Part C: Financial information

Funding impact statement – 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 2018. This revaluation will be effective for the 2019/20 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 1 September 2018 revaluation 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 3.25.

Differential Rating Category Conditions

Differential rating 3.25:1 Commercial, Industrial and Business:Base

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 section 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 unitised and referred to in 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:

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

A rate per dollar of capital value on all rating units connected to a public sewerage drain, to collect 40 percent of the required rates funding, after having deducted the total dollar amount budgeted to be collected through Trade Waste Charges (excluding consent fees).

For rating units incorporated in the Base differential rating category:

A fixed amount per annum per rating unit, plus a rate per dollar of capital value on all rating units connected to a public sewerage drain, to collect 60 percent of the required rate funding.

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 1 of 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:

A rate per dollar of rateable capital value to collect 22.5 percent of the required rates funding.

For the Base differential rating category:

A rate per dollar of rateable capital value to collect 77.5 percent of the required rates funding.

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 Area 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.

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.

The Miramar BID area covers the business and industrial areas from the south sides of Miramar Ave, to Para St, Darlington Rd, Miramar North Rd and down the hill to Shelly Bay.

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.

The Khandallah BID includes the town centre on Ganges Rd and Dekka St.

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.

The Kilbirnie BID encompasses the main town centre on Bay and Onepu roads, as well as the businesses on Tacy and Kemp streets.

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.

The Tawa BID encompasses all businesses in the suburb along or just off Main Road, from the State Highway 1 exit ramp to Surrey St and near the Tawa station.

Karori Business Improvement District Targeted Rate

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

This rate is assessed on all rating units within the Karori Business Improvement District area (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.

The Karori BID area includes Marsden and Karori villages along or just off Karori Road.

2019/20 Funding Impact Statement – Rates Funding Statement (excluding GST)

Rate Category Factor Differential Charge Type Total Value of Factor Rate/ charge* Rates yield GST Exclusive
 
General Rate Base Capital Value Base differential $58,707,459,000 ¢0.176961 $103,889,307
  Commercial, Industrial & Business Capital Value Commercial, industrial & business differential $14,404,763,000 ¢0.575129 $82,845,969
  TOTAL         $186,735,276
 
Sewerage targeted
rate
Base Fixed amount / rating unit Base differential per connection status 68977 properties $116.36 $8,026,164
    Capital Value Base differential per connection status $61,818,998,000 ¢0.031280 $19,336,983
  Commercial, Industrial & Business Capital Value Commercial, industrial and business differential per connection status $12,306,640,000 ¢0.137926 $16,974,056
  TOTAL         $44,337,203
 
Water targeted rate Base Fixed amount / rating unit Base differential per connection status without a water meter 60676 properties $167.28 $10,149,748
    Capital Value Base differential per connection status without a water meter $50,902,142,000 ¢0.034028 $17,320,981
  Base Consumption unit charge Base differential per connection status with a water meter n/a $2.435 / m3 $656,106
    Fixed amount / rating unit Base differential per connection status with a water meter n/a $135.96 $88,510
  Commercial, Industrial & Business Capital Value Commercial, industrial and business differential per connection status without a water meter $714,058,000 ¢0.368878 $2,634,003
  Commercial, Industrial & Business Consumption unit charge Commercial, industrial and business differential per connection status with a water meter n/a $2.435 / m3 $15,746,546
    Fixed amount / rating unit Commercial, industrial and business differential per connection status with a water meter n/a $135.96 $430,449
  TOTAL          $47,026,343
 
Stormwater targeted rate Base Capital Value Base differential (excluding land defined in the rural activity area) $57,950,882,000 ¢0.025972 $15,051,003
  Commercial, Industrial & Business Capital Value Commercial, industrial and business differential (excluding land defined in the rural activity area) $12,797,217,000 ¢0.034148 $4,369,994
  TOTAL         $19,420,997
 
Base sector targeted rate Base Capital Value Base differential $58,645,264,000 ¢0.013029 $7,640,891
 
Commercial sector targeted rate Commercial, Industrial & Business Capital Value Commercial, industrial & business differential $14,365,896,000 ¢0.038292 $5,500,989
 
Downtown targeted rate Commercial, Industrial & Business Capital Value Commercial, industrial & business differential located in the downtown area $9,666,741,000 ¢0.140430 $13,575,004
 
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) 253 properties $133.33 $33,733
 
Karori Business Improvement District targeted rate Commercial, Industrial & Business Capital Value Commercial, industrial & business differential located in the Karori Business Improvement District area $55,438,000 ¢0.108229 $60,000
 
Khandallah Business Improvement District targeted rate Commercial, Industrial & Business Capital Value Commercial, industrial & business differential located in the Khandallah Business Improvement District area $17,135,000 ¢0.116720 $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 105 properties $500.00 $52,500
 
    Capital Value Commercial, industrial & business differential located in the Kilbirnie Business Improvement District area $168,507,000 ¢0.016320 $27,500
  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 $116,590,000 ¢0.049370 $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 123 properties $365.00 $44,895
    Capital Value Commercial, industrial & business differential located in the Miramar Business Improvement District area $272,276,000 ¢0.012893 $35,105
  TOTAL         $80,000
 
TOTAL RATES REQUIREMENT (excluding GST) $ 324,605,436

NOTE:
  When rates for 2019/20 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.

Rates IncreasesTop

  2019/20 – Annual Plan Year on Year % Increase
  Commercial Base Total Commercial Base Total
General Rate 82,846,000 103,889,267 186,735,267 4.2% 6.8% 5.6%
Sector Targeted 5,501,000 7,641,000 13,142,000 4.8% -3.1% 0.1%
Downtown Targeted 13,575,000 0 13,575,000 2.1% -1.0% 2.1%
Water 18,811,000 28,216,000 47,027,000 2.8% 2.8% 2.8%
Sewerage 16,974,000 27,363,000 44,337,000 1.4% 1.4% 1.4%
Storm water 4,370,000 15,051,000 19,421,000 0.7% 0.7% 0.7%
BIDS & Tawa Driveways 335,000 33,733 368,733 15.0% -0.6% 13.4%
TOTAL 142,412,000 182,194,000 324,606,000 3.4% 4.4% 3.9%

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 2019/20 budget:

Indicative residential property rates exclusive of GST (for properties without a water meter)   Indicative suburban commercial property rates exclusive of GST (for properties with a water meter)   Indicative downtown commercial property rates exclusive of GST (for properties with a water meter)
Capital
Values
$
2019/20
Total Rates Inc. GST
$
  Capital
Values
$
2019/20
Total Rates Inc. GST
$
  Capital
Values
$
2019/20
Total Rates Inc. GST
$
400,000 1,620   1,000,000 9,190   1,000,000 10,804
500,000 1,943   1,250,000 11,448   1,250,000 13,467
600,000 2,267   1,500,000 13,706   1,500,000 16,129
700,000 2,590   1,750,000 15,964   1,750,000 18,791
800,000 2,914   2,000,000 18,223   2,000,000 21,453
900,000 3,237   2,250,000 20,481   2,250,000 24,115
1,000,000 3,561   2,500,000 22,739   2,500,000 26,777
1,100,000 3,884   2,750,000 24,998   2,750,000 29,439
1,200,000 4,208   3,000,000 27,256   3,000,000 32,101
1,300,000 4,531   3,250,000 29,514   3,250,000 34,763
1,400,000 4,855   3,500,000 31,773   3,500,000 37,425
1,500,000 5,178   3,750,000 34,031   3,750,000 40,087
1,600,000 5,502   4,000,000 36,289   4,000,000 42,749
1,700,000 5,825   4,250,000 38,547   4,250,000 45,411
1,800,000 6,148   4,500,000 40,806   4,500,000 48,073
1,900,000 6,472   4,750,000 43,064   4,750,000 50,735
2,000,000 6,795   5,000,000 45,322   5,000,000 53,397

Projected property informationTop

Projected property information at 30 June 2019
Rating Units 79,144
Capital Value $ 78,620,977,901
Land value $ 40,419,225,601