New funding policy will affect all ratepayers

Christchurch people are being asked to participate in a major consultation process which will determine how the City's services are funded.

"Rates or User Charges Your City Your Choice" will have important consequences for all ratepayers and users of Council services, says City Council Finance Director Bob Lineham.

The public consultation period, which runs until 21 November, follows a two year review of Council services carried out by a working party of Councillors. The working party examined every Council service, and who benefits from each, to decide whether services should be paid for by rates, user charges or a combination of the two.

"Now we are looking for public feedback on the findings before a draft policy is prepared," says Bob Lineham, who says the new funding policy, due to be introduced in July next year, will affect all ratepayers.

"Currently the figures suggest that some groups will pay less rates than at present, while others will pay more. It is important that as many people as possible take part in the consultation so that the Council can develop a policy which is fair to all," says Bob Lineham.

Copies of the public consultation booklet are available from the Civic Offices, Council Service Centres, Libraries or by calling 941 8888.

Study findings

will help set future funding policy

Under the Local Government Amendment Act (No. 3) 1996 each local authority in New Zealand is required to introduce a new funding policy by 1 July 1998.

As part of its programme to fulfil this legal requirement, the Christchurch City Council has published a consultation document, "Rates or User Charges Your City Your Choice".

This document summarises a comprehensive review, carried out by a working party of Councillors, of the way the Council pays for the services it provides.

Council services include: maintenance and development of Christchurch roads, a fresh water supply, a network of libraries, a series of festivals and events, parks, services to promote economic development, refuse disposal and environmental planning, among others.

The Councillors asked the following questions about each service:

• Which individuals or groups benefit from this service?
• What is the most appropriate way of paying for the service?

For each service, according to the legislation, Councillors were required to determine whether the service provides direct benefit, general benefit, or a combination of the two.

Direct benefits are those received directly by an individual or group. For example a building permit provides direct benefit to the builder or developer who has applied for it, and a parking meter space provides direct benefit to motorists who use it.

General benefits are those provided to the City or the community as a whole. For example street lighting provides the general benefit of improving the security of the City's streets at night and parks and gardens provide a general benefit in their overall contribution to the positive, green image of Christchurch. Most services have an element of both direct and general benefit, the issue is how to apportion benefit between the two.

The legislation says that, as a guiding principle, direct benefit should be paid for from a user charge while general benefits can be paid for from rates.

However, exceptions from this rule can be made when any of the following circumstances apply:

• When it is in the interests of the community at large to pay for the service from rates.
• When issues of fairness and equity say that funding the service from rates is more appropriate.
• When Council policy can be best served by paying for the service from rates.
• When it is impractical to introduce a user charge to pay for the service.

When the Council working party looked at the criteria and all services, they were able to draw together some overall results. These were:

• Rates for residential ratepayers would fall by two percent.
• Rates for commercial ratepayers would increase by just under five percent.
• Rates for rural ratepayers would increase by around 32 percent.
• Rates for institutions including schools, hospitals and charities would fall by around 27 percent.
• User charges would not be altered.

However, these figures only represent the findings of the working party they are not Council policy. The draft policy will be determined following public consultation, and feedback.