A law change affecting how councils bill for rates could mean added costs — including investments in IT — of about $15 million for Auckland Regional Council over the next five years.
The Local Government (Rating) Bill, which is due to be enacted this month, broadens regional council rating powers but also requires that bills provide details on how rates are calculated.
The ARC currently collects rates by levying city councils in the Auckland region based on land valuation and population. The rates are then allocated, invoiced and collected by the councils as part of their own rates collection. ARC rates are included as a single line in the general rates bill. The new law will require rates assessments to clearly identify the amount and description of each rate and how they were calculated. The aim is to make the councils more accountable and informative. It would also raise awareness of what councils do.
It remains to be seen whether the seven councils in the ARC’s region (Auckland, North Shore, Waitakere, Manukau, Rodney, Franklin and Papakura) can accommodate the changes in their own rating systems.
ARC’s information chief, Tony Darby, says each council has a different rating system. If just one can’t include the additional information required, the ARC will have to “go down another track”, he says.
Other options are for the ARC to directly invoice the 450,000 ratepayers affected or to outsource the operation to a third-party supplier. It has issued a request for information to large systems integrators on how they could provide systems for the rating process.
ARC finance head Nicholas Cory says if the ARC decides to bill directly and develop it in-house, it will have to cost less than $4 to $8 per assessment per year. That works out at $3 million to $4 million each year over a five-year period. The deadline to put a system in place is July 1, 2003.
Processes involved include calculation of rates; printing and mailing rates assessment notices and invoices to ratepayers; maintaining and updating rates databases; operating a call centre to answer queries; processing payments; and following up arrears and collecting debts. The system would have to interface with the valuation and property database and ARC’s SAP financial system to import and export debtor ledger data. There would also have to be an interface to import valuation and property information from the region’s seven councils.
The close-off date for the RFI was Friday and Darby says there have been four main submissions, mostly partnerships.
Darby says ARC is the biggest regional council in terms of number of ratepayers and city councils and is likely to be the most affected by the law change. It has double the number of ratepayers of any other regional council.
North Shore City Council information services manager Tony Rogers says if the changes could be done with minor modifications it would probably be the cheapest option for ARC.
He isn’t yet aware of what the ARC’s requirements would be. He says at the very least North Shore City Council would have to make some minor changes to its Geac financial system, such as ensuring there are fields for the new data required.
Rodney District Council IT manager Steve Wagstaff says the council is meeting the ARC to discuss the matter and it isn’t yet known what will happen. He says the new law will impose some changes on its IT systems “even if it’s as minor as removing the ARC levy from our bill”.
Franklin District Council communications manager Ken Dyer says the changes would be minor because it already has a highly transparent ratings bill. It uses Corporate Vision by Fujitsu.