Arrears tarnishing council's accounts

23:00, Mar 31 2014

Ratepayers owe the Horowhenua District Council more than $3 million in unpaid rates.

That represents more than 10 per cent of the rates the council had budgeted to collect in this financial year and is greater than the increase in rates revenue planned in its new draft Annual Plan, which comes with an average 9.9 per cent rates increase.

The figures, contained in the eight-month financial report included in the agenda for tomorrow evening's council meeting, represent rates owed as of March 19, after the payment date for the third rates instalment of the year.

At $3.2m the total amount owed is well above the $2.4m owed on February 28.

In total 4265 accounts have amounts owing. A total of 659 owe more than $1000, including 27 who owe more than $10,000. At the other end of the spectrum 1484 owe less than $50.

Close to 3000 of the overdue accounts relate to this year's third quarter payment, and the council expects to catch up with many of them in the coming weeks.


Council finance manager Doug Law said unpaid rates did have an impact, though there was no way out of paying the debt eventually.

"Non-payment of rates in the short-term usually results in council needing to use debt funding, loans or overdraft, instead of cash to run the council."

Law said the council did budget for some unpaid rates each year.

"If the level of debtors goes up, this results in council needing to fund the shortfall from debt, or reduction of cash reserves. Either way it will impact on the cost to council from either increased external debt to be financed or loss of investment income.

"Rates debt is always collectable, with very few exceptions.

"Rates debt ranks first ahead of a mortgagee."

Manawatu Standard