Toi Moana Bay of Plenty Regional Council will pay out $1.8 million to district and city councils this year, for collecting the rates on their behalf.
It will however, be the last year this occurs and could save the council up to $6 million over the next 10 years.
Since 1989, the Regional Council has contracted rates collection to the regions’ seven councils, Whakatāne, Ōpōtiki, Kawerau, Western Bay of Plenty, Tauranga, Rotorua and Taupō.
During this time, Toi Moana paid between two per cent to five per cent in commission per year, to each of the councils.
Toi Moana special projects manager Annabel Chappel says the costs paid are unique to each council and are a combination of a commission as a percentage of rates collected and associated administrative costs.
In 2020 regional council decided change this and collect their own rates from the region’s 150,000 rating units, starting from the 2022/2023 financial year.
Chapel says this was communicated to councils at the time and there are four drivers for the change.
These are increasing public awareness of the work Toi Moana does, differences in rates postponement and remission policies between councils, having more control over the “critical revenue source” and cost efficiencies.
“For many years having the district and city councils collect the regional council’s rates worked well for both parties.
“In recent years the mahi required of the regional council has expanded and circumstances have changed to an extent where it is now more appropriate for the regional council to collect its own rates.”
Accompanying rates bills recently sent to Tauranga City and Western Bay of Plenty ratepayers, was a pamphlet from Toi Moana telling people to “Get ready for change”.
It outlined the change of how the rates were to be collected, why it would occur and what to expect with the next rates bill. The pamphlets for the other five councils will go out in April and May.
The leaflet raised questions for some ratepayers and one contacted Local Democracy Reporting to express their concern about additional costs and the administration required to change the system.
Chappel says the cost of the new technology system, that has been implemented to enable regional council to collect its own rates, is budgeted at $395,000.
“Due to the initial set up costs, for the year there will be a slight increase in costs than would have been paid in commission to the other councils,” she says.
“From the second year there will be an annual cost saving, resulting in an overall cost reduction of approximately $6 million over the long term plan.”
As for the administrative process, Chapel says Toi Moana is working with the seven councils to transfer rates data that they had been managing, into the new regional council rates collection system.
“We are also working with the other councils to develop processes that help make things easy for customers.”
The ratepayer, who did not want to be named, says the information around cost should have been communicated to people to provide “greater understanding and less suspicion”.
In response to this, Chappel says, “We’re planning an extensive campaign to run in the lead up to this next year so that all ratepayers are aware of the change and we’ll make sure it’s available via many different methods and channels”.
She says many ratepayers don’t realise that a portion of their rates is paid to regional council.
“Collecting our own rates will further increase visibility of our services, and result in more community connections, feedback, and engagement.”
The separate regional council rates bill will be due in October 2022.
Local Democracy Reporting is Public Interest Journalism funded through NZ On Air.