Part E: Supporting and financial information

Funding impact statements – rating mechanisms

Rates

Rates are a property tax to fund local government activities. Rates are assessed under the Local Government (Rating) Act 2002 (the Act) on rating units in the Rating Information Database. Where rates requirements are allocated based on a rating unit’s value, the rateable value will be the capital value as assessed by the Council’s valuation services provider. The latest city-wide revaluation was carried out as at 1 September 2015. This revaluation remains effective for the 2018/19 rating year, except where subsequent maintenance valuations have been required under valuation rules or the Council’s rating policies.

City-wide revaluations are performed every three years. The next city-wide revaluation will be carried out as at 1 September 2018 and will be effective for the 2019/20 rating year and the two consecutive rating years (subject again to subsequent maintenance valuations).

Policy objective:

General Rates

General rates are set under section 13 of the Act on all rateable rating units in the City of Wellington.

The Council has set a general rate based on the capital value of each rating unit within the city.

The general rate is set on a differential basis, based on the use to which the land is put and/or the zoning. All rating units (or part thereof) will be classified for the purposes of general rates within one of the following differential rating categories.

Differential Rating Categories
Base Differential

The Base differential rating category shall be applied to the following rating units:

a. Separately rateable land used for one or more household units; excluding those properties that provide short stay (28 days or less) commercial accommodation for which a tariff is charged.

b. Vacant land zoned residential.

c. Land used as farmland and lifestyle blocks which is included in the rural activity area in the District Plan.

Farmland is defined as land used exclusively or principally for agricultural, horticultural, pastoral or silvicultural purposes, or for the keeping of bees or poultry or other livestock but excluding commercial dog kennels or catteries.

d. ​Separately rateable land occupied by a charitable organisation which is deemed by the Council to be used exclusively or principally for sporting, recreation or community purposes and that does not generate any private pecuniary benefit.

This category has a general rate differential rating factor of 1.0.

Commercial, Industrial and Business Differential

The Commercial, Industrial and Business differential rating category shall be applied to the following rating units:

a. Separately rateable land used for a commercial or industrial purpose

b. Vacant land zoned commercial, industrial or business

c. Land used for offices, administrative and/or associated functions

d. Land used for commercial accommodation for which a tariff is charged and where the principal purpose is the provision of short stay (28 days or less) accommodation

e. Business-related premises used principally for private pecuniary benefit

f. Any rating unit not otherwise categorised within the Base Differential.

This category has a general rate differential rating factor of 2.8.

Differential Rating Category Conditions

Differential rating 2.8:1 Commercial, Industrial and Business Base:

A rating unit will be differentially rated where a division of the rating unit is established, based on the use to which the land is put and / or the zoning. A division will be established where:

a) a rating unit has a value of greater than $800,000 or

b) the minority use(s) account for more than 30 percent of the total capital value of the rating unit

If neither of these criteria are met no division will take place, and the rating category will be established on the primary use of the rating unit.

In any other case, the general rate differential is determined by principal use.

a) The time at which the Council gives final approval of the completed works, or

b) The property is deemed (by the Council) to be available for its intended use.

Uniform Annual General Charge

The Council does not assess a uniform annual general charge.

Non-rateable land

Non-Rateable

Any land referred to in Part 1, Schedule 1 of the Act is non-rateable with the exception of targeted rates solely for sewerage and water where the service is provided.

50 Percent Non-Rateable

All land referred to in Part 2, Schedule 1 of the Act is 50 percent non-rateable in respect of the rates that apply, with the exception of targeted rates for sewerage and water for which the land is fully rateable if the service is provided.

Targeted Rates

Targeted rates are set under sections 16, 17, 18 and 19, and schedules 2 and 3 of the Act.

The Council has not adopted any lump sum contribution schemes under part 4A of the Act in respect of its targeted rates, and will not accept lump sum contributions in respect of any targeted rate.

The differential rating categories described above are used for a number of targeted rates.

Sewerage Targeted Rate

Targeted sewerage rates are to be apportioned 60 percent:40 percent of rates between properties incorporated under the Base differential and the Commercial, Industrial and Business differential in accordance with the Revenue and Financing Policy.

This rate is set to pay for the cost of the provision and maintenance of the sewage collection and disposal network, and sewage treatment facilities for the city. This rate is assessed on all rating units connected to the public sewerage drain.

For the purposes of these rates the sewage collection, and disposal and treatment service is treated as being provided to a rating unit if the rating unit is connected to a public sewerage drain (either directly or indirectly), irrespective of whether the property is considered fully rateable or is mandatory non-rateable or 50 percent non-rateable under Schedule 1 of the Act.

Sewerage targeted rate is calculated as follows:

a. For rating units incorporated in the Commercial, Industrial and Business differential rating category:

b. For rating units incorporated in the Base differential rating category:

Water Targeted Rate

A targeted rate for water is to be apportioned with the aim of achieving a 60 percent:40 percent split between properties incorporated under the Base differential rating category and the Commercial, Industrial and Business differential rating category in accordance with the Revenue and Financing Policy.

This rate is set to pay for the provision and maintenance of water collection and treatment facilities, the water distribution network and water conservation for the city. This rate is assessed on all rating units connected to the public water supply.

For the purposes of these rates, the water service is treated as being provided to a rating unit if the rating unit is connected to the public water supply (either directly or indirectly), irrespective of whether the property is considered fully rateable or is mandatorily non-rateable or 50 percent non-rateable under Schedule 1of the Act.

Water targeted rate is calculated as follows:

For rating units incorporated in the Commercial, Industrial and Business differential rating category, either:

a. A consumption unit rate per cubic metre of water used for all rating units connected to the public water supply with a water meter installed, plus a fixed amount per annum per rating unit.

Or

b. A rate per dollar of capital value on all rating units connected to the public water supply, without a water meter installed.

For rating units rated incorporated in the Base differential rating category, either:

a. A consumption unit rate per cubic metre of water used for all rating units connected to the public water supply with a water meter installed, plus a fixed amount per annum per rating unit.

Or

b. A fixed amount per annum per rating unit, plus a rate per dollar of capital value on all rating units connected to the public water supply without a water meter installed.

Stormwater Targeted Rate

A targeted stormwater rate is to be apportioned 77.5 percent to the non-rural rating units incorporated under the Base differential and 22.5 percent to the non-rural rating units incorporated under the Commercial, Industrial and Business differential in accordance with the Revenue and Financing Policy.

This rate is set to pay for the provision and maintenance of the stormwater collection/disposal network for the city. Properties classified in the rural area in the Council’s District Plan are excluded from the liability of this rate.

Stormwater targeted rate is calculated as follows:

For the Commercial, Industrial and Business differential rating category:

For the Base differential rating category:

Base Sector Targeted Rate

This rate is set to pay for activities where the Council’s Revenue and Financing Policy identifies that the benefit can be attributed to properties incorporated under the Base differential rating category.

This incorporates the following activities:

This rate is assessed on all properties incorporated in the Base differential rating category and is calculated on a rate per dollar of rateable capital value.

Commercial Sector Targeted Rate

This rate is set to pay for activities where the Council’s Revenue and Financing Policy identifies that the benefit can be attributed to properties incorporated in the Commercial, Industrial and Business differential rating category.

This incorporates the following activity:

This rate is assessed on all properties incorporated in the Commercial, Industrial and Business differential rating category and is calculated on a rate per dollar of rateable capital value.

Downtown Targeted Rate

This rate is set to pay for tourism promotion. This incorporates the following activities:

This rate is assessed on all properties incorporated in the Commercial, Industrial and Business differential rating category in the downtown area and is calculated on a rate per dollar of rateable capital value. For the purposes of this rate, the downtown area refers to the area as described by the Downtown Area map as follows:

Downtown Map

Tawa Driveways Targeted Rate

This rate is set to pay for the maintenance of a specified group of residential access driveways in the suburb of Tawa, overseen by the Council.

This rate is assessed on a specific group of rating units that have shared access driveway that are maintained by Council in the former Tawa Borough

The rate is calculated at a fixed amount per annum per rating unit.

Marsden Village Targeted Rate

This rate is set to fund activities of the Marsden Village Association.

The rate is assessed on all rating units in the Commercial, Industrial and Business differential rating category in the Marsden shopping village (see map below).

The rate is calculated on a rate per dollar of rateable capital value.

Marsden Village Map

Miramar Business Improvement District Targeted Rate

This rate is set by Council to fund the Business Improvement District activities of Enterprise Miramar Peninsula Incorporated.

This rate is set is on all rating units within the Miramar Business Improvement District (see map) which are subject to the Commercial, Industrial and Business differential rating category.

This rate is calculated as a fixed amount per rating unit, plus a rate per dollar of rateable capital value.

Miramar map

Khandallah Business Improvement District Targeted Rate

This rate is set by Council to fund the Business Improvement District activities of the Khandallah Village Business Association.

This rate is assessed on all rating units within the Khandallah Business Improvement District (see map) which are subject to the Commercial, Industrial and Business differential rating category.

This rate is calculated as a rate per dollar of rateable capital value.

Khandallah BID map.png

Kilbirnie Business Improvement District Targeted Rate

This rate is set by Council to fund the Business Improvement District activities of the Kilbirnie Business Network.

This rate is set on all rating units within the Kilbirnie Business Improvement District (see map) which are subject to the Commercial, Industrial and Business differential rating category.

This rate is calculated as a fixed amount per rating unit, plus a rate per dollar of rateable capital value.

Kilbirnie BID Map

Tawa Business Improvement District Targeted Rate

This rate is set by Council to fund the Business Improvement District activities of the Tawa Business Network.

This rate is assessed on all rating units within the Tawa Business Improvement District area (see map) which are subject to the Commercial, Industrial and Business differential rating category.

This rate is calculated as a fixed amount per rating unit, plus a rate per dollar of rateable capital value.

Tawa BID Map

2018/19 FUNDING IMPACT STATEMENT – RATES FUNDING STATEMENT (excluding GST)Top

Rate Category Factor Differential Charge Type Total Value of Factor* Rate/ charge* Rates yield GST Exclusive
General Rate Base Capital Value Base differential $40,289,118,000 ¢0.239314 $96,417,500
  Commercial, Industrial & Business Capital Value Commercial, industrial & business differential $11,762,518,000 ¢0.669636 $78,766,055
  TOTAL         $175,183,555
Sewerage targeted rate Base Fixed amount / rating unit Base differential per connection status 68,668 properties $116.36 $7,990,208
    Capital Value Base differential per connection status $42,867,202,000 ¢0.043744 $18,751,829
  Commercial, Industrial & Business Capital Value Commercial, industrial and business differential per connection status $9,866,355,000 ¢0.168157 $16,590,967
  TOTAL         $43,333,004
Water targeted rate Base Fixed amount / rating unit Base differential per connection status without a water meter 60,498 properties $161.24 $9,754,778
    Capital Value Base differential per connection status without a water meter $34,857,953,000 ¢0.047980 $16,724,846
  Base Consumption unit charge Base differential per connection status with a water meter n/a 2.243 / m3 $632,424
    Fixed amount / rating unit Base differential per connection status with a water meter n/a $131.05 $85,314
  Commercial, Industrial & Business Capital Value Commercial, industrial and business differential per connection status without a water meter $552,530,000 ¢0.459523 $2,539,002
  Commercial, Industrial & Business Consumption unit charge Commercial, industrial and business differential per connection status with a water meter n/a 2.243 / m3 $15,178,183
    Fixed amount / rating unit Commercial, industrial and business differential per connection status with a water meter n/a $131.05 $414,904
  TOTAL         $45,329,452
 
 
Stormwater targeted rate Base Capital Value Base differential (excluding land defined in the rural activity area) $39,737,495,000 ¢0.037244 $14,799,833
  Commercial, Industrial & Business Capital Value Commercial, industrial and business differential (excluding land defined in the rural activity area) $10,236,725,000 ¢0.041976 $4,296,968
  TOTAL         $19,096,800
Base sector targeted rate Base Capital Value Base differential $40,260,041,000 ¢0.019394 $7,808,032
Commercial sector targeted rate Commercial, Industrial & Business Capital Value Commercial, industrial & business differential $11,730,418,000 ¢0.044346 $5,201,971
Downtown targeted rate Commercial, Industrial & Business Capital Value Commercial, industrial & business differential located in the downtown area $7,829,568,000 ¢0.168323 $13,178,964
Tawa driveways targeted rate Base Fixed amount / rating unit Shared residential access driveways maintained by Council in the suburb of Tawa (extent of provision of service) 252 properties $133.33 $33,599
Marsden Village targeted rate Commercial, Industrial & Business Capital Value Commercial, industrial & business differential located in Marsden shopping village area $11,840,000 ¢0.118243 $14,000
Khandallah Business Improvement District targeted rate Commercial, Industrial & Business Capital Value Commercial, industrial & business differential located in the Khandallah Business Improvement District area $13,200,000 ¢0.151515 $20,000
Kilbirnie Business Improvement District targeted rate Commercial, Industrial & Business Fixed amount / rating unit Commercial, industrial & business differential located in the Kilbirnie Business Improvement District area 106 properties $500.00 $53,000
    Capital Value Commercial, industrial & business differential located in the Kilbirnie Business Improvement District area $143,438,000 ¢0.018824 $27,000
  TOTAL         $80,000
 
Tawa Business Improvement District targeted rate Commercial, Industrial & Business Fixed amount / rating unit Commercial, industrial & business differential located in the Tawa Business Improvement District area 72 properties $520.00 $37,440
    Capital Value Commercial, industrial & business differential located in the Tawa Business Improvement District area $100,310,000 ¢0.057382 $57,560
  TOTAL         $95,000
Miramar Business Improvement District targeted rate Commercial, Industrial & Business Fixed amount / rating unit Commercial, industrial & business differential located in the Miramar Business Improvement District area 124 properties $365.00 $45,260
    Capital Value Commercial, industrial & business differential located in the Miramar Business Improvement District area $180,285,000 ¢0.019270 $34,740
  TOTAL         $80,000
             
TOTAL RATES REQUIREMENT (excluding GST)   $ 309,454,377
             

Note:
When rates for 2018/19 are assessed, GST will be applied to the final rates. The total rates requirement includes rates remissions but excludes rates penalties which are budgeted separately.
The total rates requirement (excluding GST) differs from the revenue from rates in the Forecast Statement of Comprehensive Revenue and Expense as the revenue from rates includes rates penalties not included in this statement.

Indicative RatesTop

The following table shows the indicative residential and commercial property rates inclusive of GST for a selection of billing categories, based on the 2018-19 budget:

Indicative residential property rates (for properties without a water meter)   Indicative suburban commercial property rates (for properties with a water meter). This excludes water by consumption which is charged on actual usage.   Indicative downtown commercial property rates (for properties with a water meter). This excludes water by consumption which is charged on actual usage.
Capital Values $ 2018/19 Rates $ Increase over 2017/18 %*   Capital Values $ 2018/19 Rates $ Increase over 2017/18 %*   Capital Values $ 2018/19 Rates $ Increase over
2017/18 %*
200,000 1,211 4.73%   1,000,000 10,778 4.73%   1,000,000 12,714 2.38%
300,000 1,657 4.35%   1,250,000 13,435 4.72%   1,250,000 15,855 2.36%
400,000 2,103 4.13%   1,500,000 16,092 4.71%   1,500,000 18,995 2.35%
500,000 2,548 3.99%   1,750,000 18,749 4.71%   1,750,000 22,136 2.35%
600,000 2,994 3.89%   2,000,000 21,405 4.70%   2,000,000 25,277 2.34%
700,000 3,440 3.82%   2,250,000 24,062 4.70%   2,250,000 28,418 2.34%
800,000 3,886 3.76%   2,500,000 26,719 4.70%   2,500,000 31,558 2.34%
900,000 4,332 3.72%   2,750,000 29,376 4.70%   2,750,000 34,699 2.33%
1,000,000 4,778 3.68%   3,000,000 32,033 4.70%   3,000,000 37,840 2.33%
1,100,000 5,223 3.65%   3,250,000 34,690 4.69%   3,250,000 40,981 2.33%
1,200,000 5,669 3.62%   3,500,000 37,346 4.69%   3,500,000 44,121 2.33%
1,300,000 6,115 3.60%   3,750,000 40,003 4.69%   3,750,000 47,262 2.33%
1,400,000 6,561 3.58%   4,000,000 42,660 4.69%   4,000,000 50,403 2.32%
1,500,000 7,007 3.57%   4,250,000 45,317 4.69%   4,250,000 53,544 2.32%
1,600,000 7,452 3.55%   4,500,000 47,974 4.69%   4,500,000 56,684 2.32%
1,700,000 7,898 3.54%   4,750,000 50,630 4.69%   4,750,000 59,825 2.32%
1,800,000 8,344 3.53%   5,000,000 53,287 4.69%   5,000,000 62,966 2.32%

*This is the indicative percentage rates increase, taking into account average increases in property valuations for the relevant billing category