Video: New Cyclone Gabrielle demolition costs proposal to go before council after consultation
Hastings District Council officials have consulted with Cyclone Gabrielle category three property owners about a controversial proposal that originally suggested that the owners be liable for some of the costs of demolishing their homes.
At an emotional Council meeting two weeks ago, Councillors decided to leave the proposal on the table, requesting more information from officials. This came after Dan Gale, a representative of some of the property owners told councillors at the meeting that the owners are disgusted at a “flawed and unfair” policy.
He said that the community has been blindsided, “having been told throughout the whole process that these demolitions costs would be covered by council”.
Council CEO Nigel Bickle told Hawke’s Bay App yesterday that a revised proposal will be presented to the full Council at a meeting on Tuesday next week.
Councillors also held a closed Council workshop on Tuesday to go over all the available information, including from residents who shared their views. No decisions were made at this workshop
In an agenda item for that meeting tabled today, it states that council officials have since sent a letter to about 165 property owners asking for feedback and received 23 responses. All the feedback opposed the proposal, which would see the original policy amended, to make property owners liable for some of the demolition costs.
The key issue for Council to decide on, is stipulated in the email from the Mayor and Councillors to affected property owners.
In the email, Hazlehurst says that “the nub of the matter is if homeowners have received insurance payouts that are above the assessed market value of the property (as at February 13, 2023) and are receiving a Council offer for land or a relocation grant, then should they contribute part of the cost of demolition? Alternatively, this cost will be funded by ratepayers’”.
She tells the property owners that separate decision needs to be made for the uninsured. Currently, payments to the uninsured are being funded solely by ratepayers and taxpayers. The proposal suggests these owners also contribute to the cost of demolition.
“As your mayor and councillors, we will make the final decision on the over-arching policy. To do that, we want to be sure we have input of those most affected.”
Hazlehurst notes in the email that this process is “completely separate from the confidential conversations you are having with the buy-out office”.
She said that she understood that it was a short timeframe, but they did not want to prolong the decision.
“This is a difficult decision, with councillors having to weigh up the impact on both those immediately affected and the wider ratepayers who are funding this work.”
The new proposal puts the property owners in three categories – fully insured, under-insured and uninsured.
With regard to fully insured, the agenda item state that in this scenario the valuation process establishes the market value for the property as at 13 February 2023.
In this case the property owner is fully insured with the proceeds exceeding the independent market valuation.
“Under the policy, the homeowner chooses the option that allows them to keep insurance payout and receive an offer for the land (under 2ha.) or residential rights of the property (over 2ha).”
“That means the property owner keeps all insurance proceeds and is receiving more than the property’s assessed market value as at 13 February 2023 and the ratepayer is also paying for the demolition.”
The new proposal is that Council works out the cost of demolition based on a rate per m2 and that amount is deducted from the payment under the policy is a small proportion of payout (capped at 10%).
In the case of the Underinsured or insurance not exceeding valuation, the , the homeowner chooses the option that allows them to ‘sell’ the property (or the dwellings and residential rights) to Council at the agreed price, less the insurance payment.
The Council then ‘tops up’ the difference between the insurance payout and the market value. In this scenario Council has had the benefit of any ‘demolition component’ that may have been included within the insurance payment, as it has lowered the amount paid to the owner, so does not claim further demolition costs.
With regard to those owners who do not have insurance and choose to have Council buy the property at the market value the Council will work out the cost of demolition based on a rate per m2. The amount deducted from the payment under the policy is a small proportion of payout (capped at 10%).
Bickle said the principle in the original policy was around providing fairness and equity for the ratepayer, and affordability for the ratepayer.
“We get the trauma. And the policy was designed to provide a genuine pathway for those owners on a voluntary basis. And the original policy had all of the costs of the demolition falling on the rate payer and not on the affected property owners.”
