Sewage surcharge makes Raglan rates unaffordable

The level two sewage surcharge to be approved by the Waikato District Council will make Raglan rates unaffordable. The surcharge is included in the council’s Long Term Plan (LTP) which it will approve on the 28th June.

Waikato District Council has set a benchmark of $3,470 as the level at which rates become unaffordable.  (See comment below by a council finance spokesperson.) This threshold is based on taking 5% of the median household income of $69,400 determined for the whole Waikato District in the 2013 Census. The true affordability level for Raglan is less than this as the household income here is lower at $55,000.  So the true affordability level for Raglan is  $2,750. WDC defines the threshold is $3,470, so that’s what we’ll use.

I’ve looked at three representative properties to see how the rates for each property look against the council’s unaffordable level of $3,470.  The three Raglan properties are typical of the lower, mid and higher capital values on which rates are calculated.

The analysis shows that by Waikato District Council’s official affordability benchmark, that in Raglan township, rates charged on mid-range and high capital value have been pushed across the threshold by the sewage surcharge. This means that by the official benchmark, the rates on most Raglan properties will be unaffordable.

Using the true Raglan affordability level, nearly all residential rates in Raglan township will be unaffordable if the council approves its Long Term Plan on 28th June.

The Waikato District Council Long Term Plan proposes an expanded programme of wastewater works referred to as Option Two in the council consultation. The proposal follows criticism of the council last year after spills closed Raglan Harbour three times in a matter of four months. To fund the additional works, the council has included a sewage surcharge of $143.94. It is also applying an increase of $12.11 making a total increase of $156 for the the wastewater rates in coming year. In the Raglan Chronicle, Raglan ward councillor Lisa Thomson said the decision wasn’t an easy one to make “when you know it will hurt many in terms of increasing rates”.

In the council consultation the forms returned by Raglan residents were in favour of the option two proposal.

Community Board member Alan Vink said, “I am told there are 2000 households or ratepayers in (greater) Raglan. Therefore 3.8% responded with a submission.
If there are 1500 ratepayers then it would be 5.1%. So let’s say somewhere between 3.8% and 5.1%.”

Alan says his concern is: 30.38% voted in 2016 in WDC. About 200 turned up from the whole district at the Annual Plan Roadshow a couple of months ago. At most 5% of Raglan ratepayers submitted on the WW rate increase. Even given that this issue directly affects 1500 Raglan ratepayers to the tune of $144.00 each and every year only 76 submitted, even after all the advertising and ‘street talk’ of 2-3 RCB members.

Conclusion. Community engagement is NOT happening. No one’s fault but it ain’t happening.

Finally. Alan says he agrees with the decision. Something has to be done irrespective of past WDC performance.”

Analysis of Raglan Rates for 2017/2018

1. Cross Street – Capital Value of $280,000

2. Raglan West – Capital Value of $400,000

3. Wallis Street – Capital Value of $900,000

A Waikato District Council spokesperson said,

“What is affordable in each household is different, and the council therefore uses averages in order to determine whether rates are affordable. The council administers a rates rebate scheme and has rates remission and postponement policies in place to assist those owners where rates are unaffordable. In 2007 the Government carried out extensive research on rates affordability. That report states that rates are affordable up to 5 per cent of household income. The 2013 census results show a median household income for the Waikato district is $69,400 per annum. For 2014, a rates bill of up to $3,470 would therefore have been deemed affordable for households with an income of $69,400.”