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More than half-million in GDC rates for writing off

Gisborne District Council is facing a $507,000 rates write-off for this financial year and should consider not writing off any rates that relate to debt arising from general land, the finance and audit committee heard.

Councillor Pat Seymour suggested this as the committee received a report on statute-barred rates that would have to be written off for June 30, 2018.

Mrs Seymour asked why the council was writing off rates on general land when it had the ability to sell general land properties where rates had not been paid.

Revenue team leader Fiona Scragg said at the moment the council was reviewing its process around rating sales and land sales.

Some of these properties had dwellings on them. Staff would bring a paper to the council to see if it wanted to do rating sales.

Mrs Seymour said the council collected rates off the willing ratepayers

She would like the council to not approve the write-off for now if it was still looking at how it was going to deal with general property owners who were not paying their rates.

The council might choose to do something different but if they wrote the rates off, that would not be possible.

Committee chairman Brian Wilson said the rates had to be written off after six years by statute.

The council might need to initiate something before the six years ended.

Mrs Scragg said part of the problem with the rating sale process was that it took a long time.

It might be three years from the time it was initiated before the property went to sale. It was not something that happened within one financial year. There were always some rates that were going to have to be written off in any year.

When the council did carry out its review of the revenue and financial policy, staff would ask it to consider dropping the P3 penalty (5 percent penalty on rates to which a penalty had been added.)

This was a penalty on a penalty — it was cumulative and it was really driving up the debt, she said.

The council stopped another penalty a couple of years ago for the same reason.

Rehette Stoltz said the council’s write- off budget was $326,000, which was $180,000 short of the figure before the council. Where would the council get this money back?

Chief financial officer Pauline Freeman said there were some other savings coming back through remissions and other areas.

Staff were still forecasting that the rates write-off would be as budgeted.

Last year there were two write-offs totalling $684,000.

The committee was also told the 2018 annual rates remission on Maori freehold land totalled $134,000 for 160 properties.

Chairman Brian Wilson was told the council had received no further information on a government review of Maori land. With a change in government, it was always going to be delayed.