Targeted rate for events dropped

Chris Staynes.
Chris Staynes.
The Dunedin City Council has scrapped an ''unworkable'' plan to hike rates for some businesses - but not others - to help pay for the Forsyth Barr Stadium's events fund, deputy mayor Chris Staynes says.

Instead, the council could consider increasing rates for all commercial properties, as early as next year, to help pay for broader economic development initiatives, Cr Staynes told the Otago Daily Times yesterday.

He was speaking days after telling this week's draft budget meeting the idea of a new targeted rate to pay for the stadium events fund had been axed.

Cr Staynes is the chairman of the council's rates and funding working party and the council's economic development committee.

He raised the idea of a new targeted rate in late 2012, days after Dunedin Venues Management Ltd revealed a $3.2 million loss for the 2011-12 year.

Cr Staynes had suggested the new rate could be applied to bars, restaurants, hotels and other businesses proved to be profiting from big stadium events.

The events attraction fund, worth $400,000 a year, was later authorised by councillors last year, but paid for initially from general rates. Yesterday, Cr Staynes said the rates and funding working party had scrapped the targeted rate idea after deciding it was ''unworkable''.

That was because it had proven too difficult to accurately identify exactly which businesses benefited from the stadium, and which did not, he said.

While some were obvious, others were not, meaning any new targeted rate risked being unfairly applied and open to being challenged.

''We shied away from it. It was just becoming too difficult to determine who should be in and who should be out.

''It went in the too-hard basket.''

Cr Staynes said some bar owners had told him they would ''easily'' measure the benefits of a big stadium event, and would be quite happy to pay more through a targeted rate.

''That's when you start to get into difficulties. Who benefits when there's something on at the stadium?''There's a whole lot of people you can identify easily, but there's a whole lot of people that the people that you've identified would say also benefit.''

And, if the council focused only on the most obvious beneficiaries of the stadium, like bars and restaurants, ''there's so few businesses, you're not really achieving the funding that you'd want, or you've got to put a very high increase on them'', he said.

Existing arrangements - paying for the events fund from general rates - still meant commercial ratepayers paid about two-thirds of the fund each year, because of the higher rates they already paid, he said.

However, it was possible the council could consider increasing the tourism and economic development rate, paid by all commercial property owners, as early as next year, he said.

The rate already generated about $500,000 a year, but might need to rise to pay for enhanced city promotion efforts and projects coming from the council's economic development strategy, he said.

The council would first need to calculate by how much it wanted to increase funding for economic development, and then how that should be shared between general and commercial ratepayers, he said.

The move would also need to be agreed by councillors, and the public consulted, most likely through the council's annual or long-term plan budget process, he said.

Splitting the cost of any increase between general and commercial ratepayers recognised that the whole city benefited from economic development, although the business sector more so, he said.

The stadium's events fund was designed to help attract major events, like Sir Elton John's 2011 sell-out show, which was estimated to have pumped about $14 million into the city's economy.

However, with council budgets tight and costs increasing, the squeeze could eventually threaten the fund, he warned.

''It could threaten it, but I think the biggest issue is going to actually be what comes out of the review of the whole stadium operating model.

''That may inform us whether we leave the events attraction fund in place, or whether we increase it or we decrease it.''

- chris.morris@odt.co.nz

Good one

Good on ya mate!

Humour?

Yup. Hillarious speedfreak & sv3nn0. I remember doing that sort of thing when I was a child too. When you get a bit older though, you'll realise that the council has to pay someone to count your coins ... and the people standing in the queue probably had better things to do.

Hats off

I take my hats off to you speedfreak, paying in coins is hilarious. Pity the anti-oil/gas/everything protesters don't have that sort of humour.

Rates embargo

Not true Sparrowhawk. I cancelled my direct debit and paid late penalties for months before I gave it away. I then made the councils life miserable by taking the monthly installments in to them in $1 coins and 10 cent pieces which they initially refused to take. Sadly for them, im an ex-banker and knew just what was legal tender and therefore they had no option but to accept it.

From memory, they were given 1x$20 note, 96 $1 coins and $4 odd in ten cent pieces. I kept this up for almost a year.

And on the way out, i made sure all those waiting in the, often large queue, knew exactly why they were being held up.

Just a shame all the rest of the talkers weren't doers .

Bottom line

The bottom line is that we can't afford to keep the Stadium AND Dunedin. The conversation should be about how we dispose of it not how we fund it.

So true

I think Butler had the right idea with a rates embargo, but none of us had the guts to do it. Maybe we still should.

Oh Kaipara

Stevesone57, ideas to further tax Dunedin businesses are desperate flailings of the minions attempting to run a council bankrupted by its own decree and excess.

As the DCC's noose tightens on ratepayers think of the Mangawhai Ratepayers and Residents Association (MRRA) of Kaipara district, they're off to the High Court next week to fight back.

A tax is a tax

So instead of a targeted tax Council now propose putting up rates on commercial properties to pay for what they call economic development. Instead of imposing an unworkable targeted tax to fund the stadium they will just raise commercial rates and get it that way. Just another example of creative accounting to support the stadium. We are not fooled Mr Staynes. Look around at all the empty shops, all the businesses doing it tough or going broke. And you want to impose yet another tax? Can you explain how increasing taxes assists in promoting economic development? All it does is stifle business activities and ensures businesses contemplating hiring staff or any expansion put their plans on hold. How much in percentage terms will this mystery tax cost business in addition to the latest rate increase? Specifically how much of the money raised will go to economic development and how much will be used to fund the stadium? Where is the guarantee you can be trusted?

Target the those who pushed this

Perhaps they should hunt down and target the morons who pushed the stadium. The problem with the whole things is champagne tastes with a beer budget. We could never afford it, and chickens are comming home to roost.

No wonder there is a culture of rates/tax avoidance in this country - it's the result of things likes this. Why pay rates & tax when these geniuses waste our hard earned cash?

Stability

Stability affects the average ratepayer more than continued growth. Once a city gets above a certain size the infrastructure costs, social problems, and  maintenance become much harder to manage. The idea is to have a livable city for its citizens. It already is livable, and at the ideal size for optimum livability. Great sudden influxes of visitors that tax the cities normal coping mechanism are not really that beneficial for the average ratepayer. Business like the injection of funds, but the city pays the clean-up in so many ways.
What we need is a steady hum rather than a resounding periodic roar. Concentrating energy into supporting innovative business, scientific and cultural groundswell is by far the best way for this city to slowly maintain its viability. The stadium is an albatross around our necks as it funnels all the funding away from everything else.

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