Report to COUNCIL for information SUMMARY Council must revise the - - PDF document

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17–386

Title:

District-wide Rating Revaluation 2017 Presentation

Section: Finance Prepared by: Fiona Scragg (Revenue Team Leader) Meeting Date: 26 October 2017

 Legal ☐ Financial ☐ Significance = Medium

Report to COUNCIL for information

SUMMARY

Council must revise the district valuation roll every three years In accordance with the Rating Valuations Act 1998. This ensures that the roll represents values which are current at the date

• f the revaluation.

Opteon Property Ltd (“Opteon”, previously Landmass Technology Ltd) is the Valuation Service Provider (VSP) to seven local authorities throughout the North Island. They have been Council’s contracted VSP since 2005. Opteon review the rating value for each of the 23,500 rating units to look at current rating valuations for Gisborne district properties and reassess them. Opteon ensure that the new values fairly represent the market as at 1 July 2017. The comprehensive rating analysis of the district is audited by the Office of the Valuer General prior to implementation and public release. Public notice of the rating revaluation is released on 6 November 2017. Opteon is providing a presentation today covering the outcome of the 2017 Rating Revaluation as at 1 July 2017. The decisions or matters in this report are considered to be of low significance in accordance with the Council’s Significance and Engagement Policy.

RECOMMENDATIONS

That the Council: 1. Notes the contents of this report.

Authorised by: Pauline Foreman Nedine Thatcher Swann Acting Chief Financial Officer Chief Executive

Keywords: Rating Revaluation, Opteon, Landmass, VSP, Valuation Service Provider, rates

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BACKGROUND

• 1. The Rating Valuations Act 1998 places responsibility on territorial authorities for the

production of the District Valuation Roll (DVR). The Valuer General is responsible for monitoring and auditing the DVR against the standards set out in the Rating Valuation Rules. All general rating revaluations require the Valuer General’s certification before they may be implemented.

• 2. The Office of the Valuer General will be visiting Gisborne to carry out the final audit the

week of 23 October 2017. The exit audit interview is scheduled for 24 October 2017.

• 3. The presentation has the confirmed trends and conclusions for each property type. It gives

a clear picture of the actual trends when compared to the 2014 Rating revaluation. This is not a current market valuation.

• 4. The land value, improvements value and capital values are considered and updated for

each property. There are three parts to valuing your property. A description of each is below:  Capital Value: estimates the probable sale price of the property if it was offered for sale on 1 July 2017. The value does not include chattels, stock, plant, crops, machinery, timber, trees, or dairy company shares. It is deemed to include GST for residential properties and exclude GST for other property types.  Land Value: the probable price that would be paid for the bare land as at the date of the valuation. The value includes development work such as drainage, excavation, filling, levelling, retaining walls, clearing, fertility build-up, flood protection.  Value of Improvements: the difference between the Capital Value and the Land Value. It represents the added value to the land of any buildings or other structural improve-

• ments. This includes the value of any permanent crop eg grapes, kiwifruit, citrus.
• 5. The value of Maori Freehold Land is also included on the DVR. This is adjusted to reflect the

constraints of the Te Ture Whenua Maori Act 1993. The value is adjusted by deducting up to a maximum of 15% for the number of owners and for sites of significance. These details are required to be displayed on the rating valuation notice. This deduction is also known as the Mangatu discount.

DISCUSSION

• 6. This presentation covers the various trends in our district. Land types that will be covered

include:  Commercial & Industrial  Forestry  Residential & Lifestyle  Horticulture & Cropping  Pastoral

• 7. A notice of valuation will be issued to owners and ratepayers with public notification

commencing on 6 November 2017. They can object to the valuation of their property. In the case of a general revaluation, they may object to the valuation of any other property appearing on the DVR.

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• 8. The objections to the values close on Friday 5 January 2018.

ASSESSMENT OF SIGNIFICANCE

Criteria This Report The Process Overall The effects on all or a large part of the Gisborne district Low Medium The effects on individuals or specific communities Low Medium The level or history of public interest in the matter or issue Low Medium Inconsistency with Council’s current strategy and policy Low Low Impacts on Council’s delivery of its Financial Strategy and Long Term Plan. Low Low

• 9. The decisions or matters in this report are considered to be of low significance in

accordance with Council’s Significance and Engagement Policy.

COMMUNITY ENGAGEMENT

• 10. Owners and ratepayers will be sent a notice of valuation. They have a minimum of 30

working days to object to the values. Public notification commences on 6 November 2017. Objections to the values close on Friday 5 January 2018.

CONSIDERATIONS  Financial/Budget

• 11. The revaluation values will be used to set Council rates for financial years 2018/19, 2019/20,

2020/21 as documented in the Revenue and Financing Policy.

• 12. Where the values change more or less than the average for those groups of ratepayers,

the rates may increase or decrease when compared to the previous year.

 Legal

• 13. The Rating Valuations Act 1998 sets out that local authorities are legally required to carry
• ut a district-wide general revaluation every three years.
• 14. The Valuer General regulates the maintenance of the district valuation rolls to ensure that

they meet the minimum standards set out in the Rating Valuations Act, the Rating Valuations Regulations 1998, and the Rating Valuations Rules.

• 15. Local Government rates set in accordance with the Local Government Act 2002 and the

Local Government (Rating) Act 2002 will use the latest Rating Valuation details from 1 July 2018.

POLICY AND PLANNING IMPLICATIONS

• 16. The Revenue and Financing Policy defines how each of Council’s activities are funded.

The Local Government (Rating) Act 2002 contains the definitions of categories of rateable land and factors that may be used to calculate liability for targeted rates. The rating valuations and details provided by the Valuation Service Provider (VSP).

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RISKS

• 17. There is complex legislation and a strict timetable that is a requirement of the revaluation
• process. Having a high quality, experienced VSP such as Opteon is essential.
• 18. While the basis and audit files are supplied by Opteon, the Council has the overall

responsibility for managing the revaluation and achieving certification. The basis and audit files reflect the property details and assessments that support the new proposed values compared to the current values.

• 19. A comprehensive revaluation basis needs to be supplied which is required to be well

supported by staff with good district knowledge and good knowledge of the legislation used.

• 20. The revaluation process is managed by the Revenue Team Leader who brings sound

district knowledge, 24 years of local government experience and has managed the three successful district-wide rating revaluations for 2008, 2011 and 2014 while also having an integral role in the 2003 and 2005 revaluations.

NEXT STEPS

Date Action/Milestone Comments 4 November 2017 Implementation date of rating revaluation This is set out in the Rating Valuations Act 1998 and part of a timeline as agreed with the Office of Valuer General (OVG) 6 November 2017 Public Notice and notices issued to owners and ratepayers This is set out in the Rating Valuations Act 1998 and part of a timeline as agreed with the OVG 5 January 2018 Objections to Rating Valuations close This is set out in the Rating Valuations Act 1998 and part of a timeline as agreed with the OVG 1 July 2018 2017 Rating Revaluation values used for 2018/19 rating year This is set out in the Rating Valuations Act 1998