Earthquake Rates Relief - CCC double dipping? Part 3
After a small exchange of e-mails with the Council it is clear the Council is double-dipping on 60% of the rates. If you have to move into alternative accommodation while your land or house is being remediated/fixed/rebuilt you will be affected by this.
Where home owners have to move to alternative accommodation they will end up paying (one way or another) more rates than if their land/house had not been damaged by the earthquake. If the homeowners are fortunate enough that their insurance company will pay (which they may not) the Council still profits by charging more rates than before the earthquake (see further below for more detail on this).
One wonders if councillors we advised of this outcome before they voted for the partial rates relief package on the 18th of November?
It is likely that the policy was drafted to give only partial relief so that rating income would not drop too far, and threaten some of the Council's planned operations and projects. While this is meritorious, it is inappropriate that those most affected by the earthquake should be the ones to suffer the consequences of this approach.
An e-mail has been sent to local members of parliament to see if a multi-party approach could be made to the Government to compensate for lost rating income, providing rates are remitted in full.
Figures released by the mayor's office on 18 November stated the package represented about $1.439 million in lost rates revenue over three years. A bit of scaling up would suggest the cost of full rates relief to both homeowners and businesses would be around about the $6m mark, over three years. Not a lot compared to the money available to host the rugby world cup.
Will keep you posted.
These are the issues surrounding the rating relief package.
The rates remission policy can be summarised like this:
Now take the case of a family who own their own house which needs to be rebuilt. When they relocate there will be the normal outgoings, most likely with mortgage repayments.
Unless the residents leave the city, or stay with relatives, they will be in accommodation for which they pay rent - and a portion of the rent will go towards paying the rates the landlord incurs on the property. This will include the things under the Council's description "all other Council services such as ..." mentioned above. The bottom line is, if you are paying for these at the old address, and also at the temporary address, a large portion of the rates are double-paid.
At least one insurance company deducts "normal household expenses" from payments for accommodation. These expenses include the telephone, gas, electricity and maybe rates? I'm still waiting to hear from our insurance company as to whether they will pay rates as part of the accommodation expenses. If the insurance companies do pay the rates component that would be a financial relief to residents, but only shifts the financial burden elsewhere, rather than addressing the double-dipping issue.
Again, the bottom line is: the Council is charging households twice for the largest proportion of the rates bill.
Where home owners have to move to alternative accommodation they will end up paying (one way or another) more rates than if their land/house had not been damaged by the earthquake. If the homeowners are fortunate enough that their insurance company will pay (which they may not) the Council still profits by charging more rates than before the earthquake (see further below for more detail on this).
One wonders if councillors we advised of this outcome before they voted for the partial rates relief package on the 18th of November?
It is likely that the policy was drafted to give only partial relief so that rating income would not drop too far, and threaten some of the Council's planned operations and projects. While this is meritorious, it is inappropriate that those most affected by the earthquake should be the ones to suffer the consequences of this approach.
An e-mail has been sent to local members of parliament to see if a multi-party approach could be made to the Government to compensate for lost rating income, providing rates are remitted in full.
Figures released by the mayor's office on 18 November stated the package represented about $1.439 million in lost rates revenue over three years. A bit of scaling up would suggest the cost of full rates relief to both homeowners and businesses would be around about the $6m mark, over three years. Not a lot compared to the money available to host the rugby world cup.
Will keep you posted.
These are the issues surrounding the rating relief package.
The rates remission policy can be summarised like this:
- Of the rates charged, 40% will be remitted on the grounds that a house that needs to be demolished and rebuilt will, for a period of time, be unused. Infrastructure services can't be used (water, sewage, storm water, wheelie bins) so there should be no charge for them. The cost of these services amounts to 40% of the rates charged so this amount will be remitted.
- Residents and rate payers access all other Council services such as libraries, recreational facilities and roading remotely from their properties. These are funded through the General Rate and UAGC and represents 60% of the rates. As people consume these services irrespective of where they live they should still be paid for, so 60% of the rates remain payable.
Now take the case of a family who own their own house which needs to be rebuilt. When they relocate there will be the normal outgoings, most likely with mortgage repayments.
Unless the residents leave the city, or stay with relatives, they will be in accommodation for which they pay rent - and a portion of the rent will go towards paying the rates the landlord incurs on the property. This will include the things under the Council's description "all other Council services such as ..." mentioned above. The bottom line is, if you are paying for these at the old address, and also at the temporary address, a large portion of the rates are double-paid.
At least one insurance company deducts "normal household expenses" from payments for accommodation. These expenses include the telephone, gas, electricity and maybe rates? I'm still waiting to hear from our insurance company as to whether they will pay rates as part of the accommodation expenses. If the insurance companies do pay the rates component that would be a financial relief to residents, but only shifts the financial burden elsewhere, rather than addressing the double-dipping issue.
Again, the bottom line is: the Council is charging households twice for the largest proportion of the rates bill.
