Four Dunedin bed and breakfast operators will not get a reprieve from a sudden switch to more expensive commercial rates, the Dunedin City Council has decided.
The council's rates and funding working party had been asked to consider phasing in the change from residential to commercial rates, following objections from some B&B owners at last month's annual plan hearings.
Lisburn House owner Olivia Richmond-Johnston, of Dunedin, told last month's hearing she faced losing her business after learning her rates bill was to jump "overnight" from $3600 to $9000.
The change in rates classification was prompted by a new round of assessments by Quotable Value staff, which found the four B&B properties' predominant use was commercial.
The council's policy was to set rates based on QV assessments, and the change from residential to commercial rates meant the B&B operators were faced with suddenly higher bills for the 2010-11 financial year.
Despite their objections, a report to yesterday's full council meeting recommended the four B&Bs be confirmed as non-residential properties for 2010-11.
Working party chairman Cr Chris Staynes said the owners' cases had been given "a lot" of extra consideration but no accommodation could be reached.
QV staff had also revisited the properties, but stuck to their assessment the properties' primary use was commercial.
Councillors voted to accept the change yesterday, along with recommendations that staff meet the owners to help them assess whether they qualified for rates relief or other council assistance.
However, Cr Neil Collins wondered what the final result would be for the four B&B owners.
"The question is, can this city afford to let these people go to the wall? Is this fair?"
Cr Bill Acklin also criticised the move, saying the recommendations "basically don't do anything" to help the four owners, except "hold their hands on the way through".
"We have failed to actually do anything to change or assist these properties," he said.
However, B&B owners across the city did receive one reprieve yesterday, with councillors confirming the introduction of a $500 targeted rate - which aimed to raise $43,000 from 106 B&B owners - would be postponed until at least 2011-12.
Council staff would also investigate ways to help those running businesses from home to understand why QV might reclassify their homes as commercial, and options for reducing the impact of any changes, such as providing more warning to owners.
