Unpaid rates factor in changed plan

Press, Volume CXI, Issue 32663, 20 July 1971, Page 1

Unpaid rates factor in changed plan

At April 1, the Waimairi County Council was owed $121,928 in overdue rates and the 10 per cent penalty, and it was perfectly obvious that many people were having difficulty in making payments of rates under the old system, said the council’s treasurer (Mr W. Knudsen) yesterday.

Mr Knudsen was commenting on 14 letters to the Editor of “The Press” published since Waimairi ratepayers received their rate demands 10 days ago, and all complaining about various aspects of the system. The council itself has received many protests.

Waimairi has been joined by the Paparua County Council this year in introducing instalment payment of rates, both councils believing that this will make it easier for ratepayers to avoid the 10 per cent, penalty. For both councils, instalments are due on August 31, November 30 and February 29, with a 10 per cent penalty• added for each instal-

ment unpaid by due date. Those who prefer to pay their rates in one sum will have to do so by August 31 to avoid penalty.

Unpaid rates Mr Knudsen said that the amount owing in unpaid rates at April 1 this year had risen to $121,928, a figure the County Clerk (Mr J. Reid) had described as “alarming”. Of the total, said Mr Knudsen, $53,146 was owing as unpaid rates from years before 1970-71. “At April 1, 1968, the council was owed $76,290 in rates and the 10 per cent penalty,” said Mr Knudsen. “In 1969, the total was $84,360, and last year, the figure had risen to $110,045. The increase of $ll,BOO since then, and the progressive increase, was one factor which convinced the council that instalment payments were the answer." Mr Knudsen said that it was significant that $45,000, or 37 per cent, of the rates unpaid at April 1 last were owed from the Harewood riding, with $19,000, or 15.6 per cent, owing from the Avonhead riding—both districts with a large proportion of young home o.wners. Large overdrafts It seemed obvious to the council that rates payable by instalments would help those ratepayers who found it hard to make the total payment without penalty under the old system, by giving them the opportunity to budget progressively to meet the smaller instalments. Mr Knudsen went on to explain how the one-payment system forced the council into overdraft, saying that this had cost the council $4OOO in interest last year and that this interest had to come from rates.

“Last year, our estimated overdraft requirements were $BO,OOO in July, $95,000 in August, $130,000 in September, $lBO,OOO in October, $250,000 in November, and, as the actual overdrafts for short periods, $356,000 in December and $280,000 in January,” he said. “This year, as a result of payment by instalments, the council expects to be in overdraft only for the month of July, and that to the extent of about $BO,OOO. We should be in credit the other months. Other bodies “The effect of the old system was that the council was paid 80 per cent of its rates, or about sl.sm, in the last three weeks before the final date for payment without penalty, in February.” As the council also collected the rates for the Christchurch Drainage Board, Transport Board and North Canterbury Catchment Board, these bodies, too, went into overdraft under the old system, and one of these boards, he believed, would have paid $33,000 interest on its overdraft last year. “Add this interest up, and it means a considerable additional amount that has to be collected in rates,” said Mr Knudsen. “Because the instalment system will bring in the money earlier, and reduce or eliminate overdrafts, we have asked the boards to consider making an increase in the commission they pay us for acting as their rate collectors.”