Hardship cited as reason ratepayers owe $3.4m to district council

Rates help to fund major projects such as the Health Hub in Rolleston. Photo: Supplied
Rates help to fund major projects such as the Health Hub in Rolleston. Photo: Supplied
Financial hardship brought on by the Covid-19 pandemic is one of the reasons more than $3.4 million in rates has yet to be paid.

In the Selwyn district, a total of $3,457,199 is still outstanding, which represents 3.94 per cent of the district's total rates take.

In the 2018/2019 financial year, $2,616,986 or 3.38 per cent was still to be paid.

“The council does think it [financial hardship] could be a factor. There were approximately 40 ratepayers who have opted for the rates payment extension which amounted to around $50,000," said Selwyn District Council accounting manager Craig Moody.

Under the district council’s economic recovery package, payments for the 2019/20 financial year can be extended until June next year for ratepayers who enter into a direct debit payment plan.

In a report to the audit and risk sub-committee, Moody said the outstanding rates at the end of the last financial year increased from the same period last year.

“The Covid-19 pandemic has had a flow-on effect on the national and local economies and has reflected in job losses.

Craig Moody.
Craig Moody.
“This has had a negative impact on the council’s ability to maintain a continuing decrease in outstanding debtors.”

He said there are several factors contributing to the higher level of outstanding rates for the 2019/20 financial year.

This includes the due date for payment being changed in the 2018/19 financial year to two weeks later than the previous year.

“This change has led to a timing difference in the collection of rates with the due date being closer to June 30, a higher balance of rates is outstanding at the end of the financial year."

District council staff have also not been as active in debt management during and after the level 4 lockdown, Moody said.

“Rates arrears is a risk area that we are monitoring closely. The risk to council is that ratepayers will get into arrears and struggle to make the increased payments required to clear their accounts.”

The district council has the ability to recover the debt through a mortgage or by a LIM note on the property.

Low-income earners are eligible for a rebate scheme that can give up to $655 towards rates.

“We have a dedicated employee focused on touching base with ratepayers who have missed their recent installment and we will be working collaboratively with these ratepayers and supporting them to set up an affordable payment plan," Moody said.

Outstanding rates per financial year:

  • 2019/2020 – $3,457,199 or 3.94 per cent
  • 2018/2019 – $2,616,986 or 3.38 per cent
  • 2017/2018 – $1,793,901 or 2.80 per cent
  • 2016/2017 – $2,044,504 or 3.46 per cent
  • 2015/2016 – $2,171,099 or 4.05 per cent
  • 2014/2015 – $2,373,958 or 4.78 per cent

 

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