone submission, and will post out a hardcopy of the documentation on request. As we return to normal operations and Alert Level 1 we will ensure copies of the Statement of Proposal and Policy are made available at all Porirua City libraries, and at our front counter at Customer Services, Ground Floor, 16 Cobham Court, Porirua City 5022.

58. In addition to our normal consultation process, we propose to write directly to all businesses and inform them of the proposal.

ATTACHMENTS

1. Statement of Proposal: Rates Remission and Postponement Policy ⇩ 2. 2020 proposed Rates Remission and Postponement Policy ⇩

3. 2018 Rates Remission and Postponement Policy ⇩

ORDINARY TE PUNA KŌRERO ATTACHMENTS 7 MAY 2020

Item 6.1 - Attachment 1 Page 17

31 May 2020

2020 Rates Remission and Postponement Policy

We’d like to hear your thoughts on the addition to the Policy of a rates deferral for Porirua City businesses in response to the Covid-19 pandemic

Contents

Summary of the proposal ............................................................................................................................. 3

Have your say ............................................................................................................................................... 4

Key dates .................................................................................................................................................. 4

Making a submission ................................................................................................................................ 4

The proposal ................................................................................................................................................. 5

Background ............................................................................................................................................... 5

Reason for the proposal............................................................................................................................ 5

Conditions and criteria .............................................................................................................................. 5

Options ...................................................................................................................................................... 6

Supporting information ................................................................................................................................. 7

Submission form ......................................................................................................................................... 10

Summary of the proposal

We are looking to introduce an addition to our existing Rates Remission and Postponement Policy to allow for commercial rates deferral in response to the Covid-19 pandemic. This proposal recognises Porirua City’s strong and vibrant business sector and the importance of it as a whole to our residents and ratepayers in Porirua.

The amendment details the proposed changes to Porirua City Council (the Council) Rates Remission and Postponement Policy and would allow eligible ratepayers to apply for a postponement by deferring the 2020/21 rates payments to recognise the financial impacts on the sector as a whole that have resulted from Covid-19.

Have your say

Key dates

When What

8/05/2020 Submissions open

7/06/2020 Submissions close

18/06/2020 Submitters present to Te Puna Kōrero

18/06/2020 Te Puna Kōrero deliberates, changes are agreed, and a recommendation made to the Council

24/06/2020 Council adopts the amended Rates Remission and Postponement Policy

Making a submission

Covid-19 Alert Level 3

We want to ensure you have access to the information you need to have your say during the current level 3 lockdown restrictions:

Go online

The easiest way to make a submission is to go online to our public consultation page to share your views

Write to us

If you don’t have access to a computer you can fill in the feedback form that accompanies this document and post or email it to us:

Postal address Porirua City Council, PO Box 50218, Porirua 5240

Physical address Ground Floor, Administration Building, 16 Cobham Court, Porirua 5022

Email your feedback form to [email protected]

Give us a call

During Alert Level 3 lockdown we will be accepting submission by phone. Please call our contact centre on 04 237 5089 and ask to be put through to the Democratic Services team to record your feedback.

Returning to normal operations – lower alert levels

Once we return to our normal operating hours and services you can find copies of this proposal at all Porirua City libraries, and at our front counter at Customer Services, Ground Floor, 16 Cobham Court, Porirua City 5022.

Please include your name and contact details and let us know if you would like to attend a hearing to speak in support of your submission (so that we can allocate you a speaking time).

The hearing will be held on 18 June 2020.

Your privacy

All submissions are public information. This supports our drive to be as transparent as possible, but, if there are any personal details you don’t want made public, please let us know.

Want to know more

If you have any questions, or would like a little more information, please email Zach Morton-Adair at [email protected] or call on 04 237 1378.

https://poriruacity.govt.nz/your-council/getting-involved/public-consultation/

mailto:[email protected]

The proposal

Background

Covid-19 has impacted significantly on all sectors within the Porirua community. Operating in a lockdown environment has seen most businesses either closed or facing significant financial challenges. The proposal provides the business sector, defined as rating units 13 (Business) / 15 (Motels) / 16 (Shopping Plazas), rate relief from the immediate financial burden for the 2020/21 rate year.

The economy over the next 24 months will be challenging for all with flow on effects into our community. This proposal outlines an amendment to our current Rates Remissions and Postponement Policy. A council may amend its Rates Remission and Postponement policy at any time under section 102(4)b of the Local Government Act 2002 after consulting on the proposed amendments in a manner that gives effect to the requirements of section 82 of the Local Government Act 2002.

Reason for the proposal

In Porirua we want the business sector to recover as quickly as possible because a vibrant and strong business community creates employment and other benefits for all residents in Porirua. As we start to move out of level 4 and ultimately to levels 2 and 1, cash flow and liquidity will become important factors for many business.

Most are experiencing a customer and revenue collapse while their fixed costs remain the same. Revenue streams will take some time to return to pre Covid-19 levels and a number of businesses may not survive.

It is clear that the economics over the next 12 months will be challenging for all, but especially for the business sector (note: business sector for this paper means the three rating groups – 13 Business, 15 Motels and 16 Shopping Plazas).

While the wage support package. has enabled many businesses to keep their workers employed, it does not address other costs business’s face. Most have seen revenue collapse and fixed costs remain payable.

Council can play a role in helping businesses to navigate cashflow headwinds over the coming year by providing a deferred commercial property rate which is recovered over the following three years, as the economy recovers and we begin to move towards pre-Covid-19 levels.

Conditions and criteria

The objective of the proposed policy change is to support the business sectors recovery from the impact of Covid-19 by enabling those businesses (if they so elect to) to defer their 2020/21 rate payment for 6 or 12 months and spread the deferred payment equally over 3 years commencing 1 July 2021/22.

The principles of the proposed deferment scheme are as follows:

• The ratepayer can elect to defer their 2020/21 rates for 6 or 12 months.

• The Council will add a postponement fee which will be the financial costs to the Council of the postponement (calculated as the average interest rate of 3.58%).

• The deferred 20/21 rate amount will be recovered equally over 3 years from 1 July 2021/22.

• The interest on the deferred balances will be recovered also over the subsequent 3 years.

• Council will register a charge over the property until the deferred rates are cleared.

• There will be a one-off establishment charge of $250 plus GST to cover the cost of the registered charge and the annual administrative costs of Council to operate the scheme.

• While Council would not look to enforce it, we would expect that property owners (that had tenants who paid “rates” as part of their operating costs) would pass on the benefit of deferral.

Under the scheme the amount of rates deferred in 2020/21 would be replaced by Council increased borrowing, but as mentioned above as the cost of deferred rate will attract interest charges over the period of the scheme which will see it be fiscally neutral for the Council and rate neutral to other ratepayers.

This postponement option only relates to the 2020/21 financial year and is a clear recognition of the importance of the business sector to Porirua City, and that a strong and vibrant business sector provides benefits to all residents and ratepayers of Porirua.

The proposal will be fully self-contained and will not put any cost on non business ratepayers, any other ratepayer sectors, or any ratepayers who do not apply for it and therefore will be rate neutral due to the ability to recover the interest and administrative costs.

The current proposal only includes the Porirua City Council’s rates. We are working with Greater Wellington Regional Council (GWRC) on whether the rates deferral will include its 2020/21 rates. If this is not achievable, businesses electing to defer the Council rates will still be invoiced and expected to pay the GWRC rates every quarter – as is presently the case.

Options

Option one (recommended option) – provide options to all in the business community to defer their 20/21 rates for a 6 or 12 month period, and spread the amount deferred over the subsequent 3 years.

Option two – look to exclude those businesses that were deemed essential services under Covid Alert Level 4 from the scheme eg Supermarkets, Four Squares, unless they could prove they were financially impacted and had received some formal government assistance package.

Option three – limit the scheme availability to only those business (non-residential) ratepayers, that can show evidence of:

• a 30% reduction in revenue; or

• qualification for a Government emergency financial support package (for example the wage subsidy scheme); or

• qualification for a mortgage “holiday” from the bank

Option four – status quo, that is provide not support/relief to the commercial sector. The status quo would see the Council not assisting the business sector with any rate relief option that could assist with their recovery. This option is not considered appropriate given the extraordinary financial situation created by covid-19.

Recommended option & reason

Under a restricted approach, there is the assumption that those businesses excluded have not experienced financial challenges to date, and that as we move forward into a recovery phase that their business would be immune from such financial pressures. As the proposal is financially neutral, it may be inequitable to limit the availability of the scheme.

As the proposed policy is financially neutral to existing ratepayers over the period of its implementation, there is no financial difference to Council for options 1-3. While the proposal would be available to businesses, not all will take up the option.

Clearly those who would benefit most from it will. To restrict its application under options two and three will require more work for both the applicant and also Council to administer. As the proposal will not impact the residential or rural ratepayer, there is little advantage in restricting its application and therefore option one is the recommended option and approach.

Supporting information Supplementary information has been provided to outline the impact on Council if all business sector, rating units business/motels/shopping plaza’s, were to take the scheme up and the timings and relief provided to one individual rating unit.

The proposal as outlined above is user pays so there is no consequential impacts on any other rate payers from this proposal.

EXAMPLE 1

This example outlines the consequential impact on the Council over the life of the relief programme. The 2020/21 rates are evenly split over the subsequent three years in equal instalments each quarter and are on top of the normal rates due.

The associated interest costs are included as part of the quarterly invoice. The total rates for the business sector have been rounded to $17 million for the purposes of the discussion only. The rates have been projected with a 4.98% increase as in line with current Council projections.

2020/21 2021/22 2022/23 2023/24 Total

Rates Increase Base 4.98% 17,000,000$ 17,846,600$ 18,735,361$ 19,668,382$ 73,250,342$

Deferral Payment 5,666,667$ 5,666,667$ 5,666,667$ 17,000,000$

Interest Paid 760,750$ 329,658$ 126,792$ 1,217,200$

Total Payments 24,274,017$ 24,731,686$ 25,461,840$ 74,467,542$

Interest Rate Debt 3.58%

Payment Q

Rates Relief

ProvidedRepayments

Loan (Debt)

BalanceInterest

Interest

Repayment

2020/21 1 4,250,000$ 4,250,000$ 38,038$

2020/21 2 4,250,000$ 8,500,000$ 76,075$

2020/21 3 4,250,000$ 12,750,000$ 114,113$

2020/21 4 4,250,000$ 17,000,000$ 152,150$

2021/22 1 1,416,667-$ 15,583,333$ 139,471$ 380,375$

2021/22 2 1,416,667-$ 14,166,667$ 126,792$ 139,471$

2021/22 3 1,416,667-$ 12,750,000$ 114,113$ 126,792$

2021/22 4 1,416,667-$ 11,333,333$ 101,433$ 114,113$

2022/23 1 1,416,667-$ 9,916,667$ 88,754$ 101,433$

2022/23 2 1,416,667-$ 8,500,000$ 76,075$ 88,754$

2022/23 3 1,416,667-$ 7,083,333$ 63,396$ 76,075$

2022/23 4 1,416,667-$ 5,666,667$ 50,717$ 63,396$

2023/24 1 1,416,667-$ 4,250,000$ 38,038$ 50,717$

2023/24 2 1,416,667-$ 2,833,333$ 25,358$ 38,038$

2023/24 3 1,416,667-$ 1,416,667$ 12,679$ 25,358$

2023/24 4 1,416,667-$ 0$ 0$ 12,679$

* First years deffered interest repaid Q1 2021

Covid-19 commercial rates deferral: total business sector

EXAMPLE 2

This example outlines the relief provided to an individual rating unit and the timings of repayment over the proposal.

A rating unit with a 2020/21 rate notice of $120,000 has been used as an example only. The rates have been projected with a 4.98% increase as in line with current Council projections.

2020/21 2021/22 2022/23 2023/24 Total

Rates Increase Base 4.98% 120,000$ 125,976$ 132,250$ 138,836$ 517,061$

Deferral Payment 40,000$ 40,000$ 40,000$ 120,000$

Interest Paid 5,370$ 2,327$ 895$ 8,592$

Total Payments 171,346$ 174,577$ 179,731$ 525,653$

Interest Rate Debt 3.58%

Payment Q

Rates Relief

Provided

Deferal

Repayments

Balance

OutstandingInterest

Interest

Repayment

2020/21 1 30,000$ 30,000$ 269$

2020/21 2 30,000$ 60,000$ 537$

2020/21 3 30,000$ 90,000$ 806$

2020/21 4 30,000$ 120,000$ 1,074$

2021/22 1 10,000-$ 110,000$ 985$ 2,685$

2021/22 2 10,000-$ 100,000$ 895$ 985$

2021/22 3 10,000-$ 90,000$ 806$ 895$

2021/22 4 10,000-$ 80,000$ 716$ 806$

2022/23 1 10,000-$ 70,000$ 627$ 716$

2022/23 2 10,000-$ 60,000$ 537$ 627$

2022/23 3 10,000-$ 50,000$ 448$ 537$

2022/23 4 10,000-$ 40,000$ 358$ 448$

2023/24 1 10,000-$ 30,000$ 269$ 358$

2023/24 2 10,000-$ 20,000$ 179$ 269$

2023/24 3 10,000-$ 10,000$ 90$ 179$

2023/24 4 10,000-$ -$ -$ 90$

* First years deffered interest payable Q1 2021

Covid-19 commercial rates deferral: individual ratepayer

Submission form We’d love your feedback on the proposed Commercial Rates Deferral Policy to assist our Council in its decision-making.

Privacy

All submissions are public information. This supports our drive to be as transparent as possible, but, if there are any personal details you don’t want made public, please let us know.

Your details

We’d like to know a little more about you

First name Last name

Business

Business address

Suburb

Email

Presenting your submission in person

Would you like to come and talk to the Council about your submission?

Yes No

If yes, please provide a phone number so we can get in touch:

Your feedback

You can leave your feedback on the proposal here or complete the ‘your details’ section above and attach your feedback.

Please select your preferred option and provide some reasons why:

1. Broadly, do you support an amendment to the Rates Remission and Postponement Policy to enable some rates relief to the Porirua business sector for the 2020/21 financial year?

Yes No Partially

Comments

2. Of the options outlined on page 6 of the Statement of Proposal, which one are you most supportive of? As the proposed policy is financially neutral to existing ratepayers over the period of its implementation, there is no financial difference to Council for options 1-3.

Option 1 (recommended option) Option 2 Option 3 Option 4 Something

else (please comment below)

Comments

Ref: 5855823

2020 PROPOSED RATES REMISSION & POSTPONEMENT POLICY

INTRODUCTION

In order to provide rates relief where it is considered fair and reasonable to do so, the Council is required to adopt policies specifying the circumstances under which rates can be considered for remission or postponement.

There are various types and circumstances under which a remission or postponement can be considered. The conditions and criteria relating to each type of remission or postponement are set out below, together with the objectives of the policy. This Policy is made of up the following seven parts:

Part 1 Rates Remission on Māori Freehold Land

Part 2A Rates Remission or Postponement for Business & Economic Development

Part 2B Commercial Rates Deferral for 13 Business, 15 Motels, and 16 Shopping Plazas

Part 3 Rates Remission for Land Subject to Natural Calamity

Part 4 Rates Remission for Community, Sporting and Recreational Non-Commercial Use

Part 5 Rates Remission for Penalties on Unpaid Rates

Part 6 Rates Remission for Properties Affected by Weather Tightness Claims

Part 7 Rates Remission for Residential Development in the Central Business District

Part 8 Rates Postponement for Farm Land

STATUTORY FRAMEWORK

This Policy is prepared in accordance with section 102(3), 109 and 110 of the Local Government Act 2002.

This Policy is also prepared in accordance with the Local Government (Rating) Act 2002, where all land is rateable unless specified in this Act or another Act states that land is non-rateable. Non-rateable land is still liable to pay targeted rate for water supply, sewage disposal, or refuse collection.

APPLICATION OF POLICY

In order for an application to be considered, all applications must be in writing and must include the relevant supporting information as outlined in each type of remission or postponement.

Applications must be received prior to the commencement of the rating year (1 July – 30 June), unless stated. Successful applications received during a rating year will be applicable from the commencement of the following year. No applications will be backdated.

Remissions or postponements are only applicable to ratepayers identified in the Council’s rating information database not the occupant of the property.

Remissions or postponements are limited to rates set and assessed by the Council. The Council collects rates on behalf of the Wellington Regional Council and therefore the Council has no authority to remit or postpone such rates other than by specific approval of that Council.

The approval of any remission or postponement is at the absolute discretion of the Council or its delegated officer. The Rates Postponement and Remissions Policy will also undertake a further review later in the year in, accordance with 109(2)a and 110(2)a of the Local Government Act 2002.

PART 1 – REMISSION ON MAORI FREEHOLD LAND

Policy objectives

Objectives of this policy are to:

• support the use of the land by the owners for traditional purposes;

• recognise and support the relationship of Māori and their culture and traditions with their ancestral lands;

• avoid further alienation of Māori freehold land;

• facilitate the wish of the owners to develop the land for economic use

• recognise and take account of the presence of waahi tapu that may affect the use of the land for other purposes;

• recognise and take account of the importance of the land in providing economic and infrastructure support for marae and associated papakainga housing (whether on the land or elsewhere);

• recognise and take account of the importance of the land for community goals relating to: the preservation of the natural character of the coastal environment; the protection of outstanding natural features; and; the protection of significant indigenous vegetation and significant habitants of indigenous fauna;

• recognise the level of community services provided to the land and its occupiers;

• recognise matters related to the physical accessibility of the land.


Under the Local Government (Rating) Act 2002 Māori freehold land is defined as land whose beneficial ownership has been determined by the Māori Land Court by freehold order. Only land that is the subject of such an order may qualify for remission under this policy. The Council may remit rates where the application meets the following conditions and criteria:

a. the land is unoccupied and no income is derived from the use or occupation of that land; or

b. the land is better set aside for non-use because of its natural features, or is unoccupied; or

c. the land is inaccessible and/or is unoccupied;

d. only a portion of the land is occupied;

e. the land has limited use and/or economic value from its actual use.

Council’s consideration

The Council may give remission of up to 100% of all rates where the application meets the relevant policy objectives and conditions/criteria outlined in this policy.

Application for this remission should be made prior to commencement of the rating year.

The owners who have applications approved by the Council for remission should make contact with the Council immediately if the circumstance or a status of the land changes. All approved remissions will be subject to annual review or at least every 3 years to validate the remissions approved.

Applications made after the commencement of the rating year may be accepted at the discretion of the Council.

The Policy shall apply to owners of Māori freehold land who meet the relevant criteria as approved by the Chair of the Council Committee with responsibility for managing Council finances (at the time of adopting this Policy this is the Chair of the City Direction Committee), and the General Manager Corporate Services & Chief Financial Officer.

The administration of this Policy may be sub-delegated to a Council officer as appropriate.

PART 2A – REMISSION OR POSTPONEMENT FOR BUSINESS AND ECONOMIC DEVELOPMENT

Policy objective

To promote economic development and new business investment within the City by offering rates remission to:

• encourage developments that assist new businesses to become established in the city, or

• encourage developments that assist existing businesses in the city to expand and grow.


To be eligible for remissions or postponement for business and economic development purposes, applications must meet all of the criteria in Part 1 (A) and Part 1 (B):

• Part 1 (A)

New commercial and/or industrial developments that involve the construction of any new building or buildings intended to be used for industrial, commercial or administrative purposes; or

Existing commercial and/or industrial developments that involve substantial alterations or renovations to the existing building or buildings intended to be used for industrial, commercial or administrative purposes.

• Part 1 (B)

The new investment must increase the rateable value of the rating unit (or units) on which the development takes place by not less than $1 million per rateable unit.

Council’s considerations

Any rates remission or postponement covering the General rate, the Uniform Annual General Charge, and the City Development rate to any individual development granted is subject to:

• A maximum period of three financial years.

• The Council’s final determination of the size and length of any remission or postponement. Generally it will not be of a size that results in an absolute reduction of the rates derived by the Council from the rating unit.

• Meeting the agreed conditions which the Council considers appropriate in relation to the approval of a remission or postponement. Failure to comply with such conditions may lead either to the suspension of the remission or postponement for a period to be determined by the Council, or termination of the remission or postponement, at the Council's discretion.

All applications will be submitted to the City Direction Committee for consideration and a decision on the level of remission/postponement.

PART 2B – COMMERCIAL RATES DEFERRAL FOR 13 BUSINESS, 15 MOTELS AND 16 SHOPPING PLAZAS

Policy objective The purpose of this policy is to support the business sector’s recovery from the impact of Covid-19 pandemic and provide rate relief from immediate financial burdens. This policy change is targeted at assisting business recovery. Conditions and criteria The policy change is to support the business sectors recovery from the impact of Covid-19 by enabling those businesses (if they so elect to) to defer their 2020/21 rate payment for 6 or 12 months and spread the deferred payment equally over 3 years commencing 1 July 2021/22. To be eligible for this remissions relating to the 2020/21 financial year you must pay rates within Porirua City’s business sectors. The business sector is defined as rating units in the following categories:

• 13 Business;

• 15 Motels; and

• 16 Shopping Plazas.

Council’s considerations The objective of the proposed policy change is to support the business sectors recovery from the impact of Covid-19 by enabling those businesses (if they so elect to) to defer their 2020/21 rate payment for 6 or 12 months and spread the deferred payment equally over 3 years commencing 1 July 2021/22. The principles of the proposed deferment scheme are as follows:

• The ratepayer can elect to defer their 2020/21 rates for 6 or 12 months.

• The Council will add a postponement fee which will be the financial costs to the Council of the postponement (calculated as the average interest rate of 3.58%).

• The deferred 20/21 rate amount will be recovered equally over 3 years from 1 July 2021/22.

• The interest on the deferred balances will be recovered also over the subsequent 3 years.

• Council will register a charge over the property until the deferred rates are cleared.

• There will be a one-off establishment charge of $250 plus GST to cover the cost of the registered charge and the annual administrative costs of Council to operate the scheme.

• While Council would not look to enforce it, we would expect that property owners (that had tenants who paid “rates” as part of their operating costs) would pass on the benefit of deferral.

Under the scheme the amount of rates deferred in 2020/21 would be replaced by Council increased borrowing, but as mentioned above as the cost of deferred rate will attract interest charges over the period of the scheme which will see it be fiscally neutral for the Council and rate neutral to other ratepayers. This postponement option only relates to the 2020/21 financial year and is a clear recognition of the importance of the business sector to Porirua City, and that a strong and vibrant business sector provides benefits to all residents and ratepayers of Porirua. The proposal will be fully self-contained and will not put any cost on non-business ratepayers, any other ratepayer sectors, or any ratepayers who do not apply for it and therefore will be rate neutral due to the ability to recover the interest and administrative costs.

The current proposal only includes the Porirua City Council’s rates. We are working with Greater Wellington Regional Council (GWRC) on whether the rates deferral will include its 2020/21 rates. If this is not achievable, businesses electing to defer the Council rates will still be invoiced and expected to pay the GWRC rates every quarter – as is presently the case.

PART 3 – REMISSION FOR LAND SUBJECT TO NATURAL CALAMITY

Policy objective

To assist property owners with rates relief where the use of the rating unit has been detrimentally affected by erosion, subsidence, submersion, fire or other natural calamity.


A rates remission of the base general rate may be granted to rating units that are:

• Used principally for residential purposes and are subject to one of the following: erosion; subsidence; submersion; fire; or other natural calamity that had the effect of rendering the residence uninhabitable or unusable, such as earthquake related.

• Uninhabitable or unusable for a period of greater than one month.


To be considered for rates remission:

• Application must be made within 12 months of the event.

• Application must include the following supporting information: details of the property; the description of the natural calamity; steps taken or will be taking to return the rating unit to inhabitable or usable state; and; an estimate of the time the rating unit is expected to be affected.

• Up to 100% of all rates and charges including charges made for water and wastewater services may be remitted for the period during which the buildings are uninhabitable or unusable.

The Policy shall apply to owners of the property who meet the relevant criteria as approved by the Chair of the Council Committee with responsibility for managing Council finances (at the time of adopting this Policy this is the Chair of the City Direction Committee), and the General Manager Corporate Services & Chief Financial Officer.


PART 4 – REMISSION FOR COMMUNITY, SPORTING AND RECREATIONAL NON-COMMERCIAL USE

Policy objective

To provide remission to:

• Facilitate the ongoing provision of non-commercial community services that meet the needs of the residents of the city;

• Support ongoing provision of non-commercial sporting and recreational opportunities for the residents of the city;

• Assist the organisations’ survival

• Encourage membership of the organisations making them more accessible to the general public, particularly disadvantaged groups, such as children, youth, young families, aged people, and economically disadvantaged people.


To be eligible for rates remission for a proportion for the General rates, the rating unit must be:

• Used for educational purposes as defined in clause 6 of Part 1 of Schedule 1 of the Local Government (Rating) Act 2002; or

• Used for religious purposes as defined in clause 9 of Part 1 of Schedule 1 of the Local Government (Rating) Act 2002; or

• Land used as a marae or meeting house as defined in clauses 12 (a) and 13 of Part 1 of Schedule 1 of the Local Government (Rating) Act 2002; or

• Land owned or used for games or sports as defined in clause 2 of Part 2 of Schedule 1 of the Local Government (Rating) Act 2002, whether or not the land has a club licence under the Sale of Liquor Act 1989; or

• Land owned or used for the purpose of any branch of the arts as defined in clause 3 of Part 2 of the Local Government (Rating) Act 2002; or

• Land used primarily or exclusively for community health or public health purposes and occupied by a registered charitable trust or incorporated society; or

• Land used primarily or exclusively for youth work, support, education or development and occupied by a registered charitable trust or incorporated society; or

• Land occupied by a registered charitable trust or incorporated society and used primarily or exclusively for the gathering and assembly of people to promote community well-being. Examples include RSA clubs and associations that encourage people to recognise and retain ethnic, cultural or religious affiliations; or

• Land that, while not used primarily for any of the purposes above, is used primarily or exclusively for a combination of those purposes

To be eligible for rates remission for a proportion of the sewerage pan charges to the rating unit must:

• Be land used exclusively or principally for community, sporting and recreational non-commercial purposes

• Have a water meter connected to the property for a rating year prior to the year in which a remission is granted


• The Council may remit upt 50% of General rates for rating units that are used principally for community, sporting and recreational non-commercial purposes.

• Remissions for community or other non-commercial purposes will be assessed using the formula:

Actual Charge – Calculated Charge; where

Actual Charge = The actual charge for sewage disposal assessed against the rating unit, and

Calculated Charge = The annual water consumption for the rating unit (measured in cubic metres) for the previous financial year divided by 220m³, multiplied by the charge per pan set by the Council for the financial year in which rates assessed.

The Policy shall apply to an organisation who meets the relevant criteria as approved by the Chair of the Council Committee with responsibility for managing Council finances (at the time of adopting this Policy this is the Chair of the City Direction Committee), and the General Manager Corporate Services & Chief Financial Officer.


PART 5 – REMISSION OF PENALTIES ADDED TO UNPAID RATES

Policy objective

To enable Council to act fairly and reasonably in its consideration of penalties on rates which have not been paid by the due date.


Remissions are limited to ratepayers who:

• Wishes to pay his or her rates at regular intervals that are different from the Council’s instalment dates.

• Has fallen into arrears, the Council may remit or postpone penalties as part of a programme of agreed payments designed to eliminate the arrears over a reasonable timeframe.

• Occasionally, unusual circumstances arise which cause a ratepayer to be late with a payment. These can range from family problems to simple oversight. So long as such instances are once every 3 years.



• Application for this remission should be within one month of notification of the penalty incurred.

• Applications must include the following supporting information: details of the property; and the reason for late payment.

• The Council reserves the right to impose conditions on the remission of penalties. Conditions may relate to: completion of agreed payment schedules; and; the taking of other actions needed to resolve ratepayer liability matters.

• Rates should be paid before penalty is remitted, or an agreed payment plan is in place (i.e. a direct debits set up).

The Policy shall apply to ratepayers who meet the relevant criteria as approved by the General Manager Corporate Services & Chief Financial Officer.


PART 6 – RATES REMISSION FOR PROPERTIES AFFECTED BY WEATHERTIGHTNESS CLAIMS

Policy objective

To enable Council to provide remission for situations where properties are uninhabitable for period of time while the property is being repaired or rebuilt.


To be eligible for rates remission the applicant’s property must be subject to:

• An approved weathertightness claim

• Be partially or fully uninhabitable for a period of longer than 1 month.

• Remission will only apply up to the point the Council issues the code of compliance certificate


Application must be made within 12 months of remedial work starting.

The amount of rates remission approved will be based on the non-land portion of the total value of the property.



PART 7 – RATES REMISSION FOR RESIDENTIAL DEVELOPMENT IN THE CENTRAL BUSINESS DISTRICT

Policy objective

To enable Council to provide rates remissions to encourage Residential Development in the Central Business District.


1. To qualify the development must:- a. Include at least two residential units, each of at least 40m2 of floor area b. Meet basic quality and amenity standards for the residents c. Meet the minimum standards for noise insulation to ensure appropriate indoor noise levels

Council’s considerations The remission that is available for a qualifying development is a 100% waiver of General rates including Uniform Annual General Charges and the City Development rate for a period of five years from the time of uplifting a Building Code of Compliance Certificate. All applications for rates remission for Residential Development in the Central Business District will be submitted to the City Direction Committee for consideration.

PART 8 – RATES POSTPONEMENT FOR FARM LAND

Policy objective

To preserve the City’s rural landscapes by providing rates postponement for rateable units (or part of) that are principally used for farming purposes.


A rates postponement of the base general rate may be granted to rating units that are classified as rural under the District Plan and principally used for farming purpose. Under this policy “principally used for farming purposes” is defined as where:

• The rating unit is classified as rural under the District Plan and/or falls within the “Rural” differential rating classification; and;

• Principally used for farming purposes where land that is used exclusively or principally for agricultural, horticultural or pastoral purposes, or for the keeping of bees, poultry or other livestock excluding forestry, commercial dog kennels or catteries ; and;

• Has a land area of not less than 40 hectares.


Any rates postponement provided is subject to:

• The applicant paying the additional valuation fees the Council incurs in assessing the rates postponement value of the rating unit.

• The rating units meeting the above conditions and criteria.

• A maximum of 50% of the base general rate may be remitted.

• If at any time before the rates are postponed, subdivision for non-farming purposes occurs, or the land use is changed to a non-farming use, the postponement shall be nullified, and the rates assessed shall become due and payable.

The postponed rates shall be registered against the title of the rating unit by whatever legal instrument Council chooses and all costs of registration, subsequent de‐registration and any other dealing with the title shall be entirely at the expense of the owner.

In each year the sum postponed shall be calculated as the difference between the rates that were assessed and the rates that would have been assessed had the rating unit not had some part of its value attributable to the potential use of the land for residential, industrial, commercial or other non-farming use.

Farmland rates are postponed after five years if a property is not subdivided, sold or changed to a non-farming use. Postponed farmland rates may be registered as a charge against the land so that in the event that the property is sold the Council has first call against the proceeds of that sale.

The Policy shall apply to owners of farm land who meet the relevant criteria as approved by the Chair of the Council Committee with responsibility for managing Council finances (at the time of adopting this Policy this is the Chair of the Finance Committee), and the General Manager Corporate Services & Chief Financial Officer.


Ref: 5855823

2018 RATES REMISSION & POSTPONEMENT POLICY

INTRODUCTION

In order to provide rates relief where it is considered fair and reasonable to do so, the Council is required to adopt policies specifying the circumstances under which rates can be considered for remission or postponement.

There are various types and circumstances under which a remission or postponement can be considered. The conditions and criteria relating to each type of remission or postponement are set out below, together with the objectives of the policy. This Policy is made of up the following seven parts:

Part 1 Rates Remission on Māori Freehold Land

Part 2 Rates Remission or Postponement for Business & Economic Development

Part 3 Rates Remission for Land Subject to Natural Calamity

Part 4 Rates Remission for Community, Sporting and Recreational Non-Commercial Use

Part 5 Rates Remission for Penalties on Unpaid Rates

Part 6 Rates Remission for Properties Affected by Weather Tightness Claims

Part 7 Rates Remission for Residential Development in the Central Business District

Part 8 Rates Postponement for Farm Land

STATUTORY FRAMEWORK

This Policy is prepared in accordance with section 102(3), 109 and 110 of the Local Government Act 2002.

This Policy is also prepared in accordance with the Local Government (Rating) Act 2002, where all land is rateable unless specified in this Act or another Act states that land is non-rateable. Non-rateable land is still liable to pay targeted rate for water supply, sewage disposal, or refuse collection.

APPLICATION OF POLICY

In order for an application to be considered, all applications must be in writing and must include the relevant supporting information as outlined in each type of remission or postponement.

Applications must be received prior to the commencement of the rating year (1 July – 30 June), unless stated. Successful applications received during a rating year will be applicable from the commencement of the following year. No applications will be backdated.

Remissions or postponements are only applicable to ratepayers identified in the Council’s rating information database not the occupant of the property.

Remissions or postponements are limited to rates set and assessed by the Council. The Council collects rates on behalf of the Wellington Regional Council and therefore the Council has no authority to remit or postpone such rates other than by specific approval of that Council.

The approval of any remission or postponement is at the absolute discretion of the Council or its delegated officer.

PART 1 – REMISSION ON MAORI FREEHOLD LAND

Policy objectives

Objectives of this policy are to:

• support the use of the land by the owners for traditional purposes;

• recognise and support the relationship of Māori and their culture and traditions with their ancestral lands;

• avoid further alienation of Māori freehold land;

• facilitate the wish of the owners to develop the land for economic use

• recognise and take account of the presence of waahi tapu that may affect the use of the land for other purposes;

• recognise and take account of the importance of the land in providing economic and infrastructure support for marae and associated papakainga housing (whether on the land or elsewhere);

• recognise and take account of the importance of the land for community goals relating to: the preservation of the natural character of the coastal environment; the protection of outstanding natural features; and; the protection of significant indigenous vegetation and significant habitants of indigenous fauna;

• recognise the level of community services provided to the land and its occupiers;

• recognise matters related to the physical accessibility of the land.


Under the Local Government (Rating) Act 2002 Māori freehold land is defined as land whose beneficial ownership has been determined by the Māori Land Court by freehold order. Only land that is the subject of such an order may qualify for remission under this policy. The Council may remit rates where the application meets the following conditions and criteria:

a. the land is unoccupied and no income is derived from the use or occupation of that land; or

b. the land is better set aside for non-use because of its natural features, or is unoccupied; or

c. the land is inaccessible and/or is unoccupied;

d. only a portion of the land is occupied;

e. the land has limited use and/or economic value from its actual use.

Council’s consideration

The Council may give remission of up to 100% of all rates where the application meets the relevant policy objectives and conditions/criteria outlined in this policy.

Application for this remission should be made prior to commencement of the rating year.

The owners who have applications approved by the Council for remission should make contact with the Council immediately if the circumstance or a status of the land changes. All approved remissions will be subject to annual review or at least every 3 years to validate the remissions approved.

Applications made after the commencement of the rating year may be accepted at the discretion of the Council.

The Policy shall apply to owners of Māori freehold land who meet the relevant criteria as approved by the Chair of the Council Committee with responsibility for managing Council finances (at the time of adopting this Policy this is the Chair of the City Direction Committee), and the General Manager Corporate Services & Chief Financial Officer.


PART 2 – REMISSION OR POSTPONEMENT FOR BUSINESS AND ECONOMIC DEVELOPMENT

Policy objective

To promote economic development and new business investment within the City by offering rates remission to:

• encourage developments that assist new businesses to become established in the city, or

• encourage developments that assist existing businesses in the city to expand and grow.


To be eligible for remissions or postponement for business and economic development purposes, applications must meet all of the criteria in Part 1 (A) and Part 1 (B):

• Part 1 (A)

New commercial and/or industrial developments that involve the construction of any new building or buildings intended to be used for industrial, commercial or administrative purposes; or

Existing commercial and/or industrial developments that involve substantial alterations or renovations to the existing building or buildings intended to be used for industrial, commercial or administrative purposes.

• Part 1 (B)

The new investment must increase the rateable value of the rating unit (or units) on which the development takes place by not less than $1 million per rateable unit.


Any rates remission or postponement covering the General rate, the Uniform Annual General Charge, and the City Development rate to any individual development granted is subject to:

• A maximum period of three financial years.

• The Council’s final determination of the size and length of any remission or postponement. Generally it will not be of a size that results in an absolute reduction of the rates derived by the Council from the rating unit.

• Meeting the agreed conditions which the Council considers appropriate in relation to the approval of a remission or postponement. Failure to comply with such conditions may lead either to the suspension of the remission or postponement for a period to be determined by the Council, or termination of the remission or postponement, at the Council's discretion.

All applications will be submitted to the City Direction Committee for consideration and a decision on the level of remission/postponement.

PART 3 – REMISSION FOR LAND SUBJECT TO NATURAL CALAMITY

Policy objective

To assist property owners with rates relief where the use of the rating unit has been detrimentally affected by erosion, subsidence, submersion, fire or other natural calamity.


A rates remission of the base general rate may be granted to rating units that are:

• Used principally for residential purposes and are subject to one of the following: erosion; subsidence; submersion; fire; or other natural calamity that had the effect of rendering the residence uninhabitable or unusable, such as earthquake related.

• Uninhabitable or unusable for a period of greater than one month.



• Application must be made within 12 months of the event.

• Application must include the following supporting information: details of the property; the description of the natural calamity; steps taken or will be taking to return the rating unit to inhabitable or usable state; and; an estimate of the time the rating unit is expected to be affected.

• Up to 100% of all rates and charges including charges made for water and wastewater services may be remitted for the period during which the buildings are uninhabitable or unusable.

The Policy shall apply to owners of the property who meet the relevant criteria as approved by the Chair of the Council Committee with responsibility for managing Council finances (at the time of adopting this Policy this is the Chair of the City Direction Committee), and the General Manager Corporate Services & Chief Financial Officer.


PART 4 – REMISSION FOR COMMUNITY, SPORTING AND RECREATIONAL NON-COMMERCIAL USE

Policy objective

To provide remission to:

• Facilitate the ongoing provision of non-commercial community services that meet the needs of the residents of the city;

• Support ongoing provision of non-commercial sporting and recreational opportunities for the residents of the city;

• Assist the organisations’ survival

• Encourage membership of the organisations making them more accessible to the general public, particularly disadvantaged groups, such as children, youth, young families, aged people, and economically disadvantaged people.


To be eligible for rates remission for a proportion for the General rates, the rating unit must be:

• Used for educational purposes as defined in clause 6 of Part 1 of Schedule 1 of the Local Government (Rating) Act 2002; or

• Used for religious purposes as defined in clause 9 of Part 1 of Schedule 1 of the Local Government (Rating) Act 2002; or

• Land used as a marae or meeting house as defined in clauses 12 (a) and 13 of Part 1 of Schedule 1 of the Local Government (Rating) Act 2002; or

• Land owned or used for games or sports as defined in clause 2 of Part 2 of Schedule 1 of the Local Government (Rating) Act 2002, whether or not the land has a club licence under the Sale of Liquor Act 1989; or

• Land owned or used for the purpose of any branch of the arts as defined in clause 3 of Part 2 of the Local Government (Rating) Act 2002; or

• Land used primarily or exclusively for community health or public health purposes and occupied by a registered charitable trust or incorporated society; or

• Land used primarily or exclusively for youth work, support, education or development and occupied by a registered charitable trust or incorporated society; or

• Land occupied by a registered charitable trust or incorporated society and used primarily or exclusively for the gathering and assembly of people to promote community well-being. Examples include RSA clubs and associations that encourage people to recognise and retain ethnic, cultural or religious affiliations; or

• Land that, while not used primarily for any of the purposes above, is used primarily or exclusively for a combination of those purposes

To be eligible for rates remission for a proportion of the sewerage pan charges to the rating unit must:

• Be land used exclusively or principally for community, sporting and recreational non-commercial purposes

• Have a water meter connected to the property for a rating year prior to the year in which a remission is granted


• The Council may remit upt 50% of General rates for rating units that are used principally for community, sporting and recreational non-commercial purposes.

• Remissions for community or other non-commercial purposes will be assessed using the formula:

Actual Charge – Calculated Charge; where

Actual Charge = The actual charge for sewage disposal assessed against the rating unit, and

Calculated Charge = The annual water consumption for the rating unit (measured in cubic metres) for the previous financial year divided by 220m³, multiplied by the charge per pan set by the Council for the financial year in which rates assessed.

The Policy shall apply to an organisation who meets the relevant criteria as approved by the Chair of the Council Committee with responsibility for managing Council finances (at the time of adopting this Policy this is the Chair of the City Direction Committee), and the General Manager Corporate Services & Chief Financial Officer.


PART 5 – REMISSION OF PENALTIES ADDED TO UNPAID RATES

Policy objective

To enable Council to act fairly and reasonably in its consideration of penalties on rates which have not been paid by the due date.


Remissions are limited to ratepayers who:

• Wishes to pay his or her rates at regular intervals that are different from the Council’s instalment dates.

• Has fallen into arrears, the Council may remit or postpone penalties as part of a programme of agreed payments designed to eliminate the arrears over a reasonable timeframe.

• Occasionally, unusual circumstances arise which cause a ratepayer to be late with a payment. These can range from family problems to simple oversight. So long as such instances are once every 3 years.



• Application for this remission should be within one month of notification of the penalty incurred.

• Applications must include the following supporting information: details of the property; and the reason for late payment.

• The Council reserves the right to impose conditions on the remission of penalties. Conditions may relate to: completion of agreed payment schedules; and; the taking of other actions needed to resolve ratepayer liability matters.

• Rates should be paid before penalty is remitted, or an agreed payment plan is in place (i.e. a direct debits set up).



PART 6 – RATES REMISSION FOR PROPERTIES AFFECTED BY WEATHERTIGHTNESS CLAIMS

Policy objective

To enable Council to provide remission for situations where properties are uninhabitable for period of time while the property is being repaired or rebuilt.


To be eligible for rates remission the applicant’s property must be subject to:

• An approved weathertightness claim

• Be partially or fully uninhabitable for a period of longer than 1 month.

• Remission will only apply up to the point the Council issues the code of compliance certificate


Application must be made within 12 months of remedial work starting.

The amount of rates remission approved will be based on the non-land portion of the total value of the property.



PART 7 – RATES REMISSION FOR RESIDENTIAL DEVELOPMENT IN THE CENTRAL BUSINESS DISTRICT

Policy objective

To enable Council to provide rates remissions to encourage Residential Development in the Central Business District.


1. To qualify the development must:- a. Include at least two residential units, each of at least 40m2 of floor area b. Meet basic quality and amenity standards for the residents c. Meet the minimum standards for noise insulation to ensure appropriate indoor noise levels

Council’s considerations The remission that is available for a qualifying development is a 100% waiver of General rates including Uniform Annual General Charges and the City Development rate for a period of five years from the time of uplifting a Building Code of Compliance Certificate. All applications for rates remission for Residential Development in the Central Business District will be submitted to the City Direction Committee for consideration.

PART 8 – RATES POSTPONEMENT FOR FARM LAND

Policy objective

To preserve the City’s rural landscapes by providing rates postponement for rateable units (or part of) that are principally used for farming purposes.


A rates postponement of the base general rate may be granted to rating units that are classified as rural under the District Plan and principally used for farming purpose. Under this policy “principally used for farming purposes” is defined as where:

• The rating unit is classified as rural under the District Plan and/or falls within the “Rural” differential rating classification; and;

• Principally used for farming purposes where land that is used exclusively or principally for agricultural, horticultural or pastoral purposes, or for the keeping of bees, poultry or other livestock excluding forestry, commercial dog kennels or catteries ; and;

• Has a land area of not less than 40 hectares.


Any rates postponement provided is subject to:

• The applicant paying the additional valuation fees the Council incurs in assessing the rates postponement value of the rating unit.

• The rating units meeting the above conditions and criteria.

• A maximum of 50% of the base general rate may be remitted.

• If at any time before the rates are postponed, subdivision for non-farming purposes occurs, or the land use is changed to a non-farming use, the postponement shall be nullified, and the rates assessed shall become due and payable.

The postponed rates shall be registered against the title of the rating unit by whatever legal instrument Council chooses and all costs of registration, subsequent de‐registration and any other dealing with the title shall be entirely at the expense of the owner.

In each year the sum postponed shall be calculated as the difference between the rates that were assessed and the rates that would have been assessed had the rating unit not had some part of its value attributable to the potential use of the land for residential, industrial, commercial or other non-farming use.

Farmland rates are postponed after five years if a property is not subdivided, sold or changed to a non-farming use. Postponed farmland rates may be registered as a charge against the land so that in the event that the property is sold the Council has first call against the proceeds of that sale.

The Policy shall apply to owners of farm land who meet the relevant criteria as approved by the Chair of the Council Committee with responsibility for managing Council finances (at the time of adopting this Policy this is the Chair of the Finance Committee), and the General Manager Corporate Services & Chief Financial Officer.


Council milestones Workstreams

Mar

AprTe Puna Korero approve project programme, strategic direction and

assumptions

Combined and moved

May due to COVID-19

MayInfrastructure Strategy, Financial Strategy (including options for

rating) workshops

Level of service

workshop intro

JunRevenue/Financing

workshop intro

Jul

AugCommunication &

engagement workshop

SepFinalising key content

& material

OctTe Puna Korero approve consultation on Significance and Engagement policy, Revenue and

Financing policy, Development Contribution, and Rating Review.

Activity / assets

workshop

Nov Final workshops on themes, issues, projects

DecCouncil adoption of Significance and Engagement Policy, Revenue and Financing Policy,

Development Contributions Policy, and rating review

Council adopt consultaiton themes and

issues/key projects

Jan

Feb Audit undertaken

MarFormal consultation on

LTP

AprHearing of

submissions

MayCouncil deliberate and

agree changes

Jun

Jul LTP 2021-51 operational

Financial Strategy

LTP 2021-51

Council adopt LTP and strike the rates

Development

Contributions Policy

workshop series

Levels of Service

workshop series

All

Revenue and Financing Policy

Development Contributions Policy

Rating reviewTe Puna Korero adopt Consultation Document

and proposed LTP

Audit and Risk progress report

Decision-making

2021

2020Audit and Risk note LTP schedule

(CANCELLED)

Activity management plans

Infrastructure Strategy

Signicance and Engagement Policy

Significant assumptions

Project management

Strategic direction

Levels of service

Communication and engagementAudit and Risk provided Council Audit Plan

and Fee proposal from EY

Audit and Risk progress report

Agenda of Ordinary Te Puna Kōrero - 7 May 2020 · Remission and Postponement Policy to enable a...

Documents

Transcript of Agenda of Ordinary Te Puna Kōrero - 7 May 2020 · Remission and Postponement Policy to enable a...