Policy review could cost fifty thousand dollars

9 October 2012

Reviewing the Waipa District Council's revenue and financing policy two years earlier than scheduled could cost an extra $50,000 in audit fees alone and provide few if any benefits, a staff report has found.

Council staff were asked to report back on the merits or otherwise of undertaking an earlier review of the policy in response to concerns from some ratepayers about higher than expected rates increases.

A staff report, to be discussed by Council's Strategic Planning and Policy Committee today recommends against an early review.

The revenue and financing policy is normally reviewed every three years as part of preparing the 10-Year Plan. Reviewing it earlier would legally require a special consultative process.

Group manager business support Ken Morris said staff had looked at the implications of an early review from every angle to ensure all issues were put before elected councillors to make a decision.

The report discusses whether or not changes made to the policy during the 10-Year Plan process were appropriate and resulted in reasonable outcomes and also looks at the potential implications of an early review, including cost implications.

Staff also looked at the possibility of a limited policy review but said this would be questionable in the context of the legal requirements and would likely result in funding inconsistencies across Council's activity areas.

Mr Morris said a review of the policy, even a limited review would take considerable staff time and would likely require an independent audit costing between $20,000 - $50,000. That cost had not been budgeted and would need to be taken from other areas, he said.

Next year, with no property revaluations or policy changes scheduled, our rating position will be stable. We won't see the kind of differences in rates increases we saw between properties this year.

But if the policy is reviewed early and changes are made in isolation from the bigger picture, we could see real swings in some areas and that would be hard on some ratepayers.

The report recommends that the policy be reviewed again in just under three years' time as part of the 2015-2025 10-Year Plan process. The full staff report is available on Council's website.