Southern Lakes shock at higher than average regional rates hits

After the Otago Regional Council adopted its Long Term Plan in June with a flagged 16.3 percent rates rise in the first year, some householders in the Southern Lakes have expressed shock in recent weeks at receiving invoices revealing hikes far in excess of that average figure.

One Queenstowner tells Crux their bill for a rural property has gone from $871 to $1,275 - an increase of 46 percent.

He is calling the "widely publicised" average "completely misleading".

Meanwhile, another property owner in the Whakatipu hit with a 49 percent year on year jump thinks not enough was done to warn constituents in his part of the region of the "massive increase" coming, calling the performance of the council "disappointing".

In response to claims of ratepayers feeling blindsided by bigger than expected bills, Dunstan councillor and Queenstown resident Alexa Forbes warns "averages are dangerous because there are so many outliers".

While she does think the council could do a better job of explaining where there are likely to be big jumps, she says an online rates calculator "was pretty effective for people who used it".

The calculator provided an estimate of a property's rates based on the rating changes as proposed during the Long Term Plan process compared to the existing rates policy and its previous year's actual rates. 

"But of course many people don’t use these things and so get a shock when the bill arrives," Councillor Forbes says.

In response to Crux, ORC finance boss Nick Donnelly has provided average rates rises for this first year of the Long Term Plan specific to populations in inland Otago.

For ratepayers in the Queenstown Lakes district the average regional rates increase is 35.8 percent, in Central Otago, it is 17.8 percent, and, combined, across Dunstan, it is 31.6 percent.

Part of the reason for the rises sits with property values and part, with targeted rates.

"Increases in the Queenstown area are higher than average as they include an increase in transport rates as this activity is now fully funding the current years operating costs and the existing deficit is being repaid over the first five years of the LTP," Mr Donnelly says.

"Both Queenstown and Central Otago have higher average rates due to the higher capital values in these districts. This impacts CV based rates like general rates, transport and the new catchment management rate that was introduced this year." 

Councillor Forbes says the average increases people are seeing are "the same as we consulted on", although where the burden for increases in transport rates falls shifted from the proposed uniform rate across the entire district to the existing CV-based and targeted rate as a result of "significant feedback" during public consultation.

Claims ORC is a 'bloated beast'

Meanwhile the remaining two Dunstan councillors are reminding ratepayers they did not support the latest rates rises.

Cromwell-based councillor Michael Laws says he has received "literally" dozens of emails from ratepayers complaining about the situation.

Dunstan councillors Alexa Forbes, Michael Laws and Gary Kelliher have conflicting takes on rates rises.

One seen by Crux, from a Queenstown ratepayer, claims of a 53 percent year on year increase and a 272 percent increase over four years.

Councillor Laws says this is "typical" of what he has been receiving, and he has a standard reply.

"The primary reason for your appalling rates increases relate to the inability of the ORC to control its appetite for your money," he says.

He lists "loss-making public transport", a "sharp rise" in council staff numbers, and the "genuinely stupid decision to create a new HQ building in Dunedin" among his reasons for the rates increases.

"The ORC is a bloated beast," he says.

Meanwhile Central Otago farmer councillor Gary Kelliher says he is "fielding a number of calls and emails from shocked ratepayers too".

"I voted against these increases, and I think they show an appalling disregard towards the people who now have no option other than to pay them," he says.  

"I tried to reduce staff numbers, and reduce what will be a ridiculous lease on the new ORC building, however the left and green wing majority of councillors were more interested in ballooning the council rather than showing any prudence.  

"The higher values in QLDC area along with the greater spread of general rates has resulted in the Dunstan constituency wearing more than its fair share. And unless more councillors start voting no to these increases and nice to haves, then year on year this disregard will continue."

Blindsided by a bigger than expected bill? Here are some of Councillor Forbes' explainers:

• Transport rates have been increased to fully fund the cost and repayment of existing deficits is being rated over the first five years of the LTP which has made for a jump
• The unfunded portion of transport operating expenditure was greater in Queenstown so a larger increase in rates was required to fully fund this activity there
• Transport rates are based on CV so higher value properties will see a larger dollar increase
• A new catchment management rate has also been introduced that is CV based so higher value properties will see a higher dollar charge for this too

Councillor Forbes says a brochure explaining rates was included with invoices and is available on the ORC website.

Read more: Otago residents face 16 percent rates rise

Alexa Forbes blog: Rates shock

Main image (Insert/ORC)