Targeted rate proposal for the Akaroa Community Health Trust

If Council makes  the grant to the Trust, the cost of the grant will be recovered over time through a new targeted rate on properties in the Akaroa subdivision of the Banks Peninsula ward. The Council’s Revenue and Financing Policy allows for a targeted rate to be set to recover the cost of a grant of this type.

A targeted fixed rate is a separate additional rate set on a particular part of the community to fund a service provided that benefits only or mainly that part of the community.

Ratepayers would pay an additional fixed charge on each ‘separately used or inhabited part’ (SUIP) of their property.  A SUIP is defined as a part of a property which can be separately let and permanently occupied.  The number of SUIPs associated with each property is shown on your rates invoice.  It is the number of times you pay the Uniform Annual General Charge (UAGC).  Most properties have only one SUIP, but a property with two flats, for example, will have two SUIPs.

The targeted rate would be set on all separately used or inhabited parts of property in the Akaroa subdivision of the Banks Peninsula ward.  This area closely aligns with the Canterbury District Health Board advice on health service patterns in Banks Peninsula. The  map below gives you more detail on the areas included in the targeted rate.  All those properties within or partially within the Akaroa subdivision boundary will be included.

Business and rural properties will also pay the targeted rate, but non-rateable properties such as churches and schools will not.  If you own an empty section that you pay rates on then this would be included in the targeted rate.

Map of the Akaroa Subdivision of the Banks Peninsula ward

There are two options for you to consider in this consultation  -  a fixed charge over four years or over 10 years.  In general, the longer the rating period  the lower the annual additional rate will be. However, funding over a longer period will incur some interest costs that will be passed on through the rate. 

The targeted rate is based on an estimate of there being 2,801 rateable properties in the proposed catchment area.  The rate recognises Council will be able to earn interest on rates income received before the grant is made, and will incur interest when rates income is received after that date.

If the Council agrees to the request from the Trust, both the grant amount and the rate requirement will be included in the Council’s Annual Plan 2019/20. This would mean the rate is set for the 2019/20 year and would be charged from 1 July 2019.

If the Trust raises further funds in the future to the extent that the full $1.3 million  grant is no longer required, the Council will make a smaller grant and will reduce the targeted rate accordingly.

This would be a matter for the Trust and the Canterbury District Health Board to resolve.  The funding agreement between the organisations requires the community contribution to be paid by a set date and the Canterbury District Health Board may charge interest on any unpaid funding.

The rate will be used to reimburse the Council for making the grant to the Trust.  The grant itself will be used by the Trust to meet its costs.  The major component of those costs is the $2.5 million obligation to the Canterbury District Health Board to fund additional services  within the health centre.  These additional services include aged care and respite care and are what the community has told the Canterbury District Health Board it wants, in addition to those the Canterbury District Health Board had committed to provide.

We considered a number of options:

• An option to set the rate based on a proportionate basis. This means the rate would be based on property value instead of a fixed amount.
• To decline the application.
• To defer the request until the end of 2019, in order to have a clearer view of eventual funding requirements.

You can read more about all of these options in the staff report(external link) that was considered by elected members at the 7 February meeting of the Finance and Performance Committee of the Whole and view this meeting online(external link). 

The Akaroa Community Health Trust was formed as a community partner in the establishment of the new health centre for Akaroa.  The Trust has worked with the Canterbury District Health Board on behalf of the local community to ensure the new health centre meets local community needs and expectations. 

For more information on the Trust and the Akaroa Community Health Centre please visit their website(external link).

A Hearings Panel made up of Councillors and Community Board members will consider all written and oral submissions and then make a recommendation to the Council. The Council will then consider the recommendation from the Hearings Panel and decide whether or not to provide grant funding and set a targeted rate.

The date of the Hearing will be sometime in April/May 2019. Please ensure you indicate on your feedback form if you would like to speak at the Hearing. The Council decision is then expected to be made sometime in June 2019.

All submitters will receive written updates on the project, including details of the staff and Hearings Panel recommendations and decision meeting.