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Rates rise in the spotlight
The Office of the Auditor-General is looking into three separate complaints about South Wairarapa’s rates increases reports SOUMYA BHAMIDIPATI.
“We have received correspondence about South Wairarapa District Council’s rates and how they have been levied, and we are considering this through our standard process,” the office confirmed.
“The typical process is that some preliminary work [reviewing documents, talking to the entity if need be] is done before deciding whether to close it out then or to do further work. It’s hard to give a time frame because different issues take different amounts of time, depending on how much preliminary work there is to do. We don’t give updates on progress while that work is under way.”
Former South Wairarapa district councillor Colin Wright was one of the people who wrote to the office, lodging his complaint last Monday.
He was “frustrated” about the council’s consultation with the public on the rates rises and hoped the complaint would spark an “independent review of the situation”.
“Hopefully we’ll have some discussions,” Wright said.
“In the very least, the council needs to apologise to the public.
“They appear to be trying to blame the property valuations for the increase but, in actual fact, they’ve approved a substantial increase in their operational budget.
“The public aren’t stupid … [the council] need to be open and honest.”
He had written to the OAG because the council seemed to be “hiding behind the fact that it’s been audited by Audit New Zealand”, he said.
Wright’s letter expanded on these sentiments, stating the council’s long-term plan consultation document forecasted indicative rates increases of 15.3 per cent for urban ratepayers, 14.0 per cent for lifestyle and 7.1 per cent for rural.
Auditors had then signed off on the council’s approved long-term plan.
“The mayor’s introduction says, ‘The resulting rate increases for ratepayers would be: 14.28 per cent urban, 14 per cent lifestyle, and 3.9 per cent rural’,” Wright wrote.
“However, the prospective statement of comprehensive revenue and expenses in this same document clearly shows an actual increase in rates to be collected of 29.6 per cent [$19,921,000 this year compared to $15,371,000 last year]. Ratepayers have recently received their rates bills which generally indicate rates increases substantially greater than the council’s documents and their public comments since.
“It would seem that your auditors certified the council’s consultation document indicating planned rate increases of around 7 per cent to 15 per cent as ‘fairly represents the matters proposed for inclusion in the long-term plan’.”
However, the complaint noted that some weeks later, with no substantial changes to the plan, there was a doubling or more of the rate rise to 29.6 per cent.
“Changes of this magnitude render the whole exercise meaningless and possibly reflects a lack of integrity in the planning and rate setting process. Communications by the council around this process have also been totally inadequate and confusing which has left ratepayers feeling rather upset.
“My impression is that the council has used the outcomes of the triennial property revaluation process to disguise the proposed and actual rates increase.”
Wright referenced the fact sheet recently published by the council, which described the impact of property value changes.
“The method described here is not logically correct to fairly represent changes in the average rate from one year to the next, particularly when property values have changed by a large percentage as has occurred this year. I have looked at the Masterton and Carterton councils’ audited long-term plans. If those councils had used this same interpretation as South Wairarapa, they would be claiming reductions in their rates for this year, which would be clearly false.”
The South Wairarapa community contained a significant number of beneficiaries and others on fixed incomes, Wright said, who would face “considerable hardship with a rate rise of near 30 per cent which was not indicated at all by council during the consultation process”.
“This raises the question of what point is there in conducting an inaccurate or misleading audit of very important information. This is especially so when a SWDC press release says: “Council’s long-term plan and consultation document have been audited by Audit NZ for completeness and accuracy of information.”.”
A spokesperson for the council said the complaint was for the OAG to respond to.
“We continue to work with ratepayers on a one-on-one basis and recommend anyone with concerns to approach us to understand what has impacted their rates and discuss how we can help them manage the payments.”
