Community Plan 2009-2019

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Section 11: Policies

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The following section contains key Council policies in full or summarised form. This is not a complete collection of all Council policies, as there are many, and that would make the document very large. Rather it is a collection of policies that relate to our long-term planning, key financial matters and decision-making processes. The following policies are included.

Policy on Significance

This policy sets out how the Council judges the importance of each decision it has to make, and based on this what level of analysis is required before the decision is made and whether the Council needs to consult with the community.

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Revenue and Financing Policy

This policy guides how the Council funds its activities and investments and why it chooses particular funding sources. In particular it looks at how activities can be funded from:

• General rates.
• Uniform annual charges (UACs).
• Targeted rates.
• Fees and charges.
• Interest and dividends from investments.
• Borrowing.
• Proceeds from asset sales.
• Development contributions.
• Grants and subsidies.
• Any other funding sources.

As part of the preparation of the Draft Community Plan, the Council considered a range of options for changing this policy. The Council considered the advantages and disadvantages of these options, such as changing to capital value rating and changing the rating mechanism for business and commercial ratepayers. It was decided that none of the alternative rating systems offered sufficient advantages to justify the disruption of changing to a new system.

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Treasury Management Policy
(encompassing Liability Management Policy and Investment Management Policy)

This policy sets out the Council's objectives, policies, strategies and monitoring procedures to ensure that its responsibilities in terms of the Liability Management Policy and Investment Policy are carried out in accordance with its statutory obligations.

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Policy on Development Contributions

This policy sets out what payment developers must make to the community when undertaking development activities, in order to make a fair contribution to the community for the costs of growth in terms of upgraded and new infrastructure and community facilities over the planning period.

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Policy on Partnerships with Private Sector

This policy describes under what conditions the Council will form partnerships with private sector firms and other organisations and when it will consult over such partnerships.

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Remission and Postponement of Rates Policies

For some types of property and for people experiencing hardship the Council may remit rates, or postpone rates payments. This policy describes under what circumstances this will occur.

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Policy on Significance

Background

Councils must have a Policy on Significance. These requirements are set out in sections 90 and 278 of the Local Government Act 2002.

Once a decision is determined as significant according to the approach, criteria and procedures of this policy, or by Council resolution, the decision-making provisions contained in section 76(3)(b) of the Act will be observed.

New Plymouth District Council's general approach to significance

The Local Government Act 2002 requires local authorities to set out their 'general approach to determining the significance of proposals and decisions in relation to issues, assets, or other matters' (s90(1)(a)).

New Plymouth District Council will determine the significance of any issue requiring a decision by making judgements according to the likely impact of that decision on:

1. The current and future cultural, economic, environmental and social well-being of the district or region.
2. The achievement of, or ability to achieve, the Council's stated levels of service as set out in the 2009-2019 Community Plan.
3. Any persons who are likely to be particularly affected by, or interested in, the issue, proposal, decision or matter.
4. The capacity of the local authority to perform its role and carry out its activities, now and in the future.
5. The financial, resource and other costs of the decision.

The Council will also take into account views already expressed in the community and make judgements on the level of support for those views, when determining the significance of a decision.

Thresholds, criteria and procedures

Any thresholds, criteria, and procedures that councils use for assessing the significance of a matter must be included as part of their Policy on Significance (s90(1)(b)).

The range of issues requiring decisions by local authorities is very wide and it is impossible to foresee every possibility. It is therefore recommended that thresholds are not used to determine significance. The use of the following proposed procedure will be used to determine significance.

Procedure for determining significance

1. Identification of an issue requiring a Council decision.
2. An assessment of significance, using New Plymouth District Council's general approach to significance (set out above).
3. Officer or other professional advice on significance and options.
4. Council consideration and final decision-making on the:
   1. Degree of significance of the issue.
   2. Appropriate level and type of consultation.

Advice from Council officers will, in normal circumstances, come via the Council approved report format. This format specifically alerts elected members to significant impacts as set out in the Council's general approach above.

Strategic assets

This policy must list those Council-owned assets, deemed by the Council to be strategic. This requirement is set out in section 90(2).

The Local Government Act 2002 defines strategic assets as:

"An asset or group of assets that the local authority needs to retain if the local authority is to maintain the local authority's capacity to achieve or promote any outcome that the local authority determines to be important to the current or future well-being of the community; and includes:

1. Any asset or group of assets listed in accordance with section 90(2) by the local authority; and
2. Any land or building owned by the local authority and required to maintain the local authority's capacity to provide affordable housing as part of its social policy; and
3. Any equity securities held by the local authority in:
   - A port company within the meaning of the Port Companies Act 1988.
   - An airport company within the meaning of the Airport Authorities Act 1966."

On the next page is a matrix of New Plymouth District Council's owned assets and their relationship to the Council's seven Community Outcomes. Only those assets that are important to achieving the Council's Community Outcomes have been included.

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Revenue and Financing Policy

Overview

This policy explains how each activity is proposed to be funded for both operating and capital expenditure over the next 10 years. This is a requirement of the Local Government Act 2002 (LGA 2002).

Councils must show for each activity (LGA 2002 Section 101(3)):

• The community outcomes to which the activity primarily contributes; and
• The distribution of benefits between the community as a whole, any identifiable part of the community, and individuals; and
• The period in or over which those benefits are expected to occur; and
• The extent to which the actions or inactions of particular individuals or a group contribute to the need to undertake the activity; and
• The costs and benefits, including consequences for transparency and accountability, of funding the activity distinctly from other activities; and
• The overall impact of any allocation of liability for revenue needs on the current and future social, economic, environmental and cultural well being of the community.

This policy gives some certainty to the community as to how the activities of the Council will be funded and indicates which groups and/or individuals in the community the Council sees as receiving benefits from these activities. There is an intention to review the Revenue and Financing Policy prior to the completion of the next LTCCP.

Funding options for Council activities

General rates

These are rates that are applied to the entire rating base of the district. In New Plymouth District general rates are cents per dollar of land value, levied differentially on the following classification of property:

• Residential.
• Commercial/Industrial.
• Farmland.
• Small Holdings.

The rationale for the differential groups and an outline of a proposed review of them is discussed in the section on general funding policies. General rates also include the uniform annual general charge (UAGC), a fixed charge levied on every rateable property in the district. The level of the UAGC changes the incidence of rates within and between differential classes.Return to top

Targeted rates

The Council charges targeted rates in the form of uniform (flat rate) annual charges. These are for the recovery of the cost of providing water, wastewater and refuse collection/disposal/recycling charges for households in serviced areas and some other property uses. The Council is also introducing one new targeted rate for the roading activity to increase the transparency between the benefit the service delivers and the allocation of costs. See Volume 1 under the financial implications and forecasts section for a more detailed explanation of this change.

Fees and charges

The Council levies over 1,000 fees and charges which are either full or part charges to recover the costs of services. Fees and charges are usually for services where the user has discretion on whether to use the service or not.

Interest and dividends from investments

The Council receives interest and dividends from its investments, as managed by Taranaki Investment Management Limited and short-term cash management.

Borrowing

Borrowing is the taking on of debt and usually only borrowed to fund long-lived physical capital.

Proceeds from asset sales

These are the sums received when physical assets are sold.

Development contributions

Development contributions are sums payable, or assets transferred to Council, by developers or new service users for the costs imposed on infrastructure and facilities by growth in numbers of users.

Financial contributions under the Resource Management Act

Financial contributions are sums payable, or assets transferred to Council, by developers or new service users to enable mitigation, avoidance or remedying of adverse effects arising from subdivision or development.

Grants and subsidies

These are payments from external agencies and are usually for an agreed specified purpose. The major source of these are New Zealand Transport Agency (NZTA) subsidies for road maintenance, renewals and improvements.Return to top

Policy for funding operating expenditure

Operating expenditures are the day to day on-going expenses of providing the Council's activities. They cover costs of staff, energy, consumables such as paper, vehicle running costs and asset maintenance. Operating expenditures are funded from the following sources and for the following reasons.

Funding source for operating expenditure	Explanation of New Plymouth District Council funding methods for operating expenditure
General rates	General rates will be primarily used to fund those activities, or parts of activities, that benefit the community in general and where no identifiable individuals or groups benefit in a significantly different way to the rest of the community. General rates may also be used where the use of direct charging would discourage use, when encouraging use of the service is an explicit objective, or important to achieving the Community Outcome to which the activity is intended to contribute. General rates may also be used where it is impractical, or too administratively expensive, to fund the activity from other funding sources. New Plymouth District Council will apportion its general rates according to the land value and deemed use of each property. Land value has been historically accepted by the district's community with little or no expressed desire for change. The advantages of capital value, as a measure of benefit received from Council services and as a measure of a ratepayer's ability to afford rates, are not considered to be so superior to a land value system to justify a change at this time. Use of property is determined according to whether its primary use is residential, commercial/industrial, farms or small holdings. Each type of property pays different rates (cents per dollar of land value). These are called "differentials" and are designed to achieve an apportionment of rates that reflects the estimated value of services received by each classification of property, after significant modification by the use of the uniform annual general charge and uniform charges (targeted rates). The UAGC is a flat, per property component of the general rate. It funds the same activities as are funded by the general rate. The UAGC has a significant effect, in that it lowers rates on high value properties and raises rates on lower valued properties within each differential classes of property. The Council considers the level of fixed charges and property value based general rates each year and is able to make adjustments through the Annual Plan process.
Targeted rates	The Council may use targeted rates to fund activities where identifiable classifications of ratepayer, or ratepayers in identifiable locations, receive benefits from the activity to be funded in a significantly different way from other ratepayers. Targeted rates may be levied as a uniform annual charge, levied on the land value, capital value or any other legally permissible basis. Targeted rates may be levied differentially between locations or classifications of ratepayer. The Council may levy targeted rates for the purpose of achieving a more fair, or efficient, or transparent allocation of costs across the community.
Fees and charges	The Council will generally use fees and charges for those services where the benefit is entirely, or in part, to the direct user of the service and where the use of the service is at the discretion of the user. This includes fees for various consents, licenses, permits and property information. The user charge may recover all, including a market return on the value of the Council's investment, or part of the cost of the activity. Where the Council needs to ration the use of an activity, it may charge at a level above that which would be necessary to recover the costs of the activity. Fees and charges may be in the form of fines, penalties and like instruments and used where the Council wishes to modify the behaviours that impose costs, or inconvenience, on other members of the community.
Interest and dividends from investments	The Council treats ordinary budgeted interest and dividends, along with other investment income, as general revenue.
Borrowing	The Council will not borrow to fund operating costs.
Proceeds from asset sales	Operating costs are not funded from asset sales.
Development contributions	Operating costs are not funded from development contributions.
Financial contributions under the Resource Management Act	Operating costs are not funded from financial contributions.
Grants and subsidies	Grants and subsidies will be used for operating expenses only when this is consistent with the purpose for which they were given.
Reserves	Reserves are a component of equity generally representing a particular use to which various parts of equity have been assigned. Reserves may be legally restricted or created by the Council.

Sources of funding

The following sources of revenue are applied to the Council's operating activities.

Council activities	General rates	Targeted rates	Grants and subsidies	Fees and charges	Dividends and interest	Reserves
Govett-Brewster Art Gallery
Puke Ariki
Community Development
Recreation and Events
Parks
Roads
Solid Waste and Refuse Collection
Stormwater
Water
Wastewater
Regulatory Services
Emergency Management and Business Continuance
Economic Growth
Civic and Democracy Services
Management of Investments and Funding					*

* Management of Investments and Funding generates a surplus which is used as an offset against general rates.Return to top

Policy for funding capital expenditure

Capital expenditures includes those to purchase, build, contract to build, or acquire into Council ownership, physical assets.

Capital expenditures also include the renewal or replacement of existing assets. These are usually funded from financial reserves built up from the revenue sources that fund the particular activity.

Physical assets have service lives beyond one year. The well accepted principle of "intergenerational fairness" says that expenditures that provide benefits over time should be funded over the same period, so that each generation of users pays a fair contribution for the benefit they receive.

It also includes debt repayment. The Council does however exercise discretion in debt funding new assets with service lives that are less than 10 years as in some cases it would be inappropriate to borrow for such purposes.

Funding source for capital expenditure	Explanation of New Plymouth District Council funding methods for capital expenditure
General rates	General rates may be used to retire debt. General rates may be used to purchase physical assets where the Council determines that funding the assets from debt is not the preferred option.
Targeted rates	Targeted rates may be used to retire debt, where the debt arose from the purchase of assets used for the activity funded by the targeted rate. Targeted rates may be used to purchase physical assets, where the Council determines that funding the assets from debt is not the preferred option, and the assets are to be used for the activity funded by the targeted rate.
Fees and charges	User charges may be used to retire debt, where the debt arose from the purchase of assets used for the activity funded by the user charge. User charges may be used to purchase physical assets, where the Council determines that funding the assets from debt is not the preferred option, and the assets are to be used for the activity funded by the user charge.
Interest and dividends from investments	Investment income may be used to retire debt, where that income has not been budgeted for other purposes.
Borrowing	The Council's preferred means of funding capital expenditures will be borrowing in order to promote intergenerational fairness.
Proceeds from asset sales	Proceeds from asset sales are an appropriate source for purchasing or retiring debt as it has a neutral effect on the Council's financial position (assets versus liabilities).
Development contributions	Development contributions will be used to fund that proportion of new asset expenditure that is made necessary by increased demand as a result of growth in the number of users.
Financial contributions under the Resource Management Act	Financial contributions will be used to fund that proportion of new asset expenditure that is made necessary by the effects of subdivision and development.
Grants and subsidies	Grants and subsidies will be used for capital expenses only when this is consistent with the purpose for which they were given.
Reserves	Reserves are a component of equity generally representing a particular use to which various parts of equity have been assigned. Reserves may be legally restricted or created by the Council.

Sources of funding

The following sources of revenue are applied to the Council's capital activities.

Council activities	General rates	Targeted rates	Borrowings	Reserves	Grants and subsidies
Govett-Brewster Art Gallery
Puke Ariki
Community Development
Recreation and Events
Parks
Roads
Solid Waste and Refuse Collection
Stormwater
Water
Wastewater
Regulatory Services
Emergency Management and Business Continuance			**
Economic Growth			**
Civic and Democracy Services			**
Management of Investments and Funding			*

* Management of Investments and Funding is the activity the Council uses to centrally fund its borrowings and their associated costs.

** No capital expenditure.

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General funding policies

Differential groups within the value based general rate

In 2008/09 the general rate based on land value is estimated to make up 30 per cent of total operating revenue, and 63 per cent of total rates income. For individual properties this value based general rate can vary significantly as a result of changing relative land values as set every three years by the rating revaluations. In the early 1990s, in order to reduce this volatility and relate the amount of general rates paid by each broad sector to the amount of benefits received for Council services, the Council created four differential groups. These differential groups arose from a detailed benefit assessment study. The study resulted in the following differential groups and their proportion of value based general rates:

Commercial/Industrial 27.2%

Residential 54.0%

Small Holdings 3.0%

Farmland 15.8%

The rationale was that each group of properties would pay a fixed proportion of the total general rates required to fund activities. In this way each group would pay a fair and equitable amount that was related to the benefits received by each group and would not be subject to fluctuations caused by changing property prices between each group. As property values change over time the Council alters the group differentials (the amount of rates charged per dollar of value) to ensure that each differential group continues to pay the same overall proportion of general rates.

Within each differential group the rating valuations result in changes to the incidence of general rates. As an example the residential differential group contributes 54 per cent of value based general rates in 2009/10, the same as it did in 1995/96. Waterfront properties within the residential group however would generally be paying a higher share of those residential rates due to significantly higher valuation increases compared to the average residential property over recent years.

The benefit allocation study from the mid 1990s was extensively reviewed in 1997/98. At that time the Council decided to maintain the four groups and their value based general rate proportions as the benefit allocations had not changed significantly. These four differential groups and their value based general rate proportions have remained the same since this time and continue for the 2009/10 year.

The Council is aware that significant changes to relative property numbers and land values between each group have occurred since 1996. In particular the number of Small Holdings properties has increased four times faster than the other differential groups, while the average value of residential properties has increased faster than Commercial/Industrial and Farmland. This may have changed the benefit allocations for Council services that can be attributed to each of the four groups. The Council is also aware that the property market is currently changing rapidly, and that significant changes in the relative values between groups may be reflected in the next round of rating valuations in 2010. Changes in the services being delivered by the Council over the last 10 years may also have altered the benefit allocations across the groups.

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Proposed review of differential groups

As part of the preparation of this Revenue and Financing Policy the Council has briefly reviewed the rationale of the differential groups and the benefit assessments last reviewed in detail ten years ago. Preliminary work indicates that there could be some equity issues emerging, particularly with the Small Holdings group. The Council also wants to explore mechanisms that allow for the ongoing fine-tuning of the differential group settings to maintain equity between the groups as property numbers change over time.

This is a complex issue that needs a careful and considered approach by the Council. Any major changes in the general rate differentials would have significant impacts on many individual property owners and needs to have community input before the policy is altered.

The Council has therefore favoured maintaining current policy settings for the differential groups for the 2009-2019 Community Plan, but is signalling that an in-depth review will need to be carried out ready to implement any changes for the 2012-2022 Community Plan. This review will likely commence in 2010. Before any changes in this area are considered further work needs to be done by the Council including:

• A consideration of whether the existing four differential groups are still appropriate.
• A detailed study of the benefit assessment from the Council services on each group of ratepayers.
• Consideration of options for adjusting the group differentials, if they continue, for general rates on an ongoing basis to reflect major changes in property numbers and values.

District-wide funding: The One Bucket Policy

After the establishment of the New Plymouth District in 1989 a number of rating systems and funding policies were amalgamated. From the early 1990s New Plymouth District Council adopted a "one bucket" policy for community facilities, and a combined network pricing policy for refuse collection, and the wastewater and water supply networks. Kerbside recycling was added to this policy since then. This policy was reviewed in 1998, 2004, 2006 and again in 2008 and has been confirmed by the Council as an appropriate way of funding these services.

The Council assesses the priorities of the district as a whole. This policy ensures that funds are provided on the basis of district-wide priority and is intended to:

• Promote a unified commitment to the long term future of the district.
• Provide all urban communities across the district with an acceptable minimum standard of service for water, wastewater, refuse collection and kerbside recycling.
• Provide integrated management.
• Spread the risk associated with operating assets and intensive network services.
• Ensure funds are available to upgrade the networks and complete projects at the optimal time.
• Avoid any sudden changes in the level of funding required from specific groups of ratepayers.

The priorities are assessed on a needs basis as opposed to the amount of rates sourced from each locality. For community facilities the Council does apply the general rate differentials to attribute costs and benefits to the appropriate rating group. For refuse collection, kerbside recycling, water and wastewater a standard fixed charge for each service is applied to all urban areas within the district that receive these services.

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Changes in targeted rates

Roads

The Roads activity of the Council covers the operation, renewal and improvement of the roading network, including roads, bridges, tunnels, traffic management and control systems, footpaths and streetlights. The roading network has a replacement value of $810 million and reaches 100 per cent of the resident population. New Plymouth District Council currently funds the Roads activity through a mixture of general rates (using four differentials based on land values), subsidies (from central government reflecting the partnership between central and local government and funded through petrol taxes and road user charges) and a small amount of fees and charges. The Council in reviewing funding policies for the 2009-2019 Community Plan has identified that the roading activity could be funded on a more equitable basis that better reflects the costs and benefits.

The roading network is considered to be a single network for funding purposes. This is reinforced by the central government system for grants for subsidising capital funding for improvements. The majority of the costs are in the construction and ownership of the network. The roading network links all properties (or as many as practicable) to the network and allows access to community facilities, employment and economic development. In this manner the roading network service is partly similar to water and wastewater services in urban areas. These other network services are funded through a fixed rate across all properties who receive the service.

User pays for distance travelled is reflected in the subsidies from central government that are funded through petrol taxes and road user charges. Currently the general rate, based on land value, is funding the balance of the required costs, including the network access benefits available to all properties. Introducing a fixed charge (Uniform Annual Charge) would reflect the access to the network that all properties have, regardless of usage or actual individual benefit. A uniform targeted rate of $100 plus GST on each separately used or inhabited part of a rating unit is to be applied, representing a network charge. This would fund around 21 per cent of the rate funding requirement for the roading activity. Other local authorities that have introduced this form of rating for roading include Kapiti Coast District ($150), Manawatu District ($100) and Southland District ($110).

The Council is aware that introducing a UAC on each separately used or inhabited part of a rating unit for the roads activity will increase the proportion of rates set as flat charges. This will be regressive in nature and result in higher value properties paying less rates and lower value properties paying more.

Impact of allocation of Council costs on community well-being

Sustainability of rates funding

The Council is very aware that the level of rates can have negative impacts on property owners with low incomes. In preparing this Revenue and Financing Policy the Council investigated the affordability of current rating levels as a proportion of household income.

The Council concluded that affordability of rates was not generally a major issue for property owners within the District. Rating levels were however approaching levels at which affordability concerns could begin to emerge for the areas with lower median household incomes. The Council will continue to monitor affordability levels as more information becomes available. This will be particularly relevant for the 2012-2022 Community Plan process which will have access to data from the 2011 Census.

The four well-beings

The social well-being of New Plymouth District citizens benefits from the very high proportion of Council operating costs (21 per cent) that are paid from investment income. This allows the Council to provide higher levels of service and better facilities than would normally be available in a district of this size, while keeping the impact on the ratepayer low. Investments are carefully managed to ensure that the benefit that the community enjoys from these funds is maintained or improved.

The economic well-being of the community is taken into account by ensuring that direct beneficiaries of services pay for them whenever it is desirable to do so. This accounts for 41 per cent of Council operating costs. This enables users to make choices about how much of the service they use, so that the Council does not provide more of it than the community wants. Rates are used wherever it is considered fair that all should make a contribution to an activity and where funding from voluntary user charges would lead to under provision of the activity. To ensure that the costs of infrastructure are placed on current as well as future users, these costs are generally spread over time via borrowing.

The environmental well-being of the community is enhanced by making those whose actions bring about the need for regulation or enforcement pay for the costs they place on the community wherever possible. The Council funds activities that benefit the whole community, through creating a better environment, via rates so that these activities are funded to a degree that reflects the wider community benefits.

Cultural well-being is promoted by making a wide range of cultural events and experiences available to the community. Due to the non-economic nature of many of these events and the wider community benefits that flow from them, they are often funded in part from rates.

The overall source of funds allocation is set out in the graph below.

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NPDC Source of Funds Budget 2009/10

Assessment of benefit allocation across the community

Introduction

Identifying who benefits from an activity provided by New Plymouth District Council is important when considering who should pay for the service. Usually, if only individuals receive the benefits of an activity (private benefits), some type of user-pays system is considered. Alternatively if the benefits of an activity are shared by the whole community or by a large group within the community (public benefits) then an appropriate funding option for that activity would be the general rate or a targeted rate respectively. If a person ( or persons) creates a problem which generates cost for the Council and the community, then that person should bear some or all of that cost (exacerbator pays) This is not always practical however, as identifying and charging the offender is not always possible.

Definitions

Public Benefits Arising from benefits distributed across the whole community, rather than to identifiable groups and individuals, or where the use of payment would dissuade participation.

Private Benefits Arising from the distribution of benefits predominantly going to identifiable individuals, groups of properties or specific areas within the District using the service.

Exacerbator Pays Arising from the need to control the negative consequences of individual, or group, actions on the rest of the community.

Summary of benefit assessment

Council activity	Proportion of benefits from Council activity
	Public	Private	Exacerbator
Cultural Services:   Govett-Brewster Art Gallery   Puke Ariki and district libraries	90% 90%	10% 10%
Community Development	80%	20%
Recreation and Events:   Pools   Programmes and events   Event venues	70% 85% 45%	30% 15% 55%
Parks: Open spaces   Cemeteries   Crematorium   Sports parks, motor camps and halls	100% 65% 80%	35% 100% 20%
Roads	60%	40%
Solid Waste and Refuse Collection	100%
Stormwater	100%
Water	100%
Wastewater	100%
Regulatory Services:  Animal control  District planning   Land use consents and monitoring   Environmental health   Parking	20% 80% 60%	100%	80% 20% 100% 40%
Emergency Management and Business Continuance	100%
Economic Growth	100%
Civic and Democracy Services	100%

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Benefit assessments

For a more indepth description of the activities, contribution to Community Outcomes and the rationale for each activity refer to the Council Activities section in Volume 1 of this Plan.

Council activity	Community Outcomes contributed to	Distribution of benefits assessment	Funding sources	Period of benefit	Benefit proportions
Cultural Services: Govett-Brewster Art Gallery	Vibrant Prosperous Skilled	Govett-Brewster Art Gallery provides exhibitions and gallery services that cater for the needs of residents at large and build a collection of materials which are a community asset for the future. The private benefit accrues to individuals who use the service.	General rates Fees and charges Reserves Grants and subsidies	Benefits are ongoing	Public 90% Private 10%
Cultural Services: Puke Ariki and District Libraries	Vibrant Prosperous Skilled	Libraries provide information services that cater for the needs of residents at large and build a collection of materials which are a community asset for the future. The private benefit accrues to individuals who borrow books or materials.	General rates Fees and charges Reserves Grants and subsidies	Benefits are ongoing	Public 90% Private 10%
Community Development	Together Skilled Prosperous	Community Development provides initiatives on behalf of the community at large. By distribution of grants beneficiaries are those receiving grant aid.	General rates Grants and subsidies Fees and charges Reserves	Benefits are ongoing	Public 80% Private 20%
Recreation and Events: Pools	Vibrant Skilled Secure and Healthy	The pool provides private benefits that cater for the needs of swimmers and other patrons who use the pools, hydroslides and gym facilities. The public derive benefit from education in water safety and from provision of recreational resources that encourage community health and social well-being.	General rates Fees and charges Reserves Grants and subsidies	Benefits are ongoing	Public 70% Private 30%
Recreation and Events: Programmes and Events	Vibrant Skilled Secure and Healthy	Programmes and events provide private benefits to those who attend special programmes. The public derive benefit from provision of programmes such as Festival of Lights open to the general public.	General rates Fees and charges Reserves Grants and subsidies	Benefits are ongoing	Public 85% Private 15%
Recreation and Events: Event Venues	Vibrant Skilled Secure and Healthy	The benefits from expenditure on event venues are mainly private. The availability of grounds and facilities for use by sporting groups, teams, clubs and associations is a significant private benefit to those groups and their members. The public derive benefit from having access to sports grounds for recreation other than sport.	General rates Fees and charges Reserves Grants and subsidies	Benefits are ongoing	Public 45% Private 55%
Parks: Open Spaces	Secure and Healthy Vibrant Sustainable	The benefits from expenditure on parks and garden services are generally a public benefit. With unrestricted access to parks and gardens and the general enhancement value of access to open spaces.	General rates	Benefits are ongoing	Public 100%
Parks: Cemeteries	Sustainable Secure and Healthy	The benefits from expenditure on cemeteries are a combination of public and mainly private. Family members of the deceased benefit from the cemetery services. Public health and sanitation is a public benefit provided by having access to these facilities.	General rates Fees and charges	Benefits are ongoing	Public 65% Private 35%
Parks: Crematorium	Sustainable Secure and Healthy	The benefits from expenditure on crematorium are entirely private. Residents gain benefits from having access to a local discretionary business service.	Fees and charges	Benefits are ongoing	Private 100%
Parks: Sports Parks, Motor Camps and Halls	Vibrant Secure and Healthy	The benefits from expenditure on sports parks, motor camps and halls are a combination of public and private. The public derive benefit from having access to sports grounds for recreation other than organised sport. The availability of sports grounds and facilities for use by sporting groups, clubs and associations is a significant private benefit to those groups.	General rates Fees and charges Reserves Grants and subsidies	Benefits are ongoing	Public 80% Private 20%
Roads	Connected Sustainable	The benefits from expenditure on roads are a combination of private and public. The public derive benefit from having access to the roading network. This is reflected by the proposed network access part charge through a uniform annual charge rate. Individual properties gain varying benefits attributed to roading.	General rates Targeted rates Fees and charges Grants and subsidies Reserves	Benefits are ongoing	Public 60% Private 40%
Solid Waste and Refuse Collection	Sustainable Secure and Healthy	The benefits from expenditure on solid waste management are for every household within collection areas and further public benefit arises from transfer station operations and landfill as these activities promote public health and sanitation and control pollution.	Fees and charges Targeted rates Reserves	Benefits are ongoing	Public 100%
Stormwater	Sustainable Secure and Healthy	All properties within the serviced areas benefit from management of stormwater. Stormwater is managed on a catchment basis. Benefits apply to all.	Reserves General rates Fees and charges	Benefits are ongoing	Public 100%
Water	Secure and Healthy	The benefits from expenditure on water supply services are mainly public. There are considerable public health advantages that arise from access to a continuous supply of safe drinking water and the assured availability of water for fire fighting purposes.	Fees and charges Targeted rates Reserves Borrowing	Benefits are ongoing	Public 100%
Wastewater	Secure and Healthy	The benefits from wastewater is a degree of direct uniform benefit for every household within sewage disposal areas. Other commercial and industrial users benefit based on their activity levels.	Fees and charges Targeted rates Reserves Borrowing	Benefits are ongoing	Public 100%
Regulatory Services: Animal Control	Secure and Healthy	The benefits from animal control are mainly private in which the user pays. There is also a degree of public measurable benefit for everyone.	Fees and charges General rates Reserves	Benefits are ongoing	Public 20% Exacerbator 80%
Regulatory Services: District Planning	Sustainable	The benefits are attributable to the whole community therefore are seen as mainly a public benefit. In cases where there is non compliance with the District Plan the exacerbator pays.	General rates Fees and charges	Benefits are ongoing	Public 80% Exacerbator 20%
Regulatory Services: Land Use Consents and Monitoring	Sustainable	The benefits are attributable to the individual in order to control the negative effects of an individual or group.	Fees and charges	Benefits are ongoing	Exacerbator 100%
Regulatory Services: Environmental Health	Secure and Healthy Sustainable	The benefits of expenditure on environmental health services are a mixture of public and private. The public benefits arise from the general community health and safety welfare that results from enforcement of bylaws and statutory requirements. There is a private benefit arising from individual licenses that certify individuals or owners of premises.	General rates Fees and charges	Benefits are ongoing	Public 60% Exacerbator 40%
Regulatory Services: Parking	Sustainable	The benefits are attributable to the individual therefore is seen as a private benefit.	Fees and charges	Benefits are ongoing	Private 100%
Emergency Management and Business Continuance	Secure and Healthy	The benefits are attributable to the whole community and seen as a public benefit. In some cases individuals have private benefit for value added services.	General rates	Benefits are ongoing	Public 100%
Economic Growth	Prosperous	The benefits are attributable to the whole community and seen as a public benefit. In some cases individuals have private benefit for value added services.	General rates	Benefits are ongoing	Public 100%
Civic and Democracy Services	Together	The benefit of expenditure on civic and democracy is a public benefit. This service means the public has the opportunity to be part of the democratic process and be represented.	General rates Fees and charges	Benefits are ongoing	Public 100%
Management of Investments and Funding	Prosperous	The benefits are attributable to the whole community and seen as a public benefit.	Fees and charges Dividends and interest Borrowing Reserves	Benefits are ongoing	Public 100%

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Treasury Management Policy
Encompassing Liability Management Policy and Investment Management Policy

Broad Philosophy

The council's philosophy on the conduct of its treasury activities is to ensure that the risks associated with such activity are properly identified, quantified and managed to ensure it meets its statutory obligations, and that there is minimal negative impact on the council arising from such risks.

This Treasury Management Policy (TMP) sets out the council's objectives, policies, strategies and monitoring procedures to ensure that its responsibilities in terms of the Liability Management Policy and Investment Policy are carried out in accordance with its statutory obligations. The policy has been revised and updated for this Community Plan.

The following is an abridged version of the full policy covering its key elements. Copies of the full policy are available on request from Council offices.

Objectives

The objectives of the council in respect to the TMP are essentially in three parts - the Council's Perpetual Investment Fund, its other pure commercial and semi-commercial investments and its normal treasury management involved in its borrowing, short-term investment and financial market risk management (this part in total referred to as other treasury activity).

Objectives for Perpetual Investment Fund

The council's broad objectives in relation to the basis for and management of the Perpetual Investment Fund are:

1. The founding principle of the fund

The founding principle of the fund is to at least maintain the real capital of the fund as a sustainable perpetual investment fund.

2. Fund investment style

The fund investment style shall operate as:

• A pure investment style. The investments are made on purely commercial terms.
• A direct investment style. The council chooses to mandate a commercially focussed board to undertake the investment management role.
• A prudent, commercial, diversified portfolio investment style and asset allocation, which manages risk to meet the obligations under the founding principle.

3. Fund goals

• The key measurable goal of Taranaki Investment Management Limited (TIML) is to at least maintain the real value of the initial settled capital of the PIF over a perpetual timeframe;
• TIML seeks to deliver a return to meet the obligations of the founding principles and a sustainable release to the shareholder.

4. Management of the fund

• TIML shall undertake the investment and management of the fund;
• TIML shall provide services required under a contract between the parties;
• TIML will recommend and the PIF will provide release payments per the contract and as calculated in the release rule adopted by the council and based on recognised and evolving best practice models (currently the "Yale" model).
• TIML will operate as an independent, commercial and accountable body based in New Plymouth that:
  : Takes a direct investment role.
  : Has regard to the maintenance of the council's credit rating.
  : Manages its ongoing management costs within a level not exceeding 0.6 per cent of the fund value, plus direct investing costs.

The Council has contractually mandated TIML, a 100 per cent council-owned company, to manage the fund to meet these objectives by making investment decisions and determining investment policy in the best interests of the fund, including the exercise of all rights in respect of any voting securities that form part of the fund.

Objectives for other pure commercial and semi-commercial investments

1. To manage the investments, and enhancing the returns and the value of the investments over the long-term.
2. To identify, quantify and manage the risks associated with the investments.
3. To regularly review the investments and determine whether the value of any investment has been maximised, or could potentially reduce, and if appropriate, to dispose of the investment in the most cost effective and efficient manner.
4. For the semi-commercial investments to modify the pure commercial rationale with broader community outcomes (if applicable) that could be contributed to by holding the investment in question.

Objectives for other treasury activity

1. To prudently, effectively and efficiently manage all risks associated with other treasury activity.
2. To fully comply with the council's statutory financial obligations.
3. To ensure that appropriate funding is in place to meet current and ongoing commitments of the Council.
4. To ensure that the council receives and maintains the highest possible credit rating commensurate with its financial strength and nature of its operations.
5. To develop and maintain professional relationships with financial institutions, investors and rating agencies.
6. To manage such investments within the council's strategic objectives; invest surplus cash in liquid and creditworthy investments.
7. To arrange and structure long-term funding at the lowest achievable funding margin while also optimising flexibility and spread of debt maturities.
8. To minimise the Council's exposure to adverse interest rate movements.
9. To monitor, evaluate and report treasury performance.
10. To monitor and report on financing/borrowing covenants and ratios under the obligations of security/lending arrangements.
11. To monitor and report on financial ratios and limits stated within this policy.
12. To ensure adequate internal controls exist to protect council's financial assets and to prevent unauthorised transactions

In meeting the above objectives for other treasury activity, the Council is a risk averse entity, and does not wish to seek risk from these activities. Interest rate risk, liquidity risk, funding risk and credit risk are risks the council seeks to manage, not capitalise on. Accordingly activity that may be construed as speculative in nature is expressly forbidden.Return to top

Liability Management Policy

In broad terms the Council will have two types of liabilities: current liabilities and term liabilities.

Current liabilities

Current liabilities reflect those obligations, expressed in monetary terms, that the Council has to meet within a relatively short space of time - at a maximum within the next 12 months. For day to day obligations for its operational and capital expenditure, the Council's policy is to pay such in full (or to the full extent of any contractual obligations) by the due date. This eliminates any credit exposure or risk.

Current liabilities can include the maturing portions of any term liabilities that will be due for repayment within the following 12 months. As there are specific policy provisions for term liabilities (as opposed to the more common current liabilities like trade creditors) it is more appropriate to deal with these as part of the term liabilities' policies.

Term liabilities

Term liabilities cover obligations of the Council which in general terms are not immediately payable, i.e. not due within the following 12 months. Public debt is the most common example but long-term lease obligations or deferred settlements may also be included in this section.

As part of its new Treasury Management Policy the Council has included specific borrowing (debt) management policies to address the various issues involved. The Council is a risk averse entity and does not wish to seek risk from its borrowings. Interest rate risk, liquidity risk and credit risk are risks that the council seeks to manage, not capitalise on. Speculative activity is forbidden.

Philosophy

The Council's policy on borrowing is based on three key elements:

1. Liabilities must be maintained at a "prudent" level.

2. Borrowings provide a basis to achieve intergenerational equity.

3. Borrowings must be undertaken efficiently and in accordance with the Council's Liability Management Policy.

Power to borrow

The Council borrows as it considers appropriate. The Council approves borrowing in general terms during the Community Plan and Annual Plan processes and delegates authority to officers to raise the approved borrowing during the year concerned.

Limits on borrowing

Borrowings will be managed within the following limits:

Net external debt[2] not to exceed	20% of equity
Net external debt not to exceed	135% of total revenue[1]
Pre-tax Funds Flow from Operations (FFO)[3] to exceed net interest expense by at least	2.5 times
Net interest expense on external debt (debt secured under debenture) as a percentage of total revenue to be less than	10%
Net interest expense on external debt as a percentage of total annual rates income (debt secured under debenture) to be less than	20%
Liquidity (term debt plus commited loan facilities plus cash or cash equivalents) over projected peak net debt levels over the next 12 months, to be at least	110%

[1] Revenue is defined as earnings from rates, government grants and subsidies, user charges, interest, dividends, financial and other revenue. For the purposes of the limits above total revenues do not include realised or unrealised gains/losses arising from the PIF, as the revenue flow to the Council from that Fund is managed through a Release Rule that smoothes the revenue impact of such value-based variations over time, therefore making such variations less relevant to the ratios being measured. The revenue released to the Council under the Release Rule is included in total revenues.

[2] Net external debt = gross debt (aggregate borrowings of the council, including any capitalised finance leases, and financial guarantees provided to third parties) less any cash or near cash treasury investments held from time to time.

[3] FFO = total revenues, less capital receipts and other non recurring revenues; less total expenditure net of any capital payments and non recurring expenditure; plus depreciation and increase in provisions.

Security for lenders

The Council has a debenture registered in favour of Perpetual Trust Limited, representing the interests of all lenders to or in the Council. The debenture is a floating debenture but provides the lenders with a specific charge over the rates revenue of the Council.

Types of borrowing

The Council has a variety of borrowing sources available, and will utilise the most appropriate and cost effective source from time to time, as determined by management.

Other sources of financing will from time to time be offered to the council. Management is authorised to assess and utilise such financing sources as it so determines, but within the general constraints laid down in terms of the Treasury Management Policy.

Future borrowings and allocation of loan charges

In 2009/10 the Council proposes borrowing $7.56 million to balance the funding required for its capital expenditure programme.

All activities requiring new capital collectively contribute to the need to borrow. Consequently, it would be inequitable to attribute the cost of new debt to particular activities using capital and not to others.

The Council centralises all borrowings (including existing debt outstanding) for the purpose of internal accounting. With the exception of those activities that have been financially "ring-fenced" (water supply, waste disposal, solid waste disposal and stormwater) debt servicing costs incurred at the corporate level are charged to each activity on the basis of the proportion of long-term assets held by that operating unit, to the total long-term assets of the council. The assets include long term investments.

The mechanism to charge each activity is by way of a cost of capital charge set at a level to recover the actual costs involved.

The capital charge to other activities is included in the Management of Investments and Funding activity.

New borrowings proposed are:

2009/10 = $7.56m
2010/11 = $9.50m
2011/12 = $14.47m

Risk management

There are six main areas of risk the Liability Management Policy addresses: liquidity risk, interest rate risk, credit risk, funding risk, foreign exchange risk and operational risk.

Liquidity risk

The Council is exposed to liquidity risk in that due to unforeseen events or circumstances it may not be able to meet its day to day commitments, including debt maturities.

The Council's objective is to always be in a position to meet its day to day commitments, to maintain its reputation and prevent any financial loss occurring, whilst ensuring that the level of cash balances are minimised in accordance with good cash flow management practices.

The Council is a highly credit-rated borrower and should always be in a position to raise additional funds if, and when, required. Accordingly, the greatest risk facing the council is that of a major disruption, either to the financial markets as a whole or from a natural disaster affecting the district or region, which results in a severe disruption to the Council's day to day revenues. To safeguard the Council against such risks the following guidelines have been adopted:

• Maintain a disaster recovery fund of not less than $600,000.
• Retain membership of the Local Authority Protection Programme (LAPP).

Interest rate risk

Interest rate risk is the risk that investment returns or funding costs (due to adverse movements in market interest rates) will materially exceed or fall short of adopted annual plans and strategic 10 year plan interest returns or cost projections. This may adversely impact cost control, capital investment decisions/returns/and feasibilities.

The primary objective of interest rate risk management is to reduce uncertainty to interest rate movements through fixing of wholesale market interest rates, thereby protecting investment returns and funding costs.

Credit risk

The Council may be exposed to credit risk in circumstances where a deterioration of the credit rating of an entity occurs with which the Council has placed investments or has concluded financial derivative contracts, or has concluded a major supply, construction or service contract.

In order to safeguard the Council against such risk the following guidelines have been adopted:

• Investments are placed only with parties that meet certain minimum credit ratings and only up to certain limits.
• Financial derivative contracts are to be concluded only with registered banks with certain minimum credit ratings.
• All parties with whom the council intends to conclude major contracts will be subject to formal credit approval.

Funding risk

Funding risk management centres on the ability to re-finance or raise new debt at a future time at the same or more favourable pricing (fees and borrowing margins) and maturity terms of existing facilities/loans.

In order to safeguard the Council against this risk the following strategy has been adopted:

• Obtaining Standard and Poor's credit rating to enable access to the capital markets as well as the traditional banking sector and retail market.
• Cash advance facilities with at least two major banks.
• Spreading maturity dates.

Foreign exchange and commodity risk

The Council may be exposed to this risk when purchasing offshore items that may be subject to currency fluctuations from the point a tender is accepted to the time payment is actually made.

The Council's objective is to ensure there are no material unhedged risks by purchasing forward exchange cover or hedging commodities directly.

Operational risk

The Council manages the internal operational risks associated with this policy by:

• Setting appropriate and clear cut levels of delegation and division of responsibility.
• Timely, accurate and robust reporting procedures.
• Regular review of the Treasury Management Policy, coupled with an annual internal audit of treasury operations.

Debt repayments

The Council will borrow for terms that best suit its current and desired debt maturity profile. In general terms borrowings will not be for greater terms than 25 years. However, given current financial market constraints, it would be unlikely that the council could secure borrowings for this length of time and would expect to refinance the loan a number of times during its life.

The Council makes systematic provision for the servicing and repayment of debt in its long-term financial planning. Generally the sources of funds for such costs will be rates and other revenue such as fees and charges and investment income and, if appropriate, the sale of assets.

Debt principal repayments are funded by a combination of the financing charge to each activity and, as a medium term rates smoothing measure, the use of funded depreciation not required for annual renewal (such funds being returned to the depreciation reserve over time).Return to top

Investment Policy

Mix of investments

The Council categorises its investments into four relatively distinct areas, the first three are long-term in nature and the fourth more short-term:

1. Perpetual Investment Fund. A long-term pure-commerical investment fund set up by the Council and containing the proceeds of sale of the Council's former shareholding in Powerco Limited. The Fund is managed on behalf of the Council by its 100 per cent owned investment management company - Taranaki Investment Management Limited (TIML).
2. Other pure commercial investments. Made and/or held in the context of the council's general strategic objectives purely for the commercial return received from them. The Council's investments in the four joint forestry ventures and some miscellaneous properties fall into this category. Other investments in this category could include convertible bonds, participating debentures and other quasi-equity instruments. Such investments are subjected to a broad range of active commercial reviews e.g. regular hold/sell reviews, portfolio analysis, comprehensive monitoring.
3. Semi-commercial investments. Where the pure commercial return rationale is modified by other strategic objectives or broader community outcomes. The Joint Venture Airport, the Council's forestry estates and miscellaneous properties fall into this category. Such investments are subjected to a narrower range of active commercial reviews given their infrastructural relationships, e.g. business monitoring and long-term planning appropriate to the scale and complexity of each business.
4. Treasury investments. Made from the surplus funds available to the council from time to time, and typically made in the form of financial instruments acquired from approved counter-parties.

It is noted that the dividend flow from pure investments are regarded as part of the long-term value creation objective. Any dividends over and above that amount incorporated in the budget for any year (or, in the case of the Perpetual Investment Fund - released by TIML from the Fund) are to be treated as an offset to borrowing requirements, and not utilised to support ongoing operating requirements of the Council. This same approach will apply to general surpluses arising from annual budgets (where not required for planned works/activities).

Perpetual Investment Fund - management of investment and risk

The Council created the Perpetual Investment Fund (the Fund) by resolution on 14 December 2004. The Fund represented the full proceeds of sale of the Council's shareholding in Powerco Limited ($259.43 million). The objectives outlined earlier in this policy were established as a basis for the contractual relationship with TIML in fulfilling its investment management role on behalf of the Council.

The Council has contractually mandated TIML to manage the Fund on the following basis:

1. To establish and adhere to, investment policies, standards, and procedures for the Fund that are consistent with its duty to invest the Fund on a prudent, commercial basis. Such policy standards and procedures are to be consistent with the Council's policies and decisions. (TIML assesses the investment risks and manages them in terms of the founding principles through the statement in three below.)
2. To review those investment policies, standards, and procedures for the fund at least annually.
3. To cover in the statement of investment policies, standards, and procedures (but not limited to):
   - The release rule[4] to apply to the fund in terms of a sustainable income flow to the Council.
   - The classes of investments in which the fund is to be invested and the selection criteria for investments within those classes.
   - The determination of benchmarks or standards against which the performance of the Fund as a whole, classes of investment, and individual investments will be assessed.
   - Standards for reporting the investment performance of the fund.
   - The balance between risk and return in the overall Fund portfolio.
   - The Fund management structure.
   - The management of credit, liquidity, operational, currency, market and other financial risks.
   - The retention, exercise or delegation of voting rights acquired through investments.
   - The method of, and basis for, valuation of investments including those not regularly traded at a public exchange.

[4] The release rule for the PIF is a formula that determines the annual release to be made from the PIF ahead of the year it will apply to. It has two components:

• Eighty per cent of the previous year's release, inflation adjusted for the year prior to that to be budgeted for; plus
• Twenty per cent of a 5.6 per cent portion of the year-end audited capital value of the PIF, inflation adjusted for the year prior to that to be budgeted for.

The 5.6 per cent is a long-term release target that strikes a balance between the sustainability of the annual release and the real capital value of the PIF.

The release rule smoothes the potential annual fluctuations that would otherwise occur if a straight percentage of annual value was used. As such it provides greater certainty for the council on annual release levels for budgeting purposes.

4. To manage the fund, meeting the Council's overall objectives and mandate to TIML, namely to manage the Fund through a clearly defined portfolio of financial investments managed by an independent body (TIML) with explicit commercial objectives and clear accountability in accordance with relevant legislation. TIML is to make investment decisions and determine investment policy in the best interests of the fund, including the exercise of all rights in respect of any voting securities that form part of the fund.

The investment model under this policy clearly determines TIML as the independent, commercial decision-making body in respect of the fund investment strategy, risk management and implementation. All authorities within current legal constraints and requirements for investment are to be exercised by TIML in meeting its mandate under the founding principles for the fund. Matters such as the asset allocations for different types of investments and their location, short-term and longer investment strategy and implementation, risk management and operations are clearly within TIML's decision-making mandate.

Should investment circumstances change to such a degree that the achievement of the objectives is unlikely, TIML also has an obligation to advise the council on its options at that time.

The only matters where the Council has an expectation of prior advice from TIML are over the following matters:

• The use of derivatives/synthetics as a primary investment option.
  Note: TIML has developed a policy on hedging (or other incidental arrangements) ancillary to normal commercial investments made, where such arrangements would be seen as commercial and prudent to mitigate overall investment risk. TIML will has informed the council of this policy and will continue to do so on an annual review basis.
• Where TIML may wish to commit longer term borrowings for the purpose of leveraging the fund to better achieve its portfolio management objectives, Council approval will be firstly obtained. It is noted that any such borrowing would be made in terms of the Council's operative Long-Term Council Community Plan and related policies, be in accordance with the Act and must not adversely effect the council's current Standard and Poor's credit rating.

In giving effect to the management of the fund and subject always to the requirements of the Council's Liability Management Policy and the restrictions of the Local Government Act 2002, access may be required to the Council's short-term funding facilities to satisfy the short-term cash flow needs of the fund. The Council accepts this position provided that all costs associated with such access are charged to the fund.

Other pure commercial and semi-commercial investments

The Council's position on other pure investments is similar to that applying to the Perpetual Investment Fund except that TIML has a contracted advisory role rather than a decision-making role. Given these investments are already currently held by the Council, the issues revolve principally around active review of the hold/sell/buy decision and ensuring such investments deliver on expectation while held.

Treatment of surpluses from pure investments.
Any surplus operating funds over that budgeted to be received from pure investments are regarded as part of the long term value creation objective, and any such surplus (or in the case of the PIF – additional funds released by TIML from the PIF over and above the annual release and agreed costs), are to be applied to reducing debt, and not utilised to support ongoing operating requirements of the Council. This same approach will apply to general operating surpluses arising from annual operating budgets (where not required for planned works/activities).

Arising from Asset Sales (excludes sales occurring within the PIF):
Provided no existing restriction exists, any net asset sale proceeds are to be applied as an offset to borrowing requirements,

The Council's philosophy on semi-commercial investments broadly follows that for other pure investments but may be modified by broader community outcomes (if applicable) that could be contributed to by the investment in question.

1. Acquisition/addition/disposal of other pure commercial investments and semi-commercial investments

All new investments of these types, additions to existing investments, and/or disposals of existing investments must be approved by the Council.

The Council will only make new investments, and/or retain existing investments if all the following criteria are met:

• The investment has clear long-term benefits for the community of New Plymouth District.
• The risks associated with the investment can be managed within acceptable levels.
• Making or retaining the investment would not result in a breach of the borrowing limitations embodied in the Liability Management Policy of the Council. However, see below for instances where the Council acts with urgency and is satisfied any breach is either not material or is still within acceptable liability risk management parameters.
• The overall value of any single investment does not exceed 30 per cent of the total consolidated assets of the Council at any time.
• Total investments shall not exceed 35 per cent of the total consolidated assets of the Council.

If the Council/Investment Subcommittee receives a recommendation from TIML to dispose of all or part of its other pure commercial investment (as listed in the policy), the Council may act on that advice without further consultation with the public.

If the Council/Investment Subcommittee receives a recommendation from TIML to dispose of all or part of a semi-commercial investment (as listed in the policy), the Council may consult with the public on the disposal, depending on the significance of the disposal and the intended use of funds from that disposal.

The current policy positions of the Council with respect to its other pure or semi-commercial investments are as follows:

Joint Venture forestry: Harvest at maturity and not renew any joint venture agreements, or sell its interest if the joint venture partner or other party wishes to purchase at a commercial price.
Council forestry: Retain the investment and continue to harvest on a rotational basis where commercially feasible (the land is generally retained for other Council purposes unless it is classified as surplus to those purposes. It would then be classified as a pure investment for eventual disposal along with other surplus property).
New Plymouth Airport Joint Venture: Aim to achieve a break-even operating position without recourse to direct operational financial support from the joint venture partners and maximise any additional or ancillary opportunities as they arise to improve the financial sustainability of the overall operation. The joint venture is currently unable to make a return on capital given its limited revenue opportunities.
Surplus properties: The Council has an existing process for declaring properties surplus to operational or future requirements and a review process for properties listed on the surplus list but not yet disposed of or able to be disposed of (due to other legal or process constraints).

These policy positions are reviewable by the Council outside of this policy document (after considering any advice requested from TIML) – as such this document merely records those individual policy positions for information.

2. Management of other pure commercial investments and semi- commercial investments and risk

The Council will manage these investments in a manner which is dependent upon the size and nature of the investment.

The Council has delegated authority to the Investment Subcommittee to manage its other commercial investments where there is urgency required. The Investment Subcommittee monitors the performance of the investments and receives advice on its future position on such investments through TIML. On major decisions such as the holding or selling of such investments, the Investment Subcommittee would normally make recommendations to the Council.

The relationship between the Council and TIML is encompassed in a contract document approved by both parties. TIML also monitors the statements of intent of other pure commercial investments to enable an assessment of commercial risk and the management of that risk.

Under this management model the Council exercises decision-making power on the following types of investment issues:

• Participating in the appointment of directors or other investor representatives as applicable.
• Monitoring developments in the particular industry and the economy generally.
• Monitoring the entity's performance and actively commenting on statements of intent where these are required.
• Acting to protect and enhance the value of, and returns from, the Council's investments.

The Council's semi-commercial investments are managed more as a part of in-house operations so the risks inherent in them are addressed more at an internal level by the Council and its officers.

Subject always to the need to consider each opportunity on its own specific merits the council, in considering its option to further invest, may need to borrow funds to assist in funding its participation. To the extent that such borrowing would be outside the parameters and policies set out in this document, a submission will be made to the Council to approve the additional borrowing.Return to top

Treasury investments

Treasury investments comprise short-term surplus general funds that are held by the Council from time to time, and moneys held as restricted funds and bequests where the council has resolved to maintain a separate fund for the benefit of the specific parties or activity covered by the funds in question

Treasury investments shall only be made in NZD denominated instruments, and in accordance with the guidelines and parameters embodied in the "Treasury Investment Prudential Guidelines".

Reporting procedures

Reporting on all investments being managed or advised on by TIML will take place as per the contract document with TIML. The performance of the Perpetual Investment Fund and other pure and semi-commercial investments is principally measured through the following means:

• Perpetual Investment Fund. TIML meeting the requirements of its contract with the Council, its statement of intent and appropriate benchmarks for fund performance.
• Other investments. Statements of intent and appropriate benchmarks for investment performance.

Measuring the effectiveness of the Council's other treasury activities is achieved through a mixture of subjective and objective measures. The predominant subjective measures are as follows:

• Adherence to Treasury Management Policy guidelines.
• The overall quality of treasury management information.
• The quality of relationships with the banking sector, and key participants in the capital market.

The General Manager Support Services has prime responsibility for determining performance in respect of these aspects.

Objective measures are as follows:

• Specific exceptions to policies and guidelines which have not been authorised.
• Compliance with policy control limits.
• Average daily balance for liquidity management purposes to be less than $100,000.
• Treasury investments invested in approved counterparties and maturity term.
• Management of debt and interest rate risk.

These guidelines limit the maximum amount of investment in any one entity or sector, the maximum duration of such investments and the minimum credit quality of the investees.

Policy on Development Contributions

Introduction

Current projections for New Plymouth District Council area indicate that moderate population growth will be experienced over the next 20 years. The new development associated with a vibrant, growing community also results in increased demands on community facilities[1] such as network and community infrastructure and reserves. This can apply whether growth takes the form of greenfields development, renewal development, which changes the types of land use, or infill development, which can increase the intensity and scale of development. Affected infrastructure can include roading, water, wastewater and stormwater systems and facilities for community recreation and amenity such as reserves and libraries.

The premise behind this development contributions policy is that it is fairer for the costs of demand for increased service capacity resulting from development to be borne by developers, rather than be funded by existing ratepayers who have already paid for the assets they require. This means that all costs for network infrastructure on-site will be incurred by the developer and a contribution will be sought for off-site infrastructure and other community facilities that will require capital investment to cope with the increased service demand resulting from the development. A developer may also be required to meet any fair and reasonable off-site costs that immediately benefit the proposed development or that are needed to avoid, remedy or mitigate any adverse effects on the environment resulting from the development which have not been included in the Council's capital projects to be funded from development contributions.

Financial contributions or development contributions?

The Council's Financial Contributions Policy is a component of the New Plymouth District Plan (Volume 2, Appendix 5), and was also adopted in the 2004-2014 Long-Term Council Community Plan (2004-2014 LTCCP). Under the Local Government Act 2002, the council is required to summarise the District Plan provisions that relate to financial contributions.

The Financial Contributions Policy establishes general rules for dealing with the impacts on network infrastructure and community facilities resulting from subdivision, dwelling house development proposals and vehicle parking in the CBD. However, the policy does not address the impacts of non-residential commercial, business or industrial proposals on infrastructure.

The Financial Contributions Policy was formulated pursuant to the Resource Management Act 1991 (RMA 1991) and is focussed on avoiding, remedying and mitigating the adverse environmental effects resulting from particular developments. As the focus of the policy is on the direct marginal impact of each development, it is not possible to deal with the cumulative impact of multiple developments on infrastructure. The circumstances under which financial contributions may be required under the Financial Contributions Policy are where consent is granted for subdivision or for a dwelling house where there is no subdivision or for vehicle parking within the CBD. The purposes for which financial contributions may be used are infrastructure (water supply, wastewater collection and treatment, stormwater disposal, roading and vehicle parking) and community facilities.

While the RMA 1991 is designed to promote the sustainable management of natural and physical resources, it does not focus on the financial issues associated with growth. In contrast, the provisions of the Local Government Act 2002 (LGA 2002), which enable the adoption of a development contributions policy, are centred on recovering identified growth-driven costs using financial tools. Development contributions can be used to fund any new Council asset capacity which is required because of growth in demand resulting from development.

Development contributions and financial contributions can exist together and both can be charged against an individual development, but only for different purposes. That is, double dipping is not allowed. Contributions for the provision of off-site network and community infrastructure, and parks and reserves identified as capital projects in the Community Plan will therefore no longer be calculated or charged under the Financial Contributions Policy, but are replaced by a new system under this Development Contributions Policy.

However, it is not intended that changing to a system of development contributions under the Local Government Act 2002 will diminish the protection of the environment or undermine the social and environmental outcomes intended in the District Plan. It will still be necessary for developers to complete works on-site to avoid, remedy, or mitigate adverse effects as a condition of consent, or in accordance with rules in the District Plan. Where necessary, the provision of works or financial contributions can continue to be required for environmental reasons off-site, for example to pay for trees to be planted for screening purposes. Financial contributions may also be required for infrastructure offsite such as stormwater or roading that will solely benefit the proposed development or that is needed to avoid, remedy, or mitigate adverse environmental effects resulting from the development. The provisions in the Financial Contributions Policy relating to vehicle parking in the CBD remain unchanged.

Both types of contributions are restricted use revenue. This means that they can only be spent for the purposes for which they are collected. Development contributions may also be required to be returned if the council does not provide the reserve, infrastructure or other community facilities for which the funds were collected, or the development does not proceed.

Community Outcomes

Community Outcomes or priorities have been established as part of the process of developing and adopting the 2009-2019 Community Plan. These are as follows:

• Connected - A district that delivers accessible and integrated infrastructure, transport and communication systems which meet the needs of residents, businesses and visitors.
• Prosperous - A district that boasts a sustainable, resilient and innovative economy that prospers within the natural and social environment.
• Secure and Healthy - A district that provides a safe, healthy and friendly place to live, work or visit.
• Skilled - A district that values and supports learning so all people can play a full and active role in social, cultural and economic life.
• Sustainable - A district that appreciates its natural environment and its physical and human resources in planning, delivery and protection.
• Together - A district that is caring, inclusive and works together and where people have a strong, distinctive sense of identity.
• Vibrant - A district that provides high quality and diverse cultural and recreational experiences and where independence and creativity are encouraged.

The Development Contributions Policy, in providing funding to enable servicing of new developments for roads, water supply, wastewater and stormwater infrastructure, community infrastructure, and parks and reserves, will contribute significantly to the achievement of the Community Outcome areas: Connected, Prosperous, Sustainable and Vibrant, and to the other outcome areas to a lesser degree.

Who will contribute?

Any subdivision or development within the New Plymouth District which contributes to growth and generates a demand for reserves or infrastructure and the need for new or additional assets or assets of increased capacity to provide for that growth and demand will pay a development contribution.

Contributions for residential developments will be calculated differently to non-residential developments. Non-residential developments will be converted to Household Unit Equivalents (HUEs). They will not be charged for contributions to parks and reserves or community infrastructure such as libraries or community centres, as commercial activities generally do not create significant demand for these types of facilities. Return to top

Definitions

Community facilities

In this policy, community facilities has the same meaning as given to it in section 197 the Local Government Act 2002:

Reserves, network infrastructure, or community infrastructure for which development contributions may be required in accordance with section 199.

Community infrastructure

In this policy, community infrastructure has the same meaning as given to it in section 197 of the Local Government Act 2002:

1. Land, or development assets on land, owned or controlled by the territorial authority to provide public amenities; and
2. Includes land that the territorial authority will acquire for that purpose.

It includes assets such as community centres, events buildings and sports stadiums but does not include parks and reserves.

Contribution catchments

The entire district has been identified as a single catchment, where development contributions will be collected for all affected activities. This reflects the network nature of most of the assets attracting development contributions and the Council's long held strategic practice of treating the district as a single entity with all residents enjoying a single level of service wherever practicable. Where services are not available to developments, however, no contribution will be required for that service.

Development

In this policy development means any subdivision or other development that generates a demand for reserves, network infrastructure, or community infrastructure; but does not include the pipes or lines of a network utility operator.

Development contributions

In this policy, development contributions [2] means a contribution of money required in accordance with this policy for community and network infrastructure and parks and reserves, to provide for growth in demand for these services resulting from new development, as provided for in section 198 of the Local Government Act 2002.

Financial contributions

In this policy, financial contributions mean a contribution taken in accordance with the adopted Financial Contributions Policy in the New Plymouth District Plan and pursuant to the Resource Management Act 1991.

Household unit equivalent (HUE)

The Household Unit Equivalent (HUE) has been adopted as the basic unit of demand and is equivalent to the additional demand for services generated by one average additional dwelling.

Network infrastructure

In this policy network infrastructure means the provision of roads, water, wastewater, and stormwater collection and management.

Parks and reserves

Parks and reserves comprises land and improvements, controlled by the Council, for the purposes of:

• Access to public open space.
• Community, recreational, environmental, cultural purposes.
• Conservation of flora and fauna.
• The general enjoyment of the public, including land that is held as a reserve or part of a reserve under the Reserves Act 1977.

Units of demand

The unit of demand used is generally the household unit or its equivalent (HUE) for non-residential activity. Developments that only place low demand on infrastructure capacity will typically be assessed in percentages of HUEs, rather than whole HUEs.

Identified activities

Development contributions will be charged for the following activity groups:

• Network Infrastructure:
  - Roads.
  - Water Supply.
  - Wastewater.
  - Stormwater.
• Parks and Reserves.
• Community Infrastructure. Return to top

Application of Local Government Act s101(3)(A) to identified activities

This analysis deals only with council expenditures that result in qualitative or capacity improvements to the council's physical capital. Development contributions will only be applied to that part of the capital improvement that provides additional capacity to cope with growth in demand resulting from development.

When funding their activities councils are required to apply a set of considerations to each activity. These considerations deal with the distribution of benefits arising from the activity in order to inform the local authority and the community on a fair allocation of costs. The overall allocation of costs then needs to be considered against the effect of that allocation on the well-being of the community. The considerations set out in the legislation are:

The funding needs of the local authority must be met from those sources that the local authority determines to be appropriate, following consideration of the:

(i) Community outcomes to which the activity primarily contributes; and

(ii) Distribution of benefits between the community as a whole, any identifiable part of the community, and individuals; and

(iii) Period in or over which those benefits are expected to occur; and

(iv) Extent to which the actions or inaction of particular individuals or a group contribute to the need to undertake the activity; and

(v) Costs and benefits, including consequences for transparency and accountability, of funding the activity distinctly from other activities; and

The overall impact of any allocation of liability for revenue needs on the current and future social, economic, environmental, and cultural well-being of the community.

Analysis of development contribution affected activities on the basis of these considerations follows.

Activity	Primary Community Outcomes
Roads	Connected C1 Effective, efficient, safe and reliable infrastructure is provided and maintained. C2 High quality communication systems, information technologies and distribution networks. C3 The land transport system is safe and responsive. C4 The strategic value of the region's state highways is recognised and provided for and local roading networks are maintained and enhanced where appropriate. Sustainable SU Built environments and amenities are of a high standard and contribute significantly to the well-being of people and communities.
Water supply	Connected C1 Effective, efficient, safe and reliable infrastructure is provided and maintained.
Wastewater	Secure and Healthy S&H2 The environmental, physical and mental health of the people of New Plymouth District is maintained, enhanced, promoted and protected. Prosperous P5 Development and population growth in the district is encouraged but managed in a manner that does not compromise the natural or social environment. Sustainable SU2 Taranaki's land and soil, water, air and coast, its biodiversity and its natural features and landscapes are understood, valued, maintained and enhanced for future generations.
Stormwater	Connected C1 Effective, efficient, safe and reliable infrastructure is provided and maintained. Secure and Healthy S&H6 A sustainable management approach is taken to hazards and risks across the areas of reduction, readiness, response and recovery. Sustainable SU4 Built environments and amenities are of a high standard and contribute significantly to the well-being of people and communities.
Parks and reserves	Vibrant V1 People have access to and are encouraged to participate in a wide range of high quality recreational, sport, leisure, art and cultural activities. V2 The district has high quality public amenities and facilities. V4 All people have access to local services and facilities. V5 There is safe, convenient and affordable access to the natural environment and public access to the region's coastal marine area, lakes and rivers is maintained and where practical enhanced. Prosperous P1 New Plymouth District is an attractive place to work, do business and to visit. Secure and Healthy S&H2 The environmental, physical and mental health of the people of New Plymouth District is maintained, enhanced, promoted and protected. S&H3 A well-being model for health is promoted in the district, whereby people are encouraged to take responsibility for their own health in order to promote good health outcomes.

Distribution of benefits arising from the activity

Roads

The roading corridor is a network, available to all, so that people, goods and services can move from property to property freely. In this sense the provision of the roading corridor, and safe roads within it, benefits the community as a whole. The majority (56 per cent) of the costs of roading improvements will be met from the general rate, the uniform annual general charge and a roading uniform annual charge to reflect this. The network access benefit is reflected by the uniform annual charge that funds around 20 per cent of the total rate requirement for the roading activity.

The balance of the costs in providing sealed and gravel roads is designed for the benefit of a more limited set of beneficiaries, i.e. users of vehicles. These road users pay for the private benefits they receive by paying fuel taxes, per kilometre road user charges and registration fees, all collected by the government. These funds are received by the council as a subsidy for the roading activity costs. This funds 37.2 per cent of the costs of roading improvements, including new roads.

A small amount of roading improvement expenditure is attributed to new capacity arising from the actions of specific identifiable groups or individuals (6.8 per cent). In this case these groups and individuals are those creating a demand for new roads and improvements to existing roads, footpaths and associated infrastructure are additional road users for whom capacity must be provided. The most efficient and fair means available to levy these costs are development contributions on those developing the properties.

Water supply

No benefits from water supply are considered to apply to the community as a whole. This is because there are no obvious significant direct or indirect benefits of the supply network to those who are not connected to it.

Benefits are identifiable to individuals and to the "group" being those whose properties are connected to the water supply systems.

As the benefits of water supply capital improvement expenditures are produced over the life time of the asset, where these are not funded by development contributions and connection fees, they are generally funded through borrowing. The interest and principal repayment costs are funded from the same mechanisms used to fund the general operating expenses of the activity, i.e. through targeted rates and water by meter charges.

There are no expected costs in this activity that are to be met that are needed to remedy the actions or inaction of individuals. Actions, affecting the water supply system, that could cause unexpected costs to the council will be controlled through regulation and/or the seeking of cost recovery through regulation or general statutory provisions.

Water supply costs are funded from a range of separately identifiable mechanisms that are directly related to the actual costs of provision of supply and the physical assets required for this. Specifically these mechanisms are for operating costs, including depreciation and debt serving; targeted rates and water by meter charges, and for capital costs, borrowing, depreciation reserves, financial contributions and development contributions.

Wastewater

No benefits from wastewater reticulation, treatment and disposal are considered to apply to the community as a whole. This is because there are no obvious significant direct or indirect benefits of the supply network to those who are not connected to it.

While it is argued that the whole community benefits from the absence of wastewater pollution, this is seen as the prevention of a negative effect, rather than an activity causing positive benefits.

Benefits are identifiable to individuals and to the "group" being those whose properties are connected to the wastewater reticulation systems.

As the benefits resulting from wastewater system capital improvement expenditures occur over the life time of the asset, where these are not funded by development contributions and connection fees, they are generally funded through borrowing. The interest and principal repayment costs are funded from the same mechanisms used to fund the general operating expenses of the activity, i.e. through targeted rates and trade waste charges.

There are no expected costs in this activity that are to be met that are needed to remedy the actions or inaction of individuals. Actions, affecting the wastewater system that could cause unexpected costs to the council will be controlled through regulation and/or the seeking of cost recovery through regulation or general statutory provisions.

Wastewater system costs are funded from a range of separately identifiable mechanisms that are directly related to the actual costs of provision and the physical assets required for this. Specifically these mechanisms are for operating costs, including depreciation and debt serving; targeted rates and water by meter charges, and for capital costs, borrowing, depreciation reserves, financial contributions and development contributions.

Stormwater

The benefits of stormwater control systems tend to primarily go to those people and properties within hydrological catchment areas. Most catchments, however, contain infrastructure and other services that are used more widely across the community. The topography of North Taranaki means that the great majority of the district's people and properties reside in one catchment or another.

The stormwater activity arises from the need to protect improvements and land from inundation and slips. Subdivision and many capital improvements results in higher proportions of paved surfaces and greater runoff. Benefits accrue to people through the protection of property and improvements. Additional properties with capital improvements result in greater demand for services to protect the improvements from stormwater runoff. These benefits are still seen as public as it is not possible or practical to determine costs and benefits to individual properties within a catchment network. For this reason the bulk of the operating costs, including debt servicing and depreciation, are funded from a targeted rate on those properties serviced by stormwater systems, assessed on the capital value of properties.

The general public good factors result in some benefits that are spread across the whole community. All residents benefit from having access to business, community and social services without fear of inundation except in exceptional rainfall events. This general public benefit is reflected by funding from the general rate (on land value with differentials) for five per cent of the operating costs of the stormwater activity.

Properties with a large proportion of their area covered in impervious materials (e.g. buildings and concrete) do cause more stormwater run-off than those where the ground is uncovered or covered in natural foliage. For this reason an assessment is made on the area covered by impervious materials for the purposes of calculating development contributions.

As the benefits resulting from stormwater systems capital improvement expenditures occur over the life time of the asset, where these are not funded by development contributions, they are generally funded through borrowing. The interest and principal repayment costs are funded from the same mechanisms used to fund the general operating expenses of the activity, i.e. the Stormwater targeted rate.

The behaviour of individuals, where this might cause flooding or damage to property, is controlled through building and resource consent processes, as well as various statutes. Actions, affecting the stormwater system, people or property will be controlled through regulation and/or the seeking of cost recovery through regulation or general statutory provisions.

The groups and individuals benefiting directly from stormwater systems can be distinguished from the general rate payer. For this reason the majority of the operating costs of existing stormwater infrastructure are paid for from the stormwater targeted rate. The general public benefits gained from continued access to District services are paid from the general rate. Where a development is adding to the burden of existing or future stormwater infrastructure, these costs are recovered via development contributions.

Parks and reserves

The Council's parks and reserves portfolio is distributed across the whole district, although the major assets are situated close to the larger population areas. The portfolio includes open space, natural reserves, botanical gardens, access ways, walkways and sports parks. The direct beneficiaries of this diverse portfolio are difficult to identify because access to most of these assets is not limited or monitored. There are also indirect beneficiaries who, for example, benefit simply by living near parks, as is often reflected in their property values. This means that the beneficiaries of parks and reserves are indistinguishable from the wider community. For this reason the operating costs, including debt servicing and depreciation, are funded from the general rate, so that everyone makes some contribution.

Where the provision of any one part of the parks and reserves portfolio benefits any one group or set of individuals, though their exclusive use, and where it is practicable to do so, payment is usually sought. This occurs for such things as ground leases and sports parks rentals. These are used to cover the operating expenses of the parks and reserves portfolio.

As the benefits resulting from parks and reserves capital improvement expenditures occur over the life time of the asset, where these are not funded by development contributions, they are generally funded through borrowing. The interest and principal repayment costs are funded from the same mechanisms used to fund the general operating expenses of the activity, i.e. the general rate and uniform annual general charge.

The behaviour of individuals, where this might cause damage to property, is controlled through bylaw, as well as various statutes. Actions requiring significant remedy will be funded through the seeking of cost recovery through regulation or general statutory provisions, where practicable. The groups and individuals benefiting from parks and reserves are not sufficiently distinguishable from the general rate payer. For this reason the operating costs of existing parks and reserves are paid for from the general rate and uniform annual general charge.

Where a development is adding to the burden of existing or future parks and reserves capacity, these costs are recovered via development contributions.Return to top

Community infrastructure

Community infrastructure is provided to benefit the whole district.

While direct beneficiaries are often distinguishable, e.g. users of facilities, charging full cost of many of the facilities would render them unavailable. Because it is believed that there are benefits to the whole community in having such facilities, there is a level of general rate subsidy. The level of the subsidy depends on how much operating cost can realistically be recovered from direct users.

Where the provision of community infrastructure benefits any one group or set of individuals, though their exclusive use, and where it is practicable to do so, payment is usually sought. This occurs for such things as facility hire and entry fees. These are used to cover operating expenses.

As the benefits resulting from community infrastructure capital improvement expenditures occur over the life time of the asset, where these are not funded by development contributions, they are generally funded through borrowing. The interest and principal repayment costs are funded from the same mechanisms used to fund the general operating expenses of the activity, i.e. the user fees, the general rate and uniform annual general charge.

The behaviour of individuals, where this might cause damage to community infrastructure, is controlled through bylaw, as well as various statutes. Actions requiring significant remedy will be funded through the seeking of cost recovery through regulation or general statutory provisions, where practicable.

Identified contribution catchments

For consistency with Council policy to treat the district as a single entity, for administrative ease and to enable a developer to quickly estimate the level of development contribution required, the contribution catchment has been defined as the entire district for all activities. However, not all services are available throughout the district. In order to forecast the number of household unit equivalents (HUEs) that will contribute to demand for each service, it has been estimated that water and stormwater services will be provided to 90 per cent of new developments while wastewater services will be connected to 80 per cent of new houses, subdivided lots and businesses. Where a service is not provided the development contribution will not be charged.

Example calculations

The following examples illustrate the process used to calculate the development contribution for each new household or its equivalent for each asset type as listed in the table above.

For roads, which are available to be used by all new developments across the district, the total development contributions figure of $2,696,605 was divided by 614 household unit equivalent per year which includes houses, lots and new businesses to give $439 per household unit equivalent.

For services that are not provided across the whole district, such as water, where only 90 per cent of new developments will be able to connect, the total figure of $666,900 was divided by 307 for each household unit equivalent per year to give $217 per household unit equivalent.

Template of assessment

Expenditure and revenue over the 10 year life of the 2009-2019 Community Plan

Activity	Total capital projects	Development contributions	Other funding *	Rates	Estimated % of new developments using each asset type	Contribution per new household unit equivalent
Roads	$20,032,958	$2,696,605	$7,610,663	$9,725,690	100	$439
Water supply	$666,900	$666,900			90	$217
Wastewater	$2,221,290	$2,221,290			80	$794
Stormwater	$441,180	$441,180			90	$112
Parks and reserves	$6,902,825	$3,767,410		$3,135,415	100	$1,507
Community infrastructure	No projects meet development contributions policy criteria in this Community Plan				100
Total	$30,265,153	$9,793,386	$7,610,663	$12,861,105		$3,069

* Transfund road user funding.Return to top

Units of demand

The household unit equivalent (HUE) has been established as the basic unit of demand, and is the equivalent of one average dwelling. The average household size is taken as 2.5 people for New Plymouth District. Development contributions have been calculated according to the number of HUEs in a development. A one new dwelling residential, subdivision or building consent, is generally considered as one HUE, while non-residential applications are proportions or multiples of that.

The values represent typical levels of demand for a dwelling in the district for the asset types targeted by the policy.

Activity	Units	Demand per HUE	Comments
Roads	Vehicle trips per day	10
Water Supply	Litres per household per day	524	200 litres per person per day at 2.62 people per household
Wastewater	Litres per household per day	707	270 litres per person per day at 2.62 people per household
Stormwater	Impervious area (m2)	400	District average per dwelling

For industrial and commercial applications, development contributions for water supply, wastewater, stormwater and roads can be converted to HUEs based on a combination of accepted industry standards and assessment of information provided by the developer on the demand they expect to generate. Where insufficient information has been provided with an individual application, the council may request additional clarifying information or studies.

Developments that do not generate any demand for infrastructure will not be charged a development contribution. Developments that only place low demand on infrastructure capacity will typically be assessed in percentages of HUEs, rather than whole HUEs.

Council growth model

This policy is based on the capital expenditure required to cater for growth in capacity to meet demand generated by new development, as identified in the 2009-2019 Community Plan. The Plan is, in its turn, based on the Council's asset management, activity management, and financial plans, as well as incorporating community priorities and outcomes.

Decisions on future capital works required to meet the needs of the population of the district over time have been based on a moderate growth profile. This scenario will see an estimated increase in the population from 72,979 in 2009 to 76,158 in 2019.

Currently available information indicates that an average of 250 new houses and subdivided lots will be developed each year over the next 10 years. The potential for growth in the commercial or non-residential sector is incorporated in this figure. It is acknowledged that this is a best estimate for this sector until improved data becomes available and its contribution to growth can be identified more precisely.

Cost allocation methodology

The following methodology has been used to calculate the development contribution for each new development proposal. Only growth in demand, resulting in the need for new or increased service capacity and needs to be met through capital expenditure (CAPEX) can be funded from development contributions. Operations and maintenance costs (OPEX) and capital expenditure for qualitative improvements, such as renewals and catch-up have therefore been separated out before the other cost drivers have been considered.

All approved capital projects for the 10 year community planning term have been analysed and capital projects identified for the following activity areas have been included in the costing methodology:

• Water supply.
• Wastewater.
• Stormwater.
• Roads.
• Community infrastructure.
• Parks and reserves.

Example project: Upgrade of New Plymouth Water Treatment Plant (Manaaki Wai)

Growth in demand percentage	New development	New sections and houses, new commercial activities.	10%
	Increased consumption	Increased per capita consumption of water as more households install such things as swimming pools, spa pools and insinkerators.	40%
Increased level of service	Legislative requirements	Upgraded treatment facilities to meet new drinking water standards.	50%
	Discretional changes to service levels	No discretionary changes in this project.	0%
			100%

Each capital project has been divided into proportions depending on the degree to which the project is required to meet either growth in demand for the service, or improved quality, of service.

The portion of expenditure allocated to growth has then been further split into a percentage for new development and a percentage for increased per capita consumption or usage.

Subdivision and building consent data was analysed over the past five years to determine an average annual level of growth. This was determined to be around 300 new sections and dwellings to be serviced per annum, and is in keeping with a moderate level of population growth and the expected reductions in household size. The proportion of the total cost of new capital projects for each asset type attributable to increased demand for service from new development can therefore be divided by the average annual estimated growth in new building sections or dwellings, to give the development contribution requirement for each individual development.

Annual average expenditure on new capital capacity to accommodate growth in service demand
Forecast average annual growth in properties expected to use each service (in HUEs)
=
Total amount to be collected annually in development contributions for each service
Forecast HUEs using each service
=
Development contribution for each service

The total development contribution for each new residential section or house is then calculated by adding together the individual contributions for each service supplied to the new development. For urban developments this would normally include water supply, wastewater, stormwater, roads, community infrastructure and parks and reserves. For rural development, where water supply, wastewater, and stormwater services may not be available, only community infrastructure, parks and reserves and roads contributions may be collected.

The impact of business and industrial development proposals on demand for infrastructure will be analysed on a case by case basis, converted to household unit equivalents and the development contributions individually calculated.

Policy review

The Development Contributions Policy and schedule is to be reviewed at least every three years in line with the review cycle for the Community Plan.

Matters to be addressed in the review will include, but not be limited to:

• The level of charges as determined by the amount of capital expenditure that is attributable to growth and the number of household unit equivalent developments expected to occur over the plan period.
• Whether any unforeseen impacts on the rate of growth or its location have arisen as a result of the implementation of the policy.
• Any change to legislation, or its interpretation, due to legislative amendments, repeals or new case law.

The numbers, types and locations of new subdivision, land use, and building consents will be considered in the review.

Policy schedule

1. Events that will give rise to the requirement for a Development Contribution and Method of Payment

When deciding whether a development contribution will be required the council will first assess whether the proposed development is a subdivision or other development as defined in section 197 of the Local Government Act 2002 which generates a demand for reserves, network infrastructure, or community infrastructure and secondly, whether the proposed development is one that, on its own or cumulatively with other developments, will require the council to incur capital expenditure on new assets or assets of increased capacity (as required by section 197, 198 and 199 of the Local Government Act 2002) and thirdly, whether a contribution is required under this policy.

If following the above assessment it is decided that a contribution is required, the contribution will be assessed according to the demand generated for each type of service, as measured in whole, or percentages of, household unit equivalents (HUEs).

Contributions will be assessed under this policy when granting:

• A resource consent under the Resource Management Act 1991 for a development within the New Plymouth District.
• A building consent under the Building Act 2004 for building work situated in the New Plymouth District.

In respect of subdivision consents, payment is to be made prior to granting of a section 224(c) certificate. In respect of land use consent, payment is to be made prior to commencement of consent, or within 180 days of consent being granted, whichever occurs first. In respect of building consents payment is to be made within 180 days of granting consent, or prior to the code of compliance certificate being issued under section 43 of the Building Act, whichever occurs first.

As the sequence of development is not always consistent, development contributions will be required to be paid at the first available opportunity. At each and every subsequent opportunity the development will also be reviewed and additional contributions required if the units of demand assessed for the development exceed those previously paid. This would occur, for example, if the number of dwellings or HUEs had increased during the life of the proposal.

Homeowners carrying out renovations or extensions to their dwellings will not be subject to development contributions, unless those works create additional household units.

This policy does not apply where community facilities themselves require a resource or building consent. This decision is made on the basis that applying the policy to such developments would merely result in an internal transfer of budget from one account to another but would not generate any additional funding.

2. Method of Calculation of Contributions

Only capital expenditure (CAPEX) is considered in this methodology. All operational expenditure is excluded. Capital expenditure has been identified from asset management, activity management, and financial plans and approved via the long-term council community plan process.

The methodology for determining the development contribution for each individual development proposal has been outlined in the policy and calculated in accordance with Schedule 13 of the Local Government Act 2002. Some additional notes and worked examples are provided below.

- Parks

Contributions for parks and reserves will be used for development of existing and acquisition of new parkland and open space and for the capital development cost of new parks.

Section 203 of the Local Government Act 2002 establishes a maximum contribution for reserves as follows:

"Development contributions for reserves must not exceed the greater of:

1. 7.5 per cent of the value of the additional allotments created by a subdivision; and
2. The value equivalent of 20 square metres of land for each additional household unit created by the development".

The development contribution for parks and reserves of $1,507 currently represents around one to two per cent of the average value of an urban housing lot as determined by government valuation. This will be checked for each development proposal to ensure it falls below the statutory maximum.

- Community infrastructure

A community infrastructure contribution is required based on future projected demand for facilities such as community centres, event venues, aquatic centres, stadiums etc. An example of planned future investment to service new residents might include a new or enlarged swimming complex, or a new community or events centre. No capital projects for community infrastructure that fall within the criteria for levying development contributions have been included in this iteration of the Community Plan.

- Network infrastructure contribution

Under the existing Financial Contributions Policy, the provisions for water supply, wastewater collection and treatment, stormwater disposal and roading all require the applicant to meet the full cost of all land and works necessary to provide any subdivision or development with these services. This is achieved by requiring the applicant to meet all on-site costs associated with these services and to meet the fair and reasonable costs off-site necessary to service the development proposal in question.

No changes have been made to the requirements of the Financial Contributions Policy and District Plan, regarding the onsite provision of network infrastructure. These provisions can also be used to ensure that developers continue to pay for any fair and reasonable offsite costs associated with avoiding, remedying or mitigating adverse environmental effects resulting from the development and/or the servicing of their development, that are not accounted for by development contributions.

The Development Contributions Policy establishes a new regime for dealing with the cumulative off-site impacts of development proposals on network infrastructure. The policy does not use the RMA 1991 approach that requires a monetary contribution by a developer to remedy or mitigate the individual incremental off-site impacts of each proposal on network infrastructure. That is, it is not a reactive approach that only responds to development applications as they are received. Rather, contributions are calculated on the basis of the planned total capital investment required to service growth in the district, according to projections for new development arising from the growth model for the period identified. They are then charged on the proportional basis that each household or household unit equivalent has been estimated to contribute to demand for that particular type of network infrastructure.

The policy applies to all new development in the district, including commercial, business and industrial development applications.

- Car parking

The Financial Contributions Policy in the District Plan also establishes requirements in relation to the provision of vehicle parking (section 5.9 and Part B Appendix 22 of the District Plan). Within the Business A Environment Area in the New Plymouth CBD, the applicant is required to meet 15 per cent of the cost of constructing a parking space in a multi level parking building. This amount was set at $3,843 for the year 2004, where the number of parking spaces required, as set by Table 22.9 in Appendix 22, cannot be met on-site. This part of the Financial Contributions Policy continues to remain unchanged.

Table 22.9 in the District Plan also establishes the requirements for parking spaces to be provided on development sites outside the Business A Environment Area, but does not allow for a financial contribution in lieu of the provision of parking space.

3. Land or money

Under this policy the contribution shall in every case be money, unless at the sole discretion of the Council, a piece of land offered by a developer would adequately suit the purposes for which the contribution is sought. Return to top

4. Enforcement

As a means of ensuring development contributions are made, the Council may withhold RMA 1991 section 224(c) subdivision certificates, Building Act section 43 compliance certificates or land use consents. Finally, the Council may register an unpaid development contribution under the Statutory Land Charges Registration Act 1928 as a charge on the title of the land, as provided for by section 208(d) of the LGA 2002.

5. Credits and transitional arrangements

The LGA 2002 states that development contributions may be required for any application for a resource consent or building consent lodged after 19 December 2001 and granted on or after 1 July 2004.

Transitional arrangements were put in place so that the introduction of the policy was as fair as possible, particularly in terms of developments which were in progress when the policy came into force.

This approach gave those with developments in progress at the time that the policy came into force an additional six months to prepare and lodge all the applications for consent needed to complete their developments, without having to pay additional contributions under the policy.

6. Remissions, Reductions and Refunds

The Council may decide to allow remissions for particular community infrastructure works, such as that undertaken by schools, or charitable organisations or trusts.

Reductions might be considered where a developer is able to deal with an infrastructure requirement within the bounds of the development, for example water supply, wastewater or stormwater, such that no additional demand was placed on Council infrastructure. Any remaining off-site impact of the development would still necessitate a proportional charge for those activity groups.

A reduction would also be allowed where a financial or development contribution had been made for aspects of a particular development in the past. The development contribution would be calculated on the difference between the past amount paid and the current development contribution required. This is to ensure that the development contribution reflects the updated cost of providing infrastructure and services for the proposed development.

Refunds will be provided in accordance with the relevant provisions of the Local Government Act 2002 upon written request from the consent holder where:

• The consent lapses or is surrendered.
• The development or building for which the consent was granted does not proceed.
• The Council does not provide the reserve, network infrastructure or community infrastructure for which the contribution was required.

The Council will also take into consideration that while a current property owner might not wish to connect to council infrastructure, prudence may require that council take the development into consideration when determining infrastructure capacity because some future property owner might wish to connect. This may mean that a development contribution is payable, even though the current owner does not want to connect to Council infrastructure.

7. Significant financial and administrative assumptions

This development contributions policy is based on the following administrative and financial assumptions.

• Contributions for growth in water, wastewater and stormwater networks are only collected in those areas or catchments where that service is provided.
• The current level (quality) of service has been applied to new developments as the basis for calculating development contributions for this policy.
• Development contributions will be used towards the capital expenditure for increasing the capacity of network or community infrastructure or parks and reserves for which the contribution has been sought.
• Income generated from rates and other operating revenue will be sufficient to meet the increase in operating costs generated by the increasing level of capital expenditure into the future.
• For projects meeting Transfund criteria, Transfund subsidies will fund increased capacity alongside development contributions. Return to top

Policy on Partnerships with Private Sector

Conditions

The Council will consider partnerships with the private sector where:

• They contribute to achieving Community Outcomes and priorities as set out in the Community Plan or any subsequent Annual Plan.
• The private sector is unwilling to provide sufficient resources for the achievement of those outcomes without Council support.
• The benefits to the district exceed the costs.

This policy refers to partnerships with private business, or where the partner's primary objective, for the partnership, is to make a profit. Partnership contracts for the supply of goods and services to the local authority, as well as agreements with community organisations, charitable trusts and other community groups, government departments, not-for-profit-organisations, other local authorities and council-controlled organisations are outside the parameters of this policy.

Consultation requirements

New Plymouth District Council consulted on this Policy on Partnerships with Private Sector as part of its Annual Plan 2003/2004 process. Amendments to, or replacement of this policy will be through specific consultation, or as part of a Community Plan and Annual Plan consultation process.

This includes consultation on:

• The circumstances under which the council will enter into a partnership.
• Any general conditions that must be met under partnership agreements.
• The Council's approach to dealing with risk in any partnership it might enter into.
• The procedure to be used to monitor the use of funds and other resources under the partnership agreement.
• The methods by which the council will monitor how Community Outcomes were, or are being, achieved by the partnership.

Given that this policy will be adopted only after community wide consultation, any further consultation on any partnership will occur only where a partnership proposal:

1. Falls outside of the conditions, acceptable risks, agreed resources and outcomes monitoring procedures set out within this policy.
2. Results in a negative and material change to the projected budgets, performance measures, outcomes or other objectives set out in the council's Community Plan or Annual Plan.
3. Is considered of such interest to the community that the council resolves that public consultation will occur, irrespective of its compliance with this policy.

Any partnerships falling under the above three criteria should, where possible, be consulted on through the Annual Plan process.

Formation of a partnership with the private sector

Formation of a partnership that meets the conditions of this policy will be by ordinary Council resolution unless authority to form a partnership is delegated to a committee, subcommittee or council officer, in which case the partnership must meet the conditions of this policy.

Formation of a partnership that does not meet the conditions of this policy will be by ordinary council resolution only after appropriate and required consultation under the Annual Plan process and due consideration of the issues raised by that consultation.

Partnership conditions

In considering an application, New Plymouth District Council will require that:

• The partnership proposal will contribute to the Community Outcomes as set out in the Community Plan.
• The benefit from the partnership exceeds the costs.
• The legal status of the private sector partner will be that of a private individual, business, or registered company.
• The partner be able to demonstrate that they are able to meet the terms of any agreement between the council and themselves.
• That the partnership and its proposed business are lawful.
• That any necessary consents, licences or other approvals have been obtained.
• Any other matter the council considers appropriate.

Risk management and assessment

On setting up a partnership, the potential risks to New Plymouth District Council will be outlined and where the risks are considered significant in terms of probability and potential effect, a risk management strategy will be put in place to appropriately minimise or provide cover for that risk to the satisfaction of the Council.

Risk will be assessed by calculating the probability of an adverse outcome multiplied by the cost/impact of that adverse outcome while taking into account mitigating strategies and associated costs.

Risk factors that will be considered will be:

• Safety.
• Risk to the reputation of the council and New Plymouth District.
• Financial risk.
• Risk to the capacity of the council to carry out its activities, now and in the future.
• Risk to property.
• Protection of any intellectual property.
• Any other potential loss.

Monitoring and reporting

Monitoring and reporting requirements will be as appropriate to the significance of the proposal and the amount of resources allocated to the partnership.

Monitoring and reporting will include the following where applicable:

1. Quarterly financial reports.
2. Quarterly reports on outputs produced.
3. Annual financial reports.
4. Annual performance reports on the achievement of those Community Outcomes that are applicable and on any impacts on community well-being in terms of the economic, cultural, environmental and social dimensions.
5. Report on specifically agreed outcomes and objectives. Return to top

Remission and Postponement of Rates Policies

Rates Policy 1

Rating of community, sporting and other organisations.

Section 85 of the Local Government (Rating) Act 2002.

Objectives of the policy

The Council reaffirms its commitment to assist, where practicable, community clubs and organisations in recognition of the valuable "Public Good" contribution made by such organisations to the character and well-being of the district.

Conditions and criteria

1. The Council may remit all rates where land is owned by the Council, or owned and occupied by a charitable organisation, and is used exclusively or principally for sporting, recreation, or community purposes.
2. The policy will not apply to organisations operated for private pecuniary profit, or which charge commercial tuition fees.
3. All applications must be received in writing using the New Plymouth District Council "Application for Remission" form.
4. Any applications received during a rating year will be applicable from the commencement of the following rating year. No applications will be backdated.
5. Organisations making application should include the following documents in support of their application:
   1. Statement of objectives.
   2. Full financial accounts.
   3. Information on activities and programmes.
   4. Details of membership or clients.
6. The policy shall apply to such organisations as approved by the Manager Financial Services and the Manager Revenue and Expenditure as meeting the relevant criteria and the extent of any remission will be determined by those officers.
7. No remission will be granted in respect of those rates referred to in sections 16 and 19 of the Local Government (Rating) Act 2002, i.e. targeted rates.
8. Any appeals against the decisions of the Manager Financial Services and Manager Revenue and Expenditure will be referred to the Monitoring Committee for final determination.
9. A summary of remissions must be supplied to the Council on an annual basis.

Rates Policy 2

Remission of penalties.

Section 85 of the Local Government (Rating) Act 2002.

Objectives of the policy

The objective of this policy is to enable the Council to act fairly and reasonably in its consideration of rates which have not been received by the Council by the penalty date due to circumstances outside the ratepayer's control; or

In order to ensure the settlement of outstanding rates and the ratepayer has made an arrangement to pay over an extended period.

Conditions and criteria

1. Automatic remission of the penalties will apply to those ratepayers that have an automatic payment or direct debit in place as approved by the Manager Revenue and Expenditure.
2. Automatic remission of the penalties will apply to those ratepayers that pay their rates in full by the second instalment due date.
3. Remission of the penalty will be granted if the ratepayer is able to provide evidence that their payment has gone astray in the post or the late payment has otherwise resulted from matters outside their control.
4. Application will be considered on its merits and remission will be granted where it is considered just and equitable to do so.
5. Application for a penalty remission is required in writing however under some circumstances approved by either the Manager Financial Services or Manager Revenue and Expenditure, verbal applications will be accepted.
6. The Council may remit small balances due to cash rounding.
7. The Manager Financial Services and the Manager Revenue and Expenditure have delegated authority to grant or refuse remissions under this policy.
8. Any appeals against the decision will be referred to the Monitoring Committee for final determination.
9. If an arrangement to pay rates and/or clear outstandings is not adhered to, the Council may reinstate future penalty charges.

Rates Policy 3

Postponement of rates for extreme financial hardship.

Sections 85 and 87 of the Local Government (Rating) Act 2002.

Objectives of the policy

The objective of this policy is to assist ratepayers experiencing extreme financial hardship which affect their ability to pay rates.

Conditions and criteria

1. Only rating units used solely for residential purposes (as defined by the Council) will be eligible for consideration for rates remission for extreme financial hardship.
2. Only the person entered as the ratepayer, or their authorised agent, may make an application for rates remission for extreme financial hardship on the rating unit which is the subject of the application. The person entered on the Council's rating information database as the "ratepayer" must not own any other rating units or investment properties (whether in the district or in another district).
3. The Council will consider, on a case by case basis, all applications received that meet the criteria described in the two paragraphs above.
4. When considering whether extreme financial hardship exists, all of the ratepayer's personal circumstances will be relevant including, but not limited to, the following factors: age, physical or mental disability, injury, illness and family circumstances.
5. Before approving an application the Council must be satisfied that the ratepayer is unlikely to have sufficient funds left over, after the payment of rates, for normal health care, proper provision for maintenance of his or her home and chattels at an adequate standard as well as making provision for normal day to day living expenses.
6. The ratepayer must make application to the Council on the prescribed form.
7. The ratepayer must make acceptable arrangements for payment of future rates, for example by setting up a system for regular payments.
8. The Council may add a postponement fee to the postponed rates for the period between the due date and the date they are paid. This fee will not exceed an amount which covers the Council's administration and financial costs.
9. The policy will apply from the beginning of the rating year in which the application is made although the Council may consider backdating past the rating year in which the application is made depending on the circumstances.
10. The postponement will continue to apply until:
    1. The ratepayer ceases to be the owner or occupier of the rating unit; or
    2. The ratepayer ceases to use the property as their residence; or
    3. A date specified by the Council; whichever is the sooner.
11. The postponed rates will remain a charge against the property and must be paid either at the end of the postponement term or when the property is sold. Postponed rates may include rate arrears owing from a previous financial year.
12. A rating charge will be registered on the certificate of title and will be removed when the postponed amount has been repaid.
13. The application will be determined by the Manager Financial Services and the Manager Revenue and Expenditure.
14. Any appeals against the decision will be referred to the Monitoring Committee for final determination. Return to top

Rates Policy 4

Rates remission on Māori freehold land.

Sections 85 and 108 of the Local Government (Rating) Act 2002.

The Council only remits rates on Māori freehold land, it does not allow postponements. In determining this policy the Council has taken account of those matters set out in Schedule 11 of the Local Government (Rating) Act 2002.

Objectives of the policy

To recognise situations where there is no occupier or no economic or financial benefit being derived from the land.

Where the owners cannot be found, to take into account the statutory limitation of time for the recovery of unpaid rates.

Conditions and criteria

1. The land must be multiple-owned and unoccupied Māori freehold land that does not produce any income.
2. A request for rates remission by the owners must include:
   1. Details of the land;
   2. Documentation that shows the ownership of the land; and
   3. Reasons why remission is sought.
3. Where after due enquiry the owners of an unoccupied block cannot be found, the Council may apply a remission without the need for a request.
4. If circumstances change in respect of the land, the Council will review whether this remission policy is still appropriate to the land.
5. The Manager Financial Services and the Manager Revenue and Expenditure have delegated authority to grant or refuse remissions under this policy.
6. Any appeals against the decision will be referred to the Monitoring Committee for final determination.
7. A summary of remissions must be supplied to the Council on an annual basis.

Rates Policy 5

Rates remission in miscellaneous circumstances.

Section 85 of the Local Government (Rating) Act 2002.

Objectives of the policy

It is recognised that not all situations in which the Council may wish to remit rates will necessarily be known about in advance and provided for in Council's specific policies.

Conditions and criteria

1. The Council may remit all rates on a rating unit where it considers it just and equitable to do so because:
   1. Extraordinary circumstances have arisen by virtue of the transition from the Rating Powers Act 1988 to the Local Government (Rating) Act 2002 that meant it would be fair and equitable to grant relief.
   2. The application does not meet the circumstances provided for in any of the Council's other remission policies.
2. The application will be determined by the Manager Financial Services and the Manager Revenue and Expenditure.
3. Any appeals against the decision will be referred to the Monitoring Committee for final determination.

Rates Policy 6

Rates remission for land protected for natural historical or cultural purposes.

Section 85 of the Local Government (Rating) Act 2002.

Objectives of the policy

The objective of this policy is to encourage the protection of significant natural areas by providing rates relief for privately owned land that contains special features voluntarily protected for natural, historic, cultural or conservation purposes.

Basis of remission

The remission will be based on the proportion the area protected bears to the total area of the property. Where the protected area is covenanted, the remission will be 100 per cent of the general rate pro-rata as per this proportion; where the protected area is protected by virtue of inclusion in the District Plan but not covenanted, the remission will be 50 per cent of the general rate pro-rata as per this proportion.

N.B. Remissions granted under this policy do not include targeted rates.

Conditions and criteria

1. The area of land containing the special features is readily identified and able to be measured.
2. The special features are significant in terms of the loss of use or value of the property sustained in retaining the feature.
3. The area of land containing the feature is protected to the extent that economic utilisation is at least restricted or the value of the property is significantly affected by the existence of the feature being protected.
4. A heritage building is protected by a legal instrument or agreement.
5. The application will be determined by the Manager Financial Services and the Manager Revenue and Expenditure.
6. Any appeals against the decision will be referred to the Monitoring Committee for final determination.
7. Remissions granted under this policy will be reported to the council on an annual basis.

Rates Policy 7

Remission of Uniform Annual General Charges on rating units which are used for residential purposes and which include a separately inhabited part occupied by a dependent member of the family of the owner of the rating unit.

Section 85 of the Local Government (Rating) Act 2002.

Objectives of the policy

The policy is to provide for the possibility of rates remission where more than one uniform annual general charge is assessed on a rating unit because that rating unit comprises more than one separately used or inhabited part and where the rating unit is used for residential purposes and includes a separately inhabited part occupied by a dependent member of the family of the owner of the rating unit.

Conditions and criteria

The Council may remit the specified rates where the application meets the following criteria:

1. The rating units above must be used as the owner's residence but also contain a minor flat or other residential accommodation unit which is inhabited by a member of the owner's family who is dependent on the owner for financial support and occupies the accommodation on a non paying basis (e.g. granny flat).
2. The owner(s) of the rating unit must complete and provide to the Council a statutory declaration. Such a declaration will be effective for three years or until the conditions cease to be met, whichever is earlier. A fresh declaration must be completed and provided in order to qualify for consideration for remission beyond the first three year period.
3. The Manager Financial Services and Manager Revenue and Expenditure have delegated authority to grant or refuse remissions under this policy.
4. Any appeals against the decision will be referred to the Monitoring Committee for final determination. Return to top

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