Fed Farmers: Farmers not cash cows
FARMERS say they are disproportionately affected by Opotiki’s proposed rate rise and are not the cash cows they may appear to be.
Federated Farmers senior policy analyst Nigel Billings said the rural community was disappointed in the council’s lack of consultation on the steep rate rises and was worrying about how they would find the money.
The Opotiki district was revalued late last year and the average capital value increase across the district was 34 percent. However, some rural properties had an exponential jump in value: dairy rose 16 percent, pastoral, 18 percent, and horticultural, 70 percent.
This saw mid-range rural properties facing a 29 percent increase in rates or $1472, and higher value kiwifruit properties facing a 55 percent increase or $11,002.
Mr Billings said profits from rural land had not grown in the same way and some farmers were “lucky to break even”.
He said the council might say that rates had grown in line with property values but if this was true, residential properties should be facing the same increase.
Residential properties in the Opotiki township have increased in value between 34 and 42 percent but face a rate rise of 4 to 5 percent.
Rural residential properties have increased in value by 18 to 36 percent but will have a rate decrease of between 9 and 6 percent.
Once rural people became aware of the pending rate increases, they visited the Opotiki District Council website for further information.
Mr Billings said this information was not readily available and they had to do a “deep dive” into the website to find it.
“We found the info paper and it said a lot about Covid-19 and the like but there was no indication of a big rating change until you get to the very back page,” he said.
“The last page is the rating scenario a couple of lines and that’s it.”
The rural community is upset the council did not consult with them on its plans.
“I find that mildly extraordinary when you are proposing increases of this sort, remembering farmers have had a lot to deal with in regard to Covid-19. And we are going through a historic whole of North Island drought.
“We would have thought the council would have got in touch to say they were making the change and they would like to speak to us. We have a real feeling it is being done by stealth.
“They have a responsibility to engage with us when making a large increase like this and they haven’t.”
Mr Billings said the council had not considered the dollar cost, which would have a considerable impact on farming families and the collective was now trying to get the council to hold off on its proposed plans and speak with them first.
He said farming families had not seen an increase in profit to keep up with the rate increases and many families were likely to break even “if that”.
“Farmers work very hard and don’t make huge profits but because their land is worth more than residential, they face unending problems with the rating system,” he said.
“This is one thing after another, we face hefty compliance costs, we’ve been through a big crisis, we’re a part of the district’s economy and we’re a part of the community too.
“We want to know why the council wants to make it so hard for us. If they want to make the changes, talk to us, talk to your people and do it transparently.”
Single largest rise ever for kiwifruit
FORMER Opotiki district councillor, orchardist and sheep and beef farmer Adrian Gault said this was the single largest rate rise he had ever seen for kiwifruit growers.
“These are serious increases because these property owners are already paying an incredible amount,” he said.
Mr Gault said he already paid around $50,000 in rates each year and these rate increases would see him easily paying another $12,000 on top of that. Because of drought and Covid-19, Mr Gault’s income is down around 70 percent.
He does not believe the council is able to ascertain who can afford what and basing that assumption on someone’s capital value is ineffective and outdated.
“Because I have land and a high capital value, they think I can afford to pay more, but some of these assumptions are completely wrong,” he said.
“Councils around the country are struggling with the current rating system and providing that fairness and equity. Central Government is pushing a lot of costs onto local government and they are struggling to carry out their functions without incurring a huge rating increase. This system of basing it on capital value is no longer fit for purpose.”
Mr Gault is pleased the council has agreed to have a meeting with concerned ratepayers next week but remains concerned that the deadline for setting the rates is coming up soon.
He said the council now did not have enough time to undertake a comprehensive review of its rating policy.
“Their issue is about being disciplined financially and the big questions around affordability and fairness and equity need to be examined closely.”
An example of unnecessary spending put forward by Mr Gault is the street party held following the announcement of Provincial Growth Fund funding for the harbour project.
This party cost ratepayers several thousand dollars.
“I feel sorry for the councillors, there is a lot to learn and a lot of them have only been in for six months,” Mr Gault said.
“Rating is one of the biggest things they will do. They need to set it fairly and maybe they haven’t been given the support by council management to do their job properly.
“In fairness they have responded and said they want to meet. To their credit they are taking heed, listening and wanting to meet, that’s positive.”
Woodlands retirees: ‘We will be forced from our homes
Elderly people in the area say money is already tight on the pension and a rate rise would see them reach breaking point.
“Surely they can’t do that to us,” said a Woodlands resident aged in her 70s.
The woman and her husband moved to Opotiki from Auckland to retire, but she said it would now be impossible for her to stop working and move to the pension.
“If we were both on a pension it would be impossible for us to live here; we would have to move,” she said.
“These rate rises were a shock, a hell of a shock.”
The Hukutaia and Woodlands suburbs are two of the more affluent areas in Opotiki and property values have risen more 50 percent there in the last three years.
The proposed rate rises for the coming financial year would see residents paying an extra $145 to $407 a year.
The woman said the community saw little value for their rates and the Opotiki District Council needed to be “realistic” about how much it charged its community.
Her home was on a septic tank and the footpath, which was only on one side of the road, needed urgent repairs. In her opinion, rates would be better spent on a youth centre.
The couple choose to live in Woodlands, rather than the Opotiki township where property is less expensive, due to their concerns about burglaries, muggings and home invasions.
“The first year we moved here a man in his 90s was beaten in his home by teenagers and died,” she said.
“Maybe we should look at moving to Whakatane.”
These concerns were echoed by another elderly resident who said she too would need to move but wasn’t sure where she could go.
She is worried about moving into a home in the Opotiki township due to the “ongoing crime” she hears about there.
“I know people who get their windows smashed all the time,” she said.
“There are good people there, but a lot of bad ones too.”
Younger Woodlands residents said they could pay the new rates, but it would be a stretch.
“It is what it is,” said one.
“You can’t do anything about it.”
Another said rates funded the future of the town so it was important to pay no matter the cost.
Tony Gebert said he didn’t see why rates should go up when the community wasn’t getting any extra services.
“We’re on a septic tank here, we don’t get much for our rates,” he said.
“Services haven’t improved so why do they need more money.”
Council to review proposed rate rises
OPOTIKI District Council is trying to work out ways to make savings after experiencing a community backlash to its proposed rates rise.
Mayor Lyn Riesterer said the rises were part of a draft plan that could still be reviewed.
A rates workshop will be held next week to discuss the matter further and councillors will meet with representatives of the rural community.
“We are trying to work out where we can make savings and drop rates, but we need to get the balance right,” she said.
She said the council received many angry letters and phone calls after the proposed increases were publicised.
Although Opotiki council had the lowest rates in the North Island, Ms Riesterer said there was often confusion over what the district council, and the regional council, charged ratepayers.
The Opotiki township pays some of the highest targeted rates in the Bay of Plenty for its flood protection scheme, with the district council continuously raising concerns with the Bay of Plenty Regional Council about affordability.
The regional council pays the district council to collect its rates but Ms Riesterer wonders whether it is time to collect them separately.
“We have recently been speaking with our region’s representatives, Bill Clark and Toi Iti about this.”
Finance and corporate services group manager Bevan Gray said the rates increase wasn’t uniform because there were several factors that influenced individual rate rises.
“For many years, the kiwifruit industry was hit hard by PSA and that very real loss in productivity impacted the valuation of their properties for many years,” he said.
“Over recent years, the value of their properties has certainly rebounded as the industry has found its feet again. That increase in valuation is reflected in their QV, which in turn is reflected in the rates increase felt specifically with those properties. These came out last year and there was an opportunity to challenge those valuations at that time.”
Mr Gray said it was likely staff would be able to find more savings.
The council has already reviewed its proposed projects and removed some from the 2020-21 year in light of Covid-19, reducing the average rate rise to 4.25 percent.
Given advice that those in the primary sector would be less affected by the lockdown than those living in urban areas who might lose their jobs, the council had reduced its uniform annual general charge to provide relief to low income households.
Mr Gray said the council had asked “at every opportunity” for people experiencing financial difficulty in paying their rates to make contact to discuss possible remissions or postponements. Only one person had rung.
He said if “shovel-ready” projects put forward to the Government for funding were approved rates increases could be lowered in the future.
Because the annual plan is consistent with the council’s long-term plan, it is not carrying out a full public consultation process but is happy to have informal feedback from the community.
