Differential Roading Rates

Council is considering creating a specialised sector rate to cover road repair expenses caused by heavy vehicles, such as those from the forestry industry, dairy and industrial activities. Let’s navigate this together!

Here’s the issue - a big heavy load creates way more wear and tear on our roads, and we need to figure out how to cover those cost more fairly. Local road repairs currently cost around $5.9 million and are part funded by Council, with Waka Kotahi, New Zealand Transport Agency (NZTA) funding the rest. Waka Kotahi funding comes from fuel taxes and road user charges paid by vehicle owners. So, while it may seem like these charges we already pay should cover road wear and tear, they fall short, and local ratepayers end up paying a portion of these costs.

We know that heavy vehicles cause more wear, so Council is exploring ways to ensure those contributing more to road damage also contribute more to repair costs. The goal is to find a fair solution to collect the amount needed to cover the local roading repairs.

What’s happening now?

Currently, ratepayers pay a district-wide rate per land value (80% of total roading cost) and a fixed charge (20% of total roading cost) varying by three sectors - urban, commercial/industrial, and rural. A significant portion of roading rates is based on land values which doesn’t specifically consider heavy vehicle road use. We need to be able to tie the costs to the tonnage moved on local roads and link it back to specific properties.

We can do this by adding a new rating portion - a differential rate that considers tonnage and breaking it down across ten rating categories to ensure it’s fair. Those ten categories are dairy, forestry, farming (non-dairy), industrial, commercial, residential, lifestyle, other, mining and Utilities with a land value of zero.

Think about it like divvying up the total roading costs, and each property gets a slice based on how much heavy traffic it attracts. This new approach ensures everyone chips in for the wear and tear heavy vehicles cause on our roads. We’ve obtained an independent report from Infometrics and an external expert to determine the estimated total tonnage on our roads, the wear and tear effect, the costs of that wear and tear and an equitable roading rates model. With all that work done, the proposed differential rate requirement is around $1.1 million.

Here are the options:

• Option one: No change
• Option two (our preferred option): Retain the General and Fixed rates and introduce a ‘Heavy Vehicle’ rate.

More information on the options can be found in the document below.