Fees and Charges Policy

Reference: P10-023 
Status: 14 December 2010

POLICY PURPOSE

The purpose of this policy is to:

a) Clarify the legal mechanism for setting each fee and charge.

b) Provide greater transparency and public accountability by outlining the rationale behind fee and charge setting.

c) Ensure that fees and charges maximise community benefit from Council goods and services.

d) Ensure that fees and charges contribute to community outcomes.

e) Achieve legal compliance.

f) Encourage sustainable use of and fair access to Council services, through carefully considered fees and charges.

g) Lower the burden on ratepayers where goods or services principally benefit distinct groups or individuals, by defining those circumstances where a fee or charge is appropriate.

h) Provide a fee/charge setting process that is flexible, adaptable and able to meet changing circumstances.

i) Ensure that fees and charges recover actual and reasonable costs unless there are valid policy reasons not to do so.

POLICY STATEMENTS

The following parameters must be considered when setting; recommending or amending fees and charges. The fee or charge:

a) Must have regard to section 101 of the Local Government Act 2002 (LGA 2002) (Financial Management); and

b) Must be consistent with the community outcome(s) for the relevant significant activity as outlined in the Long Term Plan; and

c) Must directly relate to an identifiable private benefit (benefits received by those using the service, as opposed to benefiting the community generally), cases where the benefit is wholly public good (benefits the community generally, as opposed to benefiting identifiable individuals or groups) should not be funded by fees and charges; and

d) Must contribute to sustainable use of Council, goods, services or assets; and

e) Should be of similar level to fees or charges for similar council activities, and/or similar private sector activities unless there is a valid reason not to do so; and

f) Where possible should include downstream costs or a statement of what further costs may be incurred; and;

g) Any change to a group of fees or charges, must where possible be proportional, i.e. a 10% increase across a group of fees, unless it is unfeasible or there are good policy reasons not to do so;

h) There should be no cross subsidisation unless there is a valid policy reason to do so, and;

i) Should reflect market rates and/or recover cost unless there is a valid reason not to. For the avoidance of doubt, valid policy reasons not to set a fee or charge at market rates or cost are:
a) Legislation sets a fee or charge or deems that no fee or charge be applied.
b) Setting at market rate or cost recovery conflicts with another Council policy, Council objectives or community outcomes.
c) To encourage rationalised use of a service or facility.
d) Where it is more cost effective not to charge.
e) Where the benefits of not charging outweighs the disadvantages.
f) Where the market will not tolerate a fee or charge.
g) Where it is inconsistent with the Revenue and Finance Policy.
h) Any other circumstances where a lesser fee or charge or not charging will contribute to community outcomes.

Impact of other policies

When implementing fees and charges officers should consider:

a) The impact of other council policies related to the specific fee or charge or activity.

b) How the fees/charges contribute to the priorities set down in the Revenue and Finance policy.

c) Council’s significance policy, and any other significant issues, to determine the degree of public consultation required (even if the charge is set under delegation).

Methods of setting fees and charges

Fees and charges are set using the following mechanisms:

a) Fees and charges set as part of the Annual Plan or Long Term Plan process
Unless otherwise specified, the majority of the Council’s fees and charges are set annually as part the Annual Plan or Long Term Plan process.  As part of this process, fees and charges are publicly consulted on and then formally adopted by the Council prior to commencement of the new financial year.   

b) Fees and charges where bylaw must establish fee-setting mechanism
The authority to set these fees and charges is granted by section 150 of the LGA 2002, and because there is an existing bylaw, are set by bylaws.

c) Fees and charges set by statute or regulation
These fees are set down in statute or legislation. The Council has no power over the charge amounts.

d) Fees and charges required by legislation to be set by resolution
The Council is required by legislation to set these fees via resolution. The dog control legislation also places a specific time period.

e) Fees and charges set via delegation
These are fees and charges that are currently set under delegation to management. They are set by appropriate officers and should in future conform to this policy.

f) Fees and charges to be set via special consultative procedure
In most cases legislation requires the fee or charge to be set under section 150 of the Local Government Act 2002, which stipulates the fees or charges can either be authorised by a bylaw or set by special consultative procedure. These fees and charges concern council processes not governed by bylaws and are therefore set using a special consultative procedure outlined in section 83 of the Local Government Act 2002.

g) Other fees and charges
Other charges are set by Council resolution.

Circumstances for reviewing a fee or charge
The circumstances where Council can review fees and charges are;

a) An Annual/Long Term Plan objective/outcome requires a budget increase that cannot be met by another source.

b) A change to level of service (this should only occur within a Long Term Plan).

c) There is increased public demand for goods or services, placing pressure on current budgets/assets, and a fee/charge will allow for a reduction in demand.

d) There is an increased level of legislative compliance, which requires extra resources or expertise.

e) A new service is established (this should only occur within a Long Term Plan).

f) Legislation requires Council to prescribe a new fee or charge.

g) The current charge needs adjustment for inflation purposes.

h) Where any other new information is provided regarding a council good or service.

i) The fee or charge is found to have historically been too low.

j) To lower the contribution ratepayers pay for goods or services that principally benefit distinct groups or individuals.

Annual review

Fees and charges should be reviewed annually and changes to those Council fees and charges that require a special consultative procedure, council resolution or bylaw change should be done annually as a single process alongside the Long Term or Annual Plan process as one annual fees and charges consultation process unless it is impractical to do so.

POLICY CONTACT

The policy holder is the Corporate Strategy and Policy Team within the Strategy and Policy Group.

POLICY REVIEW 

This policy shall be reviewed following the adoption of the Revenue and Finance Policy.