Far North District Council

Far North District Council 

The top place where talent wants to live, work and invest 

Final 

Long-Term Plan 2012-22 Volume II



The top place where talent wants to live, work and invest

Content 

Welcome 3 

Revenue and Financing Policy 4 - 54 

Funding Impact Statement 55 - 87 

Remission and Postponement Policies 88 - 125 

Development Contributions Policy 126 - 160 

Treasury Policies 161 - 183 

Statement of Accounting Policies 184 - 195 

Policy on Determining Significance 196 - 200 

Linkages 201 - 204 

Audit Opinion 205 - 207 

Representatives 208 - 212 

Glossary 213 - 217 

Contact Details 218 

Long-Term Plan 2012-22 

1




Welcome 

Welcome to Volume 2 of the 10 year plan. This volume is largely devoted to the major policies that underpin Council’s 10 year plans. It is a requirement of the Local Government Act 

2002 (LGA) that Council provides you with this information and gives you the opportunity to comment on it as part of the consultation on the Long-Term Plan (LTP). As with other 

aspects of the plan Council will welcome your feedback on any of the policies or other information set out in Volume 2. 

Council policies 

Here is a brief snapshot of the main policies that impact 

on the development of this plan and are included in 

more detail later in the volume. 

Revenue and financing policy 

Council has determined the best way of funding its 

activities. In doing this it takes account of the factors that 

give rise to the need for Council expenditure. Based on 

that analysis, it has considered who should pay towards 

the provision of each activity. The Revenue and Financing 

Policy explains the thinking behind this and shows the 

split in activity funding between rates, user charges, 

government subsidy and other funding sources, like 

development contributions. 

Funding impact statement 

Here you will find the fine detail of the different rates 

Council has set, along with pages of example rates, to 

enable you to see the impact on properties in different 

parts of the district. 

Remission and postponement policies 

Council operates a number of separate policies that 

provide for either the remission or the postponement of 

rates in appropriate circumstances. 

Development contributions policy 

This Policy has become increasingly important in recent 

years as Council aims to ensure that growth pays for 

growth, i.e. that the infrastructure required to respond 

to the growth of the district is appropriately funded by 

contributions from the developments that give rise to 

the need for that infrastructure. This Policy sets out what 

developers will have to pay and explains how each of 

the separate contributions – for roads, water, sewerage, 

etc. – are calculated. 

Treasury policy 

This Policy underpins Council’s borrowing and investment 

activity and includes detail on borrowing limits, interest 

rate exposure, and debt management, along with 

Council’s approach to investment risk management. 

Accounting policies 

Council is required to abide by International Financial 

Reporting Standards (IFRS) and the Accounting Policies 

explain the approach underlying the financial projections 

and forecast financial statements contained in this plan. 

Policy on determining significance 

The LGA sets specific requirements around significant 

decisions or proposals made by Council and the way 

in which Council deals with strategic assets. These 

requirements cover issues such as the need for public 

consultation before certain decisions are finalised. 

Council’s Policy on Determining Significance sets out 

how it approaches these issues. 

Links to other policies and strategies 

This LTP also has links with many other policies and 

strategies (both Council and non Council) and Volume 

2 includes some information to help you trace these 

important links. 

Audit opinion 

As a requirement of the LGA this LTP has been audited 

by Audit New Zealand. Their full opinion can be found in 

Volume 2 on page 205. 


3

Revenue and Financing Policy 

Policy overview 

The LGA requires all councils to adopt a Revenue and 

Financing Policy as part of its Long-Term Plan. This Policy 

is used to demonstrate how Council proposes to fund 

its various operating and capital expenditures, and more 

importantly who will pay these and why. 

The policy is designed to show who benefits from 

different activities, the time period over which these 

benefits are expected to occur and whether the actions 

or inactions of particular groups have given rise to the 

need for the activity. Where an activity is separately 

funded, Council needs to show the benefits from 

maintaining this separate funding. 

Lastly, Council has to demonstrate that in making its 

overall funding decisions it has given consideration to the 

impact on the community and in particular the effect on 

its current and future wellbeing. 

This Policy is set out under the following major headings: 

•• 

Policy statement 

•• 

Legal requirements of the Revenue and Financing 

Policy 

•• 

Council’s process for applying these legal requirements 

•• 

Overall funding considerations 

•• 

Individual activity analysis. 

Philosophy 

As discussed in the Financial Strategy, Council manages its 

financial affairs prudently and in a manner that promotes 

the current and future interests of the community. The 

aim of this Policy is to describe how Council proposes to 

fund its activities from the most appropriate source after 

considering who benefits from each activity. As a general 

rule, operating activities will be funded from operating 

revenue and capital expenditures will be funded from 

surpluses, borrowings, subsidies and reserves. 

Council activities will be funded from appropriate sources 

of revenue following consideration of: 

•• 

The community outcomes to which the activity 

primarily contributes 

•• 

The distribution of benefits between the community 

as a whole and any identifiable groups or individuals 

within the community 

•• 

The period over which the benefits are expected to 

occur 

•• 

The extent to which the actions or inactions of 

individuals contribute to the need for the activity 

•• 

The costs and benefits, including consequences for 

transparency and accountability, of funding the activity 

distinctly from the other activities 

•• 

The overall impacts of any allocation of liability for 

revenue needs on the current and future social, 

economic, environmental and cultural wellbeing of 

the community. 

In funding its activities, Council may need to borrow 

and invest funds and as a result has risks such as inter est 

rate changes, liquidity, credit and internal control. Council’s 

policies in relation to borrowing and the associated 

risks are contained in the Liability Management and 

Investment Policy, both of which have been adopted by 

Council and are available for review on Council’s website 

www.fndc.govt.nz. 


Funding of operating expenditure 

Council funds operating expenditure from the following 

sources: 

General rates 

Targeted rates for: 

•• 

Roading 

•• 

Ward services 

•• 

Kerikeri mainstreet 

•• 

Land drainage and flood protection 

•• 

Water supply 

•• 

Wastewater 

•• 

Stormwater. 

Charges for services including fees and charges, and 

fines, Interest and dividends from investments, Grants 

and subsidies towards operating expenses (grants and 

subsidies towards capital expenditure are applied to the 

related capital expenditure only). 

4 


Other operating revenue, including: 

•• 

Petrol tax 

•• 

Property rentals 

•• 

Other income. 

Balanced budget statement 

Section 100 of the LGA requires that Council’s projected 

operating revenues match its projected operating 

expenditures. 

Despite this, Council may choose not to fully fund 

operating expenditure in any particular year if Council 

can show that it is financially prudent to do so and where 

the deficit can be funded from operating surpluses in 

the immediately preceding or subsequent years. An 

operating deficit will only be budgeted when it would be 

beneficial to avoid significant fluctuations in rates, fees, 

or charges. 

Council may choose to fund from the above sources more 

than is necessary to meet the operating expenditure in 

any particular year. Council will only budget for such 

an operating surplus if necessary to fund an operating 

deficit in the immediately preceding or following years, or 

to repay debt. Council will have regard to forecast future 

debt levels when ascertaining whether it is prudent to 

budget for an operating surplus for debt repayment. 

Council has determined the proportion of operating 

expenditure to be funded from each of the sources listed 

above, and the method for apportioning rates and other 

charges. The details of the funding apportionment are set 

out in the funding sources table that is included in this Policy. 

The LGA requires Council to produce Funding Impact 

Statements (FIS), which provides details of the funding 

mechanisms to be used for each group of activities for 

each year covered by the LTP. These Funding Impact 

Statements show how Council intends to implement the 

Revenue and Financing Policy. It also shows the amounts 

to be collected from each available source for each group 

and how various rates are to be applied. 

Funding of capital expenditure 

Council funds capital expenditure from subsidies, 

borrowing, reserves, contributions and operating 

surpluses. When funded by debt, Council spreads the 

repayment of that borrowing over several years. This 

enables Council to best match the charges placed on 

the community against the period of time over which the 

benefits from capital expenditure will be received. 

Borrowing is managed within the framework specified 

in the Liability Management Policy. Whilst seeking to 

minimise interest costs and financial risks associated 

with borrowing, Council seeks to match the term of 

borrowings with the average life of assets when practical. 

Council’s overall borrowing requirement is reduced 

to the extent that other funds are available to finance 

capital expenditure. Such other funds include: 

•• 

Council reserves, including reserves comprising 

financial contributions under the Resource 

Management Act 1991 and development contributions 

under the LGA 

•• 

Contributions towards capital expenditure from other 

parties such as the New Zealand Transport Agency 

(NZTA) (in relation to certain roading projects) and 

the Crown (in relation to certain wastewater projects) 

•• 

Revenue collected to cover depreciation charges 

•• 

Proceeds from the sale of assets 

•• 

Targeted rates 

•• 

Operating surpluses. 

Legal requirements of the revenue and 

financing policy 

This Revenue and Financing Policy has been prepared 

in accordance with the requirements of the LGA. There 

are 4 key sections that apply to this policy; Section 101, 

Financial Management, Section 101A Financial Strategy, 

Section 102, Funding and Financial Policies; and Section 

103, which describes what the Revenue and Financing 

Policy must contain. Rather than reproduce these sections 

in full, a brief description of these has been included over 

the page. 


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101 Financial management 

This section outlines the requirement for councils to 

manage their finances prudently and to ensure that it 

has adequate funds to carry out the activities that are 

outlined in its Annual Plan or LTP. Most importantly it 

discusses the key matters that have to be considered 

when making funding decisions. These matters are: 

•• 

The community outcomes to which the activity 

primarily contributes 

•• 


as a whole, any identifiable part of the community, 

and individuals 

•• 

The period in or over which those benefits are 

expected to occur 

•• 

The extent to which the actions or inaction of 

particular individuals or a group contribute to the 

need to undertake the activity 

•• 

The costs and benefits, including consequences for 

transparency and accountability, of funding the activity 

distinctly from other activities 

•• 

The overall impact of any allocation of liability for 

revenue needs on the current and future social, 

economic, environmental, and cultural wellbeing of 


These matters have been used to prepare the funding 

decisions for each of Council’s activities as is discussed in 

the body of this Policy. 

101A Financial strategy 

This is a new requirement introduced in 2010. Its purpose 

is to require councils to develop a 10 year strategy 

to provide a degree of certainty on how councils will 

fund their activities over the years covered by each LTP. 

The section specifies a number of matters that must be 

included in the policy for the next 10 years. These include: 

•• 

Quantified limits on rates and rate increases 

•• 

Quantified limits on borrowings 

•• 

Quantified returns on investments 

•• 

An assessment of Council’s ability to maintain 

existing levels of service and meet additional 

demands for service within those limits. 

The policy must also contain information on: 

•• 

The expected changes in population and land use 

and the costs of providing for those changes 

•• 

The expected capital infrastructure requirements 

needed to maintain the existing levels of service 

currently provided. 

The new Financial Strategy requirement will become 

one of Council’s key policies as it draws together all the 

different elements of the long-term planning process and 

encapsulates them in a single document. 

102 Funding and financial policies 

This section describes the policies that a council can 

introduce to allow readers to understand how Council 

is planning to fund its activities. Some of these are 

mandatory, while others are optional. Some of them 

must be introduced or amended in the LTP, while other 

can be managed separately from that process. 

The mandatory policies are: 

•• 

A Revenue and Financing Policy 

•• 

A Liability Management Policy 

•• 

An Investment Policy 

•• 

A Development Contributions Policy or 

Financial Contributions Policy 

•• 

A Policy on the Remission and Postponement 

of Rates on Māori Freehold Land. 

The optional policies are: 

•• 

A Rates Remission Policy 

•• 

A Rates Postponement Policy. 

103 Revenue and financing policy 

This section that spells out, in detail what this Policy must 

contain; in particular, it must set out the ways that Council 

will fund both operating and capital expenditures. 

It is the key policies that are used to set the basis of 

rating for the district. It includes: 

•• 

The basis of valuation 

(land value, capital value or annual value) 

•• 

Details of any differential rating systems 

•• 

The basis of the Uniform Annual General 

Charge (UAGC), if any 

•• 

Details of any targeted rates. 

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In addition it outlines the other sources used to fund 

each activity, including: 

•• 

Lump sum contributions 

•• 

Fees and charges 

•• 

Interest and dividends from investments 

•• 

Borrowing 

•• 

Proceeds from asset sales 

•• 

Development contributions 

•• 

Financial contributions under the Resource 

Management Act 1991 

•• 

Grants and subsidies 

•• 

Any other source. 

Finally the policy has to explain how Council has 

addressed the matters set out in Section 101 as discussed 

above. 

What are these matters and what do they mean? 

To assist readers, the key matters are described below. 

It is acknowledged that the terms used are complex but 

it is important that readers gain an understanding of the 

issues that Council has to balance when making funding 

decisions. 

Community outcomes 

Section 101(3)(a)(i) requires Council to identify the 

community outcome to which each activity primarily 

contributes. 

Council has taken the opportunity to revise its 

community outcomes as part of this LTP. Full details of 

the new outcomes can be found in volume I on page 38. 

The LTP sets out under each activity or group of 

activities, the outcome or outcomes to which it primarily 

contributes, and states why each activity is undertaken. 

Distribution of benefits 

Section 101(3)(a)(ii) requires Council to assess the 

benefits from each activity flowing to the community as 

a whole, and those flowing to individuals or identifiable 

parts of the community. This is often called the 

public/private benefit split. 

Essentially this is a process where every activity is examined 

to decide who should pay for it. Is it something that only the 

users should pay for, say by way of a fee, charge or targeted 

rate? Or, is it something that the community should pay for 

as a whole, say from a general rate? 

Period of benefits 

Section 101(3)(a)(iii) requires Council to assess the 

period over which the benefits from each activity will 

flow. This in turn indicates the period over which the 

operating and capital expenditure should be funded. 

For all activities, operating costs are directly related to 

providing benefits in the year of expenditure. As such, 

they are appropriately funded on an annual basis from 

annual revenue. 

Assets, purchased from capital expenditure, provide 

benefits for the duration of their useful lives. Useful lives 

range from a few years in the case of office equipment 

through to many decades for infrastructural assets 

such as pipe networks. This is often referred to as inter 

generational equity. 

This concept reflects the view that benefits occurring 

over time should be funded over time. This is particularly 

relevant for larger capital investments such as wastewater 

treatment plants, bridges, landfills etc. 

One method used to spread these costs over time is 

by loan funding. This ensures that current ratepayers do 

not pay for benefits received by future ratepayers. Each 

year, ratepayers pay the interest (representing the cost 

of capital) and depreciation charges that are associated 

with the asset. This results in infrastructural costs being 

spread more evenly across the life of the asset and the 

different ratepayers who benefit from it. 

Another method of achieving this objective is through the 

use of development contributions, where the calculation 

of the contribution includes an element to reflect the 

value or cost of the asset that has capacity for future 

growth. 


7


Exacerbator pays 

Section 101(3)(a)(iv) requires Council to assess the 

extent to which each activity exists only because of the 

actions or inaction of an individual or group. Examples 

are attending to a rural fire, dog control, littering, etc. 

Sometimes known as polluter pays, this principle aims 

to identify the costs to the community of controlling the 

negative effects of individual or group actions. 

The principle suggests that Council should recover any 

costs directly from those causing the problem. Most 

activities do not exhibit exacerbator pays characteristics. 

Costs and benefits of distinct funding 

101(3)(a)(v) requires Council to consider the costs and 

benefits of distinct funding for each activity. This section 

is interpreted as requiring Council to consider the costs 

and benefits of funding each activity in a way that relates 

exclusively to that activity. 

An example of this would be funding libraries entirely 

from user charges, or water from a targeted rate. The 

consideration of the costs and benefits of distinct funding 

must include the consequences of the chosen funding 

method for transparency and accountability. 

Transparency and accountability are most evident when 

an activity is totally distinctly funded. This allows ratepayers 

or payers of user charges, as the case may be, to see 

exactly how much money is being raised for and spent on 

the activity, and to assess more readily whether or not the 

cost to them of the activity represents good value. 

Funding every activity on such a distinct basis would be 

extremely administratively complex. For some activities 

the quantity of rates funding to be collected amounts 

to only a few cents per ratepayer. The administrative 

costs and lack of significance would lead Council to 

fund a number of activities by way of a general rate. 

The individual activity sections of this document do not 

repeat this argument for each activity, but rather assume 

that the requirements of transparency and accountability 

for each activity’s funding is adequately met by the 

publication of the estimates of activity expenditure in the 

LTP, and actual activity costs in Council’s Annual Report. 

Similarly, the funding method indicated by the distribution 

of benefits for a particular activity may include user 

charges. 

Groups of activities 

The latest amendment to the LGA has introduced some 

refinements to this requirement. Councils are now 

required to separately disclose and account for a number 

of groups of activities. The LGA specifies 5 mandatory 

groups but a council can chose to define as many groups 

as they wish. What is important to note is that Council 

must now prepare FIS for, and separately report on the 

performance of, each, group. 

The mandatory groups are: 

•• 

Water supply 

•• 

Sewerage treatment and disposal group 

•• 

Stormwater drainage 

•• 

Flood protection and control works 

•• 

The provision of roads and footpaths. 

The LGA does not define what individual activities 

these mandatory groups are made up of nor does 

it require that Council undertake one or all of them. 

As an example, it is unlikely that a Regional Council will 

undertake many of these activities. 

Consideration of the new group of activities requirement 

will influence how Council complies with the requirements 

of Section 101(3)(a)(v). 

Overall impact on community wellbeing 

101(3)(b) requires Council to consider the overall 

impact of its funding decisions on the current and future 

social, economic, environment and cultural wellbeing of 


As part of the preparation of this Policy, Council took 

into account the interests of residents and ratepayers, 

principles of fairness and equity, Council policy, and the 

avoidance of hardship from significant changes in cost 

allocation. Where appropriate, Council modified the 

strict economic analysis of funding allocation to address 

some of the more extreme impacts. 

8 


An example of this is the use of district-wide funding of 

many of Council’s activities. After considering the costs 

of providing these services on an individual community 

basis, Council decided that allocating the liability for 

funding on a district-wide basis best met the requirements 

to take in to account the community’s wellbeing. 

It is this analysis which has led to the proposals to change 

the current rating system to one that is more focused on 

the beneficiaries of the individual activities and in particular 

the proposals to change the funding of the cost of capital 

for water and sewerage to a scheme by scheme basis. 

How council applied these legal requirements 

The final process for developing the Revenue and 

Financing Policy has been to analyse the requirements of 

Section 101(3)(a) of the LGA. 

This is a 2 stage process. In the first stage, Council 

considers each of the significant activities it undertakes 

in the light of each of the different matters discussed 

above. This analysis is then used to make an initial funding 

decision. In the second stage, Council reconsiders its 

initial funding decision in the light of its impact on the 

current and future social, economic, environmental, and 

cultural wellbeing of the community. 

Using that 2 stage process, Council shows that it has 

considered how each activity should be funded and how 

it has responded to its overall responsibility to promote 

the social, economic, environmental, and cultural wellbeing 

of communities, in the present and for the future. 

Overall funding results 

The policy summarises the final funding decisions that 

have been agreed after the completion of the processes 

previously described. A detailed individual picture of the 

analysis follows on from the summary. 

Funding of operational expenditures 

The following table shows the overall results of the 

individual activity analysis. It indicates that the operating 

expenses should be funded from the following sources: 

Operational funding allocations 

Public Funding 

General Rates 40.76% 

Ward Rates 8.54% 

Penalties 1.80% 

Private Funding 

Drainage and Flood Protection 0.09% 

Stormwater 0.39% 

Roading 2.83% 

Sewerage 9.22% 

Water 7.08% 

Kerikeri Mainstreet 0.05% 

Paihia Central Business District 0.02% 

Kaitaia Business Improvement Rate 0.05% 

Contributions 0.45% 

Subsidies 20.05% 

Other Income 1.24% 

User Charges 7.44% 

Total Funding 100.00% 

Funding of capital expenditures 

Capital expenditures will be funded from the following 

sources: 

Capital funding allocations 

Contributions 2.59% 

Depreciation 34.26% 

Loan 29.86% 

Operating Surplus 1.35% 

Reserves 0.68% 

Other Funding 0.00% 

Subsidy 31.26% 


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Basis of rating 

Proposed “fairer” system 

In the Draft Plan, Council set out a new system of rating 

which it described as being fairer for the district. This 

proposed system, which is described below, attracted 

a wide range of submissions, both in support and in 

opposition to the concept. 

The key features of the proposed new rating system were: 

•• 

A change to the basis of the general rate to 

incorporate a new range of differentials 

•• 

A modified Uniform Annual General Charge (UAGC) 

based on specific activities which Council believes 

benefit ratepayers equally 

•• 

A new targeted rate for roading 

•• 

The current ward rates to be incorporated into the 

general rate 

•• 

A new range of differentials for both the roading and 

general rates to better match rates to benefits 

•• 

A change to the system of funding water and 

sewerage. Council is proposing to fund the cost 

of capital expenditure through the use of a range 

of targeted rates based on the individual schemes 

and operating expenditure using a district wide 

methodology. 

After considering all the submissions, Council decided 

that, whilst it agreed with the concept in principle, 

they believed that it needed more work to ensure that 

the differential basis for roading was robust. For this 

reason, Council decided to continue to use the current 

methodology for the general and ward rates. But it did 

agree to introduce a new targeted uniform rate for 

roading and is proceeding with the proposed system for 

funding water and sewerage. 

Council decided not to introduce the proposed method 

of calculating the UAGC rather it would continue to set 

it at the maximum level after taking account of the new 

uniform roading targeted rate. 

Over the next twelve months Council will work with 

different ratepayer sector groups to further develop the 

“fairer” rating system with the intention of introducing it 

as part of the 2013/14 plan. 

Final Rating System for 2012/22 

The general rates for 2012/13 are set on the basis of land 

value using two differentials, general and commercial. 

Every rating unit’s general rate differential will be set on 

the basis of land use as described in the Funding Impact 

Statement set out in this document. 

Council will continue to set a UAGC based on the 

separately used or inhabited part of the rating unit 

(SUIP). It will also set a new uniform targeted rate for 

roading which will also be assessed on the basis of the 

SUIP. 

Targeted rates will continue to be used to fund a range 

of activities and these will also be set on a differential 

basis according to their purpose and need. 

Operational funding allocation summaries 

Council believes that the overall allocation of funding 

requirements represents a reasonable balance between 

user pays, targeted rates and district funding. It considers 

that the impacts of these do not adversely affect the 

current and future wellbeing of the community. 

Detailed below is a summary, at the activity group level, of 

the proposed operational funding sources. This indicates 

how each activity will be funded from the following 

sources: 

•• 

User charges 

•• 

Operational subsidies 

•• 

Targeted rates 

•• 

Other funding sources 

•• 

General and other broad function rates. 

10 


Proposed allocation of operational funding 


group Group and Activity Charges Operational Subsidies Targeted Rates Other General/Ward Rates Total Funding 

1 Roading 

Roading 0% 25% 0% 7% 68% 100% 

Footpaths 0% 0% 0% 0% 100% 100% 

2 Sewerage Treatment and Disposal Group 

Sewerage Treatment and Disposal 0% 0% 93% 2% 5% 100% 

3 Stormwater Drainage Group 

Stormwater 0% 0% 0% 0% 100% 100% 

Drainage 0% 0% 100% 0% 0% 100% 

4 Water Supply Group 

Water Services 0% 0% 98% 2% 0% 100% 

5 District Facilities Group 

Community Services 

Cemetries 21% 0% 0% 0% 79% 100% 

Civic Buildings 29% 0% 0% 0% 98% 100% 

Motorcamps 94% 0% 0% 0% 6% 100% 

Pensioner Housing 52% 0% 0% 0% 48% 100% 

Recreation 0% 0% 0% 0% 100% 100% 

Town Maintenance 0% 0% 0% 0% 100% 100% 

Public Services 

Customer Services 0% 0% 0% 0% 100% 100% 

Information Centres - I-SITEs 25% 0% 0% 0% 75% 100% 

Libraries 6% 0% 0% 0% 94% 100% 

Public Safety 0% 0% 0% 0% 100% 100% 

6 Environmental Management Group 

Environmental Protection 

Animal Control 34% 0% 0% 0% 66% 100% 

Environmental Health 37% 0% 0% 0% 63% 100% 

Monitoring and Enforcement 7% 0% 0% 0% 93% 100% 

Liquor Control 62% 0% 0% 0% 38% 100% 

Parking Enforcement 0% 0% 0% 15% 63% 100% 

Resource Management 

Environmental Policy 0% 0% 0% 0% 100% 100% 

Resource Consent Management 59% 0% 0% 0% 41% 100% 

Building Control 

Building Compliance 27% 0% 0% 0% 73% 100% 

Building Consent Management 69% 0% 0% 0% 31% 100% 


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Proposed allocation of operational funding 


group Group and Activity Charges Operational Subsidies Targeted Rates Other General/Ward Rates Total Funding 

7 Governance, Strategy and Corporate Group 

Governance 0% 0% 0% 0% 100% 100% 

Strategic Planning 0% 0% 0% 0% 100% 100% 

Economic Development 0% 0% 0% 0% 100% 100% 

Maori Engagement 0% 0% 0% 0% 100% 100% 

8 Waste Management Group 

Solid Waste Management 0% 0% 0% 0% 100% 100% 

Potential future differential rating categories 

In the draft plan, Council suggested that there are 8 

distinct categories or classes of rateable properties, plus 

1 additional category of other to cover a few situations 

where Council cannot attach one of the main categories 

to the land. These are: 

•• 

Residential these are generally rating units which have 

residential land uses or are used primarily for 

residential purposes 

•• 

Lifestyle these are generally rating units which have 

lifestyle land uses 

•• 

Commercial these are generally rating units which 

have some form of commercial land use or are used 

primarily for commercial purposes 

•• 

Industrial these are generally rating units which have 

some form of industrial land use or are used primarily 

for industrial purposes 

•• 

Farming general these are generally rating units which 

have some form of primary farming land use or are 

used primarily for farming purposes other than land 

used for dairy or horticulture 

•• 

Horticulture these are generally rating units which have 

horticultural, market garden or other similar land uses 

•• 

Dairy these are generally rating units which have dairy 

land uses 

•• 

Forestry these are generally rating units which have 

forestry land uses 

•• 

Other these are generally rating units where the 

defined land use is inconsistent or cannot be 

determined. 

At this stage Council has decided not to proceed with 

the introduction of these differential categories however 

they will form the basis of future work of rating for the 

Far North. 

Council has also indicated that it intends to review the 

basis of rating coastal land and may introduce a special 

differential for coastal farm land at a later date. 

12 


Individual activity analysis 

As previously described, each activity has been analysed 

to determine which community outcomes the activity 

supports, who benefits directly or indirectly from its 

provision, over what period the benefit is provided, 

whether there are any exacerbators who caused the 

need for the activity, and lastly what are the benefits from 

separately funding the activity. 

The activity analysis has been split into a set of 8 main 

activity groups. In some instances, the main groups 

include a number of subgroups. The first 4 of these are 

mandatory and the remaining four have been established 

to best suit the way in which this Council operates. 

The groups are: 

•• 

Roading and Footpath Group 

•• 

Stormwater Drainage Group 

•• 

Water Supply Group 

•• 

Sewerage Treatment and Disposal Group 

•• 

Waste Management Group 

•• 

District Facilities Group 

•• 

Environmental Management Group 

•• 

Governance and Strategy Group 

The LGA also includes flood protection and control works 

as a mandatory group. These are functions undertaken by 

the Regional Council and are outside of this Council’s 

control. This group is therefore not included in the 

activities outlined in this Plan. Each individual activity is 

set out in the following format. 

Initial Analysis 

Description 


Who benefits 

Time period of benefits 



A brief description of the activity 

The outcome(s) that the activity supports 

A statement of who benefits from the activity 

A description of the period over which the benefits will be received and associated funding decision 

A description of any exacerbators and how they will pay for the activity 

A statement of why the activity is separately funded and the funding mechanisms to be used 

This leads to: 

Funding Proposal 

The funding proposal 

Final funding decision 

This is the ideal funding arrangement based on a strict economic analysis 

This is the final funding arrangement Council has agreed after considering the four wellbeings 


13


Roading and Footpath Group 

The Roading and Footpaths Group is a mandatory group 

made up of 2 distinct activities. These have been split 

into separate subgroups to show their different funding 

arrangements. 

Roading 

Council manages and maintains the local roading 

network including roads, street lighting, and signage. It 

also provides and manages on street parking facilities and 

controls their use. 


This activity contributes primarily to services that support 

a safe and healthy district. 

Who benefits 

Roading provides a mix of private and public benefits. 

Private benefits accrue from the use of the roading 

network. Public benefits include the amenity value of a 

well designed roading network, accessibility for all and 

the facilitation of economic activity and social interaction. 

Notwithstanding these nominal benefits, Council 

considers that the provision of the roading network 

benefits the community as a whole. Roading also 

provides some benefits to developers particularly where 

the network requires additional capital works to address 

the growth effects arising from new developments. 

For this reason development contributions have been 

one of the key funding sources for growth related capital 

works. Given the current economic climate, this growth 

related development is at a low ebb so the contributions 

to roading are significantly reduced. 

•• 

Benefit to identifiable individuals or groups 0% 

•• 

Benefit to community as a whole 100% 


The benefits of the assets used in the road network 

last many years and are recovered through operating 

surpluses and/or development contributions. 

While recognising that there are benefits to future 

ratepayers, Council will only fund capital works from 

borrowings where there is a defined programme that is 

significantly varied from a sustainable annual programme 

with the loan costs being met from general rates and/or 

development contributions. 


The need for expenditure on this activity is increased 

by the amount of traffic on the roads which causes 

congestion and delays for the travelling public. Roading 

remains the single biggest expenditure of this Council 

and whilst there is no mechanism for Council to directly 

charge the users of the roading network, Council is 

now proposing to introduce a separate targeted rate to 

better reflect the impact that different categories of road 

users have on the network. 


The majority of roading and traffic costs come from 

maintaining the roading assets. Most of these maintenance 

costs are a result of heavy vehicle movements related to a 

variety of businesses. Council does not have the ability to 

directly charge road users unless it chooses to introduce 

tolls to assist in funding certain roading developments. 

While Council views NZTA subsidies and petrol taxes as 

a surrogate for contributions from road users, it remains 

the case that there are wide variations in the benefits 

received by different categories of road users. For this 

reason Council is now proposing to introduce a new 

targeted rate to fund roading. It is also proposed that this 

targeted rate will be assessed on a differential basis to 

reflect the benefits or impacts that different categories 

of road users have on the network. 

For this reason the benefits of separately funding roading 

outweigh the costs. 

Funding proposal 

Operational funding-primarily funded by user charges 

and rates. 

14 


Cost allocation 

Final Roading Cost Allocation 

Private Funding General Rate Total 

User Charges Targeted Rates Operational Subsidies Other Income Funding Funding 

0% 0% 25% 7% 68% 100% 

Reasons for cost allocation 

Council undertakes the roading activity for the overall 

benefit of the district. Historically it has been largely 

funded from general rates and subsidies, and more 

recently with financial and development contributions. 

Its primary source of non subsidy funding is rates. After 

considering the overall impact on the current and future 

social, economic, environment and cultural wellbeing of 

the community, Council set the following cost allocation. 

Capital Funding – Renewals are primarily funded by 

depreciation where available. Any minor improvements 

of an ongoing nature are expensed through operational 

funding, however any major developments will be funded 

by way of operating surpluses which includes subsidy 

income, depreciation reserves or loan. Where the 

expenditure is growth related, funding will be provided 

from development contributions on subdivision or 

development. 


15


Footpaths 

Council provides footpaths in most of the district’s 

urban centers and in some rural areas where particular 

safety issues are of concern. 




Who benefits 

Council provides a range of footpaths throughout 

the district. Footpaths contribute to public safety and 

provide public benefits. They provide private benefits to 

individuals and businesses through access to commercial 

and retail areas. 

•• 


•• 



The benefits of the assets used in the footpath network 

last many years and are recovered through operating 

surpluses and development contributions. While 

recognising that there are benefits to future ratepayers, 

Council will only fund capital works from borrowings 

where there is a defined programme that is significantly 

varied from a sustainable annual programme with the 

loan costs being met from rates and/or development 

contributions. 


The need for expenditure on this activity is increased by 

the amount of foot traffic within the urban communities. 

Businesses operators in tourist centres rely heavily 

on foot traffic to enhance commercial opportunities. 

Notwithstanding that, there is no effective mechanism to 

charge the exacerbator; therefore the activity is funded 

on a district basis. 


Council provides footpaths both for safety and to improve 

pedestrian access across the district. It is recognised that 

the commercial properties, being reliant on foot traffic, 

benefit from the availability of adequate footpaths. 

This is recognised by the commercial differentials in the 

general rates. 



and rates. 


After considering the overall impact on the current 

and future social, economic, environment and cultural 

wellbeing of the community, Council set the following 

cost allocation. 

Final Footpath Cost Allocation 


User Charges Targeted Rates Other Income Funding Funding 

0% 0% 0% 100% 100% 

16 



Council undertakes this activity for the overall benefit 

of the district. Where possible Council endeavours to 

recover some capital costs from individuals by way of 

development contributions, other than that the primary 

source of revenue remains rates. 




funding; however, any major developments will be funded 

by way of operating surpluses, depreciation reserves or 

loan. Where the expenditure is growth related, funding 

will be provided from development contributions on 

subdivision or development. 


17


Stormwater Drainage Group 

The Stormwater Drainage Group is a mandatory group. 

It is made up of 2 activities which have been split into 

separate subgroups to show their different funding 

arrangements. 

Stormwater 

This activity is concerned with the control of stormwater 

generated from urban properties, roadways and in some 

situations from upstream rural catchments. Council 

provides a public stormwater network to ensure that 

generated stormwater from properties is disposed of 

in order to avoid flooding risks (especially of buildings), 

improve public safety, and ensure the disposal of 

stormwater in an environmentally acceptable manner. 

Community outcome 


a safe and healthy district and a sustainable and liveable 

environment. 

Who benefits 

The benefits of the stormwater system flow to both 

private individuals and groups, and to the community 

as a whole. Individuals and groups benefit from the 

protection of private property and enhanced safety, while 

the community as a whole benefits from protection of 

public property and spaces and monitoring and control 

of flooding and pollution control. 

•• 


•• 



The operating costs of stormwater arise largely from its 

disposal. These costs are recovered on an annual basis. 

The capital costs of stormwater are largely long-term, 

over the life of the asset and will, as far as possible, be 

funded from development contributions on subdivision 

or development. The remaining capital expenditure will 

be funded by way of operating surpluses or loan. 


The need for expenditure on this activity is increased by 

the land coverage of buildings and pavements. The average 

business property has significantly more impervious 

surfaces than the average residential property and the 

average rural property has significantly less. However the 

benefit accruing to all because of improved access to 

urban communities brings equity to all sectors. While the 

use of site coverage might be a useful funding mechanism, 

it is not practical. 


Council funds stormwater by a targeted rate together 

with a contribution from the general rate. 



and rates. 


After considering the overall impact on the current and 

future social, economic, environment and cultural wellbeing 

of the community, Council set the following cost allocation. 

18 


Final Stormwater Cost Allocation 



0% 0% 0% 100% 100% 


Despite the private benefit received from the provision 

of stormwater, Council is of the view that the overall 

benefit to the community as a whole supports the 

continuation of the funding from the general rate with a 

smaller stormwater rate over urban communities. 





by way of operating surpluses, depreciation reserves or loan. 

Where the expenditure is growth related, funding will be 

provided from development contributions on subdivision 

or development. 


19


Drainage 

This activity involves the management of a small number 

of drainage schemes, predominantly in the Kaitaia area 

of the district. These were originally established under 

the Land Drainage Act and are designed to lower the 

water tables in agricultural flatland areas to improve 

economic activity associated with dairy and farming and 

horticulture. 

Community outcome 

This activity contributes to services that support a 

vibrant and thriving economy. 

Who benefits 

As this activity is situated on farmland, the benefactors of 

the activity are those farmer/horticulturalists who require 

relatively well drained soils to improve farm outputs. 

•• 


•• 



The operating costs of land drainage arise largely from 

water capture and disposal. These costs are recovered on 

an annual basis. The capital costs of drainage are largely 

long-term, over the life of the asset, and will be funded 

from operating surpluses or loan. 


This activity is undertaken solely for the benefit of the 

land owners. Any negative effects from the management 

and dis posal of the drainage waters are fully funded by 

the land owners. 


Only those who receive a benefit pay the rates and 

these are ring fenced specifically for the assets within the 

drainage register. 


Operational Funding-primarily funded by user charges 

and rates 





20 


Final Drainage Cost Allocation 



0% 100% 0% 0% 100% 


The benefits arising from this activity are solely private. 




funding; however any major developments will be funded 






21


Water Supply Group 

The Water Supply Group is a mandatory group. It is also 

a single activity group. 

Water supply 

Council meets the need for high quality drinking 

water and ensures fire fighting performance standards 

are met within the defined water supply areas. This 

activity contributes significantly to present and future 

environmental, and economic wellbeing. 



safe and healthy district and a sustainable and liveable 

environment. 

Who benefits 

The benefits of the water supplies flow mainly to private 

individuals and groups. The users of the water services 

are clearly identifiable and it is this sector that will 

contribute to the cost of this activity. 

Council recognises that there is a small overall benefit to 

the community in terms of maintaining public health, the 

environment, and the provision of fire fighting capability. 

However, this is generally within the water supply areas 

and therefore this activity does not receive any public 

funding. 

•• 


•• 



The operating costs of water supplies arise largely from 

its treatment and supply. These costs are recovered on an 

annual basis. The capital costs of water are largely longterm 

over the life of the asset and will, as far as possible, 

be funded from targeted rates, financial contributions 

on subdivision or development. The remaining capital 

expenditure will be funded by way of operating surpluses 

or loan. 


There is a minimal exacerbator impact related to water. 

The exception being where individuals damage the 

infrastructure. In such an event, the individual will generally 

be required to fund the cost of repairs. While there may 

well be a negative impact from the unrestricted use of 

the scarce water resource, this is controlled by the use of 

district wide metering of all water consumption. 


It is important that consumers pay the true costs of 

their usage of water. Charging by volume encourages 

conservation of water and ensures the costs lie where 

the benefits are consumed. To achieve this, Council uses a 

targeted rate based on water volume supplied. The costs 

of connecting to the system are charged directly to those 

connecting. 



and rates. 





22 


Final Water Cost Allocation 



0% 98% 2% 0% 100% 


The benefits arising from this activity are solely private. 





by way of targeted rates, operating surpluses, depreciation 

reserves or loan. Where the expenditure is growth 

related, funding will be provided from development 

contributions on subdivision or development. 


23


Sewerage Treatment and Disposal Group 

The Sewerage Treatment and Disposal Group is a mandatory 

group. It is a single activity group. 

Sewerage 

The wastewater system carries liquid wastes from 

households, businesses and community facilities. It treats 

and disposes of the effluent to minimise the risk to the 

environment and public health. 


Wastewater contributes primarily to services that support 

a safe and healthy district and a sustainable and liveable 

environment. 

Who benefits 

The benefits of the wastewater system flow mainly 

to private individuals and groups. The users of the 

wastewater systems are clearly identifiable and it is this 

sector that will primarily contribute to the cost of this 

activity. It is recognised that there is an overall benefit 

to the community as a whole in terms of maintaining 

public health and the environment which is partly why 

the Crown has agreed to provide some subsidies to 

assist with the development of new wastewater schemes. 

•• 

Benefits to identifiable individuals or groups 90% 

•• 

Benefits to community as a whole 10% 


The operating costs of wastewater arise largely from its 

treatment and disposal. These costs are recovered on an 

annual basis. 

The capital costs of wastewater are largely long-term, 

over the life of the asset, and will as far as possible be 

funded from targeted rates, financial contributions 

on subdivision or development. The remaining capital 

expenditure will be funded by way of subsidies, operating 

surpluses or loan. 


Wastewater is largely an exacerbator issue where the 

polluter should pay; this suggests that the use of targeted 

rates is the most appropriate funding source. 

The proposed Bay of Island’s scheme, which is currently 

being designed, will specifically address exacerbator 

issues in areas such as Riverview where the existing onsite 

wastewater systems are failing. It is issues such as that 

which have given rise to the proposal to fund the capital 

costs of sewerage on a local, scheme by scheme basis. 


The majority of the costs of this activity are attributed to 

controlling the negative effects and the provision of private 

benefits. There remains a small public benefit from the 

presence of public reticulated sewerage schemes. It assists 

improve ground water standards and helps to maintain 

the quality of the district’s coastal waters. This is seen as 

benefiting overall quality of life and business opportunities. 

Using distinct funding allows the users to be identified 

and charged the full costs of the activity. This funding is 

obtained through the use of connection charges, targeted 

rates, pan fees and development contributions. 



and rates. 




of the community, Council set the following cost 

allocation. 

24 


Final Sewerage Cost Allocation 



0% 93% 2% 5% 100% 


The prime benefits are to individuals who directly receive 

this service; however there are also benefits to the wider 

community in regard to environmental protection and 

public health. 

Capital – Renewals are primarily funded by depreciation 

where available. Any minor improvements of an ongoing 

nature are expensed through operational funding, 

however, any major developments will be funded by 

way of targeted rates, operating surpluses, depreciation 

reserves or loan. Where the expenditure is growth 

related, funding will be provided from development 

contributions on subdivision or development. 


25


Waste Management Group 

The waste management group provides facilities for the 

disposal of refuse balanced with the provision of recycling 

and other waste minimisation facilities to minimise 

the risk to the environment and public health. Council 

does not provide refuse collection services; these are 

undertaken by the private sector. 



a sustainable and liveable environment. 

Who benefits 

This activity is undertaken to help protect the 

environment by the provision of refuse disposal sites, 

landfills and transfer stations and through recycling and 

waste minimisation programmes and to promote public 

health and social responsibility. Individuals who make use 

of the refuse disposal facilities pay the contractors who 

manage the facilities. Accordingly, this Council provided 

activity benefits the community as a whole and is funded 

from general rates. 

•• 


•• 



The operating costs of waste management are an annual 

cost and are funded from general rates. The capital costs of 

waste management are largely long-term, over the life of 

the asset, and will as far as possible be funded from financial 

contributions on subdivision or development. The remaining 

capital expenditure will be funded by way of operating 

surpluses or loan. 


The need for this activity is entirely due to the actions 

or inactions of individuals or groups. As such, it is an 

exacerbator issue. The users of this service pay for the 

disposal of their refuse via the commercial sector. Council 

contribution is provided from the general rates. 


The full costs of this activity are to provide district wide 

facilities for the community. Exacerbators pay for the 

actual cost of the disposal of their refuse via the fees 

charged by the commercial operators. The costs of this 

activity are therefore not deemed to require distinct 

funding and are included in the general rates. Council is 

considering introducing a separate targeted rate to fund 

the activity in the future. 



and rates. 






26 


Final Waste Management Cost Allocation 



0% 0% 0% 100% 100% 


This activity is about the provision of the facilities. 

The use of the facilities is paid for by the users. 

On that basis, it is proposed that this activity be funded 

on a uniform basis by all ratepayers. 

Capital – Renewals are primarily funded by depreciation 

where available. Any minor improvements of an ongoing 

nature are expensed through operational funding; 

however, any major developments will be funded by way 

of operating surpluses, depreciation reserves, or loan. 





27


District Facilities Group 

The District Facilities Group is an optional group. It 

contains a number of subgroups including community 

services, public services and public safety. Each of these 

sub groups is made up of a number of discrete activities. 

Community Services - 

Cemeteries 

Council carries out cemetery activities, as required by 

statute, for the public good in those areas of the district 

where the service is not provided by others. 




Who benefits 

This activity is in 2 distinct parts. The first relates to the 

provision of burial facilities and services. This is a private 

benefit to those who choose this service. There is also 

a benefit to the whole district relating to the publicly 

available green space, protecting public health by ensuring 

the safe disposal of human remains, and in maintaining 

cemeteries and cemetery records for future generations. 

•• 


•• 



The benefits of this activity can last for many years but 

they are paid for as part of the initial fee. There is a need 

for ongoing public funding because there is no effective 

mechanism to continue to charge the families of the 

deceased for future years. 


When someone is interned in a Council cemetery, this 

creates an expectation for ongoing maintenance. Council 

charges the family a one off fee to cover this expectation. 


The majority of the costs of this activity are borne by the 

families of the deceased although there is an ongoing public 

contribution. The scale of the activity does not justify separate 

funding, so it is funded jointly with other similar activities. 



and rates. 




of the community, Council set the following final cost 

allocation. 

28 


Final Cemeteries Cost Allocation 



21% 0% 0% 79% 100% 


The prime benefits are to individuals who directly receive 

this service; however there are also benefits to the wider 

community in regard to environmental protection and 

public health. 










29


Civic and Community Buildings 

Council provides a range of accessible, affordable, safe, 

and well maintained community and civic buildings 

strategically located around the district. This activity 

contributes to economic, cultural, and social wellbeing. 


This activity contributes primarily to services that support a safe 

and healthy district. 

Who benefits 

The users of these facilities are the initial beneficiaries. 

However, Council believes that there is a wider public 

benefit that is achieved from the provision of affordable 

well maintained facilities that are strategically located 

across the district. In many instances the cost of 

providing and maintaining these facilities is beyond the 

reach of most community organisations and individuals. 

The community also benefits from having access to 

information and services located within civic buildings. 

•• 


•• 



The cost of the benefits in relation to this activity are 

primarily short-term and will be recovered on an annual 

basis however the benefits to the community of having 

access to a range of community buildings are long-term. 


This activity is for the benefit of the community as a 

whole and as such has no exacerbator issues. 


There are limited benefits from separately funding this 

activity. 



and rates. 





final cost allocation. 

Final Civic Buildings Cost Allocation 



2% 0% 0% 98% 100% 


There are limited opportunities for private funding 

Capital Funding–Renewals are primarily funded by 





loan. 

30 


Motor camps 

The high market value of coastal land makes it unprofitable 

for private enterprise to retain coastal property as camp 

grounds. Council’s ownership of camp grounds ensures 

camping holidays are an option for residents and visitors. 

Council owns and leases out camp grounds at Russell, 

Tauranga Bay and Houhora Heads. 




Who benefits 

The primary beneficiary of this activity is the people who 

stay overnight in Council owned motor camps. However, 

the district as a whole benefits from having a range of 

affordable camping facilities that attracts tourists to our 

district. 

It is also Council’s belief that for the protection of our 

environment and the safety of our visitors wishing to 

camp in our district, they should be able to afford to stay 

in a registered motor camp. 

•• 


•• 



The cost of the benefits in relation to this activity is 


basis however the infrastructure may last many years. 


As a result of the actions of individuals there is a need 

to monitor illegal camping within our district but there 

are limited powers to enforce payment from these 

exacerbators. 


There are limited benefits from separately funding this activity. 


Operational funding-primarily paid by lease payments. 





allocation. 

Final Motor Camps Cost Allocation 



94% 0% 0% 6% 100% 


The provision of camping grounds is an activity that is 

primarily funded by the users with only a small public 

good rate contribution. 










31


Pensioner housing 

Council provides affordable housing to pensioners of 

modest means. This activity contributes significantly to 

the present and future social wellbeing of the community. 




Who benefits 

The primary beneficiary is the tenant of the pensioner 

housing unit but there is a small benefit to the wider 

community arising from people of modest means being 

accommodated in safe affordable housing located near 

medical facilities and other necessary services. 

•• 


•• 



The benefits of this activity are primarily short-term 

and will be recovered on an annual basis. However the 

benefits provided by the infrastructure may last many 

years. 


There are no negative effects of this activity. 


The scale and nature of the activity does not justify separate 



Operational funding-primarily funded by rentals to the 

occupiers. However, Council recognises that at times 

because of the restrictions on the level of recovery 

caused by both the market and other factors, this activity 

may not be self funding. In that event the additional 

funding will be provided by rates over the district as a 

whole. 



and future social, economic, environment, and cultural 



Final Pensioner Housing Cost Allocation 



52% 0% 0% 48% 100% 


Individuals receive the main benefit from being able to 

rent a pensioner unit at a lower than market rent. Despite 

Council intention that the majority of the funding should 

be from rental income, this cannot be achieved because 

of restrictions on the level of rents, and at times the 

inability to fill some of the available units. 

Capital Funding – The capital costs are largely longterm 

over the life of the asset and will be funded from 

operating surpluses, depreciation reserves or loan. 

32 


Recreation 

Council provides a range of parks, recreational facilities 

and other activities which contribute to the health 

of the community. These activities include sporting 

and recreational events that gather people together 

and sometimes draw large crowds to the Far North. 

Swimming pools provide a range of opportunities from 

competitive swimming to casual recreational use. 

To achieve its outcomes, Council’s parks include a diverse 

range of community assets such as local playgrounds, 

court space, sports fields, through to large un-spoilt 

wilderness areas acquired to protect the environment. Of 

particular importance to the district is the provision of 

easily available access to the coast, including strategically 

located maritime facilities. 



a safe and healthy district, and a vibrant and thriving 

economy. 

Who benefits 

The primary beneficiaries of this activity are the people 

who make use of the facilities. They can be individuals 

or a range of sports and recreation clubs. Primarily the 

benefits are people based, but because it is not possible 

to exclude the public from using most of the facilities, it is 

an activity that is primarily funded by the community as a 

whole. Because many of the facilities provided by Council 

are used by visitors to the district, there is some benefit 

to the commercial sector. 

•• 


•• 





basis. However, the benefits to the community of having 

access to a range of recreational facilities are long-term. 


As a result from the actions or inactions of individuals or 

groups, there is a need to monitor and inspect the use 

of these facilities. There are limited powers to enforce 

payment from these exacerbators. 


The community as a whole benefits from the availability 

of a range of recreational facilities and services. However, 

when sporting groups expect a higher level of service 

such as the provision of sports fields or exclusive use of 

facilities, there is an expectation that fees or charges are 

made. These charges include fees for swimming pool use, 

charges for mowing of sports fields, charges for a ground 

lease, and fees for use of reserves for events. Other than 

that, the scale of the activity does not justify separate 



Operational Funding - The operational costs of the 

activities are an annual cost and are primarily funded by 

user charges and rates. 







33


Final Recreation Cost Allocation 



0% 0% 0% 100% 100% 


Most of Council’s recreational activities are nonexcludable. 

That means that Council cannot exclude 

people from using most of the facilities. For that reason 

the activity is primarily carried out for the public good. 

Council does endeavour to recover some costs from fees 

and charges but opportunities for these are very limited. 

Capital Funding – The capital costs are largely long-term 

over the life of the asset and will be funded by way 

of operating surpluses, depreciation reserves, or loan. 



or development 

34 


Town maintenance (including public toilets, car parks and amenity lighting) 

Council provides public toilets and car parks that are 

strategically located to meet the needs of visitors and the 

travelling public. Council undertakes town maintenance 

and provides amenity lighting to ensure town centres are 

tidy, safe, and attractive to visitors. 




Who benefits 

The primary beneficiaries of this group of activities are 

the community as a whole, the visitors to our towns and 

communities, and the travelling public. A secondary but 

important beneficiary is those businesses who provide 

a range of services to the visitor and tourist market. In 

particular, these businesses benefit from the maintenance 

of our central business districts, the provision of car parks 

and the range of other facilities that encourage visitors to 

stay longer and spend more in our communities. 

•• 


•• 



The benefits from this activity accrue short-term as 

they relate to the residents and visitors to our towns 

and communities; and long-term as they relate to the 

infrastructure used to provide the facilities. 


With the exception of illegal parking, which is partly 

funded by fines, this activity has no exacerbator issues. 


These activities are considered to be primary functions 

of Council and there is no benefit to be achieved from 

separately funding them. 


Operational Funding–the operational costs of the 

activities are an annual cost and are funded from rates. 



future social, economic, environment, and cultural wellbeing 


allocation. 

Final Town Maintenance Cost Allocation 



0% 0% 0% 100% 100% 


Council needs to balance maintenance and up-grade 

costs against what the community can afford. Most of 

Council’s town maintenance activities are non excludable. 

For that reason, the activity is primarily carried out for 

the public good. 

Capital Funding – The capital costs are largely long-term 

over the life of the asset and will be funded by way 

of operating surpluses, depreciation reserves or loan. 





35


Public Services - Customer Services 

This activity consists of the operation of 6 service 

centres, located in the main towns in the district together 

with the call centre. Its purpose is to be the first point 

of contact between the ratepayer and Council, to 

answer most enquiries, and to act as a receipting agent 

for the rates, and other Council fees and charges. These 

activities contribute significantly to present and future 

environmental, economic and social wellbeing. 



a sustainable and liveable environment and a vibrant and 

thriving economy. 

Who benefits 

This activity benefits individuals and groups that make 

use of the Council services. However, Council believes, 

that the main beneficiary is the community as a whole as 

it is vital that the public and ratepayers have both easy 

and local access to Council offices. 

•• 


•• 



The cost of the benefits in relation to this activity is an 

annual cost and is recovered on an annual basis. 


This activity is for the benefit of the district as a whole 

and as such has no exacerbator issues. 


This activity has no particular benefit to any individual 

or group. It therefore does not require distinct funding. 



and rates. 






Final Customer Services Cost Allocation 



0% 0% 0% 100% 100% 


The community as a whole benefits from this activity. 

Whilst there are some opportunities to recover some 

costs by way of fees and charges, these are very limited. 

Capital Funding – There are limited capital requirements 

for this activity. 

36 


Information Centres – i-SITES 

Council provides i-SITE Visitor Centres in key locations in 

the district. These provide a valuable service to visitors to 

the district and enhance the business opportunities from 

tourism. This activity contributes significantly to present 

and future economic, social and cultural wellbeing. 



a vibrant and thriving economy. 

Who benefits 

The primary beneficiaries of i-SITE Visitor Centre 

activity are those businesses and individuals providing 

services which they sell to the visitor market. 

The community as a whole is a secondary beneficiary, 

because a vibrant visitor market increases employment 

and brings investment and revenue to the district. In 

addition, i-SITE Visitor Centres act as service centres. 

•• 


•• 



The cost of the benefits in relation to this activity is 


basis. However the infrastructure may last many years. 


This activity is primarily for the benefit of visitors to the 

district and as such has no exacerbator issues. 


The activity is relatively small and does not justify separate 

funding. 



and rates 






Final Information Centres i – SITE’s Cost Allocation 



25% 0% 0% 75% 100% 


Operational Funding-Council’s intention is to make 

i-SITES fully self funding but, given that they also act as 

Service Centres, this is unlikely to be achieved. Council 

indicated that it intends to move to 50% funding from 

rates. However, this will take some time to achieve. 

Capital Funding –The capital costs are largely long-term 

over the life of the asset and will be funded by way of 

operating surpluses, depreciation reserves, or loan. 


37


Libraries 

Far North District Council operates 6 public libraries, 

supports 4 community libraries, and 5 area school 

community libraries. The 6 public libraries, with full library 

services, are located at Kaitaia, Kaikohe, Kawakawa, 

Kerikeri, Paihia and Kaeo. Community libraries are based 

in Kohukohu, Mangonui, Rawene, and Russell. Area school 

community libraries are in Broadwood, Taipa, Mitimiti, 

Opononi, and Panguru. 



a sustainable and liveable environment, and a vibrant and 


Who benefits 

The community as a whole benefits from the availability 

of literature and knowledge resources; it promotes 

transmission of cultural, social and moral values. It 

helps people to fulfill their potential and assists with 

social interaction by providing a community focal 

point. It also provides access to public documents. 

Individuals benefit every time they use the library services. 

•• 


•• 



The costs of the benefits in relation to these activities 

are an annual cost and are recovered on an annual basis. 

There are ongoing benefits in terms of knowledge gained 

and used in the future. 


There are no negative effects of this activity. 


The spread of benefits suggests that 35% of the costs 

should be funded by distinct charges. However, there 

would also be significant costs involved in collecting 

charges from users. There is broad public support for 

the provision of library services and Council is keen 

to provide equality of access to all its residents and 

ratepayers; charging for all the services would run 

contrary to that aim. 



and rates. 





Final Libraries Cost Allocation 



6% 0% 0% 94% 100% 


The prime benefits are to individuals who directly receive this 

service; however, there are also benefits to the wider community 

in regard to environmental protection and public health. 






loan. 

38 


Public safety 

Council is required under the Civil Defence Emergency 

Management Act 2002 and The Rural Forest and 

Fires Act 1977 to plan and provide for civil defence 

emergencies and rural fires throughout its district. This 

activity contributes significantly to the present and future 

environmental and social wellbeing. 




Who benefits 

Benefits flow to private individuals and groups from 

planning for emergency events and the protection 

of property from rural fires. Public benefits flow from 

enhanced public safety, and environmental protection. 

•• 


•• 

Benefit to community as a whole. 80% 


The benefits in relation to these activities are both 

annual and over the longer term. These form control of 

immediate events, and the long-term planning. The costs 

are recovered on an annual basis. 


Civil defence is a public good with limited exacerbator 

issues. 

Rural fire events are frequently the result of individuals’ 

actions or inactions. Where these can be identified, they 

are required to contribute to this activity through fees and 

charges. 


Most of the costs of this activity relate to its public benefits. 

In the event of a civil defence emergency, funding is available 

from the Crown to assist cover the cost of the event. 

Some grants are available to assist with the costs of rural 

fires and, where possible, the costs of controlling a fire event 

are passed to the land owner/exacerbator concerned. The 

scale of this activity does not warrant distinct funding. 

Council provides for the anticipated local share costs from 

public funding sources. 



and rates. 


While Council provides for 100% community funding 

to ensure that the community is safeguarded from fire; 

recovery from land owners/exacerbators will reduce 

public funding. 




Final Public Safety Cost Allocation 



0% 0% 0% 100% 100% 


The district as a whole benefits from this activity. 

Capital Funding – There is limited capital expenditure. 

Renewals are primarily funded by depreciation where 

available. Any minor improvements of an ongoing 

nature that will be rate funded. However, any major 

developments will be funded by way of operating 

surpluses, depreciation reserves, or loan. 


39


Environmental Management Group 

The Environmental Management Group is an optional 

group. It contains a number of subgroups including 

environmental protection, resource manage ment and 

building control. Each of these sub groups is made up of 

a number of discrete activities. 

Environmental protection 

Council provides a wide range of services in relation 

to noise, air and water quality, food and liquor licensing, 

animal control, dangerous goods, bylaw enforcement, 

pollution and public health investigations, environmental 

and public health education and resource and building 

consent processing. This activity contributes significantly 

to present and future environmental and social wellbeing. 

Environmental protection includes: 

•• 

Animal control 

•• 

Environmental health 

•• 

Monitoring 

•• 

Parking enforcement 

•• 

Noise control 

•• 

Liquor control. 

Animal control 

Animal control includes carrying out Council’s responsibilities 

under the Dog Control Act 2006 and Impounding Act 1955. 

Ensuring dogs are registered, impounding of wandering 

dogs, and investigating incidents of dog attacks, barking, 

or rushing dogs. Impounding wandering stock on roads, 

and performing the responsibilities of pound keepers are 

carried out under the Impounding Act 1955. 




Who benefits 

Benefits to private individuals and groups include certainty 

and assurance through clear rules for dog ownership, 

better public acceptance, the control of wandering stock, 

and assisting with neighbourhood disputes. Public benefits 

flow from enhanced public safety, licensee accountability 

and environmental protection. 

•• 


•• 



The costs of the benefits are an annual cost and are 

recovered on an annual basis. 


Almost entirely results from individuals’ actions or 

inactions; they are required to contribute to this activity 

through fees. 


Much of the need for this activity is to control negative 

effects or for private benefits. However Council 

recognises that there is a significant public benefit to the 

community. It has determined that the funding of dog 

control should be by way of fees to those registering 

dogs and recoveries from offending owners. The funding 

for wandering stock and impounding will be by way of 

charges to those claiming animals or from the sale of the 

animals to defray costs. The scale of this activity does not 

warrant separate funding. Therefore unrecovered costs 

will be funded from general rates. 

40 




and rates. 





Final Animal Control Cost Allocation 



34% 0% 0% 66% 100% 


The district as a whole benefits from this activity. 

Capital Funding – There are no capital costs associated 

with this activity. 


41


Environmental Health 

Environmental Health includes the issue and control 

health licences, management of certain public health 

risks, inspection of licensed premises (food and liquor) 

and responding to incidents or complaints of health 

nuisance or risk. 




Who benefits 

Benefits include enhanced public safety, environmental 

protection, licensee certainty and assurance, public 

acceptability of the activity and licensee accountability 

and consistency. Benefits flow both to private individuals 

and groups through licences granted to operate 

businesses and to the public through the creation of both 

safe conditions and environment. 

•• 


•• 



The costs of the benefits are annual and are recovered 

on an annual basis. 


The activity protects the public from sub-standard food 

practices and other health risks. While licenced premises 

fund the activity through fees, there is no ability to charge 

exacerbators any additional costs. 


Most of the costs of this activity relate to private benefits 

and the control of negative effects. The ability to recover 

costs distinctly is governed by statute. It is often difficult to 

identify exacerbators so expenditure on non-recoverable 

negative effects will be funded by Council. The scale of 

this activity does not warrant separate funding. Therefore 

unrecovered costs will be funded from general rates. 



and rates. 






Final Environment Health Cost Allocation 



37% 0% 0% 63% 100% 


The majority of work carried out under this activity is for 

public good. The only individual or private good relates 

to the bylaw licensing aspect of the role where these 

costs are recovered by fees. 



42 


Monitoring and Enforcement 

Council undertakes a wide range of monitoring and 

enforcement activities. These include a range of services 

related to the building and development sector, resource 

consent monitoring, a variety of other inspection and 

investigation activities, noise control and nuisance 

minimisation. In general, these activities are required by 

many of the statutes and by laws under which Council 

operates. 




Who benefits 

This activity is required to ensure compliance with the 

various legislation and the District Plan, under which Council 

operates. It is generally considered to be a public benefit. 

•• 


•• 



The benefits in relation to these activities are considered 

to be annual and recovered on an annual basis. 


While many of the monitoring and inspection service 

activities result from the actions or inactions of individuals 

or groups, there are limited powers to enforce payment 

from exacerbators. 


Most of the costs of this activity relate to the control 

of negative effects. However, the ability to recover costs 

distinctly is governed by statute. 

It is also often difficult to identify exacerbators so 

expenditure on non-recoverable negative effects will 

be funded by Council. The scale of this activity does not 

warrant separate funding, therefore unrecovered costs 




and rates. 





Final Monitoring & Enforcement Cost Allocation 



7% 0% 0% 93% 100% 


The majority of work carried out under this activity is for 

public good. The only individual or private good relates 

to the bylaw licensing aspect of the role where these 

costs are recovered by fees. 




43


Liquor Licensing Agency 

Council has specific responsibilities under the Sale of 

Liquor Act, 1989. It acts as the District Licensing Agency 

which involves the processing and issuing all unopposed 

application for liquor licenses and managers certificates. 




Who benefits 

Benefits accrue to the community as a whole because 

of the enhanced public safety, environmental protection 

and licensee accountability; however, these are a direct 

result of the granting of the licence. Benefits to private 

individuals and groups flow from licences that are granted 

for the operation of businesses. This ensures greater 

public acceptance and provides certainty. 

•• 


•• 



The costs of the benefits in relation to all these activities 


There are ongoing benefits that may last for many years, 

in that licences issued and the monitoring of development 

can help to avoid future problems. 


The activity protects the public from the illegal sale of alcohol. 

While licenced premises fund the activity through fees, there 

is no ability to charge exacerbators any additional costs. 


Most of the costs of this activity relate to private 

benefits and the control of negative effects. The ability 

to recover costs distinctly is governed by statute which 

means that there has to be a community funding input. 

It is often difficult to identify exacerbators so expenditure 

on non-recoverable negative effects will be funded by 

Council. The scale of this activity does not warrant 

separate funding. Therefore, unrecovered costs will be 

funded from general rates. 


Operational funding-primarily funded by user charges and 

rates. 





Final Liquor Control Cost Allocation 



62% 0% 0% 38% 100% 


The majority of the work relates to an individual or 

business; however, there is a strong element of public good 

in dealing with complaints about licensed premises, and 

the host responsibility premise inspections. Additionally, 

the fees for this activity are set by legislation and there is 

no ability to recover any additional costs from the licensees. 



44 


Parking Enforcement 

Council controls and enforces parking restrictions in 

public areas in accordance with its bylaws. Currently the 

service only provides for a coverage in the townships of 

Kerikeri (Monday to Friday) and Paihia (Labour weekend 

to Easter weekend). Council’s monitoring officers enforce 

the instant infringement offences, (e.g. incorrect parking 

in disability parking spaces, parking on yellow lines etc.) 

throughout the district. 


This activity contributes primarily to services that 

support a safe and healthy district, and a vibrant and 


Who benefits 

Benefits to private individuals and groups include 

certainty and assurance through clear rules, designated 

parking areas, and the rationing of scarce resources. 

Public benefits flow from enhanced public safety, 

environmental protection, and improved traffic flow. 

Particular benefits accrue to the commercial sector 

because the availability of adequate parking improves 

their business opportunities. 

•• 


•• 



The costs of the benefits are an annual cost and are 

recovered on an annual basis. 


All fees fall on the vehicle owner who commits an offence 

by parking illegally, or overstaying. Very few actions by an 

officer are as a result of complaints. 


Council’s view is that while the users of the carparks are 

individuals, the control of parking is primarily a significant 

community benefit. The scale of this activity does not 

warrant separate funding, therefore unrecovered costs 



Operational funding-primarily funded by fines, user 

charges and rates. 

Initial cost allocation 





Final Parking Enforcement Cost Allocation 



0% 0% 37% 63% 100% 


The majority of the costs of this activity are funded by 

fines and user charges. The balance is seen as a public 

good contribution and is funded by rates. 


with this activity 


45


Resource Management 

This activity consists of 2 sub activities; Environmental 

Policy and Resource Consent Management Policy. Both 

are governed by the Resource Management Act 1991 

(RMA); firstly in the management of the District Plan; 

and secondly in the managements of resource consents. 

Environmental Policy 

Environmental Policy involves undertaking research into 

resource management issues facing the district and finding 

ways of addressing these issues. The main form being the 

preparation, administration and monitoring of a District Plan. 

Council has a statutory responsibility under the RMA to 

prepare, implement, and administer a District Plan. The 

District Plan identifies issues and develops objectives, 

policies, and rules to guide the management of the effects of 

land use activities on the environment. The ultimate purpose 

of the District Plan is to ensure the sustainable management 

of the natural and physical environment of the district. 



a sustainable and liveable environment. 

Who benefits 

This activity is required to ensure compliance with the 

various legislation under which Council operates. The 

main activity is the District Plan which is considered to 

be an overall public benefit as it guides development in a 

manner consistent with the purpose of the RMA. 

•• 


•• 



The costs of the benefits in relation to this activity are 

an annual cost and are recovered on an annual basis. The 

District Plan has a life cycle and in accordance with the 

RMA is regularly reviewed. From time to time, it may be 

subject to requests for private plan changes. 





This activity is a core planning function of Council and has 

no particular benefit to any individual or group, except 

where Council receives a request for a private plan change. 

While such requests are infrequent, they are usually 

linked to a private benefit and are cost recoverable from 

applicants. Despite that, it does not require distinct funding. 


Operational funding-primarily funded by fines, user 

charges and rates. 





Final Environmental Policy Cost Allocation 



0% 0% 0% 100% 100% 


This is a public good contribution and is funded by rates. 



46 


Resource Consent Management Policy 

The resource consent management activity primarily 

involves the processing of resource consent applications 

in accordance with the District Plan and the RMA. The 

activity processes other related applications such as 

earthworks permits, right of way applications and sale of 

liquor compliance certificates. A significant portion of the 

activity includes the provision of information to the public 

and the answering of queries which is not recoverable 

from fees and charges. In addition a significant cost can 

arise from defending appeals against Council decisions. 

These are generally not recoverable. 



all 3 community outcomes. 

Who benefits 

The main beneficiaries are those people who apply for a 

resource consent. 

However, there is a wider public good arising from the 

controls exercised in the resource consent process. 

This is because of the improved environmental effects 

that are delivered for the district as a whole. Frequently, 

the reason that the resource consent is required is to 

address broader matters of public concern, which may 

well go beyond the scope of the activity being applied for. 

There is a significant public benefit provided to the 

community at large arising from the provision of 

information and advice. The community benefits as a 

whole from the individual applicants going through the 

resource consent process as development overall is 

more likely to be sustainable. The individuals receiving 

such advice benefit. 

•• 


•• 



The costs of the benefits in relation to these activities 


There are ongoing benefits that may last for many years 

in that consents issued protect the environment for 

future generations. 


The need for consents arises almost entirely from 

individuals’ actions or inactions. Where these individuals 

or groups can be identified and charged, they should pay 

the full costs. 

In addition, those parties who request information and 

advice are also seen as being exacerbators. Generally 25% 

of the resource consent management activity resource 

is spent on such queries and this has traditionally been 

provided without charge. 


The full costs of the consent process should be borne by 

the applicants. It is currently not practical to identify and 

charge all those who receive advice, so those costs will 

remain publicly funded. Council is reviewing the ability to 

recover advisory costs, where they are attributable to a 

specific consent application. 

The provision of advice is a service that Council has 

traditionally provided without charge because charging 

would be difficult as much advice is by telephone and it 

is perceived as a service that should be provided without 

direct charge. In relation to the costs of appeals, this 

generally is not recoverable. 



and rates. 


•• 

Costs allocated to identifiable individuals or groups 65% 

•• 

Costs allocated to community as a whole 35% 






47


Final Resource Consent Management Cost Allocation 



59% 0% 0% 41% 100% 


Approximately 25% of the activity is devoted to 

responding to public queries. In addition, it is estimated 

that around 10% of the activity costs should be allocated 

to the community as a whole to fund the public good 

aspects arising from the resource consent environment. 

Taking these factors into account, suggests that the 

correct cost allocation should be 65% private, 35% public. 



48 


Building Compliance Management 

The Building Compliance management function is 

primarily an enforcement activity which is distinct from 

the consent functions undertaken by Council in its role 

as the building consent authority. Council is required to 

undertake this activity in accordance with the provisions 

of the Building Act 2004. 


The community as a whole benefits from this function as 

compliance and enforcement addresses matters of public 

health and safety. 

Who benefits 

The community as a whole benefits from this function as 

compliance and enforcement addresses matters of public 

health and safety. 

•• 


•• 



The costs of the benefits in relation to this activity are an 

annual cost and are recovered on an annual basis. There are 

ongoing benefits that may last for many years in that consents 

issued protect the environment for future generations. 


In some instances where Council have been engaged to 

investigate a dangerous, or insanitary situation; but are 

unable to seek compliance with the property owners, 

Council may, through a Court Order enforce the action 

required, and recover the costs. The Chief Executive of 

the Council can drive this function, for example, unsafe 

and dangerous buildings, etc. There are some powers to 

recover costs from exacerbators. However, the primary 

functions are for the public good. 


This activity is predominantly carried out for the public 

good and there are no particular benefits to be achieved 

from separate funding. 



and rates. 





Final Building Compliance Management Cost Allocation 



27% 0% 0% 73% 100% 


The cost of issuing compliance and other certificates 

sought by building owners are borne by applicants. The 

remainder of the activity is undertaken as a public good 

and costs should be allocated to the community. 




49


Building Consent Management 

The building consent function comprises consenting, 

inspecting, and certifying building work to ensure better, 

safer, drier buildings that meet legal requirements. These 

are administered in accordance with the Building Act 

and Building Codes. A significant portion of this activity 

includes advice and support to the public, which is not 

recoverable from fees and charges. 



a safe, and healthy district, and a sustainable and liveable 

environment. 

Who benefits 

The building consent process is undertaken to ensure 

that public welfare is not endangered by the actions of 

individuals or groups and to enhance the built environment. 

Much of the costs are incurred in giving advice and 

answering queries on building issues. 

•• 


•• 



The costs of the benefits in relation to this activity are an 

annual cost and are recovered on an annual basis. There 

are ongoing benefits that may last for many years in 

that consents issued protect the environment for future 

generations. 


The need for consents arises almost entirely from individuals 

actions or inactions. Where these individuals or groups can 

be identified and charged, they should pay the full costs. 


The full costs of the consent process should be borne by 

the applicants. It is currently not practical to identify and 

charge all those who receive advice, so those costs will 

remain publicly funded. 



and rates. 






Final Building Consent Management Cost Allocation 



69% 0% 0% 31% 100% 


The cost of issuing and managing consents is born by 

applicants. The remainder of the activity is undertaken 

as a public good and costs should be allocated to the 

community. 

50 


Governance and Strategy Group 

This Governance and Strategy group incorporates a 

number of activities which relate primarily to the operation 

of Council as a democratic organisation its strategic 

planning, economic development, Māori engagement, 

and Council’s shareholding in its Council Controlled 

Organisation, Far North Holdings Limited (FNHL). 

Governance 

This activity provides the support to enable Council, as an 

elected body, to fulfill the purpose of Local Government. 



vibrant and thriving economy and a sustainable and 

liveable environment. 

Who benefits 

The community as a whole benefits from equitable 

representation and recognition of communities’ interests, 

freedom of expression and choice, and protection of 

rights. These benefits accrue to the whole community 

rather than to individuals. 

•• 


•• 









This activity is a core function of Council and has no 

particular benefit to any individual or group, therefore, it 

does not require distinct funding. 


Operational funding-primarily funded by rates. 





Final Governance Cost Allocation 



0% 0% 0% 100% 100% 


As the activity supports the democratic process it is 

reasonable that it be funded from general rates. 




51


Strategic Planning 

This activity is about defining how Council will strategically 

plan for the wellbeing of the district. Sound planning is a 

necessary pre-requisite for sound decision making, prioritisation 

and integration of work programmes, and effective 

and efficient delivery of outcomes. Planning provides 

our communities with a sense of certainty about actions 

Council may take in future and outcomes to be achieved. 





Who benefits 

This activity ensures that the community is able to 

participate in the long-term planning of the district, 

provides for the sustainable use of resources, and assists 

in assuring that the district operates in an affordable 

and effective manner. It provides property owners 

with certainty and assurance, defines rating levels, and 

contributes towards cultural and social development. 

•• 


•• 




an annual cost, and are recovered on an annual basis. 

Different plans have different life cycles with the LTP 

having a life of 10 years (but being reviewed every 3 

years), and Annual Plans having a 1 year life. 





This activity is a core planning function of Council and 

has no particular benefit to any individual or group. 

Therefore, it does not require distinct funding. 



and rates. 






Final Strategic Planning Cost Allocation 



0% 0% 0% 100% 100% 


As the activity supports the planning for the district, it is 




52 


Economic Development 

The economic development activity is predominantly 

focused on supporting tourism, event promotion, and 

more recently the development of the Pou Herenga Tai 

Twin Coast Cycleway. However, the district is increasingly 

involved in other labour market and business activity 

initiatives. Council could look to broaden its contribution 

to this activity by increasing participation, or refocusing, 

on economic growth in the district. An example of 

this may be through a focused approach to the use 

of development contributions and the introduction 

of business improvement districts in a number of our 

communities. 


This activity contributes directly to a vibrant and thriving 

economy. 

Who benefits 

This activity benefits the community as a whole and 

the business sector in particular. Where local business 

organisations support it, Council is willing to introduce 

business improvement districts funded by local targeted 

rates. The existing businesses provide support for this 

activity through the current commercial rating differential. 

•• 


•• 







and for the business community in particular; as such it 

has no exacerbator issues. 


This activity has a mixed benefit. Where particular 

business communities request it, separate targeted rates 

may be used to fund some aspects of the activity. Other 

than that, there is no particular benefit to any individual 

or group. With the exception of community initiatives, 

such as business improvement districts, it does not 

require distinct funding. 








Final Economic Development Cost Allocation 



0% 0% 0% 100% 100% 


The economic development activity is of benefit to the 

whole district but in particular to the commercial and 

industrial sectors because its primary objective is to 

enhance business opportunities in the Far North. The 

other significant beneficiary is the residential sector 

because of enhanced job opportunities. If individual 

business communities support it, Council will be willing 

to introduce separate targeted rates to fund individual 

business improvement districts. 




53


Māori Engagement 

Council has a number of statutory functions that require 

recognition and respect of the Crown’s responsibility 

to take account of the principles of the Treaty of 

Waitangi, as well as improving opportunities for Māori to 

participate in Council’s decision making processes. The 

opportunity and ability for Māori to participate enables 

them to provide for their wellbeing while recognising and 

providing for the relationship of Māori and their culture 

and traditions with their ancestral lands, water, sites waahi 

tapu and other taonga. 

As part of their function the Māori development 

team has been tasked with facilitating and liaising with 

Iwi/hapu to give effect to Council’s responsibilities. 





Who benefits 

Equitable representation and recognition of the Māori 

communities interests, freedom of expression and choice, 

and protection of rights are the primary benefits. These 

benefits accrue to the whole community rather than to 

individuals. 

•• 


•• 









This activity is a core planning function of Council and 

has no particular benefit to any individual or group. 

Therefore, it does not require distinct funding. 








Final Māori Engagement Cost Allocation 



0% 0% 0% 100% 100% 


As the activity supports the planning for the district, it is 




54 


Funding Impact Statement 

What is the funding impact statement 

Introduction 

The Funding Impact Statement (FIS) is one of the key 

statements included in this Long-Term Plan. Essentially 

it pulls together all the information from each of the 

different groups of activities and sets out in a single 

statement the sources of both the operating and capital 

funding for everything that Council does. 

This statement is prepared in a different format to most 

of the other financial statements included in this plan 

and, in one sheet, provides a synthesis of Council’s overall 

funding requirements. 

The format of this statement has been prescribed in 

the legislation and does not have to meet the normal 

accounting requirements. The intentions are that this 

new format will provide a more understandable picture 

of what council is spending money on and how those 

expenditures are funded. 

The FIS for the whole of council position follows the 

analysis of rate types and the methodologies for applying 

them. This table represents the consolidated position for 

all activities. In addition to this, there is also a FIS for each 

of the individual groups of activities, these follow at the 

end of the rate type analysis. 

The more important purpose of the FIS is to set out the 

basis of rating which Council proposes for the term of 

this Long-Term Plan. 

Legislative requirements 

The Local Government Act 2002 requires that Council 

include a FIS in the Long-Term Plan. This statement must 

include the following information: 

•• 

the sources of funding to be used by the local 

authority 

•• 

the amount of funds expected to be produced from 

each source 

•• 

how the funds are to be applied. 

In providing this information, the legislation requires 

Council to include in its Revenue and Financing Policy 

how it proposes to set it rates for the District. 

Key features of this Funding Impact Statement 

System of Rating 

The draft Long-Term Plan included details of a proposed 

new “fairer” method of setting the rates for the Far 

North. There were a wide range of submissions received 

on the proposal, both in support and in opposition to 

the proposals. As a result of information provided by 

some submitter groups, Council has decided that more 

work is needed on the concept before it is in a position 

to be adopted. 

The main areas of concern raised by submitters were 

about the rates which would be charged to the forestry 

and dairy industries. As a result, Council has agreed to 

work with these sectors over the next twelve months 

and to bring forward a final proposal for consultation as 

part of the 2013/14 Annual plan. 

One outcome of the original proposal is that Council has 

agreed to continue with the targeted uniform roading rate. 

Funding of Water and Sewerage 

Council has also decided to continue with the proposal 

to change the method of funding water and sewerage. In 

both cases the rates will be set on the basis of the scheme 

for the capital costs and district wide for the operating 

costs. Just to clarify what this means. In both cases the 

capital cost is made up of interest and depreciation 

although there is a small amount of district wide costs 

which have also been included in the totals. Having said 

that, Council has also increased the cost of water to $3 

per cubic meter, which is more than the operating costs 

for most schemes. Any surplus from this charge will then 

be used to reduce the final capital costs for each scheme. 


55


Kaitaia Business Improvement District Rate 

There was broad support for this rate so it is proceeding 

as was outlined in the draft plan. 

Definition of the Separately Used or 

Inhabited Part of a Rating Unit (SUIP) 

Council has agreed to adopt the changed definition of 

the SUIP which was outlined in the draft plan. This means 

that the exclusions which were included in prior LTCCPs 

will be removed. Council is aware that this change may 

result in rate increases for some people so it will be 

writing to effected ratepayers let them know about any 

changes to the rates on their property. 

Over the next few months Council will be reviewing all 

rating units to see if this change will affect them; it will 

then give the ratepayers an opportunity to object to the 

changed assessment. 

Discount for Early Payment of Rates 

Following the submission process, Council has decided 

not proceed with the proposed 3% discount. The reason 

for this was that it would have added a further cost onto 

the rates. 

Revenue and Financing Mechanisms 

In addition to the rating income, Council has a number 

of other sources of revenue as outlined in the Funding 

Impact Statement below; these additional funding sources 

include: 

•• 


•• 

Subsidies 

•• 

Depreciation funds and other reserves 

•• 

Loans and borrowings 

•• 

Financial and development contributions. 

Definition of the word "Charge" or "UAC" 

In the context of this Policy the terms "charge" and "UAC" 

refer to a rate that is set on the uniform or flat basis on 

the rating unit or separately used or inhabited part of a 

rating unit. 

56 


Funding Impact Statement for 2012-22 

This table (which is in two parts) represents the Whole of Council consolidated FIS for all 

activities, individual FISs for each group of activities follows the rating information. 

Note: it is now a requirement that Water Rates, including water by meter charges, are 

shown under the Fees and Charges category rather than as rating income. 

Annual Plan 

Funding Impact Statement for 2012-22 Long-Term Plan (Whole of Council) 

2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 

$’000s $’000s $’000s $’000s $’000s $’000s $’000s $’000s $’000s $’000s $’000s 

Sources of Operational Funding 

47,245 General rates, uniform annual general charges, rates penalties 45,817 46,444 47,712 49,160 50,958 52,433 53,889 56,043 57,315 59,482 

17,013 Targeted rates (other than a targeted rate for water supply) 22,801 24,232 26,066 27,491 28,834 29,878 30,897 31,726 32,649 33,378 

7,270 Subsidies and grants for operating purposes 5,621 6,284 6,328 6,873 7,139 7,445 7,730 8,145 8,384 8,699 

16,105 Fees, charges, and targeted rates for water supply 15,492 17,148 17,648 18,308 19,163 19,883 21,526 21,909 22,660 23,590 

608 Interest and Dividends from Investments 399 411 424 439 454 470 485 497 519 537 

961 Local authority fuel tax, fines, infringement fees, and other receipts 954 1,067 1,005 1,034 1,157 1,095 1,126 1,252 1,193 1,229 

89,202 Total operating funding (A) 91,084 95,586 99,183 103,305 107,705 111,203 115,653 119,572 122,721 126,915 

Applications of operating funding 

60,776 Payments to staff and suppliers 61,152 63,408 64,415 66,680 69,854 71,662 74,282 76,962 78,777 81,520 

8,868 Finance costs 7,120 7,732 8,319 10,887 11,028 11,025 11,630 11,547 11,451 11,396 

Other operating funding applications 

69,644 Total applications of operating funds (B) 68,272 71,140 72,734 77,567 80,882 82,687 85,912 88,509 90,228 92,916 

19,558 Surplus (deficit) of operating funding (A - B) 22,811 24,446 26,449 25,738 26,823 28,516 29,741 31,063 32,493 33,999 


57


Annual Plan 

Funding Impact Statement for 2012-22 Long-Term Plan (Whole of Council) 

2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 

$’000s $’000s $’000s $’000s $’000s $’000s $’000s $’000s $’000s $’000s $’000s 

Sources of capital funding 

13,885 Subsidies and grants for capital expenditure 16,075 12,027 9,980 11,009 11,412 11,235 11,705 14,119 15,107 15,244 

2,297 Development and financial contributions 484 492 504 3,068 3,919 4,620 4,572 4,468 5,309 5,255 

5,153 Increase (decrease) in debt 10,762 9,343 2,609 1,778 (609) (2,408) (3,103) (2,476) (2,003) (3,672) 

- Gross proceeds from sale of assets - - - - - - - - - - 


21,335 Total sources of capital funding (C) 27,321 21,862 13,093 15,855 14,722 13,447 13,175 16,111 18,413 16,827 

Applications of capital funding 

35,685 Capital Expenditure 

- to meet additional demand 902 1,561 1,370 1,979 2,157 1,757 2,396 1,876 2,054 2,257 

- to improve the level of service 26,482 22,826 12,258 11,634 9,986 7,846 7,450 10,851 12,428 10,593 

- to replace existing assets 24,038 19,693 21,884 27,118 25,929 25,442 21,784 24,221 28,913 27,948 

5,208 Increase (decrease) in reserves (1,290) 2,228 4,030 863 3,474 6,917 11,286 10,225 7,510 10,028 

Increase (decrease) in investments 

40,893 Total applications of capital funding (D) 50,132 46,308 39,542 41,594 41,545 41,963 42,916 47,173 50,905 50,826 

-19,558 Surplus (deficit) of capital funding (C - D) -22,811 -24,446 -26,449 -25,738 -26,823 -28,516 -29,741 -31,063 -32,493 -33,999 

- Funding balance ((A - B) + (C - D)) - - - - - - - - - - 

Note: One of the new requirements of the legislation is for Council to split its capital works in to three categories. Works which are required to meet additional growth, works required 

to improve the level of service and works required replace existing infrastructure. A further requirement is that Council has show expenditure in the majority category. What this means 

is that even though the capital work may be partly renewal and partly growth, this statement will show that work as solely renewal if that is the primary reason for the work. 

The effect of this is that the growth portion of the any work may not appear in the above figures even though they will be included in the calculation of growth related capital works 

for the purposes of setting the Development Contributions. 

58 


Far North District Council Reconciliation Funding Impact Statement To Prospective Financial Statements 

2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 

$’000s $’000s $’000s $’000s $’000s $’000s $’000s $’000s $’000s $’000s $’000s 

REVENUE 

Prospective Financial Plan 

104,344 Total activity revenue 107,100 107,552 109,122 116,819 122,454 126,456 131,308 137,516 142,472 146,725 

88,162 Rates requirement for operations 90,541 95,034 98,639 102,743 107,123 110,601 115,031 118,930 122,056 126,226 

16,182 Rates requirement for capital 16,558 12,519 10,483 14,077 15,331 15,855 16,277 18,587 20,416 20,499 

104,344 Total Revenue 107,100 107,552 109,122 116,819 122,454 126,456 131,308 137,516 142,472 146,725 

Summary Funding Impact Statement 

Sources of Operating Funding 


Add sources of capital funding 


2,297 Development and financial contributions 484 492 504 3,068 3,919 4,620 4,572 4,468 5,309 5,255 

- Lump sum contributions - - - - - - - - - - 

105,384 Total revenue 107,642 108,105 109,666 117,382 123,036 127,058 131,930 138,158 143,137 147,414 

1,040 Less Income Reclassified to allocations 543 553 544 562 582 602 622 642 665 689 

104,344 Total Revenue less Income reclassified to Allocations 107,100 107,552 109,122 116,819 122,454 126,456 131,308 137,516 142,472 146,725 

Statement of Comprehensive Income 

104,344 Revenue and rates per prospective financial plan 107,100 107,552 109,122 116,819 122,454 126,456 131,308 137,516 142,472 146,725 

Add Vested Assets 

104,344 Total revenue 107,100 107,552 109,122 116,819 122,454 126,456 131,308 137,516 142,472 146,725 

EXPENDITURE 

Prospective Financial Plan 

95,174 Total activity expenditure 95,079 99,862 103,504 109,791 114,419 117,854 122,520 126,693 130,115 134,623 

Summary Funding Impact Statement 

Applications of Operating Funding 

69,644 Total applications of operating funding (B) 68,272 71,140 72,734 77,567 80,882 82,687 85,912 88,509 90,228 92,916 

26,570 Add Depreciation Expense 27,350 29,274 31,314 32,787 34,119 35,769 37,230 38,826 40,552 42,396 

96,214 Total expenditure 95,622 100,414 104,048 110,354 115,001 118,456 123,142 127,335 130,780 135,312 

(1,040) Less Income Reclassified to allocations (543) (553) (544) (562) (582) (602) (622) (642) (665) (689) 

95,174 Total Expenditure less Income reclassified to Allocations 95,079 99,862 103,504 109,791 114,419 117,854 122,520 126,693 130,115 134,623 

Statement of Comprehensive Income 

Expenditure 

95,174 Expenditure per prospective financial plan 95,079 99,862 103,504 109,791 114,419 117,854 122,520 126,693 130,115 134,623 

0 Add loss on forestry revaluation 

95,174 Total expenditure 95,079 99,862 103,504 109,791 114,419 117,854 122,520 126,693 130,115 134,623 

Depreciation shown in the Funding Impact Statement differs from depreciation shown in the Activity Statements as the depreciation on Corporate activities is allocated to the activities 

and forms part of the direct and indirect costs. 


59


Rates for 2012-13 

This section of the Funding Impact Statement discusses the rates for 2012-13. 

In the Draft plan, Council proposed the introduction of a new rating system referred to as the “fairer” system. As a result of submissions to the draft document, Council has agreed not 

to introduce the new differential rating structure for the 2012/13 rating year, however it is proceeding with the roading uniform targeted rate and the new method of funding water and 

sewerage. In addition Council has agreed to introduce the Kaitaia Business Improvement Rate. 

Sewerage and water rates 

As part of the overall rating review, Council has looked 

at how it should charge for sewerage and water. In the 

Draft Plan it set out a number of proposals which would 

change the current system. A number of submissions 

were received, both in support and opposed to the 

proposal, however following a further review of budgets, 

Council has agreed to proceed with the proposals. 

Under this new system, the costs of capital for the 

sewerage and water schemes will be borne by the 

individual schemes whereas the operating costs will 

continue to be treated on a district wide basis. This 

system will also better recognise schemes that are being 

funded by government subsidies. The primary reason 

why the operating costs remain district wide is that they 

can be treated as a single network and achieve some 

economies of scale. 

The result of this new system is that there are some 

significant changes to the sewerage and water rates 

payable by each scheme. Some go up whilst others will 

go down. After finalising the budgets and reviewing the 

on-going costs, some of the higher rates, which were 

outlined in the draft plan, have been reduced however 

there are some smaller increases for other schemes. 

Set out below are several tables which show the 

anticipated expenditures and projected rates for 

sewerage for the current and future years. 

60 


Sewerage expenditures (GST inc) 

Sewerage Total Expenditures 

Capital Costs 

2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 

Ahipara $188,674 $225,091 $242,362 $270,218 $355,861 $367,436 $382,414 $389,743 $398,168 $406,709 

East Coast $515,456 $546,026 $667,614 $743,083 $757,982 $797,000 $824,338 $839,528 $857,301 $875,385 

Hihi $95,453 $248,647 $338,415 $355,880 $361,979 $369,460 $387,054 $393,360 $400,600 $407,912 

Kaeo $166,490 $211,169 $219,573 $228,242 $232,053 $237,574 $245,995 $249,876 $254,499 $263,641 

Kaikohe $470,872 $541,523 $616,048 $636,963 $643,061 $664,681 $683,163 $688,873 $706,598 $725,158 

Kaitaia (Including Awanui) $802,295 $972,167 $1,147,448 $1,203,918 $1,250,881 $1,303,987 $1,347,022 $1,378,796 $1,417,944 $1,465,416 

Kawakawa $454,966 $459,399 $464,804 $489,292 $488,198 $501,279 $516,327 $525,995 $527,232 $539,928 

Kerikeri $513,771 $689,661 $1,008,216 $1,295,348 $1,563,766 $1,853,055 $2,084,067 $2,112,150 $2,144,579 $2,177,375 

Kohukohu $58,588 $60,407 $61,846 $67,922 $78,194 $96,456 $100,146 $102,278 $104,728 $107,204 

Opononi $164,878 $173,964 $178,128 $184,152 $189,117 $197,974 $203,979 $209,048 $214,866 $220,775 

Paihia $1,002,887 $1,302,053 $1,688,597 $1,756,008 $1,766,912 $1,797,695 $1,859,184 $1,869,314 $1,884,050 $1,899,293 

Rangiputa $38,155 $39,548 $52,704 $54,872 $56,070 $58,178 $60,334 $61,557 $62,966 $64,398 

Rawene $159,452 $171,925 $252,576 $263,331 $266,558 $271,864 $282,169 $285,411 $289,399 $293,455 

Russell $541,750 $551,735 $535,775 $560,743 $572,525 $562,272 $555,618 $538,008 $522,129 $506,419 

Whangaroa $13,782 $19,057 $26,877 $82,089 $138,889 $140,688 $149,269 $150,905 $152,755 $154,620 

Whatuwhiwhi $434,326 $452,159 $500,468 $517,618 $525,546 $541,591 $557,584 $565,489 $575,169 $585,050 

Operating Costs 

Op Costs $5,791,755 $5,865,654 $6,265,560 $6,674,145 $7,021,657 $7,432,972 $7,617,280 $7,965,339 $8,252,529 $8,497,660 

Total Funding $11,413,549 $12,530,184 $14,267,012 $15,383,825 $16,269,250 $17,194,161 $17,855,944 $18,325,670 $18,765,513 $19,190,396 


61


Sewerage rates (GST inc) 

Sewerage Rates Capital & Operating 

2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 

Ahipara $721 $785 $842 $916 $1,079 $1,127 $1,164 $1,201 $1,236 $1,267 

East Coast $691 $712 $806 $875 $908 $958 $986 $1,019 $1,049 $1,077 

Hihi $917 $1,725 $2,224 $2,345 $2,402 $2,471 $2,576 $2,634 $2,693 $2,749 

Kaeo $1,115 $1,308 $1,372 $1,438 $1,479 $1,531 $1,580 $1,621 $1,661 $1,717 

Kaikohe $632 $670 $733 $772 $799 $839 $861 $888 $917 $943 

Kaitaia (Including Awanui) $676 $736 $821 $869 $909 $956 $983 $1,019 $1,052 $1,085 

Kawakawa $1,089 $1,101 $1,137 $1,203 $1,226 $1,275 $1,311 $1,350 $1,373 $1,409 

Kerikeri $812 $952 $1,226 $1,476 $1,707 $1,959 $2,149 $2,196 $2,242 $2,285 

Kohukohu $970 $993 $1,035 $1,122 $1,244 $1,446 $1,494 $1,539 $1,583 $1,624 

Opononi $718 $740 $776 $817 $851 $897 $921 $955 $987 $1,015 

Paihia $792 $888 $1,055 $1,109 $1,138 $1,179 $1,214 $1,243 $1,269 $1,292 

Rangiputa $716 $732 $864 $910 $945 $991 $1,021 $1,056 $1,087 $1,116 

Rawene $966 $1,014 $1,320 $1,386 $1,422 $1,470 $1,519 $1,555 $1,590 $1,621 

Russell $1,110 $1,128 $1,136 $1,198 $1,238 $1,254 $1,259 $1,262 $1,262 $1,260 

Whangaroa $867 $1,044 $1,328 $3,158 $5,035 $5,123 $5,416 $5,495 $5,576 $5,654 

Whatuwhiwhi $798 $819 $890 $934 $966 $1,010 $1,037 $1,069 $1,098 $1,125 

62 


Water Rates 

Council has been able to keep the total cost of water to 

a similar level to last year so any changes to water rates 

is a direct outcome of a change to the rating system. 

It has become apparent that there is an increasing cost 

in providing water to some of the smaller communities 

and in particular Omapere/Opononi and Rawene. This 

is a result of the difficulties Council has in providing an 

adequate source of supply to meet demand. 

Water is becoming a scarce resource and there are 

increasing pressures on Local Government to introduce 

ways to manage the environmental effects of increasing 

water consumption. The government has produced a 

number of discussion documents on this issue and the 

broader metering of water is now being encouraged. 

The Far North supplies water on a metered basis so it 

can use its charging mechanisms as a way to encourage 

greater reductions in the use of water. For that reason 

Council has increased the metered cost of water to 

$3.00 per cubic meter (GST Inc). 

Water expenditures (GST inc) 

Water Total Expenditures 

2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 

Kaikohe $328,969 $551,183 $555,833 $591,594 $609,883 $642,636 $658,197 $679,589 $695,091 $718,197 

Kaitaia $398,592 $684,048 $712,851 $757,240 $777,172 $818,367 $837,911 $859,308 $879,258 $916,635 

Kawakawa $207,581 $362,916 $369,322 $395,270 $458,355 $491,227 $506,849 $523,675 $539,747 $562,694 

Kerikeri $239,609 $422,833 $435,052 $464,934 $482,288 $510,672 $558,187 $659,189 $800,008 $962,241 

Okaihau $32,722 $54,682 $55,453 $62,056 $67,502 $70,976 $72,354 $74,589 $76,720 $79,705 

Omapere/Opononi $177,275 $311,852 $362,552 $438,433 $447,714 $464,382 $474,060 $484,742 $494,377 $513,382 

Paihia $252,719 $457,259 $474,158 $508,437 $531,542 $591,090 $605,974 $632,344 $658,094 $686,722 

Rawene $64,412 $133,233 $163,532 $174,659 $182,285 $195,033 $204,721 $211,019 $216,891 $225,232 

Water by Meter Funding 

Meter charges $6,929,312 $7,138,578 $7,354,163 $7,576,258 $7,805,061 $8,040,774 $8,283,606 $8,533,770 $8,791,490 $9,056,993 

Non-metered $127,906 $146,425 $150,434 $155,918 $160,301 $165,537 $169,595 $174,626 $180,080 $186,457 

Total Funding $8,759,097 $10,263,010 $10,633,350 $11,124,798 $11,522,102 $11,990,694 $12,371,454 $12,832,852 $13,331,756 $13,908,260 


63


Water rates (GST inc) 

Water Rates 

2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 

Scheme by Scheme Funding (water by meter charges) 

Kaikohe $171 $287 $290 $308 $318 $335 $343 $354 $362 $374 

Kaitaia $153 $263 $274 $291 $299 $315 $322 $331 $338 $353 

Kawakawa $173 $302 $307 $329 $381 $409 $422 $436 $449 $468 

Kerikeri $101 $179 $184 $197 $204 $216 $236 $279 $339 $407 

Okaihau $185 $309 $313 $351 $381 $401 $409 $421 $433 $450 

Omapere/Opononi $372 $655 $762 $921 $941 $976 $996 $1,018 $1,039 $1,079 

Paihia $125 $226 $234 $251 $262 $292 $299 $312 $325 $339 

Rawene $195 $403 $494 $528 $551 $589 $618 $638 $655 $680 

Water by Meter Rate (per m 3 ) 

Per m 3 $3.00 $3.06 $3.12 $3.18 $3.25 $3.31 $3.38 $3.45 $3.51 $3.59 

Other targeted rates 

Council has not introduced any other new targeted rates, other than the proposed Kaitaia Business Improvement Rate, discussed later in the plan. 

64 



This Funding Impact Statement includes the rates which Council has set for 2012-13 rating year. These rates are based on the budgets set out in the plan together with the land values 

and property numbers contained within the current Rating Information Database. 

The table shows the title of the rate or rates together with their basis of calculation. Where the rate has been set on a differential basis, the matters used to define the differential are 

shown. The clause numbers in the statement refer to the 2nd Schedule of the Local Government (Rating) Act 2002. 

Rates for the subsequent years of this LTP. 

In accordance with the provisions of the Local 

Government Act 2002, Council only needs to detail the 

rates for the first year of the LTP if those mechanisms 

are to continue to be used for the remaining nine years. 

Subject to the possibility of a future change to the basis 

of rating, Council proposes to retain current mechanisms 

for setting rates, as set out for the 2012-13 rating year, 

for the remaining years of this LTP. 

General rates: 

Council has set a General Rate on the basis of Land Value 

using two differentials to fund its general activities 

Uniform Annual General Charge (UAGC) 

Council has set a UAGC (and other charges unless 

otherwise stated) on the basis of one charge in respect 

of every rating unit or every separately used or inhabited 

part of a rating unit (SUIP), whichever is the larger. 

The effect of this is that where any separate rating unit 

has more than one use or inhabitation or is capable of 

having more than one use or inhabitation, each of these 

will give rise to a separate set of charges. For more 

information on the SUIP refer to the definition of the 

SUIP later in this document. 

General rate differential 

Council has set the general rate on the basis of two 

differentials, General and Commercial. 

The General Rate differential is based on land use, (Local 

Government (Rating) Act 2002, Schedule 2 Clause 1) 

The differential categories are: 

•• 

General – all rating units or separately used or 

inhabited parts of rating units that are not included in 

the commercial category 

•• 

Commercial – all rating units or separately used or 

inhabited parts of rating units that have a clear and 

demonstrable commercial use. Where only part of a 

rating unit has a commercial use, that part will only be 

assessed using the commercial differential if and where 

there is a clear and definable area of land used for that 

commercial purpose and Council’s valuation service 

provider is able to separately value that part of the 

land. Where the area of the land used for the 

commercial purpose is only minimal or cannot be 

separately defined, Council reserves the right not to 

assess that part using the commercial differential. 

For the sake of clarity, residential dwellings which are 

rented on a permanent or semi-permanent basis for 

private residential accommodation are not considered 

commercial uses. 

Notwithstanding the above, Council retains the right not 

to apply the commercial differential if the owner of a 

rating unit which has commercial characteristics, such 

as a commercial land use code, demonstrates to the 

satisfaction of Council that the land concerned is not 

being used for commercial purposes. 

Likewise, Council retains the right to apply a commercial 

differential to land which it believes is being used 

for commercial purposes despite it displaying noncommercial 

characteristics. 


65


Where Council proposes to change the differential on 

a rating unit it will consult with the property owner 

concerned and give them the opportunity to lodge an 

objection to the proposal. 

Where any rating unit or separately used or inhabited 

part of a rating unit would normally be subject to the 

commercial differential but complies with one or more 

of the exceptions set out below, that rating unit will be 

subject to the general differential. 

•• 

Where the rating unit or part thereof is in receipt of 

a remission of rates pursuant to a policy adopted by 

Council is not used for private pecuniary profit and is 

not subject to a licence for the sale of liquor 

•• 

Is used solely for the purposes of providing private 

rental accommodation. However this exclusion does 

not include properties such as hotels, motels or other 

forms of visitor accommodation. 

Bed and breakfast establishments, home or farm stay 

operations or similar accommodation providers including 

residential properties used for holiday rentals, will only be 

charged a commercial differential where they contain six 

or more bedrooms provided for guest accommodation. 

Such properties will however, be subject to any additional 

sewerage charges where the property provides additional 

toilets for guest use, for example en-suite facilities. 

Targeted rates: 

Council has set the following targeted rates: 

Roading rate 

Council has set a targeted rate to provide dedicated 

funding for roading. This rate is set on a uniform basis on 

every rating unit or separately used or inhabited part of 

a rating unit, whichever is the larger. 

Ward rates 

Council has set a targeted rate to fund urban and 

recreational and other local activities within the three 

wards of the district. This rate is set as a differential 

rate payable by every rating unit or separately used or 

inhabited part of a rating unit and based on the ward 

within which the rating unit is located. (Local Government 

(Rating) Act 2002, Schedule 2 Clause 6). 

Stormwater rates 

Council has set a targeted rate to fund stormwater 

developments across the district. This rate is set as a 

differential rate according to land use on the basis of the 

rating unit. The differentials are General and Commercial 

using the same differential categories as defined for the 

General Rate. (Local Government (Rating) Act 2002, 

Schedule 2 Clause 1). 

This rate is payable by every rating unit that is located 

within each/any urban settlement that is provided with 

stormwater disposal services: 

Kerikeri Mainstreet rate 

Council has set a targeted rate to fund the Kerikeri 

Main Street project. The area to be rated includes the 

whole of the former Kerikeri/Paihia Community with the 

exclusion of the area to the south of the Waitangi River. 

This rate is set as a differential rate payable by every 

rating unit or separately used or inhabited part of a rating 

unit. The differentials are based on land use using the 

same differential categories as defined for the general 

rate. (Local Government (Rating) Act 2002, Schedule 2 

Clause 1). 

Paihia Central Business District development rate 

Council has set a targeted rate to fund improvements to 

the Paihia Central Business Area. The area to be rated 

includes rating rolls 00221, 00223, 00225, 00227 but will 

exclude any rating units in those rolls that currently pay 

the Kerikeri Mainstreet Rate. 

This rate is set as a differential rate payable by every 

rating unit or separately used or inhabited part of a rating 

unit. The differentials are based on land use using the 

66 


same differential categories as defined for the general 

rate. (Local Government (Rating) Act 2002, Schedule 2 

Clause 1). 

Kaitaia business improvement district rate 

Council has set a targeted rate to fund the introduction 

of a Kaitaia Business Improvement District. This rate is 

assessed over all commercial properties within the 

defined rating area – Refer map on page 87 for details 

of the rating area. 

Wastewater disposal rates 

Council has set a series of targeted rates for wastewater 

disposal. 

Capital Rates (set on the basis of the scheme) 

1. Council has set a targeted rate for the capital costs 

associated with the provision of sewerage services. 

This rate has been set on the basis of a fixed 

amount on every rating unit or every separately 

used or inhabited part of a rating unit (whichever 

is the larger) that is connected, either directly 

or indirectly, to a public reticulated wastewater 

disposal system. This rate is set differen tially 

according location and availability of service. 

(Local Government (Rating) Act 2002, Schedule 2 

Clauses 5 & 6). 

2. Where the total number of water closets or urinals 

connected either directly or indirectly in a rating 

unit exceeds two, or where the total number of 

water closets or urinals connected either directly 

or indirectly exceeds two for every separately used 

or inhabited part of the rating unit that has been 

assessed the rate under 1 above, a targeted rate 

has been set in respect of every subsequent water 

closet or urinal in the rating unit. This rate is set 

differentially according location (Local Government 

(Rating) Act 2002, Schedule 2 Clause 6). 

3. Where a rating unit is capable of being connected 

to a public reticulated wastewater disposal system, 

but is not so connected, a targeted rate has been 

set on the basis of a fixed rate on every rating unit 

that is capable of being connected. This rate has 

been set differentially according to location and 

availability of service. (Local Government (Rating) 

Act 2002, Schedule 2 Clause 5). 

Operating rates (set district wide) 

1. Council has set a targeted rate for the operating 

costs associated with the provision of sewerage 

services. This rate is set on the basis of a fixed 

amount on every rating unit or every separately 

used or inhabited part of a rating unit (whichever 

is the larger) that is connected, either directly 

or indirectly, to a public reticulated wastewater 

disposal system. This rate will be set differentially 

according to availability of service. (Local 

Government (Rating) Act 2002, Schedule 2 Clause 

5). 

2. Where the total number of water closets or urinals 

connected either directly or indirectly in a rating 

unit exceeds two, or where the total number of 

water closets or urinals connected either directly 

or indirectly exceeds two for every separately used 

or inhabited part of the rating unit that has been 

assessed the rate under 1 above, a targeted rate 

on the basis of a flat amount will be set in respect 

of every subsequent water closet or urinal in the 

rating unit. 


67


Wastewater rate differentials 

The differential categories for sewage disposal are: 

Location – The location or scheme to which the rating 

unit is connected or to which it is capable of being 

connected 

Connected – any separately used or inhabited part of a 

rating unit that is connected either directly or indirectly 

to a public reticulated sewage disposal system 

Serviceable – any rating unit that is not connected to 

a public reticulated sewage disposal system but that 

is within 30 metres of the reticulation and is within a 

defined “area of benefit” and Council will allow the rating 

unit to be connected to it. 

Note: Rating units that are outside of one of the defined 

sewerage service areas and that are neither connected 

to, nor capable of connection to a public reticulated 

sewerage system, will not be liable to this rate. 

Water rates 

Council has set a series of targeted rates for water supply, 

Capital Rates (set on the basis of the scheme) 

1. Council has set a targeted rate for the capital 

costs associated with the provision of water 

services. This rate will be set on the on the basis 

of a fixed amount on every rating unit or every 

separately used or inhabited part of a rating unit 

(whichever is the larger) that is connected, either 

directly or indirectly, to a public reticulated water 

supply system. This charge is set differentially 

according location and availability of service. (Local 

Government (Rating) Act 2002, Schedule 2 Clause 

5 & 6). 

2. Where a rating unit is capable of being connected 

to a public reticulated water supply system, but is 

not so connected, a targeted rate will be set on 

the basis of a flat amount on every rating unit that 

is capable of being connected. This charge will be 

set differentially according location and availability 

of service. (Local Government (Rating) Act 2002, 

Schedule 2 Clause 5 & 6). 

3. Council has set a targeted rate for a potable water 

supply to every rating unit or separately used or 

inhabited part of a rating unit, whichever is the 

larger, and that is supplied with water other than 

through a water meter. This rate is based on a 

flat amount equivalent to the supply of 250 cubic 

metres of water per annum (Local Government 

(Rating) Act 2002, Schedule 2 Clause 5 & 6). 

4. Council has set a targeted rate for a non-potable 

water supply to every rating unit or separately 

used or inhabited part of a rating unit, whichever 

is the larger, that is supplied with water other than 

through a water meter. This rate is based on a 

flat amount equivalent to the supply of 250 cubic 

metres of water per annum. (Local Government 

(Rating) Act 2002, Schedule 2 Clause 5 & 6). 

Note: Rating units that are outside of one of the defined 

water supply areas and that are neither connected to, 

nor capable of connection to a public reticulated water 

supply system, will not be liable to this rate. 

Water rate differentials 

The differential categories for water are: 

Location – The location or scheme to which the rating 

unit is connected or to which it is capable of being 

connected 

Connected – any separately used or inhabited part of a 

rating unit that is connected either directly or indirectly 

to a public reticulated water supply system 

Serviceable – any rating unit that is not connected to a 

public reticulated water supply system but that is within 

100 metres of the reticulation and is within a defined 

“area of benefit” and Council will allow the rating unit to 

be connected to it. 

Water by meter rates (set district wide) 

1. Council has set a targeted rate for a water 

supply based on the volume of water supplied or 

consumed by a rating unit or separately used or 

inhabited part of a rating unit, as recorded by meter. 

68 


This charge is set differentially according location. 

(Local Government (Rating) Act 2002, Schedule 2 

Clause 6). 

Land drainage rates 

There are four different Land Drainage areas in the Far 

North District. These currently operate differing forms 

of rating depending on the District. These are outlined 

below. 

Waiharara Drainage District: Council has set a targeted 

rate for land drainage in the Waiharara Drainage area. 

This rate will be based on a rate per hectare of land within 

each rating unit. This rate is differentiated according to 

location. (Local Government (Rating) Act 2002, Schedule 

2 Clause 6). 

Hikurangi Drainage Rates: Council has decided that it will 

no longer collect rates over the Hikurangi Drainage Area. 

Kaikino Drainage Area: Council has set a targeted rate 

for land drainage in the Kaikino Drainage area. This 

rate will be based on a rate per hectare of land within 


location (Local Government (Rating) Act 2002, Schedule 

2 Clause 6). 

Kaitaia Drainage District: Council has set a uniform 

targeted rate for land drainage in the Kaitaia Drainage 

District based on a rate per hectare of land area within 

each rating unit. 

Motutangi Drainage District: Council has set a targeted 

rate for land drainage in the Motutangi Drainage area. 

This rate will be based on a rate per hectare of land within 


location (Local Government (Rating) Act 2002, Schedule 

2 Clause 6). 


69



Set out below are the rates that Council has set for the 2012-13 rating year if it uses the Current Rating System. For comparison purposes, the rates for 2011-12 are also shown. Please 

note that these rates include GST 

Differential 

2011-12 2012-13 2012-13 

Basis of Assessment 

Matters 

Rate Rate Total Rate 

1. GENERAL RATES 

1.1 Uniform Annual General Charge Per rating unit or separatly used or inhabited part of the rating unit $523.25 $411.40 $14,447,921 

1.2 General Land Differential Per $ of Land Value 1 0.0036104 0.0037855 $31,003,740 

1.3 Commercial Differential Per $ of Land Value 1 0.0108313 0.0113565 $5,006,020 

2. TARGETED WARD SERVICES RATE 

2.1 Eastern Ward Differential Per rating unit or separatly used or inhabited part of the rating unit 6 $253.92 $314.02 $4,861,639 

2.2 Northern Ward Differential 6 $238.64 $264.58 $3,153,811 

2.3 Western Ward Differential 6 $279.47 $339.78 $2,551,055 

3. TARGETED ROADING RATE 

3.1 Uniform Roading Rate Per rating unit or separatly used or inhabited part of the rating unit 6 $- $100.00 $3,511,900 

4. STORMWATER TARGETED RATES 

4.1 General Differential Per rating unit 6 $35.78 $35.78 $418,197 

4.2 Commercial Differential Per rating unit 6 $71.55 $71.56 $87,017 

5 TARGETED DEVELOPMENT RATES 

5.1 Kerikeri Mainstreet Rate Per rating unit or separatly used or inhabited part of the rating unit 

5.1.1 General Differential 6 $9.20 $9.20 $54,349 

5.1.2 Commercial Differential 6 $27.60 $27.60 $10,677 

5.2 Paihia CBD Development Rate Per rating unit or separatly used or inhabited part of the rating unit 

5.2.1 General Differential 6 $9.20 $9.20 $18,078 

5.2.2 Commercial Differential 6 $27.60 $27.60 $8,832 

5.3 Kaitaia BID Rate Per $ of Land Value 1 $- 0.0010171 $57,500 

6. SEWERAGE TARGETED RATES 

6.1 Sewerage Capital Rates 

70 


6.1.1 Connected Rates 


Differential 

Matters 

2011-12 2012-13 2012-13 


6.1.1.1 Ahipara Per rating unit or separatly used or inhabited part of the rating unit 5 & 6 $669.28 $303.53 $146,728 

6.1.1.2 Awanui " 5 & 6 $669.28 $258.55 $36,898 

6.1.1.3 East Coast " 5 & 6 $669.28 $273.17 $359,642 

6.1.1.4 Hihi " 5 & 6 $669.28 $499.86 $76,359 

6.1.1.5 Kaeo " 5 & 6 $669.28 $697.62 $119,889 

6.1.1.6 Kaikohe " 5 & 6 $669.28 $214.69 $357,089 

6.1.1.7 Kaitaia " 5 & 6 $669.28 $258.55 $622,843 

6.1.1.8 Kawakawa " 5 & 6 $669.28 $671.17 $386,503 

6.1.1.9 Kerikeri " 5 & 6 $669.28 $394.49 $409,149 

6.1.1.10 Kohukohu " 5 & 6 $669.28 $552.56 $47,758 

6.1.1.11 Opononi " 5 & 6 $669.28 $300.53 $109,940 

6.1.1.12 Paihia " 5 & 6 $669.28 $374.61 $659,598 

6.1.1.13 Rangiputa " 5 & 6 $669.28 $298.37 $28,787 

6.1.1.14 Rawene " 5 & 6 $669.28 $548.03 $127,228 

6.1.1.15 Russell " 5 & 6 $669.28 $692.20 $368,700 

6.1.1.16 Whangaroa " 5 & 6 $669.28 $449.36 $6,322 

6.1.1.17 Whatuwhiwhi " 5 & 6 $669.28 $380.07 $241,023 

6.1.2 Availability Rates 

6.1.2.1 Ahipara Per rating unit 5 & 6 $401.57 $303.53 $36,120 

6.1.2.2 Awanui " 5 & 6 $401.57 $258.55 $2,586 

6.1.2.3 East Coast " 5 & 6 $401.57 $273.17 $139,590 

6.1.2.4 Hihi " 5 & 6 $401.57 $499.86 $16,995 

6.1.2.5 Kaeo " 5 & 6 $401.57 $697.62 $7,674 

6.1.2.6 Kaikohe " 5 & 6 $401.57 $214.69 $17,175 

6.1.2.7 Kaitaia " 5 & 6 $401.57 $258.55 $26,114 

6.1.2.8 Kawakawa " 5 & 6 $401.57 $671.17 $6,041 

6.1.2.9 Kerikeri " 5 & 6 $401.57 $394.49 $43,788 

6.1.2.10 Kohukohu " 5 & 6 $401.57 $552.56 $5,526 


71



Differential 

Matters 

2011-12 2012-13 2012-13 


6.1.2.11 Opononi Per rating unit 5 & 6 $401.57 $300.53 $36,364 

6.1.2.12 Paihia Per rating unit 5 & 6 $401.57 $374.61 $70,427 

6.1.2.13 Rangiputa Per rating unit 5 & 6 $401.57 $298.37 $8,653 

6.1.2.14 Rawene Per rating unit 5 & 6 $401.57 $548.03 $19,729 

6.1.2.15 Russell Per rating unit 5 & 6 $401.57 $692.20 $119,058 

6.1.2.16 Whangaroa Per rating unit 5 & 6 $401.57 $449.36 $4,494 

6.1.2.17 Whatuwhiwhi Per rating unit 5 & 6 $401.57 $380.07 $189,655 

6.1.3 Additional Pans 

6.1.3.1 Ahipara 

Per pan basis for the 3rd and subsequent WC or Urinal in the 

rating unit or separatly used or inhabited part of a rating unit. 

6 $401.57 $182.12 $5,828 

6.1.3.2 Awanui " 6 $401.57 $155.13 $10,549 

6.1.3.3 East Coast " 6 $401.57 $163.90 $16,226 

6.1.3.4 Hihi " 6 $401.57 $299.92 $2,099 

6.1.3.5 Kaeo " 6 $401.57 $418.57 $38,927 

6.1.3.6 Kaikohe " 6 $401.57 $128.81 $96,608 

6.1.3.7 Kaitaia " 6 $401.57 $155.13 $103,317 

6.1.3.8 Kawakawa " 6 $401.57 $402.70 $62,419 

6.1.3.9 Kerikeri " 6 $401.57 $236.69 $60,829 

6.1.3.10 Kohukohu " 6 $401.57 $331.54 $5,305 

6.1.3.11 Opononi " 6 $401.57 $180.32 $18,573 

6.1.3.12 Paihia " 6 $401.57 $224.77 $272,871 

6.1.3.13 Rangiputa " 6 $401.57 $179.02 $716 

6.1.3.14 Rawene " 6 $401.57 $328.82 $12,495 

6.1.3.15 Russell " 6 $401.57 $415.32 $53,992 

6.1.3.16 Whangaroa " 6 $401.57 $269.62 $2,966 

6.1.3.17 Whatuwhiwhi " 6 $401.57 $228.04 $3,649 

6.2 Sewerage Operating Rate 

6.2.1 Connected Rate Per rating unit or separatly used or inhabited part of the rating unit 5 & 6 $- $417.56 $4,875,048 

6.2.2 Additional Pans 

Per WC or urinal for the 3rd and subsequent WC or Urinal in the 

rating unit or separatly used or inhabited part of the rating unit 

6 $- $250.54 $916,726 

72 



Differential 

Matters 

2011-12 2012-13 2012-13 


7. WATER TARGETED RATES 

7.1 Water Capital Rates 

7.1.1 Connected Rates 

7.1.1.1 Kaikohe Per rating unit or separatly used or inhabited part of the rating unit 5 & 6 $208.53 $171.43 $316,288 

7.1.1.2 Kaitaia " 5 & 6 $208.53 $153.30 $386,929 

7.1.1.3 Kawakawa " 5 & 6 $208.53 $172.70 $200,505 

7.1.1.4 Kerikeri " 5 & 6 $208.53 $101.40 $222,573 

7.1.1.5 Okaihau " 5 & 6 $208.53 $184.87 $31,798 

7.1.1.6 Omapere/Opononi " 5 & 6 $208.53 $372.43 $138,916 

7.1.1.7 Paihia " 5 & 6 $208.53 $124.74 $240,998 

7.1.1.8 Rawene " 5 & 6 $208.53 $194.60 $59,937 

7.1.2 Availability Rate 

7.1.2.1 Kaikohe Per rating unit 5 & 6 $208.53 $171.43 $12,686 

7.1.2.2 Kaitaia " 5 & 6 $208.53 $153.30 $11,651 

7.1.2.3 Kawakawa " 5 & 6 $208.53 $172.70 $7,081 

7.1.2.4 Kerikeri " 5 & 6 $208.53 $101.40 $17,035 

7.1.2.5 Okaihau " 5 & 6 $208.53 $184.87 $924 

7.1.2.6 Omapere/Opononi " 5 & 6 $208.53 $372.43 $38,360 

7.1.2.7 Paihia " 5 & 6 $208.53 $124.74 $11,726 

7.1.2.8 Rawene " 5 & 6 $208.53 $194.60 $4,476 

7.2 Water Operating Rates 

7.2.1 Water by Meter Rates 

7.2.1.1 Potable Water Per cubic metre of water consumed as recorded by a water meter 5 & 6 $2.82 $3.00 $6,929,312 

7.2.1.2 Non-potable Water " 5 & 6 $1.83 $1.95 $1,950 

7.3 Non-Metered Rates 

7.3.1 Non-metered Potable Rate Per rating unit or separatly used or inhabited part of the rating unit 5 $912.33 $902.04 $116,363 

7.3.2 Non-metered non-potable Rate " 5 $666.00 $639.54 $9,593 


73



Differential 

Matters 

2011-12 2012-13 2012-13 


8. DRAINAGE TARGETED RATES 

8.1 Kaitaia Drainage Area Per Hectare of land area $6.90 $6.90 $70,061 

8.2 Kaikino Drainage Area 

8.2.1 Differential A Per Hectare of land area 6 $9.41 $9.41 $3,543 

8.2.2 Differential B Per Hectare of land area 6 $4.71 $4.71 $1,924 

8.2.3 Differential C Per Hectare of land area 6 $1.57 $1.57 $2,109 

8.3 Motutangi Drainage Area 




8.4 Waiharara 




NOTE: the differential matters refer to the Local Government (Rating) Act 2002 2 nd Schedule 

1 - Land Use 

5 - The provision or availability of a service 

6 - Where the land is situated 

74 


Example rates 

Set out below are examples of the rates on a range of 

properties drawn from across the district. These are 

generally based on average land values on the land uses or 

rating rolls shown. 

It should be noted that the proposed percentage rate 

increases set out in the table are based on an average 

valued property from within the category or rating area 

described. Individual properties may show higher or lower 

increases depending on their location, value and the range 

of service charges that they are liable for. 

The Council’s web site has tools to assist you to check 

how these rates impact you and your property. 

Notes: All rates figures include GST 

All rates are rounded to the nearest dollar. 

Rates and Charges 2012-13 (rounded to nearest $) 

Sewerage 

Ave Land 2011-12 General 

Roading Ward Storm Water Capital Op Other Final Change 

Change 

Land use and Location 

Value Rates Rates UACG UAC Rate UAC Rate (ave) Rate Rate Rates Rates 

$ 

% 

District Average Values 

Residential $157,332 $2,259 $596 $411 $100 $303 $36 $152 $352 $418 $- $2,367 $108 4.8% 

Lifestyle $271,649 $1,758 $1,028 $411 $100 $303 $- $- $5- $- $1,842 $84 4.8% 

General Farming $614,675 $2,997 $2,327 $411 $100 $303 $- $- $- $- $- $3,141 $144 4.8% 

Horticulture/Orchard $476,122 $2,496 $1,802 $411 $100 $303 $- $- $- $- $- $2,616 $120 4.8% 

Dairy $1,044,740 $4,549 $3,955 $411 $100 $303 $- $- $- $- $- $4,769 $220 4.8% 

Forestry $241,050 $1,648 $912 $411 $100 $303 $- $- $- $- $- $1,727 $79 4.8% 

Other $310,467 $1,898 $1,175 $411 $100 $303 $- $- $- $- $- $1,989 $91 4.8% 

Commercial $204,525 $3,942 $2,323 $411 $100 $303 $72 $152 $352 $418 $- $4,129 $188 4.8% 

Industrial $289,467 $4,862 $3,287 $411 $100 $303 $72 $152 $352 $418 $- $5,094 $232 4.8% 

Average Te Hiku Ward 

Awanui - Roll 15 $54,705 $1,664 $207 $411 $100 $265 $36 $- $259 $418 $- $1,695 $31 1.8% 

Kaitaia Township - Roll 33 $53,711 $1,869 $203 $411 $100 $265 $36 $153 $259 $418 $- $1,844 $(25) -1.3% 

Ahipara West Coast Values - Roll 39 $216,397 $2,248 $819 $411 $100 $265 $36 $- $304 $418 $- $2,352 $104 4.6% 

Karikari Peninsular Values - Roll 81 $223,648 $1,569 $847 $411 $100 $265 $- $- $- $- $- $1,623 $53 3.4% 

Rangiputa Values - Roll 81 $258,088 $2,399 $977 $411 $100 $265 $36 $- $298 $418 $- $2,505 $106 4.4% 

Whatuwhiwhi Values - Roll 81 $236,508 $2,321 $895 $411 $100 $265 $36 $- $380 $418 $- $2,505 $184 7.9% 

East Coast Bays Values - Roll 83 $224,043 $2,276 $848 $411 $100 $265 $36 $- $273 $418 $- $2,351 $75 3.3% 

Hihi Values - Roll 85 $194,804 $2,170 $737 $411 $100 $265 $36 $- $500 $418 $- $2,467 $296 13.7% 

*NOTE: the ward rate is calculated as the average of the rates for the three wards 


75


Land use and Location 

Average Bay of Islands/ Whangaroa Ward 

Ave Land 

Value 

2011-12 

Rates 

General 

Rates 

UACG 

Roading 

UAC 

Ward 

Rate 

Storm 

UAC 

Rates and Charges 2012-13 (rounded to nearest $) 

Whangaroa Coastal - Roll 121 $367,874 $2,105 $1,393 $411 $100 $314 $- $- $- $- $- $2,218 $113 5.4% 

Whangaroa Township - Roll 122 $231,775 $2,319 $877 $411 $100 $314 $36 $- $449 $418 $- $2,606 $286 12.4% 

Kaeo Township - Roll 133 $138,959 $1,984 $526 $411 $100 $314 $36 $- $698 $418 $- $2,502 $518 26.1% 

Purerua Peninsular - Roll 211 $516,433 $2,651 $1,955 $411 $100 $314 $- $- $- $- $9 $2,790 $139 5.2% 

Kerikeri/Waipapa Coastal - Roll 213 $343,480 $2,026 $1,300 $411 $100 $314 $- $- $- $- $9 $2,135 $108 5.3% 

Kerikeri Township - Roll 215 $212,748 $2,468 $805 $411 $100 $314 $36 $101 $394 $418 $9 $2,589 $121 4.9% 

Puketona Road / Coastal - Roll 221 $578,395 $2,875 $2,190 $411 $100 $314 $- $- $- $- $9 $3,024 $149 5.2% 

Haruru Falls - Roll 223 $139,980 $2,205 $530 $411 $100 $314 $36 $125 $375 $418 $9 $2,317 $112 5.1% 

Paihia - Roll 225 $276,495 $2,698 $1,047 $411 $100 $314 $36 $125 $375 $418 $9 $2,834 $136 5.0% 

Russell Township - Roll 411 $421,388 $3,004 $1,595 $411 $100 $314 $36 $- $692 $418 $- $3,566 $563 18.7% 

Bay of Islands/ Rawhiti - Roll 413 $628,238 $3,045 $2,378 $411 $100 $314 $- $- $- $- $- $3,204 $158 5.2% 

Kawakawa Values - Roll 419 $53,309 $1,883 $202 $411 $100 $314 $36 $173 $671 $418 $- $2,324 $441 23.4% 

Opua - Roll 423 $246,856 $2,582 $934 $411 $100 $314 $36 $125 $375 $418 $- $2,713 $131 5.1% 

Moerewa - Roll 427 $13,168 $1,069 $50 $411 $100 $314 $36 $173 $- $- $- $1,084 $15 1.4% 

Southern Rural - Roll 431 $193,707 $1,477 $733 $411 $100 $314 $- $- $- $- $- $1,559 $82 5.6% 

Average Kaikohe/Hokianga Ward 

Kaikohe Township - Roll 523 $67,245 $1,959 $255 $411 $100 $340 $36 $171 $215 $418 $- $1,945 $(14) -0.7% 

Kaikohe Rural - Roll 527 $265,626 $1,762 $1,006 $411 $100 $340 $- $- $- $- $- $1,857 $95 5.4% 

Ngawha Township - Roll 529 $171,567 $2,336 $649 $411 $100 $340 $36 $171 $215 $418 $- $2,340 $4 0.2% 

Rawene Township - Roll 611 $125,088 $2,168 $474 $411 $100 $340 $36 $195 $548 $418 $- $2,521 $353 16.3% 

Opononi / Omapere - Roll 618 $199,733 $2,437 $756 $411 $100 $340 $36 $372 $301 $418 $- $2,734 $296 12.1% 

Hokianga Rural - Roll 655 $129,128 $1,269 $489 $411 $100 $340 $- $- $- $- $- $1,340 $71 5.6% 

Kohukohu - Roll 659 $108,766 $1,900 $412 $411 $100 $340 $36 $- $553 $418 $- $2,269 $368 19.4% 

Water 

Rate (ave) 

Capital 

Rate 

Sewerage 

Op 

Rate 

Other 

Rates 

Final 

Rates 

Change 

$ 

Change 

% 

76 


Other rating provisions 

Definition of a separately used or inhabited part 

of a rating unit (SUIP) 

Where rates are calculated on each separately used or 

inhabited part of a rating unit, the following definition 

will apply: 

•• 

Any part of a rating unit that is used or occupied by 

any person, other than the ratepayer, having a right to 

use or inhabit that part by virtue of a tenancy, lease, 

licence, or other agreement, 

•• 

or any part or parts of a rating unit that are used or 

occupied by the ratepayer for more than one single 

use. 

The following are considered to be separately used parts 

of a rating unit: 

•• 

Individual flats or apartments 

•• 

Separately leased commercial areas which are leased 

on a unit basis (A unit basis means that the area is 

capable of separate and clear identification) 

•• 

Vacant rating units 

•• 

Single rating units which contain multiple uses such as a 

shop and dwelling on the same rating unit 

•• 

A residential building or part of a residential building 

that is used, or can be used as an independent 

residence. An independent residence is defined as having 

a separate entrance, cooking facilities, living facilities 

and toilet/bathroom facilities. 

The following are not considered to be separately used 

parts of a rating unit: 

•• 

A residential sleep-out or granny flat that does not 

meet the definition of an independent residence 

•• 

A hotel room with or without kitchen facilities 

•• 

A motel room with or without kitchen facilities 

•• 

Individual offices or premises of business partner 

Postponement charges 

Pursuant to the Local Government (Rating) 2002 Act 

Council will a charge postponement fee on all rates that 

are postponed under any of its postponement policies. 

The postponement fees will be as follows: 

•• 

Application Fee: $50 

•• 

Administration Fee: $50 pa 

•• 

Management Fee on the Residential Postponement 

Policy: 1% on the outstanding balance 

•• 

Reserve Fund Fee on the Residential Postponement 

Policy: 0.25% on the outstanding balance 

•• 

Counselling Fee on the Residential Postponement 

Policy $300 

•• 

Financing Fee on all postponements: Currently set at 

6.5% pa but may vary to match Council’s average cost 

of funds. 

At Council’s discretion all these fees may be added to 

the total postponement balance. 

Payment of rates 

Rates 

With the exception of water by meter charges, Council 

will charge the rates for the 2012-13 rating year will be 

by way of four instalments. Each instalment must be paid 

on or before the due dates set out below. Any rates 

paid after the due date will become liable for additional 

charges or penalties as set out below. 

Rate instalment due dates 

Rate Instalment 

Due Date 

First instalment due date: 20 August 2012 

Second instalment due date: 20 November 2012 

Third instalment due date: 20 February 2013 

Fourth instalment due date: 20 May 2013 

Note: Where any due date falls on a weekend or 

public holiday, the due date will be the first working day 

following the due date. 

Water by meter 

Water meters are read on a six-month cycle and are 

payable on the 20th of the month following the issue 

of the invoice. If the invoicing dates do change the due 

date will always be the 20th of the month following the 

invoice date. 


77


Penalties on rates 

Sections 57 and 58 of the Local Government (Rating) 

Act 2002 empower councils to charge penalties on the 

late payment of rates. 

Pursuant to sections 57 and 58 of the Act, Council is 

proposing to impose the following penalties: 

1. A ten percent (10%) penalty on any portion of 

each instalment of rates assessed in the 2012-13 

financial year that is not paid on or by the due date 

for payment, as stated above. 

2. A further ten percent (10%) penalty on any rates 

assessed in any financial year prior to 1 July 2012 

that remain unpaid on 1 September 2012. 

3. A further ten percent (10%) penalty on any rates 

to which a penalty has been added under (2) above 

that remain unpaid on 1 March 2013. 

Penalties on water charges 

1. A ten percent (10%) penalty on any portion of 

the charge for the supply of water, as separately 

invoiced, that is not paid on or by the due date for 

payment as set out on the invoice. 

78 


Groups of activity funding impact statements 

The Local Government Act 2002 now requires Council to prepare Funding Impact Statements for every Activity Group. Set out below are the proposed Funding Impact Statements for 

each of the Activity Groups of Council included in this LongTerm Plan. These statements start with District Facilities and finish with Water Supply. 

Annual Plan 

FAR NORTH DISTRICT COUNCIL DISTRICT FACILITIES 

2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 

$’000s $’000s $’000s $’000s $’000s $’000s $’000s $’000s $’000s $’000s $’000s 




150 Subsidies and grants for operating purposes 110 115 40 - - - - - - - 


6 Internal charges and overheads recovered 13 13 14 14 15 15 16 16 17 17 

153 Local authority fuel tax, fines, infringement fees, and other receipts 157 162 167 173 179 185 191 194 205 212 




1,250 Finance costs 1,200 1,243 1,298 1,997 1,987 1,965 2,048 2,062 2,043 1,998 

3,769 Internal charges and overheads applied 4,177 4,246 4,381 4,509 4,880 5,000 5,174 5,302 5,478 5,625 

- Other operating funding applications - - - - - - - - - - 




- Subsidies and grants for capital expenditure - - - - - - - - - - 

570 Development and financial contributions 113 113 113 788 899 1,010 979 854 963 930 

798 Increase (decrease) in debt 714 893 775 176 (35) (201) 170 (44) (428) (560) 



1,369 Total sources of capital funding (C) 827 1,006 888 964 863 809 1,150 810 535 370 



- to meet additional demand 170 422 318 600 843 613 594 612 - - 

- to improve the level of service 825 813 1,149 273 135 139 317 122 126 - 


1,438 Increase (decrease) in reserves (2,718) (2,538) (1,660) (2,454) 729 (849) 1,601 150 1,589 2,957 

- Increase (decrease) in investments - - - - - - - - - - 


(2,281) Surplus (deficit) of capital funding (C - D) (3,404) (3,777) (4,049) (3,694) (3,901) (4,073) (4,245) (4,562) (4,788) (4,992) 



79


Annual Plan 

FAR NORTH DISTRICT COUNCIL ENVIRONMENTAL MANAGEMENT 

2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 

$’000s $’000s $’000s $’000s $’000s $’000s $’000s $’000s $’000s $’000s $’000s 



- Targeted rates (other than a targeted rate for water supply) - - - - - - - - - - 

10 Subsidies and grants for operating purposes - - - - - - - - - - 







8 Finance costs 177 176 174 187 186 184 197 195 194 192 

3,506 Internal charges and overheads applied 2,352 2,347 2,438 2,519 2,815 2,888 2,994 3,075 3,174 3,266 



148 Surplus (deficit) of operating funding (A - B) 164 159 164 170 176 181 187 193 200 207 



- Development and financial contributions - - - - - - - - - - 

(7) Increase (decrease) in debt (23) (23) (23) (23) (23) (23) (23) (23) (23) (23) 



(7) Total sources of capital funding (C) (23) (23) (23) (23) (23) (23) (23) (23) (23) (23) 


Capital Expenditure 

- to meet additional demand - - - - - - - - - - 

- to improve the level of service 10 - - - - - - - - - 

- to replace existing assets - - - 21 5 5 - - - - 

141 Increase (decrease) in reserves 131 136 141 125 147 154 164 170 177 184 


93 Total applications of capital funding (D) 141 136 141 147 153 158 164 170 177 184 

(148) Surplus (deficit) of capital funding (C - D) (164) (159) (164) (170) (176) (181) (187) (193) (200) (207) 


80 


Annual Plan 

FAR NORTH DISTRICT COUNCIL GOVERNANCE AND STRATEGY 

2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 

$’000s $’000s $’000s $’000s $’000s $’000s $’000s $’000s $’000s $’000s $’000s 




10 Subsidies and grants for operating purposes 32 25 (0) (0) (0) (0) (0) (0) (0) (0) 

567 Fees, charges, and targeted rates for water supply 528 544 562 581 601 622 642 663 687 711 






1,059 Finance costs 1,435 1,438 1,438 1,523 1,530 1,501 1,585 1,554 1,522 1,491 

(9,362) Internal charges and overheads applied (10,072) (10,222) (10,516) (10,836) (11,758) (12,058) (12,476) (12,799) (13,222) (13,589) 






124 Development and financial contributions 371 379 391 401 422 431 445 455 470 481 

(672) Increase (decrease) in debt 54 (35) (367) 49 (529) (352) (538) (538) (538) (538) 



(548) Total sources of capital funding (C) 425 345 23 450 (107) 79 (93) (83) (68) (56) 


792 Capital Expenditure 


- to improve the level of service 585 439 128 551 - 177 - - - - 

- to replace existing assets 1,285 258 531 621 3,696 1,367 304 948 628 396 

2,185 Increase (decrease) in reserves 2,310 3,514 3,546 3,330 215 2,783 4,034 3,567 4,085 4,517 






81


Annual Plan 

FAR NORTH DISTRICT COUNCIL ROADING AND FOOTPATHS 

2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 

$’000s $’000s $’000s $’000s $’000s $’000s $’000s $’000s $’000s $’000s $’000s 




7,101 Subsidies and grants for operating purposes 5,479 6,144 6,288 6,873 7,139 7,445 7,730 8,145 8,384 8,699 

757 Fees, charges, and targeted rates for water supply 792 818 844 873 903 934 965 996 1,032 1,069 






1,332 Finance costs 961 1,101 1,148 1,510 1,508 1,514 1,602 1,622 1,667 1,749 

301 Internal charges and overheads applied (199) (208) (230) (240) (195) (209) (211) (226) (235) (251) 






313 Development and financial contributions - - - 783 1,331 1,879 1,867 1,862 2,409 2,395 

583 Increase (decrease) in debt 2,332 776 659 134 235 (80) 277 739 1,270 1,083 



11,261 Total sources of capital funding (C) 12,237 8,317 9,760 11,018 12,038 12,551 13,849 16,720 18,786 18,722 



- to meet additional demand 732 1,139 1,053 1,379 1,313 1,145 1,802 1,264 2,054 2,257 

- to improve the level of service 6,195 3,510 3,369 3,010 3,109 2,553 3,658 6,642 7,887 7,817 


(970) Increase (decrease) in reserves 86 992 163 (87) 516 1,186 708 871 796 834 





82 


Annual Plan 

FAR NORTH DISTRICT COUNCIL SEWERAGE 

2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 

$’000s $’000s $’000s $’000s $’000s $’000s $’000s $’000s $’000s $’000s $’000s 


715 General rates, uniform annual general charges, rates penalties 762 776 790 804 818 833 848 821 831 843 


- Subsidies and grants for operating purposes - - - - - - - - - - 

677 Fees, charges, and targeted rates for water supply 231 334 268 219 261 273 395 317 259 309 


- Local authority fuel tax, fines, infringement fees, and other receipts - - - - - - - - - - 




2,722 Finance costs 1,711 2,101 2,584 3,507 3,683 3,764 3,998 3,895 3,770 3,658 

601 Internal charges and overheads applied 981 1,006 1,025 1,054 1,118 1,146 1,183 1,214 1,254 1,289 





2,930 Subsidies and grants for capital expenditure 5,757 4,301 879 908 940 483 - - - - 

922 Development and financial contributions - - - 665 781 794 787 801 916 909 

4,902 Increase (decrease) in debt 7,028 7,711 1,863 1,809 238 (1,335) (3,061) (3,085) (2,908) (2,983) 



8,753 Total sources of capital funding (C) 12,785 12,012 2,742 3,383 1,959 (59) (2,274) (2,285) (1,992) (2,074) 




- to improve the level of service 15,750 15,758 5,751 5,974 4,918 2,846 639 551 777 708 

- to replace existing assets 2,021 258 771 3,836 1,598 507 1,058 321 4,877 4,765 

1,036 Increase (decrease) in reserves (990) 444 1,425 (1,419) 908 2,576 2,328 3,309 (914) (538) 






83


Annual Plan 

FAR NORTH DISTRICT COUNCIL STORMWATER 

2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 

$’000s $’000s $’000s $’000s $’000s $’000s $’000s $’000s $’000s $’000s $’000s 



518 Targeted rates (other than a targeted rate for water supply) 517 520 524 527 531 535 538 542 547 551 


- Fees, charges, and targeted rates for water supply - - - - - - - - - - 

12 Internal charges and overheads recovered - - - - - - - - - - 




928 Payments to staff and suppliers 899 927 956 988 1,022 1,056 1,090 1,126 1,166 1,206 

626 Finance costs 339 356 371 555 563 570 611 627 641 659 

256 Internal charges and overheads applied 298 303 309 318 334 342 353 362 374 384 



917 Surplus (deficit) of operating funding (A - B) 1,107 1,159 1,200 1,106 1,160 1,215 1,271 1,326 1,393 1,463 




(242) Increase (decrease) in debt 286 251 240 235 225 214 270 319 374 427 



(60) Total sources of capital funding (C) 286 251 240 425 460 493 541 587 686 730 




- to improve the level of service 1,095 980 1,012 991 1,026 1,061 1,156 1,258 1,368 1,483 

- to replace existing assets 300 310 320 330 342 354 365 377 391 405 

7 Increase (decrease) in reserves (2) 120 109 210 252 294 290 278 320 305 


857 Total applications of capital funding (D) 1,393 1,410 1,440 1,531 1,619 1,708 1,812 1,913 2,079 2,193 

(917) Surplus (deficit) of capital funding (C - D) (1,107) (1,159) (1,200) (1,106) (1,160) (1,215) (1,271) (1,326) (1,393) (1,463) 


84 


Annual Plan 

FAR NORTH DISTRICT WASTE 

2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 

$’000s $’000s $’000s $’000s $’000s $’000s $’000s $’000s $’000s $’000s $’000s 





1,019 Fees, charges, and targeted rates for water supply 916 946 966 999 1,208 1,249 1,290 1,332 1,380 1,429 

- Internal charges and overheads recovered - - - - - - - - - - 





530 Finance costs 394 380 358 364 340 316 315 290 264 240 

307 Internal charges and overheads applied 491 503 513 528 558 573 591 607 627 644 



536 Surplus (deficit) of operating funding (A - B) 583 602 628 662 660 683 707 725 752 779 



1 Development and financial contributions - - - - - - - - - - 

(339) Increase (decrease) in debt (227) (367) (367) (367) (367) (367) (361) (361) (353) (353) 



(339) Total sources of capital funding (C) (227) (367) (367) (367) (367) (367) (361) (361) (353) (353) 




- to improve the level of service 215 36 43 55 28 29 30 25 26 27 

- to replace existing assets 217 245 225 176 156 717 55 431 135 156 

(42) Increase (decrease) in reserves (76) (46) (7) 64 109 (430) 261 (92) 239 243 


197 Total applications of capital funding (D) 356 235 261 295 293 316 346 364 399 427 

(536) Surplus (deficit) of capital funding (C - D) (583) (602) (628) (662) (660) (683) (707) (725) (752) (779) 



85


Annual Plan 

FAR NORTH DISTRICT WATER SUPPLY 

2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 

$’000s $’000s $’000s $’000s $’000s $’000s $’000s $’000s $’000s $’000s $’000s 


212 General rates, uniform annual general charges, rates penalties 206 212 218 225 232 239 246 253 261 269 




- Internal charges and overheads recovered - - - - - - - - - - 





1,341 Finance costs 903 937 948 1,243 1,231 1,211 1,274 1,302 1,350 1,410 

621 Internal charges and overheads applied 837 855 872 898 954 979 1,010 1,037 1,070 1,100 





590 Subsidies and grants for capital expenditure 413 184 - - - - - - - - 


131 Increase (decrease) in debt 597 137 (171) (235) (353) (263) 163 517 602 (724) 



906 Total sources of capital funding (C) 1,010 321 (171) 5 (101) (36) 386 744 842 (489) 




- to improve the level of service 1,808 1,290 807 781 770 1,042 1,649 2,252 2,244 558 

- to replace existing assets 1,985 2,408 1,877 1,235 1,805 1,219 448 295 1,352 1,606 

1,413 Increase (decrease) in reserves (32) (394) 312 1,093 599 1,205 1,900 1,972 1,219 1,527 





86 


Proposed Kaitaia BID Rating Area - area to be rated shown in red. 


87

Remission and Postponement Policies 

Introduction 

The LGA and Local Government (Rating) Act 2002 require that if a Council wishes to 

provide for the remission and/or postponement of rates, it must first introduce policies 

to provide for this, using the Special Consultative Procedure (SCP). 

The LGA also provides that councils must adopt a Policy for the Remission and 

Postponement of Rates on Māori Freehold Land. The eleventh Schedule to the LGA sets 

out a number of matters that Council must consider when adopting this Policy. 

This section of the plan sets out the Remission and Postponement Policies that the Far 

North District Council has adopted for the period of this plan. 

Background 

The LGA sets out a number of policies that Council can adopt, some of these are 

mandatory while others are optional. Included in these are: 

•• 

A Policy for the Remission and Postponement of Rates on Māori Freehold Land – this is 

a mandatory policy 

•• 

A Rates Remission Policy – this is an optional policy 

•• 

A Rates Postponement Policy – this is also an optional policy. 

The existing policies were first introduced in the 2004 Long-Term Council Community 

Plan. Since then, they have been reviewed a number of times however have remained 

largely unaltered. 

Significant changes 

Remission of rates 

Council proposed a number of changes to the policy in the draft plan. The outcome of 

these proposals are discussed below and where required the policy has been amended 

to reflect the change. 

Remission of Charges on Contiguous Properties (Policy 04/06) 

Council proposed to alter the basis of when and how it charges the UAGC and other 

charges, other than those for water, sewerage and stormwater, on contiguous lots owned 

by the same ratepayer. 

A number of submissions were received on this proposal which broadly apposed the 

change. For this reason, Council decided not to proceed with the amendment. 

Remission of School Sewerage Charges (Policy R04/07) 

Council reviewed the Policy which grants a remission on rates for school sewerage 

charges (Policy R04/07). Council does not believe that this policy is appropriate in a 

district where a significant portion of the children and staff attending schools come from 

the rural areas, and therefore make no contribution to the cost of the sewerage schemes. 

Council believes that the policy is inconsistent with the proposed new rating system 

outlined in this Long-Term Plan. In the draft plan Council discussed an amendment to this 

policy but because no educational establishments submitted on it, Council is concerned 

that the changes may have not been understood. For this reason Council is deferring the 

introduction of this change to allow for direct consultation with the education sector. 

Remission of Rates on Land Owned or Used by Charitable or Community Organisations 

(Policy R04/04) 

Council introduced a minor change of wording to clarify that “op-shops” or similar 

“commercial” undertakings owned by charitable and community organisations will not 

be eligible for remission. 

Postponement of Rates 

No significant changes have been introduced. 

88 


Remission and postponement of rates on Māori Freehold Land 

Council made the following changes: 

•• 

The definition of qualifying land has been altered to exclude certain categories of land. 

·· 

Vacant or unoccupied land which has a residential or commercial characteristic and 

which is located within townships and urban settlements will no longer qualify for 

a remission of rates. The reason for this proposed change is that Council does not 

consider it appropriate that land which is located in urban communities and that can 

easily be developed for residential or other purposes should qualify for a remission 

of rates. 

As an example, Council has previously granted rating relief on small residential lots located 

within urban communities. Council’s view is that this is unreasonable and does not 

meet the purposes for which the policy was introduced. 

·· 

Vacant or unoccupied land that has a particular amenity value that can be enjoyed by 

the owner/owners will no longer qualify for a remission of rates. The reason for this 

proposed change is that there have been a number of instances where the occupiers 

of Māori Freehold Land enjoy an amenity benefit on unoccupied land. 

As an example, Council has previously granted rating relief on Māori Freehold 

Land where the land provides an amenity benefit to the occupiers of the land or to the 

occupiers of the adjoining land. An amenity benefit includes such things as coastal views, 

access to the sea and or access to roading or other facilities. Council’s view is that where 

the land is providing an amenity benefit, it is being used, and therefore does not qualify 

for a remission of rates. 

•• 

Council agreed to repeal the policy “Rates Postponement to Assist Forestry 

Development on Māori Land (Policy ML04/04)”. The reason for this is that this policy 

has never been used and there are limited opportunities to obtain adequate security 

over Māori Freehold Land to secure the rating debt. 


89


Policy on the remission of rates (policy # R06) 

Background 

The Local Government (Rating) Act 2002 Section 85 sets out that a Council may remit 

rates, including penalties, only if it has adopted a remission policy under Section 109 of 

the LGA. 

The policy set out below has been prepared in accordance with LGA. It consists of a 

number of policy statements each of which deal with specific rate remission requirements. 

Definitions 

For the purposes of this policy the following definitions apply: 

Occupier – a person, persons, organisation or business entity that is using a rating unit 

under a formal agreement for a term of not less than 10 years. 

Ratepayer – under the Local Government (Rating) Act 2002, the ratepayer is either 

the owner of the rating unit or a lessee under a registered lease of not less than 10 

years, where the lease provides that the lessee is required to be entered into the Rating 

Information Database as the ratepayer. 

Policy statements 

Each set of policy statements deals with a different set of 

remission criteria. 

They have all been prepared in the following format. Firstly, 

a brief background will explain the reason for the policy. 

This will be followed by a description of the objectives to 

be met by the policy, then a statement of the conditions 

and criteria that will be used to determine applications in 

respect of each policy statement. 

Policy Statements have been developed to meet the 

following requirements: 

•• 

Remissions of Penalties (Policy R04/01) 

•• 

Remissions of Additional Penalties (Policy R04/02) 

•• 

Remission of Rates on Land Owned or Used 

by Charitable or Community Organisations 

(Policy R04/04) 

•• 

Remission of Charges on Properties only partly 

within District (Policy # R04/05) 

•• 

Remission of Charges on Contiguous 

Properties (Policy 04/06) 

•• 

Remission of School Sewerage Charges 

(Policy R04/07) Policy subject to review 

•• 

Remission of Excess Water Charges (Policy R04/08) 

•• 

Remission of Postponed Rates (Policy R04/09) 

•• 

Remission of Rates on Land that has made Lump 

Sum Contributions (Policy R04/10) 

•• 

Remission of Rates on Land Subject to Protection 

for Outstanding Landscape, Cultural, Historic or 

Ecological Purposes (Policy R04/11) 

•• 

Remission of Sewerage Charges on Schemes funded 

by Government Subsidy Schemes (Policy R06/12). 

Applications for remissions in excess of those 

provided for in the policies set out below 

Any application for a remission of rates in excess of that 

allowed under these policies must be made in writing 

to Council. It must set out in detail the reasons why 

the application is being made outside of the policies 

established under the Local Government (Rating) 

Act 2002. 

Council is under no obligation to approve any applications 

that do not comply with the established policies and 

Council’s decision on the matter is final. 

90 


Remissions of penalties (policy # R04/01) 

Background 

From time to time Council receives requests for remission of rates penalties on the grounds of financial hardship. Council recognises the economic hardship faced by some ratepayers 

and has therefore adopted criteria for considering requests for remission of rates penalties. 

Policy objectives 

To ensure the fair and equitable collection of rates from 

all sectors of the community, 

To provide the ability to remit penalties on rates where 

reasonable grounds exist. 

Conditions and criteria 

The penalties on rates may be remitted upon written 

application from the ratepayer subject to the following 

conditions: 

1. There is evidence of a previous good record of 

payment, including all instalments of rates in the 

past 2 years paid on time, a reasonable reason for 

remission has been supplied and an honest attempt 

has been made to have payment delivered on time; 

or 

2. The rating unit has a new owner who has been given 

insufficient notice of invoice due date; or 

3. If a request is made on compassionate grounds and 

the granting of a remission would extend Council’s 

“goodwill”; or 

4. The ratepayer has entered into a Rates Easy Pay 

agreement and has maintained the arrangement to 

clear their outstanding rates; and 1 

5. If there is no cost to Council i.e. where, as an action 

of Council’s revenue recovery process, the remission 

of penalty results in immediate full payment of 

arrears. 

Remissions of additional penalties (policy # R04/02) 

Background 

Council has resolved to make additional penalties of 10% on all rates arrears outstanding 

at the commencement of each new financial year and at 6 monthly intervals thereafter. 

These additional charges may act as a disincentive to ratepayers agreeing to make formal 

arrangements for payment of arrears particularly when they are on limited income and/ 

or facing business downturn. 

This policy statement provides that where a ratepayer enters into a Rates Easy Pay 1 

agreement to pay outstanding arrears over an agreed period of time, no additional 

penalties will be charged to the ratepayer subject to their keeping to the arrangement. 

1 

Clarifying that successfully completing a Rates Easy Pay arrangement will result in a remission of penalties 


91



The fair and equitable collection of rates from all sectors 

of the community. 

To improve the payment of rates by encouraging 

ratepayers to enter into formal agreements for the 

payment of rate arrears. 


The additional penalties on a rating unit may be remitted 

subject to the following conditions: 

1. The ratepayer/s must enter into a Rates Easy Pay 

agreement to pay the outstanding arrears on the 

rate account over a period to be negotiated with 

Council, but of not more than 2 years. 

2. The current rates must be paid not later than the 

penalty date of each instalment. 

3. In the event that the agreement is not maintained, 

Council reserves the right to levy future additional 

charges and reinstate any remitted penalties. 

Remission of rates on land owned or used by charitable or community organisations 

(policy # R04/04) 

Background 

From time to time, Council receives applications from charitable or community organisations 

which are seeking rating relief for land that they own or occupy. This policy 

statement addresses these remissions and refers to particular organisations or classes of 

organisations that operate for the community good 2 . 

Any remission of rates under this policy statement will not apply to rates for the supply 

of services such as water or sewerage, etc. 

It is of note that the Local Government (Rating) Act 2002 provides for a 100% non 

rateability of land owned or used by certain categories of charitable and community 

organisations. In addition, a 50% non-rateability is provided in respect of land owned 

or used by organisations for sports or any branch of the arts, except where these 

organisations operate a club licence under the Sale of Liquor Act. 

For more details on the rateability of this type of land refer to the Local Government 

(Rating) Act 2002, 1st schedule, Parts 1 and 2. 

2 

Simplified wording from previous policy 

92 



To provide a fair and equitable collection of rates from all 

sectors of the community. 

To recognise that there is a community benefit in 

providing assistance through rating relief to certain 

charitable and community organisations. 


Council may agree to remit up to 100% of the rates 

payable on land owned or used by charitable or 

community organisations subject to the following 

conditions: 

1. All applications must be made in writing and provide 

such financial and other information as Council may 

require from time to time. 

2. A 100% remission of rates will be granted on Māori 

Reserves created under the Te Ture Whenua Māori 

Act 1993 (Māori Land Act 1993). 

3. Land owned or used by the following organisations 

will receive a 50% remission of rates other than 

service charges: 

a. Royal NZ Plunket Society 

b. Youth Hostel Association of New Zealand, Inc. 

c. Order of St John 

d. New Zealand Scouts Association. 

4. From time to time Council may decided that the 

following land may receive a 50% remission of rates 

other than targeted rates for water, sewerage or 

other utilities and where appropriate such land will 

be assessed rates on the general differential: 

a. Land owned or used by such other society or 

association of persons, whether incorporated or 

not, whose object or principal object is to promote 

any purpose of recreation, health, education, or 

instruction for the benefit of residents or any 

group or groups of residents of the district 

b. Land that is owned or used by, or in trust of 

any society or association or persons, to run a 

camping ground for the purpose of recreation, 

health, education or instruction, for the benefit of 

residents of the district. 

5. Land owned or used by, or in trust for, any society 

or association of persons, whether incorporated or 

not, which is used principally to provide free family 

counselling, assessment and counselling for people 

with alcohol and drug related problems may receive 

up to a 100% remission of rates, other than targeted 

rates for water sewerage or other utilities and where 

appropriate such land will be assessed rates on the 

general differential. 

6. No remission will be given on any land in respect of 

which a licence under the Sale of Liquor Act is held. 

7. No remission will be given on any land where any 

member of the society, association, administering 

body, or governing body receiving any private 

pecuniary profit from any of the activities carried out 

on the land. 

8. Land that is used for an activity which is commercial 

in nature, for example an “op-shop” will not qualify for 

rating relief under this policy 3. 

3 

There have been a number of applications for rating relief from charitable and not-for-profit organisations for shops that they operate as fund raising ventures. Whilst Council may agree to grant 

rating relief on the administrative buildings and meeting rooms of these organisations, it does not believe that this should apply to their commercial operations. This is because it could potentially 

create an inequity when compared with the private sector. 


93


Remission of charges on properties only partly within District (policy # R04/05) 

Background 

There are a small number of rating units that are on the boundary between the 

Far North and Whangarei Districts that incur a Uniform Annual Charge from both 

Councils. 

The previous legislation provided that in these circumstances a pro-rata UAGC may be 

assessed in respect of the portion of the rating unit that falls within the Far North District. 

This provision is not repeated in the new legislation therefore this policy statement has 

been prepared to achieve a similar effect. 

For example, this policy provides that if a property is 75% within the Far North District 

and 25% in the Whangarei District, it will only bear 75% of the Far North Uniform 

Annual General Charge. 


The fair and equitable rating of all sectors of the 

community. 

To provide a fair method of assessing the charges on 

rating units that are partly within the boundaries of the 

Far North District. 


This policy will only apply to rating units that are situated 

across the boundaries of the Far North District and an 

adjoining district. 


Where any property is situated only partially within the 

district any Uniform Annual General Charge in respect 

of that rating unit, will be reduced to such proportion of 

the whole charge as the area of that part of the property 

which is situated within the Far North District bears to 

the total area of the property. 

94 


Remission of charges on contiguous properties (policy # R04/06) 

Note: Council sought submissions on a possible change to this policy provision. After considering these, Council decided not to introduce the change. 

Background 

This policy statement has been developed to provide for the remission of rates in situations 

where two or more uniform annual general charges, or other selected targeted rates, are 

assessed on contiguous, separately owned rating units which are being used jointly as a 

single property or business. In addition, the policy also provides for a limited remission 

of the UAGC and other targeted rates to the original developer of multi lot subdivisions, 

multi unit commercial developments or multi apartment residential complexes for the 

periods described below. 

The circumstances where an application for a remission of charges will be considered are: 

•• 

A residential dwelling and associated garden and ancillary buildings where the property 

occupies a maximum of two rating units and those 

•• 

rating units are used jointly as a single property 

•• 

A farm that consists of a number of separate rating units that are either contiguous or 

are located within a 2 kilometre radius 

•• 

A commercial, retail, or industrial business that operates from more than 1 rating unit 

where those rating units are contiguous and are used jointly as a single property 

•• 

A subdivision for the period that the individual lots continue to be in the ownership of 

the original developer. This provision has a maximum term of 3 years in respect of all 

charges plus a further term of 3 years in respect of charges excluding those that are set 

to fund utility services such as stormwater, wastewater and water supplies. 

•• 

A commercial development consisting of 2 or more separate rating units, for the 

period that the individual units remain vacant and continued to be in the ownership of 


charges, plus a further term of 3 years in respect of charges excluding those that are set 

to fund utility services such as stormwater, wastewater, and water supplies. 

•• 

A residential development consisting of 2 or more separate rating units, for the period 

that the individual units remain vacant and continued to be in the ownership of 


charges plus a further term of 3 years in respect of charges excluding those that are set 

to fund utility services such as stormwater, wastewater and water supplies. 


95



To enable Council to act fairly and equitably with 

respect to the imposition of the UAGC and applicable 

targeted rates on 2 or more separate rating units that 

are contiguous, separately owned and used jointly for a 

single residential or farming use. 

To deal equitably with the imposition of the UAGC and 

applicable targeted rates on 2 or more separate rating 

units that have resulted from a subdivision to facilitate 

the development of the district. 


Applications under this policy must be in writing, signed 

by the ratepayer and must comply with the conditions 

and criteria set out below. 

1. The rating units must be contiguous, or in the case 

of a farm, must be situated within a radius of 2 

kilometres from the primary property 5 . 

2. The rating units must: 

a) In the case of a residential property, be owned 

by the same ratepayer who uses the rating units 

jointly as a single residential property 

i) It should be noted that lifestyle properties do 

not comply with this policy 

ii) There must be some significant development 

that combines the properties in to 1. A vacant 

section adjoining a residential lot does not 

comply 

iii) The individual areas of the rating units 

concerned must not exceed the size of a 

typical residential lot. 

b) In the case of a farm, be owned by the same 

owner, or be leased for a term of not less than 

10 years, to the same ratepayer who uses the 

rating units jointly as a single farm. The owners of 

each of the individual rating units must confirm in 

writing that their unit/s is being jointly used as a 

single farming operation 

c) In the case of a subdivision, commercial or 

residential development, be owned by the original 

developer who is holding the individual rating 

units pending their sale or leasing to subsequent 

purchasers or lessees. 

i) It should be noted that this remission is 

limited for a term of 3 years for all charges 

and subsequently for a further 3 years in 

respect of all charges, other than those that 

are set for the funding of utility services such 

as stormwater, wastewater and water supplies 

ii) It should be further noted that the remission 

under this clause does not extend to subsequent 

purchasers 

iii) The term of this provision will be calculated 

from 1 July in the year that the rates were 

first remitted. 

3. Council may on written application from a ratepayer 

of such rating units remit any separate uniform 

annual general charge levied on the rating units if it 

considers it to be reasonable in the circumstances to 

do so. 

4. The applicant must provide sufficient evidence as 

is necessary to prove that the properties are being 

jointly used as a single property and Council’s 

decision on the matter is final. 

5. Council may also consider reducing or cancelling any 

targeted charge on such rating units if it considers it 

to be reasonable in the circumstances to do so. 

6. Council reserves the right to determine that any 

specific targeted charge will be excluded from this 

policy. 

5 

Clarification of the 2 km rule 

96 


Remission of school sewerage charges (policy R04/07) 

Policy to be modified 

In the draft plan Council proposed to alter the following policy and replace it with 

alternative wording as set out on the following page. Council received no submissions 

on the issue and was concerned that the education sector had not understood the 

implications of the proposal. For that reason Council has decided to defer the introduction 

of this change for a further twelve months to allow for direct consultation with the 

affected educational establishments. 

Current wording 

Background 

On 1 July 2002, an Act of Parliament established a new method of charging for sewage 

disposal for educational establishments. 

This Act, The Rating Powers (Special Provision for Certain Rates for Educational 

Establishments) Amendments Act 2001 was introduced to limit the level of charges 

that Local Authorities could set for sewage disposal for schools and other educational 

establishment. While the provisions of that Act were not included in the Local Government 

(Rating) Act 2002, provisions have been made for the Governor-General to introduce 

regulations to determine how councils set these charges. 

Section 26 of LGA sets out that the Minister of Education may carry out a review of the 

charging for sewerage and in particular the methods that councils have used to remit 

those rates. 

It is implicit in LGA that if councils do not develop remission policies for sewerage 

charging for educational establishments, regulations may be introduced to impose such 

policies. 

This policy statement deals with that issue. 


To provide relief and assistance to education establishments 

as defined in the Rating Powers (Special Provision 

for Certain Rates for Educational Establishments) 

Amendments Act 2001 in paying sewerage charges. 


1. The policy will apply to the following educational 

establishments: 

a) Established as a special school under section 

98(1) of the Education Act 1964: or 

b) Defined as – 

i) A state school under section 2 (1) of the 

Education Act 1989; or 

ii) An integrated school under section 2 (1) of 

the Private Schools Conditional Integrated Act 

1975; or 

iii) A special institution under section 92 (1) of 

the Education Act 1989; or 

iv) An early childhood centre under section 308 

(1) of the Education Act 1989, but excluding 

any early childhood centre operated for profit. 

2. The policy does not apply to schoolhouses occupied 

by a caretaker, principal or staff 

3. The sewage disposal rate in any one year may not 

exceed the amount calculated under clause 4 

4. The sewage disposal rate is the rate that – 

a) Would be levied using the same mechanisms as 

are applied to other separately rateable rating 

units within the district divided by the number 

of toilets as determined in accordance with 

condition 5 below (the full charge); and 


97


Conditions and criteria (continued) 

b) Reduced in accordance with the following graduated 

formula: 

i) The full charge for each of the first 4 toilets 

or part thereof: 

ii) 75% of the full charge for each of the next 6 

toilets or part thereof; 

iii) 50% of the full charge for each toilet after the 

first 10. 

5. For the purpose of clause 4 (a) above the number of 

toilets for separately rateable units occupied for the 

purposes of an educational establishment is 1 toilet 

for every 20 students and staff or part thereof. 

6. The number of students in an educational 

establishment is the number of students on its roll 

on 1 March in the year immediately before the year 

to which the charge relates. 

7. The number of staff in an educational establishment 

is the number of teaching staff and administration 

staff employed by that educational establishment on 

1 March immediately before the year to which the 

charge relates. 

The following wording sets out the revised version of this policy provision. Council will reconsider introducing this change after it has undertaken further consultation with the education 

sector. 

Background 

Council recognises that schools may be adversely affected by the current method of 

charging for sewerage. This is because there are a number of schools with large numbers 

of toilets but because of falling school rolls these are now surplus to their requirements. 

Council is also of the view that there is an increasing use of schools for after hours, 

weekend and holiday programmes. The effect of this is that schools are making an 

increasing use of the reticulated sewerage systems. Given that a significant number of the 

pupils and users of the schools come from outside the rating areas, there is a limited level 

of contribution to the cost of providing the service. 

To address these issues, Council is proposing to continue to use the nominal pan method 

(20 pans per student or staff member) that it previously used to assess the number of 

chargeable pans in a school, but it will no longer grant the discount. 

98 



To provide relief and assistance to education 

establishments as defined in the Rating Powers (Special 

Provision for Cer tain Rates for Educational Establishments) 

Amendments Act 2001 in paying sewerage charges. 


1. The policy will apply to the following educational 

esta blishments: 

a) Established as a special school under section 

98(1) of the Education Act 1964: or 

b) Defined as – 

i) A state school under section 2 (1) of the 

Education Act 1989; or 

ii) An integrated school under section 2 (1) of 

the Private Schools Conditional Integrated Act 

1975; or 

iii) A special institution under section 92 (1) of 

the Education Act 1989; or 

iv) An early childhood centre under section 308 

(1) of the Education Act 1989, but excluding 

any early childhood centre operated for profit. 

2. The policy does not apply to schoolhouses occupied 

by a caretaker, principal or staff 

3. For the purpose of determining the number of 

toilets for separately rateable units occupied for 

the purposes of an educational establishment, the 

following formulae will be used 

a) 1 toilet for every 20 students and staff or part 

thereof. The number of pans determined by this 

formula will be known as the “nominal” number 

of pans. 

4. The number of students in an educational 

establishment is the number of students on its roll 

on 1 March in the year immediately before the year 

to which the charge relates. 

5. The number of staff in an educational establishment 

is the number of teaching staff and administration 

staff employed by that educational establishment on 

1 March immediately before the year to which the 

charge relates. 

NOTE: No discount will be provided on any pan charges 

except where the nominal number of pans is less than 

the actual chargeable number of pans. In that instance, the 

educational establishment will be charged for sewerage 

on the nominal number of pans and the balance will be 

remitted. 


99


Remission of excess water charges (policy R04/08) 

Background 

From time to time water consumers experience a loss as a result of leaks or damage to 

their water supply system. It is the normal practice for the consumer to be responsible 

for the maintenance of the reticulation from the water meter to the property and to 

account for any consumption of water supplied through the meter. 

Council has taken the view that some consumers may experience an occasional water 

leak without them being aware of the problem. Therefore, they have decided that it 

would be reasonable to allow for a reduction in charges to these consumers in certain 

circumstances. 

This policy statement addresses that decision. 


To standardise procedures to assist ratepayers who have 

excessive water rates due to a fault (leak) in the internal 

reticulation serving their rating unit whilst at the same 

time ensuring that consumers retain responsibility for the 

maintenance of their private reticulation. 


1. The policy will apply to applications from ratepayers 

who have incurred excessive water rates due to a 

fault(s) in the internal reticulation. 

2. All applications must be made in writing and signed 

by the owner(s) of the property. 

3. The ratepayer must supply a report from a registered 

plumber that the property has experienced a water 

loss as a result of a leak. 

4. Proof of the repairs to the internal reticulation is 

submitted for verification (i.e. Plumber’s repair 

account). 

5. Meter readings will be taken after application has 

been received to ensure all leaks have been repaired. 

6. The ratepayer must not previously have had an 

application for a relief under this policy granted. 

7. The maximum relief that will be provided will be 50% 

of the difference between the normal consumption 

and the actual water consumption for that period. 

Note: The “normal consumption” will be calculated from 

the average consumption for the previous 3 meter readings 

for the property concerned. 

Remission of postponed rates (policy R04/09) 

Background 

Council has adopted a number of policy statements which grant a postponement of 

rates to ratepayers under certain circumstances. A number of these contain provisions 

which allow the postponed rates to be written off, or remitted after a predetermined 

period, subject to the terms and conditions of the policy being complied with. This policy 

statement provides the power for those postponements to be remitted in accordance 

with the postponement policies. 

100 



To remit postponed rates that have reached the 

predetermined age or term as provided for in the rates 

postponement policies. 


1. The conditions that gave rise to the postponement 

of the rates must have been fully complied with over 

the term of the postponement period. 

2. Subject to the conditions and criteria being complied 

with as set out in (1) above, Council will remit the 

applicable postponed rates without any further 

applications being required from the ratepayer. 

3. This policy statement will only apply to those rate 

postponement policy statements that provide for the 

rates to be remitted after a predetermined period of 

time. 

Remission of rates on land that has made lump sum contributions (policy R04/10) 

Background 

Prior to Local Government reorganisation in 1989, a number of sewerage schemes were 

established or enhanced using loans. In certain cases, the ratepayers were offered the 

opportunity to make a lump sum contribution rather than paying an annual loan rate. 

There are still a few schemes where these loans have not yet been fully extinguished; 

therefore any new rate that incorporates debt-servicing costs will include costs relating 

to these schemes. 

Because some ratepayers made the lump sum contributions, it would be inappropriate to 

charge them any costs relating to these loans. The most appropriate solution to resolving 

this problem would be to offer these ratepayers a remission of rates equal to the amount 

of the rate that they were previously exempt from paying. 

This policy statement provides the authority to make the necessary remissions. 


To fairly deal with those ratepayers that have previously 

made lump sum contributions in lieu of loan rates, who 

would otherwise become liable to the new sewerage 

rates. 


1. Rating unit must have previously paid a lump sum 

contribution in lieu of paying a loan rate. 

2. The amount of the remission must not exceed the 

amount of the exemption from paying the loan rate. 

3. The remission will only apply for so long as the 

underlying loan which gave rise to the loan rate 

remains in existence. 


101


Remission of rates on land subject to protection for outstanding landscape, cultural, historic or 

ecological purposes (policy # R04/11) 

Background 

The Far North District Council recognises that certain rateable land within the district, 

both general and Māori Freehold Land, is protected for outstanding landscape, cultural, 

heritage, or ecological purposes. 

In its District Plan, the Far North District Council states “Council will postpone or remit 

rates where an area is afforded permanent legal protection through a covenant or reserves 

status where Council’s Rates Remission Policy is met 6 , and “Where heritage resources are 

afforded permanent legal protection through means such as a covenant, an application may 

be made to Council for rates relief according to Council policy 7 ” 

Where the land is subject to permanent protection, Council will consider applications for 

a remission of rates on the land as set out below. 

Where the protection is for a finite period, but for a term of not less than 10 years, 

Council has introduced a policy to provide for a postponement of rates for the period 

that the protection is in place. 


To provide for the fair and equitable collection of rates 

from all sectors of the community. 

To recognise and/or reward the efforts of landowners 

who have preserved for future generations, lands that 

have particular outstanding landscape, cultural, historic or 

ecological values. 


The Far North District Council will consider remitting 

the rates on land that is subject to one of the protection 

mechanisms set out in the conditions below. 

This policy statement applies to land that is subject to 

permanent protection under an agreed mechanism and 

is not used. Where any part of the area that is protected 

is in use, that part will not receive any rate relief: 

•• 

Where the entire rating unit is the subject of the 

application, the remission of rates will apply to all 

rates levied on the property 

•• 

Where part of the rating unit is being used, the used 

and unused parts will be separately valued and 

assessed as separate parts pursuant to Section 45 (3) 

of the Local Government (Rating) Act 2002. In these 

instances, the remission of rates will only apply to the 

unused part and will apply only to the land value based 

rates 

•• 

It should be noted that these separate parts will not 

constitute separately used or inhabited parts for rating 

purposes and a full set of UAGC and other charges will 

be assessed against the part of the rating unit that is 

being used. 

Any remissions on the land will be cancelled immediately 

in the event that the land ceases to be protected under 

the agreement. 

6 

Clause 12.2.5.13 

7 

Clause 12.5.5.14 

102 



Council will consider remitting the rates on the land 

upon written application from the ratepayer, subject to 

the following conditions: 

1. No person must actually be using the land, or the 

part of land that is the subject of the application, as 

set out below: 

For the purposes of this Policy, the definition of 

person actually using land is taken from the Local 

Government (Rating) Act 2002. It means a person 

who, alone or with others: – 

1) Leases the land; or 

2) Does 1 or more of the following things on the 

land for profit or other benefit: 

a) Resides on the land 

b) Depastures or maintains livestock on the land 

c) Stores anything on the land 

d) Uses the land in any other way. 

Notes: Notwithstanding the above, work undertaken 

to preserve or enhance the features covenanted on the 

land, including weed control, will not impact the “unused” 

status of the land. 

The removal of traditional medicinal tree and plant 

material by Iwi for personal use will not constitute actual 

use of the land. 

2. The land must be subject to a formal protection 

agreement in perpetuity, as set out below and in a 

form acceptable to Council: 

a) An open space covenant under section 22 of the 

Queen Elizabeth the Second National Trust Act 

1977; or 

b) A conservation covenant under section 77 of the 

Reserves Act 1977; or 

c) A declaration of protected private land under 

section 76 of the Reserves Act 1977; or 

d) A management agreement for conservation 

purposes under section 38 of the Reserves Act 

1977; or 

e) A covenant for conservation purposes under 

section 27 of the Conservation Act 1987; or 

f) A management agreement for conservation 

purposes under section 29 of the Conservation 

Act 1987; or 

g) A Māori reservation for natural, historic, or cultural 

conservation purposes under sections 338 to 341 

of the Te Ture Whenua Mˉaori Act 1993 (Māori 

Land Act 1993). 

3. The part of the land for which remission of rates 

is sought must only be for that area protected by a 

legal covenant, and must have a nil or minimal value 

of improvements. 

4. The application must be supported by a written 

assessment of the outstanding landscape, historic, 

cultural or ecological values of the land prepared 

by a suitably qualified person or organisation, and a 

Management Plan detailing how the values are to be 

maintained, restored, and/or enhanced. 

5. Council, their duly authorised officers or agents, be 

authorised to enter and inspect the land from time 

to time to confirm compliance with the criteria or to 

request such information as is reasonably necessary 

to assess the application of the policy. 

6. Any remission under this policy will come in to effect 

on 1 July in the year following the approval of the 

application. 


103


Remission of sewerage charges on schemes funded by Government subsidy schemes 

(policy # R06/12) 

Background 

Council operates a rate remission policy to address a requirement of the government 

funded subsidy schemes. These subsidies have been provided to enable Council to 

establish reticulated sewerage schemes in communities where, because of inability of 

that community to afford the cost, the scheme would otherwise not be developed. 

It is a condition of these subsidies, that the ratepayers in those communities that are of 

greatest need receive a benefit from the subsidy in the form of reduced charges. This 

policy provides for a remission of rates to those communities that have a deprivation 

index of 7 or worse. 

The purpose of the remission is to recognise that the capital costs of the new scheme 

have been funded by the subsidy and therefore it reduces the sewerage charge to the 

level of the operational cost for the scheme. 

The remission has a limited term of 10 years from the date at which the scheme became 

operational. 


To assist with the establishment of reticulated sewerage 

schemes in communities of greatest need. 

To comply with the requirements of the Government 

Funded Sewerage Subsidy Scheme 


The Far North District Council will provide a remission to 

the sewerage charge in respect of the capital portion of 

that charge in respect of new sewerage schemes that are 

funded by the Government Sewerage Subsidy Scheme 

and where the deprivation index of that community is 

7 or less. 

104 



1. Where the policy applies, Council will automatically 

grant the remission to the rate accounts that qualify. 

2. The remission will only apply to the capital portion 

of each year’s rate and is only available to existing 

properties and to the owners of these at the time 

that the schemes become operational. 

3. The remission will only remain in place for a period 

of 10 years after which time no further remissions 

will be granted. 

4. Where any qualifying property is subdivided, any 

new rating units that are created over and above the 

original single existing rating unit will not be eligible 

for this remission. 

5. The remission will terminate at the earlier of the 

date of sale, disposal or transfer of the rating unit 

(other than to a member of the family as the result 

of a gift or bequest), or 10 years after the date at 

which the sewerage scheme became operational. 

Policy for the postponement of rates (policy # P04) 

Background 

The Local Government (Rating) Act 2002, Section 87, sets out that a Council must 

postpone rates, including penalties, if it has adopted a postponement policy under section 

110 of the LGA and Council is satisfied that the conditions and criteria set out in the 

policy, are met. 

The Local Government (Rating) Act 2002 provides that a postponement fee based on 

the cost of funds together with administrative costs can be charged to the ratepayer 

concerned. This fee becomes part of the rate and is added to the postponed rates. 

If a postponement fee is not charged, Council is required to show the cost of the 

postponement in their accounts as paid on behalf of the ratepayer. 

Council’s policy is that, unless otherwise proscribed by legislation, it will charge a 

postponement fee which will be added to the postponed rates. 

The policy set out below has been prepared in accordance with LGA. It consists of 

a number of policy statements, each of which deal with specific rate postponement 

requirements. 

Definitions 

For the purposes of this policy the following definitions apply: 

•• 

Occupier – a person, persons, organisation, or business entity that is using a rating unit 

under a lease, license or other formal agreement for a term of not less than 10 years. 

•• 

Ratepayer – under the Local Government (Rating) Act 2002, the ratepayer is either the 

owner of the rating unit or a lessee under a registered lease of not less than 10 years, 

and where the lease provides that the lessee is required to be entered into the Rating 

Information Database as the ratepayer. 


105


Definitions (continued) 

Landlocked – For the purposes of this Policy, the definition of landlocked land is that 

set out in the Property Law Act 1952: – “Landlocked” means land to which there is no 

reasonable access. Reasonable access includes access from the sea and practical access 

across adjoining land not owned by the owner of the land concerned. 

Person Actually Using Land – For the purposes of this Policy, the definition of person 

actually using land is taken from the Local Government (Rating) Act 2002. It means a 

person who, alone or with others: – 

1. Leases the land; or 

2. Does 1 or more of the following things on the land for profit or other benefit: 

a. Resides on the land 

b. Depastures or maintains livestock on the land 

c. Stores anything on the land 

d. Uses the land in any other way. 

Farmland Postponement Value – a value attributed to land by Council’s valuation service 

provider which is based on the value of land as farmland: 

1. So as to exclude any potential value that, at the date of valuation, the land may have 

for residential purposes, or for commercial, industrial, or other non-farming use; and 

2. So as to preserve uniformity and equitable relativity with comparable parcels of 

farmland, the valuations of which do not contain any such potential value. 


Each set of policy statements deals with a different set of 

postponement criteria. 

They have all been prepared in the following format. 

Firstly, a brief background will explain the reason for the 

policy. This is followed by a description of the objectives 

to be met by the policy, a statement of the grounds upon 

which the postponement will be terminated, and finally 

a statement of the conditions and criteria that will be 

used to determine applications in respect of each policy 

statement. Other matters may be included, where 

appropriate in particular policy statements. 

Policy Statements have been developed to meet the 

following requirements: 

•• 

Postponement of Rates on Land Subject to Protection 

for Outstanding landscape, Cultural, Historic, or 

Ecological Purposes, (Policy P04/01) 

•• 

Postponement of Rates on Unusable Land 

(Policy P04/02) 

•• 

Postponement of Rates on Landlocked General 

Title Land (Policy P04/03) 

•• 

Transitional Policy for the Postponement of 

Rates on Farmland (Policy P06/04) 

•• 

Postponement of Rates on Residential Land 

(Policy P04/05). 

106 


Conditions and criteria applicable to all postponement policy statements 

1. All applications must be made in writing and signed 

by the owner(s) or trustees of the land. 

2. The owner must agree to a statutory land charge 

being entered on the Certificate of Title. 

3. As provided for in the legislation, a postponement 

fee will be calculated added to the postponed rates. 

4. The basis of calculating the postponement fee is 

included in each year’s Funding Impact Statement 9 . 

In the event that a rating unit ceases to qualify for a 

postponement of rates but, in terms of the relevant policy 

statement is not required to repay any accumulated 

postponed rates held against the rating unit, the policy 

will continue to apply in respect of any fees and charges 

that continue to be applied pursuant to the policy. 

Note: For the sake of clarity, this provision has been 

included to ensure that the ratepayer is not required 

to commence paying any fees and charges that may be 

applied each year and provides that these can continue 

to be postponed until the later of either: 

- The total postponed rates are repayable by the 

ratepayer, or 

- The total postponed rates are remitted in accordance 

with the provisions of the policy. 

Postponement of rates on land subject to protection for outstanding landscape, cultural, 

historic or ecological purposes (policy # P04/01) 

Background 

The Far North District Council recognises that certain rateable land within the district, 

both general and Māori Freehold Land, is protected for outstanding landscape, cultural, 

historical or ecological purposes. 

In its District Plan, the Far North District Council states “Council will postpone or remit 

rates where an area is afforded permanent legal protection through a covenant or reserves status 

where Council’s Rates Remission Policy is met 10 and “Where heritage resources are afforded 

permanent legal protection through means such as a covenant, an application may be made to 

Council for rates relief according to Council policy”. 11 

Where the land is subject to permanent protection, Council will consider applications for 

a remission of rates on the land as set out in the Remissions Policy. 

Where the protection is for a finite period, but for a term of not less than 10 years, 

Council has introduced a policy to provide for a postponement of rates for the period 

that the protection is in place. 

This policy statement applies to land that is subject to a finite term of protection, but for 

a term of not less than 10 years. 

9 

To clarify how the postponement fee will be calculated 

10 

Clause 12.2.5.13 

11 

Clause 12.5.5.14 


107


This policy provides that Council will postpone rates, for a period of 10 years and then 

will remit those rates on land which complies with the criteria set out in this policy. 

This policy applies to land which is subject to protection under an agreed mechanism 

and is not used. Where any part of the area that is protected is in use, that part will not 

receive any rate relief. 

Where the entire rating unit is the subject of the application, the postponement of rates 

will apply to all rates assessed on the property. 

Where part of the rating unit is being used, the used and unused parts will be separately 

valued and assessed as separate parts pursuant to Section 45 (3) of the Local Government 

(Rating) Act 2002. In these instances, the postponement of rates will only apply to the 

unused part and will apply only to the land value based rates. 

It should be noted that these separate parts will not constitute separately used or 

inhabited parts for rating purposes and a full set of UAGC and other charges will be 

assessed against the part of the rating unit that is being used 

The rates postponement will cease to apply and the postponed rates will be repayable if the 

covenant conditions, and/or the Management Plan objectives are not upheld 12 . 


To provide for the fair and equitable collection of rates 

from all sectors of the community. 

To recognise and/or reward the efforts of landowners 

that have preserved for future generations, lands that 

have particular outstanding landscape, historical, ecological, 

or cultural values. 


The rates on the subject land will be postponed upon 

written application from the ratepayer, subject to the 

following conditions: 

1. No person must actually be using the land, or the 

part of land that is the subject of the application, as 

set out below. 

For the purposes of this Policy, the definition of 

person actually using land is taken from the Local 

Government (Rating) Act 2002. It means a person 

who, alone or with others: – 

a. Leases the land; or 

b.. Does 1 or more of the following things on the 

land for profit or other benefit: 

i Resides on the land 

ii. Depastures or maintains livestock on the land 

iii. Stores anything on the land 

iv. Uses the land in any other way. 

Notes: 

•• 

Notwithstanding the above, work undertaken to preserve 

or enhance the features covenanted on 

the land, including weed control, will not impact 

the “unused” status of the land 

•• 

The removal of traditional medicinal tree and plant 

material by tangata whenua for personal use will not 

constitute actual use of the land). 

2. The land must be subject to a formal protection 

agreement, as set out below and in a form acceptable 

to Council, for a finite period of not less than 10 

years: 

a. An open space covenant under section 22 of the 

Queen Elizabeth the Second National Trust Act 

1977; or 

b. A conservation covenant under section 77 of the 

Reserves Act 1977; or 

c. A declaration of protected private land under 

12 

Minor wording changes 

108 


section 76 of the Reserves Act 1977; or 

d. A management agreement for conservation 

purposes under section 38 of the Reserves Act 

1977; or 

e. A covenant for conservation purposes under 

section 27 of the Conservation Act 1987; or 

f. A management agreement for conservation 

purposes under section 29 of the Conservation 

Act 1987; or 

g. A Māori reservation for outstanding landscape, 

historic, cultural, or ecological purposes under 

[sections 338 to 341 of the Te Ture Whenua Māori 

Act 1993 (Māori Land Act 1993)] (this includes 

covenants registered with Nga Whenua Rahui). 

3. The part of the land for which postponement of 

rates is sought must only be that area protected by a 

legal covenant, and must have a nil or minimal value 

of improvements. 

4. The application must be supported by a written 

assessment of the outstanding landscape, historic, 

cultural or ecological value of the land, prepared 

by a suitably qualified person or organisation, and a 

Management Plan detailing how the values are to be 

maintained, restored and/or enhanced (Council may 

be able to assist with this process). 

5. That Council, their duly authorised officers or agents, 

be authorised to enter and inspect the land from 

time to time to confirm compliance with the criteria 

or to request such information as is reasonably 

necessary to assess the compliance with the policy. 

6. Any postponement under this policy will come in to 

effect on 1 July in the year following the approval of 

the application. 

Termination and repayment of postponed rates 

1. The repayment of postponed rates will not be 

required merely because of a change of ownership 

of the land provided that the land continues to 

comply with the criteria. 

2. Council will not seek repayment of postponed rates 

where future postponement is revoked due to 

Council changing its criteria for postponement. 

3. At the conclusion of the 10 year term, the rates for 

the first year of the covenant period will be remitted 

together with all charges for that year. In subsequent 

years, an additional year of the postponed rates will 

be remitted so that at any time there is a maximum 

of 10 years of postponed rates held against that rate 

account. 

4. If, at the conclusion of the 10 year term, the owner 

does not renew the covenant or other agreement 

for a further term, the postponement will cease to 

apply to the land in respect of future rates. Any 

rates that are postponed against the land at that 

time will not become payable unless the land ceases 

to comply with the criteria as set out in 5 below. 

5. If the land ceases to comply with the criteria set out 

in the covenant or other agreement, due to a change 

in use or action by the ratepayer(s), all postponed 

rates that have not been otherwise remitted, will 

become immediately due and payable. 


109


Postponement of rates on unusable land (policy # P04/02) 

Background 

From time to time, Council is approached by the owners of land that has become unusable either for a long period of time, or in perpetuity, as a result of a natural calamity such as 

erosion, inundation etc. 

These owners seek Council’s assistance by way of rating relief for the period that their land remains unusable as a result of the calamity. 


To provide rating relief to the owners of properties that 

have become unusable as a result of a natural calamity 

and where the loss of the property will result in financial 

hardship to the owner. 


All applications must be made in writing and signed by 

the owner(s) of the land. 

1. The application must set out in detail the grounds 

for the application. This must describe the nature of 

the natural calamity that has caused the land to be 

unusable and must give an estimate of the time that 

it is expected that the land will remain in that state. 

2. The application must outline the steps that the owner 

has taken or will take to return the land to a usable 

state, or if that is not possible, it must state why. 

3. The application must be supported by a report from 

a Registered Engineer or other similarly qualified 

expert setting out the reasons why the land has 

become unusable. 

4. The applicant will be required to sign an agreement 

that the rates will be immediately repayable if 

the land is made usable during the period of the 

postponement. 



6. The maximum term for the postponement of rates 

will be 5 years. At the end of that period, if the land 

remains unusable a new application will be required. 

7. If a second or subsequent application is approved, 

rates that have been postponed for a period of 5 

years will be remitted. 


fee will be added to the postponed rates. 




of the land, provided that the land continues to 


2. Any rates postponed and not remitted under this 

policy, will become payable as soon as the land 

becomes usable or at the end of the postponement 

period, unless renewed. 

110 


Postponement of rates on landlocked general title land policy (P04/03) 

Background 

From time to time, Council is approached by the owners of general title land that is 

landlocked by either general title or Māori title Freehold Land. 

This policy does not include any land that has access from the sea nor any land that has 

practical access across adjoining land. 

These ratepayers claim that they cannot gain access to their land and they are not in 

a position to remedy this through actions under section 129B of the Property Law 

Act 1952. 

This policy has been prepared to cover the exceptional circumstances and will only be 

applied after all other avenues for access have been explored by the owner. 


To enable Council to act fairly and equitably with respect 

to the rating of landlocked General Title Land, in the 

same manner as has been provided for Māori freehold 

title land. 


1. The application must be made in writing and signed 

by the owner(s) of the land. 

2. The land must be landlocked in the manner as 

defined above. 

3. The application must include a statutory declaration 

that the land is not being actually used by any person, 

see definition of “Person Actually Using Land” above 

and that there is no practical access across adjoining 

land. 

4. The owner must provide evidence that they have 

taken all steps to obtain access and must show why 

the provisions of section 129B of the Property Law 

Act is not available to them. 

5. The maximum term for the postponement of rates 

will be 5 years. At the end of that period, if the 

land remains landlocked a new application will be 

required. 

6. If a second or subsequent application is approved, 

rates that have been postponed for a period of five 

years will be remitted. 

7. The owner must agree to advise Council if the status 

of the land changes, if access is obtained, or if any 

person commences to use the land. 

8. The applicant will be required to sign an agreement 

that the rates will be immediately repayable if the 

land ceases to be landlocked during the period of 

the postponement. 




fee will be added to the postponed rates. 




of the land provided that the land continues to 


2. Any rates postponed and not remitted under this 

policy will be immediately repayable if the land 

ceases to be landlocked during the period of the 

postponement. 


111


Transitional policy for the postponement of rates on farmland (policy # P06/04) 

Background 

This transitional policy statement has been prepared to 

address the rating of farmland that previously received a 

rates-postponement value pursuant to Section 22 of the 

Rating Valuations Act. 

That section of LGA, which has now been repealed, 

provided for rates relief for the owners of farmland 

whose values were increased beyond that of other 

farmland in the district because of the potential use to 

which the land could be put for residential, commercial, 

industrial, or other non-farming development. 

A number of properties in the Far North received these 

farmland postponement values because their values 

were significantly enhanced because of their proximity 

to high valued urban or coastal areas. 

This transitional policy provides Council with the ability 

to continue to provide rating relief to certain properties 

that were receiving a postponement of rates prior to the 

introduction of the Local Government (Rating) Act 2002, 

and that qualified after that date under policy P04/04, 

which has now been repealed. 

This Transitional Policy is restricted to those farms which are 

owner operated, where the owner is a natural person and/ 

or is a company where the owners live on and operate the 

farm as a personal business. The policy specifically excludes 

those farms which are held as investment properties where 

the owners, corporate or otherwise, live either outside the 

district 13 . 

This policy is a transitional policy which will remain in 

force until council so decides or until the last affected 

property no longer qualifies, whichever is the sooner 

no further applications will be considered under this 

policy. 

Effect of rates postponement values: 

The postponed portion of the rates for any rating period 

shall be the amount equal to the difference between the 

amount of the rates for that period calculated according 

to the postponement value of the rating unit and the 

amount of the rates that would be payable for that 

period if the rates were calculated on the basis of its 

actual value. 

The amount of the rates for any rating period so 

postponed shall be entered in the rate records and will 

be included in or with the rates assessment issued by 

Council in respect of the rating unit. 

Any rates so postponed will, so long as the property 

continues to qualify for rates postponement, be remitted 

at the expiration of 10 years from the date at which the 

postponement was granted. 

Each year a postponement fee will be added to the 

outstanding balance and will become part of the rates 

postponed on the rating unit pursuant to Section 88(3) 

of the Local Government (Rating) Act 2002. 

13 

This amendment to the policy is to clarify that the provision only applies to those farms where the farmer lives on the property and manages it as their main source of revenue. It is not designed 

apply to properties that are held as investments by owners who live outside the district. 

112 



To afford rating relief to farmers who had previously been 

receiving this form of rating relief under the provisions 

of repealed legislation and/or previous versions of this 

policy, where Council believes that it is in the interest 

of the district to maintain a postponement of rates to 

reduce the incidence of coastal development. 

Conditions and criteria: 

1. This policy provision only applies to those rating units 

which previously qualified for a postponement of rates 

under policy P04/04, which was repealed on 30 June 

2006, and which continues to be owned by the same 

ratepayer/s who owned it at that date 14 . 

2. Council will not accept any new applications under 

this policy. 

3. For the purposes of this transitional policy, the 

definition of qualifying farmland has been revised as 

follows: 

a) Farmland means land which is used principally 

or exclusively for agricultural, horticultural, or 

pastoral purposes but excludes land that is used 

for forestry, life style, or farm park type purposes 

b) The farming operation must provide the principal 

source of revenue for the owner of the land, who 

must be the actual operator of the farm and who 

must reside on the land 15 . 

c) The area of the land that is the subject of the 

application must be not less than 50 hectares 

4. The properties that are the subject of this policy 

will be identified and the rates postponement values 

determined by Council’s Valuation Service Provider 

and will: 

• exclude any potential value, at the date 

of valuation, that the land may have for 

residential use or for commercial, industrial, 

or other non-farming use; and will 

• preserve uniformity and equitable relativity 

with comparable parcels of farmland, the 

valuations of which do not contain any such 

potential value. 

5. No objection to the amount of any rates 

postponement value determined under this policy 

will be accepted by Council (other than where the 

objector proves that the rates postponement value 

does not preserve uniformity with existing roll values 

of comparable parcels of land having no potential 

value for residential use, or for commercial, industrial, 

or other non-farming use). 

6. The Postponement Value will be reviewed after each 

triennial revaluation and the revised value will be 

advised to the ratepayer. At that time Council will 

seek the advice of its valuation service provider as to 

whether they believe that the land continues to be 

actively farmed and qualifies under the terms of this 

policy provision. Council reserves the right to ask the 

owner to provide evidence showing that the land 

continues to operate as a farm 16 . 


being entered on the Certificate of Title of the 

farmland before receiving a postponement of rates. 


All rates that have been postponed under this policy 

and have not been remitted become due and payable 

immediately on: 

1. The land ceasing to be farmland; 

2. The interest of the owner is passed over to, or 

becomes vested in, some person or other party 

other than; 

a) the owner’s spouse, son or daughter; or 

b) the executor or administrator of the owner’s estate. 

14 

See footnote 12 above 

15 

See footnote 12 above 

16 

To clarify that Council will review the use of the land as part of every triennial revaluation 


113



3. Where only part of the land is disposed of then only 

part of the postponed rates will become immediately 

repayable. The amount repayable will be calculated 

in accordance with the following formula: 

A x C 

B 

Where: 

A – is the difference between the rateable value and 

rates special value of the balance of the land 

re tained by the person who was the occupier 

on the date on which the rates postponement 

value was entered on the valuation roll; and 

B – is the difference between the rateable value 

and the special value of the whole of the land 

immediately before the date of the vesting of 

that interest in that other person. That special 

value shall be specially re-determined if, because 

of a general revaluation of the district in which 

the land is situated, the special value appearing 

on the valuation roll is no longer directly related 

to the rateable value on the date of the vesting; 

and 

C – is the total amount of the rates postponed 

immediately before the date of vesting. In all 

cases the amount of the rates to be repaid will 

be not less than 20% of the value of the total 

amount of rates currently postponed. 

4. Subject to the land continuing to qualify for the 

special postponement value, any rates postponed 

under this policy will be remitted at the expiration of 

10 years from the date on which they were assessed. 

Postponement of rates on residential land (policy # P04/05) 

Background 

Council operates a policy provision for the postponement 

of rates on residential land. This policy has been designed 

to assist the elderly remain in their homes by allowing 

them to postpone or defer their rates and for these 

to be paid at their death from the settlement of their 

estate. In general, this policy is aimed at those ratepayers 

who are over 65. However, Council will also consider 

applications from people who are younger than 65, but 

17 

Minor wording changes 

in those instances there is a limit of 15 years, after which 

time the postponements must be repaid 17 . 

In adopting this policy, Council considered: 

•• 

The objectives (target group/purpose) 

•• 


•• 

Duration 

•• 

Repayment. 

Objectives - target group/purpose 

Generally, rates bear down most heavily on those 

ratepayers who are in the low income bracket and who 

also have the least scope to increase their income. The 

most obvious group is the so-called “asset rich/income 

poor” elderly, who may own a debt free home but have 

difficulty meeting fixed outgoings, especially rates – 

approximately 65% of older people are mainly dependent 

on New Zealand superannuation with little or no other 

income. The next most obvious group is those ratepayers 

who are beneficiaries or otherwise on low incomes. 

114 


For both these groups, rates, especially when they are 

increasing to meet the cost of investing in areas such as 

infrastructure renewal or upgrade, may impose a very 

heavy burden on their disposable income. People in these 

groups may be significantly better off in terms of quality 

of life if they can indefinitely postpone the obligation to 

pay (until they sell the property or die), or for younger 

ratepayers for a period whilst they are coping with heavy 

costs – perhaps establishing a business, or as a single 

parent, bringing up children. For a council, postponement 

can provide a means of relieving cash flow pressure on 

those groups with consequent benefits including, for 

councils, reducing a source of community resistance to 

significant rates-based infrastructure funding. 

The main issue for a council adopting an indefinite 

postponement policy is the risk that, when the 

postponement period ends, accrued rates and charges 

will exceed the value of the property. As a general 

statement, the older a ratepayer is at the beginning of 

the postponement period, the lower the risk. 

Both the nature of the problem and the requirements 

for managing risk suggest a two-part policy. People aged 

65 years and over are the largest group under pressure 

from the obligation to pay rates from limited income. 

They are also lower risk than younger ratepayers as their 

life expectancy is shorter. The policy objective could be 

defined as giving ratepayers a choice between paying rates 

now or later subject to the full cost of postponement being 

met by the ratepayer and Council being satisfied that the 

risk of loss in any case is minimal. 

For cases where one or more owners (including people 

occupying a family trust owned property) is aged 65 or 

older, postponement would be available until either sale 

or the death of whoever was named in the application as 

occupier(s). The intention is that postponement should 

be available until the sale of the property or the death 

of the individual or survivor of the couple named in the 

application as the occupier(s). 

For cases where all the owners are younger than 65 

years at the time of application, any postponement 

would be available for a maximum of 15 years. In these 

circumstances, the intention is to provide a temporary 

benefit on the grounds of particular hardship. To qualify, 

the applicant must acknowledge that, at the end of the 

postponed period, repayment in full will be required and 

that the applicant must accept a responsibility to do, at 

that time, whatever is required to make full repayment 

and resume paying normal rates. 

In each case, the impact of postponement will be tested 

by Council as part of its confirmation of eligibility. This 

will be done by running the details of the property 

concerned through an actuarial model designed to 

calculate the total rates and accrued charges outstanding 

at the end of the postponement period and the expected 

value of the property, in each case using assumptions 

(inflation, interest rates, rates, life expectancy) developed 

by the actuary. If it appears that the total of accrued 

rates and charges could exceed 80% of the expected 

value of the property, Council will offer partial rather 

than full postponement; set at a level that will keep the 

forecast final total within the 80% limit. 

The next question is whether (or to what extent) 

people whose property is subject to a mortgage should 

be eligible. Technically, this need not concern a Council 

as postponed rates have priority over mortgages. In 

practice, it would not be sensible for a Council to treat 

the interest of mortgagees in a cavalier manner. It is 

proposed to deal with these by advising applicants that 

they should seek their mortgagee’s approval before 

proceeding with an application. 

Māori Freehold Land 

At present, the law does not allow councils to register 

a charge on Māori Freehold Land. Accordingly, Māori 

Freehold Land is not eligible for the postponement of 

rates under this policy statement, unless and until the law 

is changed so that councils can register a statutory land 

charge and can enforce such a charge. 


115



To give ratepayers a choice between paying rates now or 

later, subject to the full cost of postponement being met 

by the ratepayer, and Council being satisfied that the risk 

of loss in any case is minimal. 


1. Any ratepayer is eligible for postponement provided 

that the rating unit is used by the ratepayer for 

personal residential purposes (whether as a principal 

residence or as a holiday home). This includes, in 

the case of a family trust owned property, use by 

a named individual or couple. People occupying 

a unit in a retirement village under an occupation 

licence will be able to apply for postponement of the 

rates payable by the retirement village on their unit 

with the agreement of the owner of the retirement 

village. 

2. If a property is in a known hazard zone, Council has 

the right to decline to offer rates postponement to 

the property. 

3. Council must be satisfied, on reasonable assumptions, 

that the risk of any shortfall when postponed rates 

and accrued charges are ultimately paid is negligible. 

To determine this, an actuary has been engaged to 

develop a model that will forecast, on a case by case 

basis, expected equity, when repayment falls due. If 

that is likely to be less than 20%, Council will offer 

partial postponement, set at a level expected to 

result in final equity of not less than 20%. 

4. The property must be insured at the time the 

application is granted and must be kept insured and 

evidence of this produced annually. 

5. To assist ratepayers who are currently uninsured, 

Council is arranging for the development of a group 

insurance policy to provide all risks cover, with an 

excess of $10,000. This will achieve cover against 

catastrophic loss at minimum cost. The premium will 

be treated as part of the postponement fee and thus 

come within the postponement arrangements. Once 

the policy is available, all ratepayers whose rates are 

postponed under this policy will be required either 

to have their own insurance, and produce evidence 

of that to Council on an annual basis, or to have their 

properties insured under the group insurance policy. 

6. Any postponed rates (under this policy) will be 

postponed until: 

a) The death of the ratepayer(s) or named individual 

or couple, (in this case Council will allow up to 

12 months for payment so that there is ample 

time available to settle the estate or, in the case of 

a trust owned property, make arrangements for 

repayment); or 

b) Until the ratepayer(s) or named individual or 

couple ceases to be the owner or occupier of 

the rating unit (if the ratepayer sells the property 

in order to purchase another within Council’s 

district, Council will consider transferring the 

outstanding balance, or as much as is needed, to 

facilitate the purchase, provided it is satisfied that 

there is adequate security in the new property for 

eventual repayment); or 

c) In the case of ratepayers under the age of 65 at 

the time of application, until a date specified by 

Council. 

7. Council will charge an annual fee on postponed rates 

for the period between the due date and the date 

they are paid. This fee is designed to cover Council’s 

administrative and financial costs and may vary from 

year to year. 

8. The financial cost will be the interest Council will 

incur at the rate of Council’s cost of borrowing for 

funding rates postponed, plus a margin to cover 

other costs (these will include Council’s own inhouse 

costs, a 1% p.a. levy on outstanding balances 

to cover external management and promotion costs, 

a reserve fund levy of 0.25% p.a., and a contribution 

to cover the cost of independent advice). 

The purpose of the reserve fund levy is to protect 

Council and the applicants against the possibility 

that, in some instances, the proceeds of the sale of 

a property may not be sufficient to repay accrued 

116 


ates and charges. Neither the applicants, nor the 

estate will be required to repay any part of a shortfall; 

instead this will be paid from the reserve fund. 

9. To protect Council against any suggestion of 

undue influence, applicants will be asked to obtain 

advice from an appropriately qualified and trained 

independent person. A certificate confirming this 

will be required before postponement is granted. 

10. The postponed rates or any part thereof may be 

paid at any time. The applicant may elect to postpone 

the payment of a lesser sum than that which they 

would be entitled to have postponed pursuant to 

this policy. 

11. Postponed rates will be registered as a statutory 

land charge on the rating unit title. This means that 

Council will have first call on the proceeds of any 

revenue from the sale or lease of the rating unit. 


The policy is in place indefinitely and can be reviewed 

subject to the requirements of the LGA at any time. Any 

resulting modifications will not change the entitlement of 

people already in the scheme to continued postponement 

of all future rates. 

Council reserves the right not to postpone any further 

rates once the total of postponed rates and accrued 

charges exceeds 80% of the rateable value of the 

property as recorded in Council’s rating information 

database. This will require the ratepayer(s) for that 

property to pay all future rates but will not require any 

payment in respect of rates postponed up to that time. 

These will remain due for payment on death or sale. 

The policy consciously acknowledges that future changes 

in policy could include withdrawal of the postponement 

option. 

Remission and postponement of rates on Māori Freehold Land (policy # ML04) 

Background 

Sections 108 and 109 of the LGA require that all councils introduce policies for the 

remission and postponement of rates on Māori Freehold Land. 

In compliance with LGA and in recognition that the nature of Māori land is different to 

General Land the Far North District Council has formulated a policy “The Remission and 

Postponement of Rates on Māori Freehold Land” to deal with these issues. 

Definitions 

Māori Freehold Land – as set out in Te Ture Whenua Act/ Māori Land Act 1993 Part VI 

section 129(2)(a) means “Land, the beneficial ownership of which has been determined 

by the Māori Land Court by freehold order, shall have the status of Māori Freehold Land”. 


117


Policy goals 

To introduce policies which promote the collection of rates from Māori Freehold Land 

in order that a fair and equitable collection of rates from all sectors of the community 

can be achieved. 

To recognise that certain unoccupied Māori Freehold Land may have particular conditions, 

ownership structures, or other circumstances which make it appropriate to remit or 

postpone rates for defined periods of time. 

To comply with the provisions of the 11th Schedule of the LGA 18 . 

Principles 

The principles used in establishing this policy are: 

•• 

That as defined in Section 91 of the Local Government (Rating) 2002 Act Māori Freehold 

Land is liable for rates in the same manner as if it were general land 

•• 

That pursuant to Sections 108 and 109, Council is required to adopt a policy for the 

remission and postponement of rates on Māori Freehold Land 

•• 

That Council and the community benefit through the improved collection of rates that 

are collectable and the removal from the rating debt of that debt which is considered 

non collectable 

•• 

That applications for remission and/or postponement of rates meet the criteria set by 

Council or LGA 

•• 

That the policy does not provide for the permanent remission or postponement of 

rates on the lands concerned 

•• 

That Council’s GST liability in respect of rate arrears is minimised 

•• 

That all land that receives the benefit of this policy be included in a Register, the “Māori 

Land Rates Relief Register” (The Register) and the total amount of the remissions and/ 

or postponements will be separately disclosed in each year’s Annual Plan and Annual 

Report. 

In preparing this policy, Council has taken account of the provisions of the 11th Schedule 

of the LGA, which states: 

1 The matters that the local authority must consider under Section 108(4) are— 

a) the desirability and importance within the district of each of the objectives in 

clause 2; and 

b) whether, and to what extent, the attainment of any of those objectives could be 

prejudicially affected if there is no remission of rates or postponement of the 

requirement to pay rates on Māori Freehold Land; and 

c) whether, and to what extent, the attainment of those objectives is likely to be 

facilitated by the remission of rates or postponement of the requirement to pay 

rates on Māori Freehold Land; and 

d) the extent to which different criteria and conditions rates relief may contribute to 

different objectives. 

2 The objectives referred to in clause 1 are: 

a) supporting the use of the land by the owners for traditional purposes 

b) recognising and supporting the relationship of Māori and their culture and 

traditions with their ancestral lands 

c) avoiding further alienation of Māori Freehold Land 

d) facilitating any wish of the owners to develop the land for economic use 

e) recognising and taking account of the presence of waahi tapu that may affect the 

use of the land for other purpose: 

f) recognising and taking account of the importance of the land in providing economic 

and infrastructure support for marae and associated papakainga housing (whether 

on the land or elsewhere) 

18 

Recording that Council considered the requirements of the LGA when developing these policies. 

118 


g) recognising and taking account of the importance of the land for community goals 

relating to: 

i) the preservation of the natural character of the coastal environment: 

ii) the protection of outstanding natural features: 

iii) the protection of significant indigenous vegetation and significant habitats 

of indigenous fauna. 

h) recognising the level of community services provided to the land and its occupiers 

i) recognising matters related to the physical accessibility of the land 19 . 


Policy Statements have been developed to meet the following requirements: 

•• 

Remission of Rates on Unoccupied Māori Freehold Land (Policy ML04/01) 

•• 

Remission of Rates on Māori Freehold Land Used For the Purposes of Papakainga or 

Other Housing Purposes Subject to Occupation Licenses or Other Informal Arrangements 

(Policy ML04/2) 

•• 

Postponement of Rates on Māori Freehold Land (Policy ML04/03) 

•• 

Rates Postponement to Assist Forestry Development on Māori Land (Policy ML04/04) 

– to be repealed 

General conditions 

•• 

Burden of proof of eligibility is on the owner/s of the property and as confirmed against 

relevant information held in Council records 

•• 

Where land is in multiple ownership, a signed statement authorising an individual to act 

for 1 or more owners must be enclosed 

•• 

Properties will remain on the Register for a maximum term of 3 years after which time 

the owners will be required to make a fresh application for consideration by Council 

•• 

In the event of the land or any portion of the land being sold within that 3 year period, 

a claw back provision applies to enable Council to recover the rates remitted for the 

applicable period. This claw back may, at Councils sole discretion, relate to the whole 

property or only to that portion of the land that has been sold 

•• 

Council or duly designated officers are given approval to undertake periodic inspection 

of land to confirm unoccupied status 

•• 

Council reserves the right to seek further information, e.g. Memorial Schedule of 

Owners, if Council deems it necessary. 

Remission of rates on unoccupied Māori Freehold Land (policy ML04/01) 

Background 

The Far North District contains large tracts of Māori Freehold Land which are unoccupied 

and unimproved. This land creates a significant rating burden on the Māori owners who 

often do not have the means nor, in some cases, the desire to make economic use of the 

land. Often this is due to the nature of the ownership or, because the land has some 

special significance which would make it undesirable to develop or reside on, is isolated 

and marginal in quality. 

19 

Refer LGA Schedule 11: previously not referred to LGA 


119



To recognise and take account of the presence of wahi 

tapu sites of cultural significance or other cultural values 

that may affect the use of the land for other purposes, 

To avoid further alienation of Māori Freehold Land as a 

result of pressures that may be brought by the imposition 

of rates on unoccupied lands, 

To recognise matters related to the physical accessibility 

of the land, 

To recognise land that the owners have set aside for 

non-use because of recognised natural features, 

To recognise situations where there is no person using 

or gaining an economic or financial benefit from the land, 

To provide the ability to grant remission for the portions 

of land not occupied, 

In general, reasons for placement on the Register and 

receiving a remission of rates, would include some or all 

of the following: - 

•• 

Unoccupied and Unimproved – The land is unoccupied 

and has no, or minimal improvements 

•• 

The Land is Land Locked – much Māori Land is land 

locked, i.e. does not have legal access to Council or 

National Roading Network. 

•• 

Fragmented Ownership – Ownerships vary in number 

and individual share proportions. Owners are 

scattered throughout the country and even worldwide. 

Attempts to contact a majority representation are 

often painstaking and difficult. 

•• 

The land has Particular Conservation Value – 

Because of their remoteness and inaccessibility, much 

Māori Land has a high conservation value, which 

Council or the community may wish to preserve. 

•• 

Unsecured Legal Title - Many land titles have not been 

surveyed. Therefore, they cannot be registered with 

the District Land Registrar. Owners seeking finance for 

development of their land are restricted, as mortgages 

cannot be registered against the title. 

•• 

Isolation and Marginal in Quality – The lands are 

geographically isolated and are of marginal quality. 

•• 

No Management Structures – Lands have no management 

or operating structures in place to administer 

matters. 

•• 

Rating Problems – Because of the above factors, 

there is a history of rate arrears and/or a difficulty in 

establishing who is/should be responsible for the 

payment of rates. 


The Far North District Council may, upon receipt of an 

application in writing from the owners, or authorised 

agents of the owners, or Council itself acting for the 

owners of multiply owned Māori land, agree to remit 

the rates on such unoccupied land for a period not 

exceeding 3 years subject to that land complying with 

the criteria set out below. 

1. The land must be Māori Freehold Land (as defined in 

Te Ture Whenua Act 1993 Part VI section 129 as set 

out above). 

2. It must have particular historical, ancestral, or cultural 

significance which marks the land as requiring special 

treatment for rating purposes. 

3. In general it will be remote and have limited access. 

4. It must not be used by any person – for the purposes 

of this policy land will be defined as “used” if any 

person, alone or with others carries out any of the 

following activities on the land as set out in section 

96 of the Local Government (Rating) Act 2002 - 

a. leases the land; or does one or more of the 

following things on the land for profit or other 

benefit: 

b. resides on the land 

c. depastures or maintains livestock on the land 

d. stores anything on the land 

e. uses of the land in any other way 

120 


5. In addition, the land must not provide an amenity 

value to any resident of the land or the owners of 

any adjacent land. An amenity value means that the 

land provides an indirect benefit to the owners or to 

some other person. For example if the land provides 

access to the coast, or to a right of way, or to Council 

road, then Council may regard the land as providing an 

indirect benefit 20 . 

6. If the land is maintained in its unimproved state to 

provide or improve the views of the residents of 

the land or to add to their enjoyment of the land or 

adjacent land, then Council may regard the land as 

providing an indirect benefit 21 . 

7. Under no circumstances will this policy apply to 

any land that is has a residential or commercial 

characteristic and that is located within an urban 

township or settlement 22 . 

8. It must not be subject to an Occupation Order issued 

by the Māori Land Court 23 . 

9. Council will have the sole judgement on whether 

or not to grant the application and may seek such 

additional information as they may require before 

making their final decision. 

10. If the status of the land changes, so that it no longer 

complies with the criteria, Council will immediately 

remove the land from The Register. 

11. Council expects that any rating relief will be 

temporary; each application will be limited to a term 

of 3 years. However, Council may consider renewing 

the rate relief upon the receipt of further applications 

from the owners. The owners shall endeavour to 

bring the land back into the rating base as soon as 

practicable. 

12. In the event that subsequent applications for rating 

relief are made by only one or a minority of owners, 

Council may require that these are signed or 

supported by such greater proportion of owners as 

may be required from time to time. (The purpose 

of this requirement is to ensure that all the owners 

of the land are aware that Council is providing rate 

relief and to encourage economic use of the land). 

20 

Council has decided that where land has an amenity value it should not qualify for any rating relief except in extraordinary circumstances. 

21 

There have been occurrences in the past where the owners of Māori Freehold Land deliberately do not use areas of land so as to preserve views to the coast. Council does not believe that this 

land should qualify for any rating relief except in extraordinary circumstances. 

22 

There have been a number of instances rating relief has been granted on small parcels of land located within urban communities. Council’s view is that the primary purpose of this policy is 

to address rates on more remote parcels of land, and it does not believe that it is equitable to grant rating relief where the land is located with urban areas, except in extraordinary circumstances. 

23 

An occupation order grants exclusive use and occupation of the whole or any part of an area of land as a site for a house to a person or a group of persons. On that basis, the land may be 

considered “used” and therefore cannot qualify under this policy, 


121


Remission of rates on Māori Freehold Land used for the purposes of Papakainga or 

other housing purposes subject to occupation licenses or other informal arrangements 

(policy #ML04/2) 

Background 

The Far North District Council recognises that occupation licenses, or other informal 

arrangements, only provide an interim or temporary right to occupy part or all of an area 

of Māori Freehold Land. This right is only available to the licensee, or informal occupier 

and does not create an interest that can be transferred or bequeathed as part of an 

estate. 

This form of occupation is different to an occupation order, which provides a permanent 

right to occupy an area of land, and can be passed on to future generations. 

Occupation licenses are generally used to define a specific area of Māori Freehold Land 

that the licensee can occupy for the purposes establishing a dwelling. At the termination 

of the license, the dwelling has to be removed or transferred to the owners of the land. 

Informal arrangements are where a person occupies an area of Māori Freehold Land 

for a period of time; however, has no formal agreement and no rights to permanent 

occupation. 

There is a willingness of occupiers of land that is the subject of these types of arrangements 

to pay rates in respect of the area of land that they occupy. However, there is a concern 

that these “parts” may become liable for the UAGC and other non-service related 

charges assessed on the basis of a separately used or inhabited part of a rating unit. 

This policy statement has been prepared to address these issues. It recognises that 

papakainga and similar housing on Māori Freehold Land are generally occupied by 

members of owners families and no rentals are payable. 

The policy is consistent in effect to the treatment of multiple housing on general title land, 

where the separate parts are occupied on a rent-free basis by members of the owner’s 

family. 

To assist the occupiers pay the rates of the parts of a rating unit that are the subject of 

occupation licenses, Council will issue a separate rate assessment for each part as set out 

in Section 45 (3) and (4) of the Local Government (Rating) Act 2002. 

The occupier of land that is the subject of an occupation license or informal agreement 

is generally not required to pay any rental to the owners of the land, i.e. it is not a 

commercial arrangement. 

122 



To put in place processes to allow the residents of 

occupation licenses or other informal arrangements to 

pay their portion of the rates in respect of the land that 

they occupy, thus reducing the overall rate debt on Māori 

Freehold Land. 

To assist Māori to establish papakainga or other housing 

on Māori Freehold Land. 

To assist Māori to establish a economic base for future 

development. 


The Far North District Council recognises that the 

imposition of multiple UAGCs or other non-service 

related charges might act as a disincentive to Māori seeking 

to occupy Māori Freehold Land for housing purposes. 

Council will consider applications for the remission of 

multiple UAGCs and other charges, with the exception 

of those that are set for the provision of utilities such 

as water, sewerage etc., in respect of separately used 

or inhabited parts of a rating unit where these are 

the covered by occupation licenses, or other informal 

arrangements subject to the conditions and criteria set 

out below: 

1. The land must be Māori Freehold Land (As defined 

in Te Ture Whenua Act 1993 Part VI Section 129 as 

set out above), 

2. The part of the land concerned must be the subject of 

an occupation license or other informal arrangement 

for the purposes of providing residential housing for 

the occupier on a rent free basis, 

3. The area of land covered by each arrangement 

must have a separate valuation issued by Council’s 

valuation service providers and will be issued with 

a separate rate assessment pursuant to Local 

Government (Rating) Act 2002 Section 45 (3) 24 

4. Council reserves the right to cancel the agreement 

on any part of a rating unit if the rates remain unpaid 

for a period of more than 3 months after the due 

date. 25 

5. The application must be in writing signed by the 

owners, and the occupier must agree to pay any 

rates assessed in respect of the part or division of 

the rating unit that is the subject of the arrangement. 

6. Any remissions will not include rates set for the 

provision water, sewerage or other services to the 

separate division of the rating unit, 

7. The remission of the UAGC and other charges will 

remain on the land so long as the arrangement is in 

force subject to the occupation complying with the 

conditions and criteria set out above. 

24 

Clarifying that separate assessments will be issued for each part of the rating unit that is separately occupied. 

25 

This allows Council to cancel the arrangement if rates are not paid on the land. 


123


Postponement of rates on Māori Freehold Land (policy ML04/03) 

Background 

The Far North District Council recognises that significant rate arrears can act as a 

disincentive to any new occupation of the Māori Freehold Land, where a new occupier 

could become responsible for the payment of any existing arrears of rates on the land. 

It has, therefore, introduced policies that provide for the postponement of rates in respect 

of Māori Freehold Land that is to be used by a new person or persons and the person or 

persons, agree to pay the future rates for such period that they continue to use the land. 

This policy provides for the remission of outstanding penalties and the postponement of 

rate arrears outstanding at the time that the agreement comes into force. 

It further provided that in the event that the rates continue to be paid, the postponed 

rates will be remitted 6 years after the date upon which they were charged to the land. 


To facilitate the development and use of the land for 

economic use, where Council considers utilisation would 

be uneconomic if full rates were payable. 


The Far North District Council will agree to postpone 

the arrears of rates on Māori Freehold Land subject to 

the land being continuously used by a new person or 

persons as defined by Section 96 of the Local Government 

(Rating) Act 2002 and that person or persons agreeing 

to pay the current and future rates while they are using 

the land, subject to the criteria set out below. 

1. The land must be Māori Freehold Land (as defined in 

Te Ture Whenua Act 1993 Part VI Section 129 as set 

out above). 

2. The application must be in writing signed by the 

owner/s, or their agent or by the person or persons 

proposing to use the land. 

3. The person or persons proposing to use the land 

must be a new user or users, 

4. The new person or persons using the land must 

enter in to an agreement in writing to keep the 

current and future rates up to date whilst they are 

using the land. 

5. All previous instalments of the current year’s rates 

must be paid in full within 1 month of the agreement 

date, or in part payments, by the 30 June of the 

current year. 

6. Council will have the sole judgement on whether 

or not to grant the application and may seek such 

additional information as they may require before 

making their final decision. 

7. An application will only be considered in respect of 

a new user or users of the land. 

8. Pursuant to Section 88 of LGA, a postponement fee 

will be added to the postponed rates. 

Note: In this context a “new person” means a person 

who has not previously had a connection with the land. 

It does not include new trustees appointed to a Māori 

trust or incorporation because the ratepayer remains the 

trust or incorporation. 

124 



1. Postponed rates will remain as a charge on the 

property for period of 6 years from the date on 

which the rate was assessed, after which time they 

will be remitted. 

2. If the current and future rates are not paid within 1 

month of the due dates, Council reserves the right to 

reapply the postponed rates to the land. 


125

Development Contributions Policy 

Policy Overview 

The Local Government act 2002 

The Local Government Act 2002 (LGA) places emphasis 

on democratic local decision making and promoting 

the social, economic, environmental, and cultural wellbeing 

of communities. The LGA also promotes the 

accountability of local authorities and provides for a 

sustainable development approach. 

Under Section 102 (4)(d) of the LGA, councils are 

required to prepare and adopt policies on development 

or financial contributions. The purpose of this Policy is to 

manage the costs of growth resulting from development 

in the district. 

The LGA sets out a framework for calculating, managing 

and accounting for development contributions in Subpart 

5 and Schedule 13. 

The LGA also sets out a number of principles in Section 

14 which Council must abide by such as: 

•• 

Ensuring prudent stewardship, efficient and effective 

use of its resources in the interests of its district; 

•• 

Taking a sustainable development approach, taking into 

account: 

a. The social, economic, and cultural wellbeing of 

people and communities 

b. The need to maintain and enhance the quality of 

the environment 

c. The reasonably foreseeable needs of future 

generations. 

Amongst other things, it is these principles that guide 

the Development Contributions Policy by providing 

the mechanism to support the sustainable development 

of the district and to ensure that future needs are 

provided for. 

Whilst the Development Contributions Policy relates 

specifically to the provisions in the LGA, it should be 

noted that Council also has a Financial Contributions 

Policy. This Policy is contained within Chapter 13 of 

the Far North District Council’s District Plan which was 

promulgated under the Resource Management Act 1991. 

This policy only relates to esplanade reserves and non 

residential car parking requirements. 

Policy evolution 

The first Development Contributions Policy was adopted 

by the Council in 2003 and has been subsequently 

reviewed and updated on a number of occasions. These 

subsequent iterations of the Policy were developed 

following various analyses of the previous policies and 

the need to include additional provisions or to provide 

further clarity to assist developers. 

One of the key features of the previous policies has 

been the district wide nature of both the expenditure 

needs and contribution levels. This approach was taken 

because Council believed that it was important to treat 

the district as a single entity rather than a number of 

discrete areas. 

This allowed for a high degree of flexibility of funding and 

provided certainty to developers. 

In 2008, Council changed its Development Contributions 

Policy from a fully district wide to a ward based approach. 

This change was accomplished as an amendment to the 

LTCCP as part of the 2008-09 Annual Plan. 

In that document, Council indicated that it was proposing 

to move to a local community based scheme and that the 

ward approach was an intermediate step towards that 

aim. In addition, it indicated that it would introduce the 

local community based policy as a further amendment 

to the LTCCP. 

Following the introduction of the ward based policy; 

Council decided that it would not consider the move to 

the more local approach until the economic environment 

improved. 

126 


In 2009, Council introduced new provisions relating to 

residential housing and clarified the need to charge for 

small commercial developments in existing fully service 

communities. A policy was introduced in regard to grants 

to charitable and not for profit organisations towards 


Particular changes in this policy 

There are a number of specific changes outlined in this 

policy. The main purpose behind these changes is to 

simplify how the contributions are calculated the most 

notable are: 

•• 

The methodology for calculating the contributions on 

commercial and industrial developments has changed. 

The contributions will be calculated based on factors 

which convert gross floor area into units of demand 

in the various contribution categories. This will make 

it easier for developers to estimate, at an early stage, 

the contributions that are likely to be payable. 

The use of conversion factors also removes the need 

to have the 6% cost of the project cap for roading 

contributions 

•• 

As a further change to the contributions on commercial 

and industrial subdivisions, a development 

contribution, equivalent to that of 1 household unit 

of demand, will be charged at the time of subdivision 

for each additional lot in commercial and industrial 

subdivisions. Once a development proceeds on that 

lot then its actual growth impact will be assessed and 

if the growth is greater than that for a single residential 

lot then the development will be assessed on its actual 

growth impact and the residential contribution will be 

offset against the final amount. This will allow Council 

to adjust the level of contributions where the demands 

on the infrastructure made by the eventual 

development exceed that placed by a residential 

development. The levying of contributions on 

commercial/industrial subdivisions is so the policy is 

consistent in dealing with other subdivisions 

•• 

In terms of residential contributions, the method for 

calculating a reduction in contributions for low cost 

housing is with lower units of demand for houses up 

to 70m 2 and from 71 to 150 m 2 of gross floor. This 

is to simplify the calculation of the reduction and 

remove the need for the property owner to go to 

the expense of obtaining a registered valuation of the 

building. If a dwelling is increased in size at a later date 

then a building consent will be required and further 

contributions sought 

•• 

The unit of demand on retirement units is fixed 

at 0.6 per household unit of demand 

•• 

One significant change relates to the levying of 

contributions on residential development on lots 

which were created prior to 1 July 2003, the date 

that the first Development Contributions Policy 

was introduced. 

There has been a continuing concern that it is 

unfair to assess contributions on lots which have 

been in existence for many years. The 2009-19 

policy exempted certain lots from the need to 

pay development contributions on building consents 

where the lot had been in existence for many years, 

had remained in the same ownership for not less 

than 10 years, and the owner was erecting a first 

dwelling on the lot for their own personal 

occupation. Council will not charge any contributions 

on a building consent when the first dwelling 

is erected on any lot created prior to 1 July 2003, 

subject to the following conditions. 


127


The lot has paid full UAGCs and other rates, 

including availability rates for water and sewerage 

(if applicable). Has not had any rates remitted under 

one of Council’s remission policies and/or has not 

been exempted from the need to pay rates under 

the provisions of Section 20 of the Local 

Government (Rating) Act 2002. 

This provision does not apply to the second or any 

subsequent dwelling erected on the property nor does 

it exempt the lot from the need to pay contributions 

in respect of any resource consent granted on the land, 

nor will it apply to any non-residential development on 

the land 

•• 

As a consequence of adopting this provision the 

current policy relating to a reduction, where a person 

owns a property for at least 10 years and wants to 

build his/her own house, is no longer required and 

has been removed. Council considers that, on lots created 

prior to the Development Contributions Policy 

coming into force, the lot owners will have made an 

adequate contributions through rates towards the 

categories of contributions that would have been 

levied at the building consent stage. Given that when 

this policy comes into force on 1 July 2012, the 

minimum time rates will have paid on existing lots is 

9 years, the Council considers this to be an appropriate 

time to introduce this provision and it would not 

have been reasonable to introduce it any earlier 

•• 

As a further consequence of this change, Council has 

reviewed the situation in respect of lots which were 

created after 1 July 2003. Council will now charge 

development contributions for water and sewerage, on 

any building consent granted on any lot created after 

1 July 2003 unless a contribution for either or both of 

those contribution classes were required at the time 

that the lot was created. 

Notwithstanding that, Council recognises that in some 

instances the owners have contributed to the provision 

of the water and sewerage infrastructure through the 

payment of availability charges (rates) on these lots. 

The total of any availability charges which have been 

paid will be treated as a credit against the development 

contributions for these two classes 

of contributions. 

Appendix B has been added to the document and 

summarises how contributions are to be calculated. 

Other changes 

Accumulated Deficit 

Between 2005 and 2008 a number of projects were 

undertaken with the expectation that future growth 

would occur. Unfortunately, due to the economic 

downturn, this has not occurred and the overall 

development contribution deficit stands at $21 million. 

A significant part of this deficit will be funded through 

rates because Council believe that the anticipated 

growth, which gave rise to these expenditures will not 

occur. 

Contributions at the time of resource consent, other 

than subdivision consents will be assessed at the 

resource consent stage but only levied and invoiced at 

the time of the building consent for the development. 

Some developments obtain resource consent but don’t 

proceed any further. 

A section has been added in relation to debt recovery 

to confirm the Council’s intention to recover outstanding 

debt and to tighten up procedures to collect contributions 

owing as soon as possible. 

The value used to calculate a reduction in contributions 

where a lot is created that has a low registered 

valuation is reduced from $122,000 down to 

$100, 000 in line with the latest valuations which have 

seen an average 27% drop in values district wide. The 

lowering of the land value from $122,000 to $100,000 

will have the effect of keeping the reductions in the same 

order as currently calculated. 

Definitions have been added for: 

•• 

Non residential development 

•• 

Dwelling gross floor area 

•• 

Dwelling unit 

•• 

Gross business area 

•• 

Retirement unit 

•• 

Unit of demand. 

These new definitions have mainly become necessary 

because of changes to the Policy and the way contributions 

are calculated. Being specific over what constitutes a 

dwelling unit for the purpose of contributions has been 

done to remove uncertainty in that regard. 

128 


The criteria for grants towards contributions for 

charitable and non charitable organisations has been 

expanded to include those criteria set by Council at its 

meeting on 30 June 2010. 

In regard to the review of contributions, 2 previous 

criteria for a reduction or waiving of the contributions 

have been removed. These are hardship and the period 

that the property owner has owned the land. The 

reason for removing the first is that there have been no 

reductions or waiving of contributions due to hardship in 

the last 2 years. The second criteria has been removed 

because the change to exempt lots created prior to 

1 July 2003 from further contributions at the building 

consent stage makes it no longer necessary. 

Other considerations 

Consideration has been given to “time payment” options 

in the case of contributions related to subdivision 

consents, however it is considered that the present 

bonding arrangement as set out in the policy adequately 

addresses the situation where a developer wants to 

receive the subdivision 224(c) certificate, sell the lots and 

then pay the contributions. 

The reason for this provision is that the Local 

Government Act 2002 gives councils certain powers to 

enforce the payment of development contributions. If 

Council departs from these provisions, without adequate 

security, it is potentially at risk for acting imprudently. 

Proposed level of contributions and growth 

related works 

Council has reviewed the basis of contributions with the 

aim to keep them as low as possible. As will be discussed 

later, Council has undertaken works to support future 

development, but with the current slow down in the level 

of growth, it will take longer to recover the costs of these 

works. The effect of this is that the new contribution 

levels include some costs that have already been incurred 

plus an interest element to cover the shortfall in funding. 

However as noted above, some of these expenditures 

are now being recovered from rates. 

Given the reduction in growth forecasts for the next few 

years, Council has reduced the future growth related 

expenditure, extended the period over which some 

of these expenses will be recovered and has reduced 

the growth assumptions on which this Policy has been 

prepared. 

Why does a developer have to pay development contributions? 

Financial planning 

Council must follow the financial planning and reporting 

requirements set out in the LGA. As part of these 

requirements Council is required to prudently manage 

its finances in a manner which promotes the current and 

future interests of the community. This includes planning 

how to meet the costs Council expects to face in the 

short- and long-term. Another key aspect of the financial 

planning is to provide predictability and certainty about 

where its funds are coming from and the amount of 

funds from each source (e.g. rates). 

In working out where funds are coming from, Council 

has to adopt a Development Contributions Policy. In 

developing this Policy Council has to identify the amount 

of capital expenditure that is necessary to meet the 

increased demand on community facilities resulting 

from growth. In order to ensure that its policies are well 

thought out and fair Council must assess the activities it 

is involved in (e.g. waterworks) and consider a number of 

aspects such as how the activity meets the community’s 

outcomes and who benefits from the activity. 


129


Growth results in increased capital demands on network 

and community facilities. If Council does not collect a fair 

and reasonable amount to manage the costs incurred as 

a result of meeting this demand, then either property 

owners will have to pay to manage the effects of this 

development from the rating base or an alternative 

funding source will have to be found. This is not consistent 

with the principles which Council must abide by through 

Section 14 of the LGA. 

Additionally, such a policy would not be fair or equitable, 

especially where the Council is required to consider 

aspects such as: 

•• 


as a whole, any identifiable part of the community and 

individuals 

•• 

The need to provide for and develop a district-wide 

reserves network 

•• 

The extent to which the actions or inaction of individuals 

or a group contribute to the need to undertake the 

activity (Section 101). 

Demand for network and community facilities 

Council is aware that the level of ongoing growth 

continues to fall in line with the current economic 

downturn. There is however still a strong demand for 

additional services. 

Council is under pressure to: 

•• 

Upgrade existing services such as roading 

•• 

Extend water and sewerage reticulation, and 

•• 

Manage an increasing range of expectations in 

stormwater management. 

In addition there are requirements for additional reserves 

as well as community infrastructure facilities such as 

libraries, footpaths, recycling facilities and swimming 

pools. 

The district is facing continuing development in the three 

main areas identified below: 

•• 

Doubtless Bay 

(Mangonui-Taipa, Tokerau-Whatuwhiwhi) 

•• 

Kerikeri (Kerikeri-Waipapa) 

•• 

Bay of Islands 

(Russell, Opua-Paihia, Waitangi-Haruru Falls). 

Council also has to manage the expectations of the 

existing communities that reticulated services will either 

be provided or upgraded. 

Council is required to have the following: 

•• 


•• 

Development Contributions Policy or Financial 

Contributions, (under section 102 LGA). 

This policy framework requires the Council to apportion 

the costs for its services between existing and new 

developments. 

Council requires development contribu tions for: 

•• 

Water 

•• 

Wastewater 

•• 

Roading 

•• 

Stormwater 

•• 

Reserves 

•• 

Community infrastructure. 

130 


When is a development contribution required? 

There has been a degree of confusion over when a 

contribution is charged and becomes payable. There are 

2 important points to note when considering the issue 

of contributions. 

The LGA says Council may require a contribution at 

the different stages. In this context, the “may” refers to 

Council having the ability to decide whether or not to 

charge contributions. It makes that decision through the 

adoption of the Development Contributions Policy. If 

Council has such a Policy it must charge the contribution, 

Council does not have the ability not to charge. 

The second point is that the Council may require a 

contribution to be made at different stages in the 

development process. Under the LGA a contribution 

may be required at any of the following stages: 

•• 

The granting of a resource consent including a consent 

for a subdivision 

•• 

The granting of a building consent 

•• 

The granting of a service connection 

(to water or wastewater). 

The requirement for the contribution does not necessarily 

relate to when Council will demand payment. The LGA is 

silent on the time for payment as it is considered that this 

is a matter between the developer and Council. The main 

guidance that is given is in respect of the provisions that 

are available to councils to enforce contributions. 

Under these provisions, a Council can: 

•• 

Withhold a Section 224 certificate if the contributions 

are not paid where the contribution has been required 

as a result of the granting of subdivision consent 

•• 

Prevent the commencement the contribution has 

been required as a result of the granting of a resource 

consent that has been granted under the Resource 

Management Act 1991 (RMA). What that means is, that 

if a developer has been granted a resource consent 

to carry out an activity, that activity cannot commence 

until the contributions have been paid 

•• 

Withhold the granting of a code compliance certificate 

where the contributions have been required as a result 

of granting a building consent 

•• 

Withhold the connection to water or wastewater 

where the contribution has been required as a result 

of the granting of a consent to connect to either or 

both services. 

The point to note is that each of these provisions 

is exclusive, they must relate to the reason that the 

contribution was required in the first place, i.e. if a 

contribution was required as a result of a subdivision, 

the Council can withhold the Section 224 certificate. 

Sometimes developers ask that the payment be deferred 

until the building consent is issued, but this is not possible 

because it was the subdivision consent that gave rise to 

the contribution. 

There has also been a request that Council consider 

some form of time payment for contributions relating to 

subdivisions on similar lines as for rates “easy pay” time 

payment but there is already a provision in the policy that 

allows the payment to be deferred subject to bonding 

for the sum involved. 

Where a contribution is required on a resource consent, 

payment is required prior to the commencement of 

the consent. A resource consent is considered to be 

“commenced” at the time that a building consent is 

applied for, so Council will require the payment of any 

development contributions prior to the issue of that 

consent. In line with that requirement, the contribution 

will be levied at the building consent stage and assessed 

only at the resource consent stage. 

The last point to note is that councils can place a Statutory 

Land Charge on the land to secure the contribution. 

Council is loath to take that step because it can restrict 

how a developer can deal with their land, for instance 

can restrict the ability to raise funds against it. The table 

on the next page summarises the priority of when the 

Far North District Council will require contributions to 

be taken. 


131


Priority Applications Contribution Class 

One The granting of a resource consent for a subdivision Roading, stormwater, waterworks, wastewater, reserves and 

community infrastructure 

Two 

The granting of a building consent for a dwelling or a non residential 

building 

Roading, stormwater, waterworks, wastewater, reserves and 

community infrastructure 

Three Service connection Waterworks, wastewater services 

Under this Policy Council will require development 

contributions at the first opportunity, i.e. at the time 

of resource consent for subdivision and at the building 

consent for land use. Contributions will only be payable 

at the time of the granting of the building consent or 

service connection in instances where that contribution 

had not previously been paid. 

Where a lot has paid full rates, was created prior to 1 July 

2003 (the date of adoption of Council’s Development 

Contributions Policy), the property is separately rated 

and there has been no recent rates remission for 

contiguous properties, Council will not levy contributions 

on a building consent for the first dwelling on the lot. This 

is in respect of the contribution categories that did not 

exist prior to 1 July 2003. 

Also, where the water or wastewater availability charge 

has been paid from the time the lot was created then no 

water supply contribution will be levied where the water 

availability charge has been paid or waste contribution 

where wastewater availability charge has been paid. 

Council will, however continue to charge contributions 

for reticulated services such as water, wastewater and 

stormwater, (where applicable) on new lots on the 

basis that any new development creates a growth 

related impact that will either require additional capital 

expenditure or will utilise surplus infrastructure that has 

been developed to address future growth. 

Commercial industrial developments 

Council will assess contributions equivalent to that of 

one unit of demand at the subdivision stage for each 

lot in a commercial or industrial development but will 

subsequently recalculate the level of the contribution on 

the development at the time that the building consent is 

applied for. 

The reason for this is that the actual use of the land may 

not be known until a development takes place and it is 

only at that stage that Council will be able to assess the 

growth related impact of the development. 

132 


When will a developer have to pay? 

The process that Council now adopts is that once an 

application for a consent has been made, Council prepares 

an assessment of contributions. This assessment is not 

an invoice; rather it is a formal notice of the amount of 

contributions that will be required on the development. 

Assuming that the project proceeds, Council will issue a 

formal invoice and require payment as discussed: 

•• 

In the case of a contribution required on a subdivision, 

at the time that the developer applies for the Section 

224(c) certificate 

•• 

In the case of a contribution required on a land use 

consent, at the time of the granting of the building 

consent 

•• 

In the case of a contribution required on a building 

consent, at the time of the granting of the consent 

•• 

In the case a contribution required on a service 

connection, at the time of the granting of the consent. 

As is discussed in this Policy, Council is willing to accept a 

bond for a deferred payment of contributions subject to 

the terms and conditions set out. 

How much will a developer have to pay? 

Since 1 July 2008, Council has set its contributions on 

a mixed district and ward basis. The total amount of 

contributions that are payable on any development are 

made up of both the district wide portion and the ward 

portion. 

The table below indicates the level of contributions 

proposed for the term of this LTP and compares this 

against the contributions that were required for the 

previous LTCCP (as amended in 2009). 

It should be noted that the level of contributions are 

set at the time that the relevant consent is granted. This 

means that if the consent was granted on or before 30 

June 2012, the 2011-22 Development Contributions 

Policy will apply. If the consent is granted on or after 

1 July 2012, this new Development Contributions Policy 

will apply. 

The table on the following page shows the proposed 

level of contributions for the currency of this LTP. The 

actual amount that any developer will pay is the total of 

the district and ward amounts. 


133


Contribution Class 

District Wide 

2011-22 Annual Plan 2012-22 Long-Term Plan 

Bay of Islands- 

Whangaroa 

Ward Based 

Te Hiku 

Kaikohe- 

Hokianga 

District Wide 


Whangaroa 

Ward Based 

Te Hiku 

Kaikohe- 

Hokianga 

Roading $2,077 $0 $0 $0 $843 $1,923 $1,730 $3,656 

Water Services $2,589 $0 $0 $0 $1,520 $250 $907 $244 

Wastewater Services $5,416 $164 $58 $0 $2,697 $2,643 $1,218 $0 

Stormwater Services $969 $566 $399 $68 $1,796 $302 $521 $109 

Community Infrastructure $128 $1,447 $861 $0 $532 $2,285 $569 $67 

Reserves $427 $3,589 $679 $192 $295 $1,321 $100 $0 

Total Contributions $11,606 $5,766 $1,997 $260 $7,683 $8,724 $5,045 $4,076 

GST Inc $13,347 $6,631 $2,297 $299 $8,835 $10,033 $5,802 $4,687 

134 


The basis on which these contributions have been calculated is shown in the following schedule. 

Activity Ward Unit Charge Charge Basis 

Roading 

Bay of Islands-Whangaroa 

$2,766 

Te Hiku 

$2,573 

Kaikohe-Hokianga 

$4,499 

Waterworks 

Wastewater 

Stormwater 

Reserves* 

Community 

infrastructure 


Te Hiku 



Te Hiku 



Te Hiku 



Te Hiku 



Te Hiku 


$1,770 

$2,427 

$1,764 

$5,340 

$3,915 

$2,697 

$2,098 

$2,317 

$1,905 

$1,616 

$395 

$295 

$2,817 

$1,101 

$599 

Household 

Charge 

per Unit of Demand (UOD) $2,766 

$2,573 

$4,499 

Per Unit of Demand (UOD) $1,770 

$2,427 

$1,764 

Per Unit of Demand (UOD) $5,340 

$3,915 

$2,697 

Lots less than 600m 2 

Per m 2 of increased impermeable surface area (min 200m 2 ) per residential unit or if 

increasing impermeable surface area by more than 30% 

Lots greater than 600m 2 

Per m 2 of increased impermeable surface area (min 200m 2 ) per residential unit or per 200m 2 

of increased impermeable surface area if greater than 200m 2 . 

Per lot (based on a minimum lot size of 1,200m 2 ). The contribution will increase on a prorata 

basis where a residential lot size exceeds 1,200m 2 . Note: where any rural subdivision makes 

provision for one or more house sites, the contribution will be based on the minimum lot size 

per house site. 

No reserve contribution shall be payable on any non residential activity in rural or urban areas. 

Per new household unit. 

For non residential development contributions will be assessed on an individual basis related 

to identified demand 

*Note: In addition to reserve contributions, subdivisions of more than 4 hectares fronting a waterway of 3 metres or greater in width may also have to provide an esplanade reserve 

or strip under Chapter 13 of the Proposed District Plan. 

Also note that development contributions for residential development will be subject to the adjustment factor to give a reduced unit of demand and consequent reduction the 

contributions payable. This adjustment factor will be applied as detailed in this Policy. 

$2,098 

$2,317 

$1,905 

$1,616 

$395 

$295 

$2,817 

$1,101 

$599 


135


Non-residential (commercial/industrial) 

development 

While most of the development in the Far North is 

residential, contributions will also be taken for non 

residential development. Non residential developments 

(except for travellers’ accommodation) will not be 

required to pay community infrastructure or reserves 


In addition, Council will consider a reduction of certain 

contribution classes where a new small business is 

proposed to be developed in an existing community and 

that small business will place minimal or no additional 

demand on Council’s infrastructure. The reason for this 

provision is that it supports the community’s wellbeing 

by supporting employment and economic growth. 

Long-term/long life developments 

As was mentioned in the introduction to this Policy, 

Council has altered the basis on which the contributions 

have been calculated. As shown in the tables, there has 

been some expenditure that has already been incurred, to 

address the growth that was anticipated for the currency 

of the previous 2009-19 Policy. As a direct result of the 

worldwide economic downturn, there has been a slow 

down in the level of growth. This means that it will take 

longer to recover the expenditure that has already been 

incurred. This particularly affects wastewater and water. 

When Council plans new capital developments for these 

utilities, (in particular to address the wastewater demands 

of Kerikeri) that infrastructure will be designed with a life 

of 30-50 years and Council has to take account of the 

future growth over that period. The problem is that the 

expenditure will take place within the period of this LTP. 

Normally the expenditures undertaken during the term 

of an LTP are paid for during the same term. But with 

long-term assets, such as new reticulated systems, the 

actual recovery period should be over the period that 

the capacity of the scheme is utilised. 

Council has developed a methodology that will extend 

the recovery period of this expenditure over the next 

30 years thus ensuring that developers, who need the 

increased capacity, pay for it as the spare capacity is 

utilised. 

The methodology has been applied to the works to 

address the long-term requirements of the Kerikeri 

wastewater scheme and some water scheme 

developments in the Kaikohe-Hokianga Ward. 

Over the life of this LTP, Council will be reviewing all its 

long-term projects to ensure that the costs are allocated 

fairly across the “generations” who use them. 

Debt recovery 

As the recovery of debt in the development 

contributions area has become a major issue Council has 

instituted procedures designed to recover development 

contributions within as short as possible time of them 

becoming due and payable. 

136 


Outcomes sought from this policy 

•• 

A more integrated and comprehensive approach to 

managing social, economic, environmental and cultural 

impacts of development and subdivision 

•• 

Recovery of costs that result from development from 

those to whom benefits accrue 

•• 

Services which are effective and have a capacity 

to meet the growing needs of the district 

•• 

A safe and efficient roading network 

•• 

Waterworks, wastewater services, and stormwater 

services of sufficient volume and quality, to meet 

reasonable current and future needs 

•• 

Cost effective provision of services for new growth 

without incurring undue financial burdens on existing 

district ratepayers 

•• 

Maintenance of the quality of the environment, 

particularly water and natural features 

•• 

Maintenance of social and economic stability and the 

ability of all people to provide for their cultural, social, 

economic and environmental wellbeing 

•• 

Encouraging the development of affordable housing 

in areas where the land values and infrastructural 

development requirements are lower. 

Objectives 

•• 

To ensure that the development contributions are 

used for the purpose of meeting the capital expenditure 

needed to meet the extra demand placed on the 

district’s network and community infrastructure and 

reserves resulting from the growth 

•• 

To ensure that the costs of providing services to and 

within subdivisions and developments, or the upgrading 

of services as a result of subdivision and development, 

are met by the subdivider/developer 

•• 

To ensure that developers that utilise spare growth 

related capacity that has been built into existing 

infrastructure, meet the costs of the provision of 

that capacity 

•• 

To assure those making a development contribution 

that the contributions are fair and equitable, while 

keeping transaction costs to a minimum 

•• 

To provide necessary services to subdivided lots and 

developments in anticipation of the likely effects of 

land use activities on those lots and within the 

developments 

•• 

To improve the efficiency and capacity of services 

•• 

To enhance sustainable development 

•• 

To maintain and enhance the district’s amenities. 

Summary of capital expenditure that council 

expects to incur as a result of growth 

Summary and explanation in accordance with Section 

106 (2)(a) of the LGA. 

Note: The capital expenditure tables show the following. 

The first column shows the name of the ward where 

the capital works will be undertaken, the next 2 columns 

show the total capital expenditure arising from renewals, 

improvements to service levels and growth for the activity 

concerned. The last 2 columns only show the expenditure 

arising from growth. It is only this expenditure that is 

used to set the level of the development contributions. 


137


Roading 

The total annual capital funding requirement for roading which Council considers to be growth related is shown in the following table as is the forecast average annual Council capital 

expenditure requirements (inclusive of subsidies) for the 10 years 2012-22. 

Ward or District 

Total Capital 

Expenditure 

Average Annual 

Expenditure 

Total Growth Related 

Expenditure 

Annual Growth Related 

Expenditure 

Bay of Islands-Whangaroa $4,412,775 $441,278 $3,692,826 $369,283 

Te Hiku $24,490,964 $2,449,096 $2,024,511 $202,451 

Kaikohe-Hokianga $5,031,288 $503,129 $1,663,656 $166,366 

District $169,511,809 $16,951,181 $2,987,133 $298,713 

Totals $203,446,836 $20,344,684 $10,368,125 $1,036,813 

Waterworks 

The total annual capital funding requirement for waterworks which Council considers to be growth related is shown in the following table as is the forecast average annual Council capital 



Total Capital 

Expenditure 


Expenditure 


Expenditure 


Expenditure 

Bay of Islands-Whangaroa $13,900,515 $1,390,052 $139,804 $13,980 

Te Hiku $3,165,739 $316,574 $127,039 $12,704 

Kaikohe-Hokianga $7,279,113 $727,911 $53,781 $5,378 

District $3,085,940 $308,594 $1,398,129 $139,813 

Totals $27,431,307 $2,743,131 $1,718,753 $171,875 

138 


Wastewater services 

The total annual capital funding requirement for wastewater which Council considers to be growth related is shown in the following table as is the forecast average annual Council capital 

expenditure requirements (inclusive of subsidies) for the 10 years 2012-22 


Total Capital 

Expenditure 


Expenditure 


Expenditure 


Expenditure 

Bay of Islands-Whangaroa $36,406,223 $3,640,622 $1,664,980 $166,498 

Te Hiku $25,880,542 $2,588,054 $742,808 $74,281 

Kaikohe-Hokianga $5,597,077 $559,708 $0 $0 

District $5,799,594 $579,959 $3,802,492 $380,249 

Totals $73,683,436 $7,368,344 $6,210,280 $621,028 

Stormwater 

The total annual capital funding requirement for stormwater which Council considers to be growth related is shown in the following table as is the forecast average annual Council capital 



Total Capital 

Expenditure 


Expenditure 


Expenditure 


Expenditure 

Bay of Islands-Whangaroa $30,000 $3,000 $190,017 $19,002 

Te Hiku $100,000 $10,000 $317,822 $31,782 

Kaikohe -Hokianga $15,000 $1,500 $32,618 $3,262 


Totals $14,922,325 $1,492,233 $3,306,366 $330,637 


139


Reserves 

The total annual capital funding requirement for reserves which Council considers to be growth related is shown in the following table as is the forecast average annual Council capital 



Total Capital 

Expenditure 


Expenditure 


Expenditure 


Expenditure 

Bay of Islands-Whangaroa $4,054,947 $405,495 $4,215,107 $421,511 

Te Hiku $214,940 $21,494 $171,952 $17,195 

Kaikohe-Hokianga $0 $0 $0 $0 

District $0 $0 $940,404 $94,040 

Totals $4,269,887 $426,989 $5,327,463 $532,746 

The LGA allows Council to collect development contributions for reserves either in cash or land. Unless any particular circumstances require it, Council will take the contribution in cash. 

In accordance with the legislation, these funds will be held in a separate account and applied only to reserves acquisition and development. No reserve contribution shall be payable on 

any non residential activity in urban or rural areas. 

Community infrastructure 

The total annual capital funding requirement for community infrastructure which Council considers to be growth related is shown in the following table as is the forecast average annual 

Council capital expenditure requirements (inclusive of subsidies) for the 10 years 2012-22. For non residential development contributions will be assessed on an individual basis related 

to specific demand for future community infrastructure. 


Total Capital 

Expenditure 


Expenditure 


Expenditure 


Expenditure 

Bay of Islands-Whangaroa $19,834,165 $1,983,417 $4,386,802 $438,680 

Te Hiku $15,244,892 $1,524,489 $665,797 $66,580 

Kaikohe-Hokianga $10,656,069 $1,065,607 $30,682 $3,068 


Totals $73,880,237 $7,388,024 $6,969,073 $696,907 

140 


Summary of capital expenditure that council has incurred in anticipation of development 

The LGA allows development contributions to be levied This policy does not identify any such expenditure. 

to meet the cost of capital expenditure that has already 

been incurred in anticipation of development. 

Funding proportions and explanations 106(2)(B) & 106(2)(C) 

Capital expenditure funding 

The purpose of the Development Contributions Policy 

is to ensure that the full capital cost of development is 

paid for by development contributions. There will be no 

rate contributions towards those works that have been 

identified as resulting from growth. 


This policy has been developed to support the community 

outcomes included in this LTP and in particular the 

following 2 outcomes: 

•• 

A sustainable and liveable environment 

•• 

A vibrant and thriving economy. 

The individual contributions support the activities and 

their goals and objectives as set out in volume 1 of this 

document. 

Distribution of benefits 

Growth related capital expenditure for roading is 

designed to reduce the effects of having more vehicles 

on the road. While these improvements are required by 

growth, they generally benefit other road users indirectly. 

Roading improvements have to take account of different 

growth areas, rather than any one particular development. 

Development causes the need for growth related capital 

expenditure. Council sees roading as primarily a district 

wide network service. 

Council runs a number of schemes across the district for 

water supply, wastewater and stormwater. Growth related 

capital expenditure improvements would generally have 

benefits mainly related to those people connected to 

those systems. The type and amount of benefit will 

depend on the type of improvement; therefore the 

distribution of benefits from growth related capital 

expenditure is much narrower than that for roading. It 

is recognised that there are public health benefits for 

particular communities and for the district as a whole 

from wastewater schemes that mitigate contamination, 

these wider benefits are addressed through the rating 

system. 

Council has noted that there is a differing level of 

development across the district which results in a differing 

level of growth driven demand. The recent introduction 

of the ward basis of contributions recognises the differing 

distribution of benefits across the different wards. 

Lifetime of benefits 

Once roading improvements have been undertaken they 

tend to last for significant periods of time, for example 

if you widen a road – it stays at that width until there is 

further requirement for more widening, or it is closed 

down (e.g. because of a bypass). Therefore the life of 

roading improvements tends to be long-term, though 

for both it has to be recognised that major ongoing 

maintenance and ultimately, renewal is required to 

support the asset. 

Benefits created by water supply, wastewater and 

stormwater scheme improvements will tend to 

have a shorter lifespan than the benefits of roading 

improvements. This is because these systems tend to 

have a shorter lifespan than roads and are replaced more 

frequently. For example wastewater treatment plants 

may require replacement because of renewal, improved 

technology or new resource consent requirements. 


141


Reserves and open space are of critical importance 

as the district continues to grow. Current community 

based recreation planning indicates that there are urgent 

priorities to look after. For example: children and youth 

within the area. Council also has a relatively low level 

of direct provision of sports facilities which reflects the 

tradition of self reliance in rural communities. 

As many areas of the district continue to grow there is an 

expectation that existing facilities will be upgraded and 

new facilities will need to be provided to meet changing 

needs and expectations. Many of the recreational assets 

have different demands dependent on the changing 

nature of the population, for example: there is a change 

in the demographics of parts of the district with a 

greater proportion of elderly people. This section of the 

community tends to have different recreational needs 

to the younger residents. In addition “popular sports” 

can give rise to additional demands. In general there 

is a community expectation that there will be public 

recreation available to meet the lifecycle needs of the 

population. 

Community infrastructure needs also span generational 

needs and are influenced by factors such as aging and 

ongoing growth. In general the community draws benefits 

from community infrastructure in relation to its lifecycle. 

Council does not consider that the lifetime of benefits 

generated by any of these services creates intergenerational 

issues (i.e. people paying for a service 

which will be utilised in the future). This is because the 

demand for these services is being generated now; 

the benefits created by these services are focussed on 

meeting demand, rather than providing benefits. Future 

generations will be required to fund their demands. 

Demand generation 

By definition, the action of development causes the need 

for growth related capital expenditure. This indicates 

that a significant portion of the growth related capital 

expenditure should be collected from the developments 

which make the capital expenditure necessary. Other 

capital expenditure required as part of historical catchup, 

increased level of service or replacement of an asset 

are all separate issues, with separate revenue streams. 

Distinctions between activities 

Each service is funded separately. Funding any of 

these services in a combined fashion would reduce 

transparency and accountability. Additionally some 

activities, such as waterworks and wastewater, are not 

utilised by all of the community. Combined funding could 

result in concerns about potential cross subsidisation. 

In essence each activity is quite distinct and should be 

funded in a distinct manner. 

Funding entirely from rates would reduce some 

compliance costs, however Council has strived to produce 

simple requirements for development contributions and 

reduce compliance costs as far as possible. The costs of 

such compliance costs are outweighed by the benefits 

from obtaining contributions from developments which 

create the requirement for additional services, particularly 

in preventing these costs payable by the ratepayers. 

Units of demand 

Schedule 13 of the LGA requires Council to calculate 

the level of growth related expenditure according to 

units of demand. Council has continued to monitor the 

level of growth in the district since it introduced its first 

Development Contributions Policy. 

The projected average number of new lots over the next 

10 year period is 355. 

Council has decided to consider the average growth a 

year as an appropriate level for the 2012-22 Development 

Contributions Policy given that there may be an upturn 

in development in the later years of the period. 

The anticipated new lots that will be liable for contributions 

has been retained at 80% of the total annual lots on the 

basis that this figure takes into account non payment of 

contributions by existing or parent lots estimated at 20%. 

The total of new lots has been further broken down 

to the ward and activity level to support the setting of 

contributions for this Policy. Growth assumptions are set 

out below under each contribution activity. 

These growth figures are used as the divisor to determine 

the level of contributions under this revised policy. 

142 


Overall impact of funding revenue liability 

When Council originally introduced the Development 

Contributions Policy, it was of the view that 100% of 

growth related capital expenditure for all services should 

be paid for through development contributions as it is 

development which creates the need for this capital 

expenditure. 

In the first few years Council gradually phased in the full 

impact of the development contributions so that it was 

not until 2006 that the developers paid the full cost of 

growth related expenditures. 

Using the growth related expenditures and the district’s 

growth characteristics; the overall funding liability in 

respect of new developments has been calculated. 

It should be noted that these figures are based on an 

individual household unit. 

Total Contribution 

2011-12 Annual Plan 2012-22 LTP 

Contribution Class 


Whangaroa 

Te Hiku 

Kaikohe- 

Hokianga 


Whangaroa 

Te Hiku 

Kaikohe- 

Hokianga 

Roading $2,077 $2,077 $2,077 $2,766 $2,573 $4,499 

Water Services $2,589 $2,589 $2,589 $1,770 $2,427 $1,764 

Wastewater Services $5,580 $5,474 $5,416 $5,340 $3,915 $2,697 

Stormwater Services $1,535 $1,368 $1,037 $2,098 $2,317 $1,905 

Community Infrastructure $1,575 $989 $128 $2,817 $1,101 $599 

Reserves $4,016 $1,106 $619 $1,616 $395 $295 

Total Contributions $17,372 $13,603 $11,866 $16,407 $12,728 $11,759 

Plus GST $19,978 $15,643 $13,646 $18,868 $14,637 $13,523 


143


Activities requiring development contribution 106(2)(D) 

The following table indicates: 

•• 

The activities from which development contributions 

will be sought 

•• 

The amount Council is seeking to obtain from each 

activity 

•• 

The source of the contributions obtained. 

Group of Activities 

Average Annual Amount 

of Contribution sought Revenue Source 

Roading $1,036,813 Contributions 

Water services $171,875 Contributions 

Wastewater services $621,028 Contributions 

Stormwater services $330,637 Contributions 

Reserves $532,746 Contributions 

Community infrastructure $696,907 Contributions 

Total $3,390,006 

144 


Methodology For Calculating Development 

Contributions S106(2)(E) 

Roading, waterworks and wastewater services S106(2)(E) 

Future services calculation - explanation 

In the preceding sections Council has summarised and 

explained the growth related capital expenditure it is 

planning over the next 10 years. This is the infrastructure 

which is being built as a consequence of having a greater 

demand on services, rather than increasing the level of 

service, historical upgrades or maintenance. 

Development contributions for roading, waterworks and 

wastewater services will be calculated using the Future 

Services (FS) assessment. 

There are 3 parts to the FS contribution: 

•• 

Annual growth related cost of capital expenditure to 

be collected through development contributions (A) 

•• 

Estimated additional daily use of the service by the 

development, estimated by the applicant and verified 

by Council (B) 

•• 

Estimated average daily use of the service by new 

developments over 1 year (i.e. the unit of demand)(C) 

•• 

FS equals A x B/C. 

This spreads the annual cost of capital expenditure 

across new developments on the basis of how much of 

the service is used. This scheme is reasonably simple and 

there is potential for unanticipated negative impacts if it 

is incorporated in this simple form. In making a decision, 

Council has to bear in mind a number of aspects, including: 

•• 

The diversity of the community, and the community’s 

interests, within its district or region 

•• 

The interests of future as well as current communities 

•• 

The likely impact of any decision on each aspect of 

wellbeing referred to in Section 10 s14(c). 

Consequentially, Council has undertaken modelling of this 

system to determine whether there are unanticipated 

negative effects stemming from the FS calculation, and to 

ascertain how these effects may be addressed. Council 

has not observed any unanticipated negative effects 

during the period that the preceding policies have been in 

existence and therefore believes that the methodologies 

for setting the contribution levels in respect to residential 

developments are appropriate for the Far North. The FS 

calculation in respect of non residential developments is 

changed in this Policy. 

Assumptions 

Estimates of growth related capital expenditure. 

Council has to assume that its planned growth related 

capital expenditure will be undertaken. This is a realistic 

assumption, in that Council has planned its capital 

expenditure in accordance with the statutory procedures. 

Estimates of connections to roading, waterworks and 

wastewater services. 

The number of new developments and subdivisions that 

it is anticipated will require roading, waterworks and 

wastewater services is an estimate based on historical 

information and anticipated future growth. The assumed 

growth for these services for the period of this Policy is 

shown in the table on the next page. 


145


Annual Growth Assumptions by Activity 

Activity District Bay of Islands- 

Te Hiku Kaikohe-Hokianga Ward Totals 

Whangaroa 

Roading 355 192 117 46 355 

Wastewater 141 63 61 17 141 

Water Services 92 56 14 22 92 

Estimates of additional daily usage for new development. 

This has been estimated on the basis of the average 

household usage (for each service) per day multiplied 

by the estimated number of new connections to the 

respective service (i.e. new developments). Using 

household usage per day is a significant assumption. The 

benefits of using this assumption are that households are 

the most common form of land use in the Far North 

(by number) and there is a significant amount of data 

relating to the average usage of services households 

generate (e.g. vehicle trips per day). This household data 

therefore provides a realistic set of base data. Also traffic 

modelling of the number of household trips per day 

was undertaken as part of the preparatory material for 

the review of the District Plan. There are also national 

benchmark standards. 

A more complex question is whether non residential 

activities have, on average, more or less usage for each 

service per day. Given the wide variety of business activities, 

it is difficult to accurately estimate the non-residential 

activities average usage for each service per day. 

In order to simplify the calculation process in relation 

to contributions for non residential developments 

conversion factors will be used to convert gross floor 

area to equivalent units of demand. The factors are 

based on average use of roading, water, wastewater and 

stormwater facilities based on research carried out by 

Councils with similar commercial environments as to 

those within the Far North. 

Estimates of additional demand for waterworks and 

wastewater services by non-residential development. 

As previously indicated water and wastewater 

contributions will be calculated using a conversion factor 

to convert gross floor area to units of demand. This 

method is considered to give a good average demand by 

a non residential development. 

Small business development. 

Council is concerned to ensure that development 

contributions do not discourage the development of 

small businesses within its communities. If a small business 

is to be established in an existing community and it is 

anticipated that the new business will create little or no 

additional demand on the infrastructure, Council will 

consider whether adequate contributions have already 

been paid through residential development within that 

community. 

146 


Stormwater 

Explanation 

In the preceding sections Council has summarised and 

explained the growth related capital expenditure it is 

planning over the next 10 years. This is the infrastructure 

that is being built as a consequence of having a greater 

demand on services, rather than increasing the level of 

service, or undertaking major maintenance. 

The contribution is aimed at those developments and 

subdivisions which are likely to have the greatest impact. 

These are per residential unit at the time of subdivision 

or resource consent, or where the impermeable surface 

area is increased by 30% or more on sites of less than 

600m 2 . For sites 600m 2 and over, including non residential 

development the contribution required will be a pro rata 

rate based on a per m 2 of impermeable area. 

Hypothetical example: A 600m 2 site increasing the 

impermeable surface area by 200m 2 and a 1,400m 2 site 

adding 400m 2 of impermeable surface. The site adding 

400m 2 of impermeable surface will have to pay twice 

the amount of stormwater development contribution 

as the site adding 200m 2 . Effectively 200m 2 of additional 

impermeable surface will be the unit of demand. This 

will be the unit applied to all residential development. 

For non residential development 200m 2 of additional 

impervious surface will equate to 1 unit of demand. 

Assumptions 


Council has to assume that its planned growth related 

capital expenditure will be undertaken. This is a realistic 

assumption, in that Council has planned its capital 

expenditure in accordance with the statutory procedures. 

Estimates of connections to stormwater. 

The number of new developments and subdivisions that 

it is anticipated will require connection to stormwater 

services are an estimate based on historical information 

and anticipated future growth. The assumed stormwater 

growth for the period of this Policy is shown in the 

following table. 




Whangaroa 

Stormwater 154 63 61 30 154 

As the contribution is a fixed fee for residential units 

it is unlikely that there will be potential effects greater 

than those anticipated by Council. The increase of 30% 

impermeable surface area for residential units is an 

assumption; however it is at this increase that the impact 

on run off and therefore stormwater becomes significant. 

A pro-rata link for the contribution is needed so that the 

impact of the development is linked to the contribution 

payable. Non residential contributions will be calculated 

on the estimated additional impermeable surface area 

converted to units of demand. 


147


Reserves 

Explanation 

Reserves open spaces are important components of the 

quality of life in the district. Council has had a long history 

of taking reserve contributions. 

Development contributions can be paid in land, money or 

a combination of both. Council’s preference is that unless 

special circumstances dictate, reserve contributions will 

be taken in monies. 

Land will be preferred where: 

•• 

The contribution relates to the provision of new 

reserves as part of a subdivision and the land 

proposed is suitable for the purpose 

•• 

The land will provide suitable access to the coast. 

Money will be preferred where: 

•• 

It is impractical to take land 

•• 

There is sufficient developed reserve land in the 

vicinity 

•• 

There are recreation needs elsewhere in the 

community. 

For future reserve land and facilities, no contribution 

shall be payable on any non residential development 

activity in urban or rural areas. This is because increased 

demand for reserves is usually generated through growth 

in population associated with residential subdivisions and 

developments. Industrial and commercial activities do 

not contribute significantly to demand, and should not 

be required to contribute to the provision of reserves. 

The legislation provides a cap or maximum level of 

reserve contributions. This cap is 7.5% of the value of the 

new lots created or the value of 20m 2 of land for every 

residential unit created in the development. 

Assumptions 


Council is aware that it is below the accepted national 

benchmark standard of 4 hectares of open space per 

1000 people. This has been addressed through a 

comprehensive series of recreation plans that have been 

prepared assessing recreation demand. 

Estimated new lots that will be subject to contributions. 

The number of new developments and subdivisions 

that it is anticipated will require the provision of reserve 

facilities is an estimate based on historical information 

and anticipated future growth. The assumed reserve 

growth for the period of this policy is shown in the 

following table. It should be noted that Council’s view is 

that only 90% of these new lots will contribute cash with 

the remaining contributing land. 




Whangaroa 

Reserves 355 192 117 46 355 

90% new lots contributing cash 319 173 105 41 319 

Average residential lot area is calculated on 1,200 square metres. 

Contributions will either be received in land or cash or a combination of both. 

The development contribution payable for reserves will not exceed the 7.5% lot value prescribed by Section 203, and if it does whatever is the lesser figure will apply. 

148 



Explanation 

Community infrastructure is defined in Section 197 of 

the LGA as: 

•• 

Land, or development assets on land, owned or 

controlled by the territorial authority to provide 

public amenities 

•• 

Includes land that the territorial authority will 

require for that purpose. 

Council has a significant list of growth related capital 

expenditure which relates to projects such as: 

•• 

Recreational/cultural amenities upgrading and 

new facilities 

•• 

Cemetery expansion 

•• 

Refuse recycling stations 

•• 

Street lighting; footpath improvements 

•• 

Carparking. 

Assumptions 

Estimated new lots that will be subject to contributions: 

The number of developments and subdivisions subject 

to contributions for community infrastructure are an 

estimate based on historical information and anticipated 

future growth. The anticipated community infrastructure 

growth is shown in the following table. 




Whangaroa 

Community Infrastructure 355 192 117 46 355 

Community priorities will remain as they are now 

Costs: Do not alter significantly. 

The proposed 10 year programme: Represents a reasonable provision of future growth related needs. 

Adjustment factors 

Residential 

Previous modelling of the FS scheme indicated that the 

combined amount of contribution for these services was 

likely to have a significant adverse effect on economic wellbeing 

on low value developments throughout the district. 

Council is required to take account of the 4 aspects of 

wellbeing described in Section10 of the LGA (economic, 

social, cultural and environmental). An adjustment factor 

was introduced as a method of balancing the economic 

impact of development contributions with the associated 

benefits of such a scheme. 

The adjustment factor introduces a gradient of payment 

whereby residential subdivision and residential 

developments with a value of less than $100,000 per 

lot or less than 70m 2 or between 70 and 150m 2 gross 

floor area per residential unit receive a further discount 

from what would otherwise be required of them. This 

is called the adjustment factor. This reduces the impact 

of the scheme on low value development, where a 

requirement to pay more would significantly impact on 

the ability of the developer’s ability to build. Not adding 

this adjustment would create unreasonable inequities, 


149


and skew the current range and type of development. By 

creating 2 categories of contribution for developments 

with a gross floor area less than 70m 2 or between 70 

& 150m 2 per residential unit, or $100,000 per lot at 

subdivision, the Council is preventing its development 

contribution scheme from interfering too greatly with 

the community’s right to economic and social wellbeing. 

The adjustment factor to give reduced units of demand 

generally prevents the contribution payable from 

becoming too great a portion of the development value. 

This allows a fair amount to be paid in development 

contributions while minimising likely adverse economic 

and social effects. 

The adjustment factor – residential development - 

is calculated by: 

House Gross Floor Area Unit of demand 

Up to 70m 2 0.6 

71 to 150m 2 0.8 

For residential subdivision, the integer will be the value of 

a residential lot, and the divisor the $100,000 subdivision 

adjustment factor: 

Residential lot value (divided by) 

$100,000 

(i.e. a residential lot with a development value of $60,000 

will have a unit of demand of 0.6). 

The amount of development contribution in each category 

is then multiplied by the calculated unit of demand. 

Notes: Where the ‘per lot’ subdivision value and the 

residential unit gfa exceed $100,000 and 150m 2 respectively, 

then no adjustment applies. The value of the 

adjustment factor for subdivisions has been reviewed 

following the triennial revaluation of the district. 

Adjustment factor - non residential 

The new factors proposed for converting gross floor 

area to equivalent household units are considered to 

have been set at a level where the adjustment factor 

for roading is no longer required for non residential 

development. 

If a small business is established in an existing community 

and it is anticipated that the new business will create 

little or no additional demand on the infrastructure, 

Council will consider whether adequate contributions 

have already been paid through residential development 

within that community. 

It is important that developers of new commercial 

developments contact Council at an early stage to 

discuss any potential contribution requirements. 

Remission, postponement and refund of 

development contributions 

Where Council has required development contributions 

on a resource consent application and either: 

•• 

No development is undertaken on the site within 

10 years 

•• 

The resource consent lapses. 

Then the original development contribution amount will 

be refunded to the owner of the site at the time the 

refund comes due. This refund does not prevent Council 

requiring development contributions on future building 

consent applications. 

Where a development contribution has been taken at 

the time of building consent issue and the consent lapses 

or is cancelled, Council will refund the contribution. 

In assessing a development contribution, Council will 

take into account funds or community infrastructure 

or network infrastructure provided by a developer in 

accordance with Section 200(1)(b). This includes financial 

contributions previously paid under Plan Change 7. 

Development contributions may be reduced in 

accordance with the request for further consideration 

process as specified in the development contributions 

schedule. 

150 


Section 202 LGA2002 schedule of development contributions (S106 (2)(E)) 

Development contributions schedule 

This section sets out the rules Council will operate by 

when assessing and requiring development contributions. 

It outlines aspects such as when contributions will be 

assessed, how they will be assessed and the definitions 

applying to development contributions. 

Definitions 

For the purposes of the section on development 

contributions and the associated schedule, the following 

words have the corresponding meanings: 

Capital expenditure means (unless otherwise specified) 

growth related capital expenditure on an annual basis, 

averaged over 10 years. 

Development has the same meaning as development in 

Section 197 of the LGA. 

Development Contribution has the same meaning as 

development contribution in Section 197 of the LGA 

Development value means: 

•• 

For sites (not subdivision) connected to the 

reticulation service, the value estimated for the 

total project 

•• 

For sites (not subdivision) not connected to the 

reticulation service, the value of the site 

•• 

For subdivision, the expected future value of all 

sites created by the subdivision minus the initial 

value of the site. 

Residential development means: 

•• 

Addition of 1 or more residential units on a site 

with no existing residential units 

•• 

1 or more additional residential units on a site, 

with 1 or more existing residential units 

•• 

The connection of non-reticulated (i.e. water and 

wastewater) sites to existing infrastructure 

•• 

Additions to existing reticulated properties where 

an additional connection to existing infrastructure 

is undertaken. 

Dwelling gross floor area means the gross floor area of 

any dwelling unit measured from the outside faces of the 

exterior walls and includes the area of any permanently 

covered outdoor areas which are part of the main 

dwelling structure. 

Dwelling unit means any building or buildings or any part 

of those buildings used or intended to be used solely 

or principally for residential purposes and occupied or 

intended to be occupied by one household and contains 

a kitchen including a sink but not necessarily a stove or 

other cooking facilities. 

Financial Contribution means (unless otherwise 

specified) the total financial contribution as detailed in 

the Far North District Council’s Plan Change 7 to the 

Transitional District Plan. 

Gross business area means: 

•• 

The gross floor area of any building measured from the 

outside faces of the exterior walls 

•• 

The area of any part of the lot used solely or 

principally for the storage, sale, display or servicing of 

goods or the provision of services on the lot but not 

including permanently designated vehicle parking, 

manoeuvring, loading , loading and landscaping areas, 

the conversion of which to another use would 

require resource consent. 

The gross business area will exclude the area of network 

infrastructure including pipes, lines and installations, roads, 

water supply, wastewater, and stormwater collection and 

management systems, but will include the area of buildings 

occupied by network service providers, including offices, 

workshops, warehouses and any outside areas used for 

carrying out their normal business. 

Household means a building or part of a building intended 

to be used as an independent residence, and includes 

any apartment, townhouse and dwelling house, flat or 

household unit. 

Infrastructure means any: 

•• 

Water collection, treatment and supply system 

•• 

Sewage collection, treatment and disposal system 

•• 

Stormwater collection, treatment and disposal system 

•• 

A road which meets the criteria of a road, in Section 

315 of the Local Government Act 1974 


151


Land in the subdivision means land which is the subject 

of an application for a subdivision consent. 

Lot has the corresponding meaning to site. 

Non residential development means any development 

other than residential development. In particular, business, 

retailing, office, service and manufacturing industries and 

travellers accommodation. 

Residential unit has the corresponding meaning to 

household. 

Retirement unit means a dwelling unit in a “retirement 

village” as defined in Section 6 of the Retirement Villages 

Act 2003. 

Road means a road as defined in Section 315 of the 

Local Government Act 1974. 

Site means an area of land which complies with the 

provisions of the Plan, as regards minimum frontage, and 

configuration and which (being all the land comprised in 

one certificate of title) may be disposed of separately. 

Stormwater services means stormwater drainage and 

any associated infrastructure. 

Subdivision consent has the meaning set out in Section 

87(b) of the Resource Management Act 1991. 

Subdivision of land, and to subdivide land have the 

meanings set out in Section 218 of the Resource 

Management Act 1991. 

Unit of demand (UOD) means a unit of measurement 

by which the relative demand for a community facility, 

generated by different types of development activity 

(existing or proposed) can be assessed. A unit of demand 

may be expressed as a lot unit of demand or an activity 

unit of demand. For the purposes of this policy 1 standard 

household unit creates 1 unit of demand. 

Wastewater services means sewerage, treatment and 

disposal of sewage and all associated infrastructure. 

Waterworks means waterworks as defined in Section 5 

of the LGA. 

Conditions relating to development contribution 

Council will require development contributions for 

roading, waterworks, wastewater services, stormwater 

services, community infrastructure and reserves in 

accordance with the formulae specified in this schedule. 

Council will require an assessment of development 

contributions on all building consent and resource 

consent applications with a development value over 

$5,000. Council will also require an assessment of 

development contributions on all service connection 

applications or authorisations. 

Council shall notify the applicant for a resource consent, 

building consent or authorisation for a service connection: 

•• 

The amount to be paid by the consent holder or the 

method by which the amount of the payment shall be 

determined 

•• 

How and when the payment is to be made. As 

previously stated, it is Council’s requirement that all 

contributions will be paid at the time of the granting 

of the building consent or subdivision consent. 

However, where an application is received for a 

development for which a particular contribution class 

has not been previously paid, that contribution will 

be payable at the earlier stage of: 

·· 

The time the building consent is issued, or 

·· 

When the subdivision commences 

·· 

The time service connection is made 

·· 

Some other time or in stages agreed by Council and 

the subdivider/developer. In the case of a delayed 

payment under this provision, the developer will 

be required to enter in to a bond, guaranteed by 

a trading bank, stating that the contribution will be 

paid on or by a date to be determined by Council 

152 


•• 

The acceptance of land, or a combination of land or 

money in lieu of the contribution set by the formulae. 

The value of the combination shall be more than or 

equal to the development contribution 

•• 

Where the sum of all development contributions 

payable is less than $500, no development contribution 

shall be payable. 

Where there is a resource consent application for 

subdivision: 

•• 

A development contribution will be set at the time 

of resource consent 

•• 

Where no development is undertaken on the site 

within 10 years, or the resource consent lapses, the 

original amount will be refunded to the owner of 

the site at the time of refund. 

Development contributions for waterworks and 

wastewater services and stormwater are only payable 

where the relevant service is available, or where there is 

a reasonable expectation of it being available within 10 

years of the granting of a building consent. 

Where a contribution has been taken at the time 

of building consent issue and the consent lapses or is 

cancelled, Council will refund the contribution. 

In assessing the development contribution, Council will 

take into account funds or other provision of community 

infrastructure or network infrastructure provided by a 

developer in accordance with Section 200(1)(b). 

Requests for further consideration by Council 

Persons who have been required to pay a development 

contribution may request Council to further consider 

the development contribution required. 

Charitable and not for profit organisations 

From time to time, Council receives applications for a 

waiver of development contributions from charitable, 

church, private schools and other not for profit 

organisations. Council’s view is that all these developments 

do make demands on the district’s infrastructure and 

therefore should pay the appropriate development 

contributions. Council also acknowledges that, these 

organisations may make significant contributions to the 

wellbeing of the community and is therefore willing to 

receive applications for a grant to offset the contribution. 

Council has set the following criteria in relation to the 

consideration of a grant: 

•• 

The applicant must be a registered Charitable Trust or 

incorporated society or other acceptable not for profit 

organisation 

•• 

The development will not be used for private 

pecuniary profit 

•• 

The level of the grant is to range between 25% and 

50% of the proposed contributions with no single 

application exceeding $25,000 

•• 

Council will make the final determination on the level 

of the grant which will be based on the nature and 

scale of the proposal 

•• 

In general the development is not to be used for 

private residential purposes except in the following 

special circumstances: 

a. The residential development is to provide 

accommodation to persons in need on a rent 

free or subsidised basis 

b. The residential development is to be 

transferred 

to an owner without cost or on a significantly 

subsidised basis for example a Habitat for 

Humanity development 

c. Where the development is to be used for 

residential purposes, the developer will have 

to demonstrate that the project meets these 

special provisions 

d. Where a qualifying residential development is 

connected to water or sewerage Council will 

consider whether it is appropriate to include 

these services in the grant. 


153


Any organisation wishing to apply for such a grant will 

have to do so in writing and must provide sufficient detail 

to allow Council to assess the application. Information to 

be supplied must include: 

•• 

The most recent set of audited accounts 

•• 

A copy of the document or documents forming 

the organisation, ie trust deed, certificate of 

incorporation etc 

•• 

A statement about the organisation, including its aims 

and objectives 

•• 

A detailed description of why it is seeking a grant to 

offset the contributions and what benefit that this will 

bring to improving the wellbeing of the community 

•• 

Council will consider such applications as soon as 

possible and Council’s decision on the matter will 

be final. 

Other applications for a review of contributions 

Other than the options described, any developer may 

apply for a review of their contributions on the grounds 

as described. 

Council will require a payment of $500 to cover 

the administrative costs of further considering the 

contributions required. Any such request shall be made 

by notice in writing to Council setting out the reasons for 

the request, within 15 working days after the assessment 

of development contributions is notified to that person. 

It is important that, prior to making a formal application 

for review, the developer has taken the opportunity to 

discuss their project and the contribution level with the 

Development Contribution Team. The Development 

Contribution Information Sheet, available from 

Council, provides further information on the ways that 

contributions are set and can be reviewed. 

Council shall as soon as practicable consider the request. 

Where the application is to be heard by Council, 

Council will give at least 5 working days notice of the 

commencement date, time, and the place, of a hearing of 

the request by the person. 

In considering the development contribution required, 

Council may, at its full discretion, decide whether to 

uphold or reduce the original amount of development 

contributions required. 

In making its decision Council may take into account: 

•• 

Appropriate statutory considerations, including matters 

under the LGA 

•• 

Reasonableness 

•• 

Fairness 

•• 

Consistency 

•• 

Integrity of the development contributions scheme 

•• 

Appropriateness of the development contribution 

policy to a particular development 

•• 

Whether a residential development is being 

undertaken on behalf of a first home buyer 

•• 

Whether a small business to be developed in a fully 

reticulated and serviced township will give rise to 

a significant demand for growth related additional 

infrastructure 

•• 

Other sources of funding. 

It will be the responsibility of the applicant to provide 

sufficient evidence to allow the Council to fairly assess 

the application for further consideration. 

Non residential development contributions will be 

assessed on an individual basis as per the policy. If a small 

business is established in an existing community and it 

is anticipated that the new business will create little or 

no additional demand on the infrastructure, Council will 

consider whether adequate contributions have already 

been paid through residential development within that 

community. 

Where a larger area of esplanade reserve or ecological 

reserve is required under the District Plan or negotiated 

to provide increased access to the coast, Council may 

reduce the area of reserve required under development 

contributions. Any such application will be considered 

by Council or Council may delegate this role to Council 

Officers. 

Having heard the request Council, at its discretion, will 

make its decision and communicate that decision to the 

person making the request, within 10 working days. 

154 


Basis of calculating development contributions 

Roading - network infrastructure 

Events giving rise to a development contribution for 

roading are: 

•• 

Resource consent under the Resource Management 

Act 1991 

•• 

Building consent under the Building Act 2004. 

The development contribution payable for roading will 

be calculated by: 

FS = A x 

Where – 

FS – is the future services contribution, based on 

the costs of creating new growth related 

infrastructure. 

C 

B 

A – 

B – 

C – 

is 100% of the annual growth related capital 

expenditure for roading averaged over 10 

years. 

is the estimated additional vehicle movements 

per day, (for example an average of 10 

per household) created by the new site or 

development, estimated by the developer and 

verified by the Council 

is the estimated average daily traffic movement 

(10 per household) calculated by multiplying 

the expected new subdivision sites connected 

to the roading network (refer growth 

assumptions table) by the average daily traffic 

volume = (10 per lot). This is the unit of 

demand (UAD). 

The roading contribution for non residential development 

will be calculated using factors to convert gross floor 

area plus outdoor area used for business purposes to 

equivalent units of demand. The factors are based on 

average use of roading, based on research carried out 

by Councils with similar commercial environments as to 

those within the Far North. The below table sets out the 

factors. 

Use Conversion Factor Activity 

Roading Low 1 equiv UOD = 100m 2 GFA Industrial, low volume commercial = Less than 16vpd per 100m 2 

Medium 2.5 equiv UOD = 100m 2 GFA Range of commercial , retail and entertainment activities = 16 – 

45 vehicles per day (vpd) per 100m 2 

High 5 equiv UOD = 100m 2 GFA High level retail etc = 45 plus vpd per 100m 2 

Residential development with a value of less than 

$100,000 per lot for land at subdivision, or a gross 

floor area up to and including 70m 2 or between 70 

and 150m 2 per residential unit at resource or building 

consent qualifies for the adjustment factor. The 

adjustment factor is: FS times the value of development 

divided by $100,000 in the case of subdivisions or in 

the case of residential development a unit of demand 

of 0.6 for gross floor areas up to and including 70m 2 

and a unit of demand of 0.8 for floor areas between 

70 and 150m 2 . 

No development contribution is payable for residential 

developments with a development value of less than 

$5,000. 


155


Waterworks - network infrastructure 


waterworks are: 

•• 


Act 1991 

•• 

Building consent under the Building Act 2004 

•• 

An authorisation for a service connection. 

The development contribution payable for waterworks 

will be calculated by: 

B 

FS = A x 

C 

Where: 




A – is 100% of the annual growth related capital 

expenditure for water averaged over 10 

years. 

B – is the estimated additional daily use of water 

(580 litres is the norm per residential site per 

day) to be estimated by the resource consent 

applicant and verified by Council. 

C – is the estimated average daily volume of 

water consumed by new sites. It is calculated 

by multiplying the expected new connections 

per year (refer growth assumptions table) 

by the average daily water consumption 

volume (580 litres per site per day). 

This is the unit of demand. 

The waterworks contribution for non residential sites is 

calculated using a factor to convert gross floor area to 

units of demand. 

Waterworks 

0.5 equiv UOD = 100m 2 GFA 

Travellers’ accommodation on sites connected to the 

public water supply system will be charged a water 

supply contribution based on 0.6 units of demand per 

room or per motel unit. 

Residential development with a value of less than $100,000 

per lot for land at subdivision, or a gross floor area less 

than or equal to 70m 2 or between 70 and 150m 2 per 

residential unit at resource or building consent qualifies 

for the adjustment factor. The adjustment factor is: FS 

times the value of development divided by $100,000 in 

the case of subdivisions or in the case of residential 

development a unit of demand of 0.6 for gross floor 

areas up to and including 70m 2 and a unit of demand of 

0.8 for floor areas between 70 and 150m 2 . 



$5,000. 

Wastewater services - network infrastructure 


wastewater services are: 

•• 


Act 1991 

•• 

Building consent under the Building Act 2004 

•• 


The development contribution payable for wastewater 

services will be calculated by: 

B 

FS = A x 

C 

Where: 





expenditure for wastewater averaged over 

10 years as detailed in Council’s long-term 

financial strategy. 

B – is the estimated additional daily wastewater 

generated (550 litres is the norm per 

residential site per day) to be estimated by 

the resource consent applicant and verified 

by Council. This includes non residential 

developments. 

C – the estimated average daily volume of 

wastewater generated from all new sites. 

It is calculated by multiplying the expected 

new connections per year (refer growth 

assumptions table) by the average daily 

wastewater generation volume (550 litres 

per site). This is the unit of demand. 

156 


The waterworks contribution for non residential sites is 

calculated using a factor to convert gross floor area to 

units of demand. 

Wastewater 


Travellers’ accommodation on sites connected to the 

public wastewater system will be charged a wastewater 

contribution based on 0.6 units of demand per room or 

per motel unit. 


$100,000 per lot for land at subdivision, or a gross floor 

area up to and including 70m 2 or between 70 and 150m 2 

per residential unit at resource or building consent 

qualifies for the adjustment factor. The adjustment 

factor is: FS times the value of development divided 

by $100,000 in the case of subdivisions or in the case 

of residential development a unit of demand of 0.6 for 

gross floor areas up to and including 70m 2 and a unit of 

demand of 0.8 for floor areas between 70 and 150m 2 . 



$5,000. 

Stormwater - network infrastructure 


stormwater services are: 

•• 


Act 1991 

•• 

Building Consent under the Building Act 2004 

•• 


The development contribution payable for stormwater is: 

Sites under 600m 2 : A fee calculated by: 

A x C 

B 

Where: 





expenditure for stormwater averaged over 

10 years. 

B – is the estimated number of new serviced 

sites in the district (340 per year). 

C – is 1 (the equivalent impact of 1 household 

unit (200m 2 of impermeable surface is the 

unit of demand)) 

Sites under 600m 2 : A fee calculated by: 

A x C 

B D 

Where: 





expenditure for stormwater averaged over 

10 years. 

B – 

C – 

D – 

is the estimated number of new serviced 

sites in the district (refer growth assumptions 

table) per year. 

is the increased area of impermeable surface. 

is the equivalent impact of 1 household unit 

(200m 2 of impermeable surface is the unit of 

demand for all residential uses). 

The stormwater contribution for non residential sites is 

calculated using a factor to convert gross floor area plus 

outside impervious areas to units of demand. 

Stormwater 


Travellers’ accommodation on residentially zoned sites 

will be charged a stormwater contribution based on 0.6 

units of demand per room or motel unit. 












developments with a development value less than $5,000. 


157


Reserves 


reserves are: 

•• 

Resource consent application under the RMA 1991 

(for subdivision) 

•• 

Building consent under the Building Act 2004 (This 

requirement relates to the building of a second and or 

subsequent dwelling on a lot). 

Of the monies that Council needs to collect for reserves, 

only 60% of this will be collected as cash. The rest will 

be taken as land which reduces the overall level of 

contributions anticipated to be received by Council and 

as outlined in this Policy. 

For subdivision consent applications the development 

contribution payable for reserves will be calculated by: 

A x C 

B D 

Where: 

FS – is the future services contribution, based 

on the costs of creating new growth related 


A – 

B – 

C – 

D – 

is the growth related capital expenditure 

for reserves. 

is the number of new lots created (refer 

growth assumptions table). 

is the actual size of the new allotment 

created. 

is the average lot size (estimated to be 

1200m 2 ). 

The FS figure is the total development contribution 

required for reserves. This is limited to 7.5% of the 

value of additional allotments created by a subdivision, 

in accordance with Section 203. If the figure calculated 

above (FS) exceeds 7.5% of the value of additional 

allotments, then the lesser figure will apply (ie 7.5% of 

the value). This includes proposed residential sites in the 

rural area. 

The basis, on which the value of additional allotments or 

land is assessed for the purposes of the 7.5% limit, will 

be the current land value as determined by a registered 

valuer. 

The development contribution for reserves may be 

collected by Council as cash or land. 













$5,000. 

No reserve contribution shall be payable on any nonresidential 

activity in urban or rural areas. 

158 




community infrastructure are: 

•• 


Act 1991 

•• 

Building consent under the Building Act 2004. 

The development contribution payable for community 

infrastructure will be calculated by: 

FS = 

B 

Where: 





expenditure for community infrastructure 

averaged over 10 years. 

B – is the number of new sites created per year 

(refer growth assumptions table). 

A 

For non residential developments community infrastructure 

contributions will be assessed on an individual 

activity basis related to specific demand. If a business for 

example a plumber or upholsterer is established with 

locally resident owners/employees Council will consider 

whether an adequate contribution has already been paid 

through residential development. 

Travellers’ accommodation is assessed at 0.6 of a unit of 

demand per accommodation unit and a full unit for any 

managers unit. 

Conversely a new restaurant, bulk retail facility or tourist 

development with significant out of location visitors will 

place demands on the districts community infrastructure. 

Therefore a contribution will be assessed and taken in 

accordance with the formula above. 













$5,000. 


159


Appendix A 

Summary of units of demand generated by subdivision and development 

Lot unit of demand 

One residential lot 1.0 

One rural lot 1.0 

One residential or rural lot the registered valuation 

of which is $100,000 or less 


Registered valuation/ 

$100,000 x 1 

One commercial or industrial lot with an area of less than 1.0 

1,000m 2 

One commercial or industrial lot with an area of 1,000m 2 1.0 x lot area divided by 1,000m 2 

or more 

Activity unit of demand 

One dwelling unit 1.0 

One dwelling unit gross floor area up to and including 70m 2 0.6 

One dwelling unit gross floor area 70 - 150m 2 0.8 

Any motel unit or other accommodation unit, excluding an 0.5 

hotel room 

First dwelling unit on a site created prior to 1 July 2003 0 

Retirement unit (excluding any room such as a hospital room 0.6 

accommodating > 3 people) 

Any hotel room , room or other tourist accommodation room 

or any room in a hospital, retirement unit or school normally 

accommodating more than 3 persons 

One commercial or industrial unit including the commercial 

part of any activity excluding any part that comprises hotel 

rooms, motel rooms or other accommodation units 

The number of persons 

accommodated in the room divided 

by 5 

The gross business area on the lot 

multiplied by the applicable unit of 

demand factors in this table or the 

total impervious area on the site 

in the case of stormwater 

Lot unit of demand (continued) 

Farm buildings associated with normal farming operations 

including sheds, barns, garages including buildings for indoor 

poultry, livestock and crop production 

Any other activity not specified above 

For the purpose of calculating water and wastewater 

development contributions in a dwelling unit situation only, where 

lot owner has being paying the water or wastewater availability 

charge or charges then in which ever service has been paid 

Commercial/Industrial demand factors 

Roading 

•• 

Low traffic volume generated; 

•• 

Medium traffic volume generated 

•• 

High traffic volume generated 

Water supply 

Wastewater 

Stormwater 


0 

For roading, watersupply, sewerage 

and stormwater only the gross 

business area of the activity 

divided by 200m 2 

1 in the contribution category the 

availability charge has been paid 

minus the availability charges that 

have been paid 

1 per 100m 2 of gross floor area 

2.5 per 100m 2 of gross floor area 




1.0 per 200m 2 of impervious area 

160 


Treasury Policies 

Introduction 

The following Treasury Policies include the overarching 

Treasury Policy, Liability Management Policy and Investment 

Policy. 

Policy purpose 

The purpose of the Treasury Policy is to outline approved 

policies and procedures in respect of all treasury activity 

to be undertaken by council. The formalisation of these 

policies and procedures will enable treasury risks within 

Council to be prudently managed. 

As circumstances change, the policies and procedures 

outlined in this policy will be modified to ensure that 

treasury risks within Council continue to be well managed. 

In addition, regular reviews will be conducted to test the 

existing policy against the following criteria: 

•• 

Industry best practices for a council the size and 

type of council 

•• 

The risk bearing ability and tolerance levels of the 

underlying revenue and cost drivers 

•• 

The effectiveness and efficiency of the Treasury Policy 

and treasury management function to recognise, 

measure, control, manage, and report on Council’s 

financial exposure to market interest rate risks, funding 

risk, liquidity, investment risks, counterparty credit risks, 

and other associated risks 

•• 

The operation of a pro-active treasury function in 

an environment of control and compliance 

•• 

The robustness of the policy’s risk control limits and 

risk spreading mechanisms against normal and 

abnormal interest rate market movements and 

conditions. 

It is intended that the policy be distributed to all personnel 

involved in any aspect of the council’s financial 

management. In this respect, all staff must be completely 

familiar with their responsibilities under the policy at 

all times. A 12 month transition period is permitted in 

terms of implementation and compliance to this policy. 

Scope 

•• 

This document identifies the policies and procedures 

of Council in respect of treasury management activities 

•• 

The policy has not been prepared to cover other 

aspects of council’s operations, particularly transactional 

banking management, systems of internal control 

and financial management. Other council policies and 

procedures cover these matters 

•• 

Planning tools and mechanisms are also outside of the 

scope of this policy. 

Objectives 

The objective of this Treasury Policy is to control and 

manage costs and investment returns that can influence 

operational budgets and public equity. 

Statutory objectives 

•• 

All borrowing, investments and incidental financial 

arrangements (e.g. use of interest rate hedging financial 

instruments) will meet requirements of the LGA, and 

incorporate the Liability Management Policy and 

Investment Policy 

•• 

Council is governed by the following relevant 

legislation: 

a. LGA in particular Part 6 including sections 

101,102,104 and 105 and Subpart 4 Sections 112 

to 122 

b. Trustee Act 1956. When acting as a trustee 

or investing money on behalf of others, the 

Trustee Act highlights that trustees have a duty 

to invest prudently and that they shall exercise 

care, diligence, and skill that a prudent person of 

business would exercise in managing the affairs of 

others. Details of relevant Sections can be found 

in the Trustee Act 1956 Part ll Investments 

c. Public Bodies Lease Act 1969 and Property Law 

Act 2007 

•• 

All projected borrowings are to be approved by 

Council as part of the LTP or Annual Plan process, 

or by resolution of Council before the borrowing is 

undertaken 

•• 

All legal documentation in respect to borrowing and 

financial instruments will be approved by Council’s 

in-house solicitors prior to the transaction being 

executed 


161


•• 

Council will not enter into any borrowings 

denominated in a foreign currency 

•• 

Council will not transact with any Council Controlled 

Trading Organisation (CCTO) on terms more 

favourable than those achievable by Council itself 

•• 

A resolution of Council is not required for hire 

purchase, credit or deferred purchase of goods if: 

a. The period of indebtedness is less than 91 days 

(including rollovers) 

b. The goods or services are obtained in the 

ordinary course of operations on normal terms 

for durations not exceeding the economic life of 

the asset. 

General objectives 

•• 

To manage debt to optimise low cost of funding in the 

long-term whilst balancing risk and cost considerations 

•• 

Monitor, evaluate and report on treasury performance 

•• 

Borrow funds and transact risk management 

instruments within an environment of control and 

compliance under Council approved Treasury Policy 

so as to protect Council’s financial assets and costs 

•• 

Arrange and structure long-term funding for Council 

at the lowest achievable interest margin from debt 

lenders 

•• 

Optimise flexibility and spread of debt maturity 

within the funding risk limits established by this 

policy statement 

•• 

Monitor and report on financing/borrowing covenants 

and ratios under the obligations of Council’s lending/ 

security arrangements 

•• 

Comply with financial ratios and limits stated within 

this policy 

•• 

Monitor Council’s return on investments 

•• 

Ensure Council, management and relevant staff are 

kept abreast of the latest treasury products, 

methodologies, and accounting treatments through 

training and in house presentations 

•• 

Maintain appropriate liquidity levels and manage cash 

flows within Council to meet known and reasonable 

unforeseen funding requirements 

•• 

To manage investments to optimise returns in the longterm 

whilst balancing risk and return considerations 

•• 

To minimise exposure to credit risk by dealing with and 

investing in credit worthy counterparties 

•• 

Ensure that all statutory requirements of a financial 

nature are adhered to 

•• 

To ensure adequate internal controls exist to protect 

council’s financial assets and to prevent unauthorised 

transactions 

•• 

Develop and maintain relationships with financial 

institutions, investors, and investment counterparties. 

Overview of management structure 

The following diagram illustrates those individuals and 

bodies who have treasury responsibilities. Authority levels, 

reporting lines and treasury duties and responsibilities 

are outlined in the following section: 


Chief Executive Officer (CEO) 

General Manager Corporate Services (GMCS) 

Financial Controller (FC) 

Assistant Finance Manager (AFM) 

Banking Officer (BO) 

162 


Council 

Council has ultimate responsibility for ensuring that there 

is an effective policy for the management of its risks. In 

this respect, Council decides the level and nature of risks 

that are acceptable, given the underlying objectives of 


Council is responsible for approving the Treasury Management 

Policy. While the policy can be reviewed and 

changes recommended by other persons, the authority 

to make or change policy cannot be delegated. 

In this respect, Council has responsibility for: 

•• 

Approving the long-term financial position of council 

through the 10 year Long-Term Plan (LTP) and the 

adopted Annual Plan approving new debt through the 

adoption of the Annual Plan, specific Council resolution, 

and approval of this policy 

•• 

Approving the Treasury Management Policy 

incorporating the following delegated authorities 

•• 

Borrowing, investment and dealing limits and the 

respective authority levels delegated to the GMCS, 

FC, and other management 

•• 

Counterparties and credit limits 

•• 

Risk management methodologies and benchmarks 

•• 

Guidelines for the use of financial instruments 

•• 

Receive a triennial review report on the policy 

•• 

Evaluating and approving amendments to the policy 

•• 

Approving budgets and high level performance 

reporting 

•• 

Delegate authority to the CEO and other officers. 

Council should also ensure that: 

•• 

It receives regular information from management 

on risk exposure and financial instrument usage in a 

form that is understood, and that enables it to make 

informed judgements as to the level of risk undertaken 

•• 

Issues raised by auditors (both internal and external) 

in respect of any significant weaknesses in the treasury 

function are resolved in a timely manner 

•• 

Submissions are received from management requesting 

approval for one-off transactions falling outside policy 

guidelines. 

Chief Executive Officer (CEO) 

While Council has final responsibility for the policy 

governing the management of council’s risks, it delegates 

overall responsibility for the day to day management 

of such risks to the Chief Executive Officer. The Chief 

Executive Officer can sub delegate these responsibilities, 

and currently does, to the General Manager Corporate 

Services. 

General Manager Corporate Services (GMCS) 

In respect of treasury management activities, the General 

Manager Corporate Services responsibilities include: 

•• 

Ensuring the Treasury Management Policies comply 

with existing and new legislation 

•• 

Approve new counterparties and counterparty limits 

•• 

Approve new borrowing undertaken in line with 

Council resolution and approved borrowing strategy 

• Approve interest rate strategy 

•• 

Authorising borrowing, investing, interest rate, cash 

management transactions with bank counterparties 

•• 

Receive advice of breaches of Treasury Management 

Policy and significant treasury events from the FC 

or AFM 

•• 

Approve all amendments to council records arising 

from checks to counterparty confirmations. 

Financial Controller (FC) 

The FC’s responsibilities are as follows: 

•• 

Management responsibility for borrowing and 

investment activities 

•• 

Recommending policy changes to Council for approval 

•• 

Ongoing risk assessment of borrowing and investment 

activity including procedures and controls 

•• 

Approving treasury transactions in accordance with 

delegated authority 

•• 

Authorising the use of approved interest rate risk 

management instruments within discretionary authority 

•• 

Approving the register of cheque and electronic 

banking signatories 

•• 

Approve opening and closing of bank accounts 

•• 

Monitoring current and forecast cash position 

•• 

Investigate financing alternatives to minimise borrowing 

costs, margins and interest rates, and making 

recommendations to the GMCS as appropriate 

•• 

Proposing new funding requirements to the GMCS 

for consideration and submission to Council 

•• 

Handle all administrative aspects of bank counterparty 

agreements and documentation such as loan 


163


agreements and ISDA (International Swap Dealers 

Association Incorporated) documents 

•• 

Reviewing and making recommendations on all aspects 

of the policy to the GMCS, including; dealing limits, 

approved instruments, counterparties, and general 

guidelines for the use of financial instruments 

•• 

Conducting a review, at least triennially, of the Treasury 

Management Policy, treasury procedures and 

counterparty limits 

•• 

Managing the long-term financial position of council as 

outlined in the LTP 

•• 

Ensuring management procedures and policies are 

implemented in accordance with this Treasury 

Management Policy 

•• 

Ensuring all financial instruments are valued and 

accounted for correctly in accordance with current 

best practice standards 

•• 

Monitoring and reviewing the performance of the 

treasury function in terms of achieving the objectives 

of minimising and stabilising funding costs 

•• 

Approving all amendments to council records arising 

from checks to counterparty confirmations 

•• 

Reviewing and approving borrowing and investment 

system/spreadsheet reconciliation to internal records 

•• 

Review and approve bank reconciliations. 

Assistant Finance Manager (AFM) 

•• 

Recommending authorised signatories and delegated 

authorities in respect of all treasury dealing and 

banking activities 

•• 

Monitoring treasury exposure on a regular basis 

including the investment portfolio, interest rate 

exposures, and borrowings 

•• 

Execute borrowing, investment, and interest rate 

management transactions in accordance with set limits 

•• 

Account for all treasury transactions in accordance 

with legislation and generally accepted accounting principles, 

council’s accounting, funding and financial policies 

•• 

Check compliance against limits and prepare report on 

an exceptions basis 

•• 

Co-ordinate the compilation of cash flow forecasts and 

cash management. 

Banking Officer (BO) 

•• 

Update treasury spreadsheets for all new, 

re-negotiated and maturing transactions 

•• 

Monitor and update credit ratings of approved 

counterparties 

•• 

Settlement of borrowing, investment, and interest 

rate management transactions 

•• 

Check all treasury deal confirmations against deal 

documentation and report any irregularities 

immediately to the FC 

•• 

Complete general ledger reconciliations to treasury 

spreadsheets 

•• 

Forecast future cash requirements (working capital) 

•• 

Cash management 

•• 

Reconcile monthly summaries of outstanding financial 

contracts from bank counterparties to internal records 

•• 

Monitor all treasury exposures daily 

•• 

Prepare treasury reports. 

Delegation of authority and authority limits 

Treasury transactions entered into without the proper 

authority are difficult to cancel given the legal doctrine 

of apparent authority. Also, insufficient authorities for a 

given bank account or facility may prevent the execution 

of certain transactions (or at least cause unnecessary 

delays). 

To prevent these types of situations, the following 

procedures must be complied with: 

•• 

All delegated authorities and signatories must be 

reviewed at least annually to ensure that they are still 

appropriate and current 

•• 

A comprehensive letter must be sent to all bank 

counterparties at least annually to confirm details of all 

relevant current delegated authorities empowered to 

bind council. 

Whenever a person with delegated authority on any 

account or facility leaves council, all relevant banks and 

other counterparties must be advised in writing in a timely 

manner to ensure that no unauthorised instructions are 

to be accepted from such persons. 

Council has the following responsibilities, either directly 

itself, or via the following stated delegated authorities. 

164 


Activity Delegated Authority Limit 

Approving and changing policy Council Unlimited 

Approve borrowing programme for year Council Unlimited (subject to legislative 

and other regulatory limitations) 

Acquisition and disposition of investments other than financial 


Unlimited 

investments 

Approval for charging assets as security over borrowing Council Unlimited 

Appoint Debenture Trustee Council N/A 

Approving transactions outside policy Council Unlimited 

Overall day to day risk management 

CEO (delegated by Council) Subject to Delegations Policy 

GMCS (delegated by CEO) 

FC (delegated by GMCS) 

Re financing existing debt 

GMCS (delegated by CEO) Subject to Delegations Policy 

FC (delegated by GMCS) 

Authorising lists of signatories FC Unlimited 

Opening/closing bank accounts FC Unlimited 

Approve new borrowing in accordance with Council resolution GMCS Per Council approved 

borrowing programme 

Negotiate bank facilities FC N/A 

Manage borrowing and interest rate strategy FC N/A 

Adjust net debt or net investment interest rate risk profile FC Per risk control limits 

Manage cash/liquidity requirements FC Per risk control limits 

Managing funding and investment maturities in accordance with 

council approved risk control limits 

FC 

Per risk control limits 

Maximum daily transaction amount (borrowing, investing, 

interest rate risk management and cash management) excludes 

roll overs on floating rate investments and interest rate roll 

overs on swaps 


CEO 

FC 

Triennial review of policy FC N/A 

Ensuring compliance with policy FC N/A 

All management delegated limits are authorised by Council through the Delegations Policy. 

Unlimited 

$10 million 

$10 million 


165


Liability management policy 

Council’s liabilities comprise borrowings and various 

other liabilities. Council maintains borrowings in order to: 

•• 

Raise specific debt associated with projects and capital 

expenditures 

•• 

Raise finance leases for fixed asset purchases 

•• 

Fund assets whose useful lives extend over several 

generations of ratepayers. 

Borrowing limits 

Debt will be managed within the following macro limits 

as shown in the table opposite. 

Ratio 

Net debt as a percentage of equity

•• 

Available terms from banks, LGFA, debt capital markets 

and loan stock issuance 

•• 

Council’s overall debt maturity profile, to ensure concentration 

of debt is avoided at reissue/rollover time 

•• 

Prevailing interest rates and margins relative to term 

for loan stock issuance, LGFA, debt capital markets, 

and bank borrowing 

•• 

The market’s outlook on future interest rate 

movements as well as its own 

•• 

Ensuring that the implied finance terms and 

conditions within the specific debt (e.g. project finance) 

are evaluated in terms such as cost tax/risk limitation 

compared to the terms and conditions Council could 

achieve in its own right 

•• 

Legal documentation and financial covenants together 

with credit rating considerations 

•• 

For internally funded projects, to ensure that finance 

terms for those projects are at least as equitable with 

those terms from external borrowing 

•• 

Alternative funding mechanisms such as leasing should 

be evaluated with financial analysis in conjunction with 

traditional on balance sheet funding. The evaluation 

should take into consideration, ownership, redemption 

value, and effective cost of funds. 

Council’s ability to readily attract cost effective borrowing 

is largely driven by its ability to rate, maintain a strong 

financial standing, and manage its relationships with its 

investors and financial institutions. 

Security 

Council’s external borrowings and interest rate risk 

management instruments will generally be secured by 

way of a charge over rates and rates revenue offered 

through a deed of charge, debenture or debenture trust 

deed. Under a deed of charge, debenture or debenture 

trust deed, council’s borrowing is secured by a floating 

charge over all council rates, levied under the Local 

Government (Rating) Act 2002. The security offered by 

council ranks equally or pari passu with other lenders. 

From time to time, and with Council approval, security 

may be offered by providing a charge over 1 or more of 

councils assets. 

Physical assets will be charged only where: 

•• 

There is a direct relationship between the debt and 

the purchase or construction of the asset, which it 

funds (e.g. an operating lease, or project finance) 

•• 

Council considers a charge over physical assets 

to be appropriate 

•• 

Any pledging of physical assets must comply with 

the terms and conditions contained within the deed 

of charge. 

Debt repayment 

The funds from all asset sales and operating surpluses will 

be applied to the reduction of debt and/or a reduction 

in borrowing requirements, unless Council specifically 

directs that the funds will be put to another use. 

Debt will be repaid as it falls due in accordance with the 

applicable loan agreement. Subject to the debt limits, a 

loan may be rolled over or renegotiated as and when 

appropriate. 

Council will manage debt on a net portfolio basis and will 

only externally borrow when it is commercially prudent 

to do so. 

Contingent liabilities 

Council may act as guarantor to financial institutions 

on loans or enter into incidental arrangements for 

organisations, clubs, trusts, or business units, when the 

purposes of the loan are in line with Council’s strategic 

objectives. 

Council is not allowed to guarantee loans to Council 

Controlled Trading Organisations under Section 62 of 

the LGA. 

Financial arrangements include: 

•• 

Rural housing loans 

•• 

Tenant contribution flats 

•• 

Rural water supply loans 

•• 

Advances to community organisations. 

Council will ensure that sufficient funds or lines of credit 

exist to meet amounts guaranteed. Guarantees given will 

not exceed NZ$1 million in aggregate over and above 

the existing loan guarantee to the Douglas Turner Centre 

(currently $1.9 million). 


167


New Zealand Local Government funding agency limited investment 

Despite anything earlier in this policy, Council may resolve 

to borrow from the New Zealand Local Government 

Funding Agency Limited (LGFA) and, in connection with 

that borrowing, may enter into the following related 

transactions to the extent it considers necessary or 

desirable: 

•• 

Contribute a portion of its borrowing back to the 

LGFA as an equity contribution to the LGFA for 

example borrower notes 

•• 

Provide guarantees of the indebtedness of other local 

authorities to the LGFA and of the indebtedness of the 

LGFA itself 

•• 

Commit to contributing additional equity 

(or subordinated debt) to the LGFA if required 

•• 

Secure its borrowing from the LGFA and the performance 

of other obligations to the LGFA or its creditors 

with a charge over council’s rates and rates revenue 

•• 

Subscribe for shares and uncalled capital in the LGFA. 

Investment policy and limits 

General policy 

Council generally holds investments for strategic reasons 

where there is some community, social, physical or 

economic benefit accruing from the investment activity. 

Generating a commercial return on strategic investments 

is considered a secondary objective. Investments and 

associated risks are monitored and managed, and 

regularly reported to Council. Specific purposes for 

maintaining investments include: 

•• 

For strategic purposes consistent with Council’s Long- 

Term Plan 

•• 

To reduce the current ratepayer burden 

•• 

The retention of vested land 

•• 

Holding short-term investments for working capital 

requirements 

•• 

Holding investments that are necessary to carry out 

council operations consistent with annual plans 

•• 

Invest amounts allocated to accumulated surplus, council 

created restricted reserves and general reserves 

•• 

Invest proceeds from the sale of assets. 

Council recognises that as a responsible public authority 

all investments held, should be low risk. Council also 

recognises that low risk investments generally mean 

lower returns. 

Objectives 

In its financial investment activity, council’s primary 

objective when investing is the protection of its 

investment capital and that a prudent approach to 

risk/return is always applied within the confines of 

this policy. Accordingly, only approved creditworthy 

counterparties are acceptable. Council will act effectively 

and appropriately to: 

•• 

Protect council’s investments and ensure they are risk 

averse and secure 

•• 

Ensure the investments benefit council’s ratepayers 

•• 

Maintain a prudent level of liquidity and flexibility to 

meet both planned and unforeseen cash requirements. 

Acquisition of new investments 

With the exception of approved financial investments, 

new investments are acquired if an opportunity arises 

and approval is given by the appropriate Council 

committee, based on advice and recommendations from 

Council officers. Before approving any new investments, 

Council gives due consideration to the contribution 

the investment will make in fulfilling Council’s strategic 

objectives, and the financial risks of owning the investment. 

The authority to acquire financial investments is delegated 

to the GMCS. 

Investment mix 

Council may maintain investments in the following assets 

from time to time: 

•• 

Equity investments, including investments held in CCO/ 

CCTO and other shareholdings 

168 


•• 

Property investments incorporating land, buildings, a 

portfolio of ground leases and land held for 

development 

•• 

Forestry investments 

•• 

Financial investments 

•• 

Other investments approved by Council. 

Equity investments 

Council maintains equity investments and other minor 

shareholdings. 

Council’s equity investments fulfil various strategic, 

economic development, and financial objectives as 

outlined in the LTP. 

Council seeks to achieve an acceptable rate of return on 

all its equity investments, consistent with the nature of the 

investment and their stated philosophy on investments. 

Dividends received from Council Controlled Organisations 

(CCO’s) and unlisted companies, not controlled 

by Council, are recognised when they are receivable in 

the Consolidated Statement of Financial Performance. 

Any purchase or disposition of equity investments 

requires Council approval, and any profit or loss arising 

from the sale of these investments is to be recognised in 

the Statement of Financial Performance. 

Any purchase or disposition of equity investments will be 

reported to the next meeting of Council. 

Unless otherwise directed by Council, the proceeds from 

the disposition of equity investments will be used firstly 

to repay any debt relating to the investment and then 

included in the relevant consolidated capital account. 

Council recognises that there are risks associated with 

holding equity investments and to minimise these 

risks Council monitors the performance of its equity 

investments on a twice yearly basis to ensure that the 

stated objectives are being achieved. Council seeks 

professional advice regarding its equity investments when 

it considers this appropriate. 

Property investments 

Council’s overall objective is to only own property that is 

necessary to achieve its strategic objectives. As a general 

rule, council will not maintain a property investment where 

it is not essential to the delivery of relevant services, and 

property is only retained where it relates to a primary 

output of council. Council reviews property ownership 

through assessing the benefits of continued ownership in 

comparison to other arrangements which could deliver the 

same results. This assessment is based on the most financially 

viable method of achieving the delivery of council services. 

Generally, council follows similar assessment criteria in 

relation to new property investments. 

Council reviews the performance of its property 

investments on a regular basis. All income, including rentals 

and ground rent from property investments, is included in 

the Consolidated Statement of Financial Performance. 

Forestry 

Forestry assets are held as long-term investments on the 

basis of net positive discounted cash flows, factoring in 

projected market prices, and annual maintenance, and 

cutting costs. 

All income from forestry is included in the Consolidated 

Statement of Financial Position. 

Any disposition of these investments requires Council 

approval. Unless otherwise directed by Council, the 

proceeds from forestry disposition are used firstly 

to repay related borrowings and then included in the 

relevant consolidated capital account. 

Financial investments 

Council’s investment portfolio will be arranged to provide 

sufficient funds for planned expenditures and allow for the 

payment of obligations as they fall due. Council prudently 

manages liquid financial investments as follows: 

•• 

Any liquid investments must be restricted to a term of 

no more than 91 days ensuring that meets future cash 

flow, and capital expenditure projections are met 

•• 

Interest income from financial investments is credited 

to general funds, except for income from investments 

for special funds, reserve funds, and other funds where 

interest may be credited to the particular fund 

•• 

Internal borrowing will be used wherever possible to 

avoid external borrowing. 


169


Financial investment objectives 

•• 

Council’s primary objectives when investing is the 

protection of its investment capital. Accordingly, 

Council may only invest in approved creditworthy 

counterparties. Creditworthy counterparties and 

investment restrictions are covered in Counter Party 

Credit Risk section. Credit ratings are monitored and 

reported quarterly to Council 

•• 

Council may invest in approved financial instruments as 

set out in the approved financial instruments section. 

These investments are aligned with Council’s objective 

of investing in high credit quality and highly liquid assets. 

Special funds, reserve and endowment funds 

Liquid assets are not required to be held against special 

funds and reserve funds. Instead, Council will internally 

borrow or utilise these funds where ever possible. 

Unless otherwise directed by Council, internal borrowing 

to/from reserves will be undertaken at the external cost 

of borrowing, or in accordance with the fund agreements. 

Trust funds 

Where Council hold funds as a Trustee, or manages 

funds for a Trust, then such funds must be invested on the 

terms provided within the Trust. If the Trusts’ Investment 

Policy is not specified, then this policy should apply. 

New Zealand Local Government Funding Agency 

Limited Investment 

Despite anything earlier in this policy, Council may invest 

in shares and other financial instruments of the New 

Zealand Local Government Funding Agency Limited 

(LGFA), and may borrow to fund that investment. 

Council’s objective in making any such investment will 

be to: 

•• 

Obtain a return on the investment 

•• 

Ensure that the LGFA has sufficient capital to become 

and remain viable, meaning that it continues as a 

source of debt funding for Council. 

Because of these dual objectives, Council may resolve 

to invest in LGFA shares in circumstances in which the 

return on that investment is potentially lower than the 

return it could achieve with alternative investments. If 

required in connection with the investment, Council 

may subscribe for uncalled capital in the LGFA and be 

a guarantor. 

Risk management 

The definition and recognition of interest rate, liquidity, 

funding, investment, counterparty credit, market, 

operational and legal risk of council will be as detailed 

below and applies to both the Liability Management 

Policy and Investment Policy. 

Risk recognition 

Interest rate risk 

Interest rate risk is the risk that funding costs or investment 

(due to adverse movements in market interest rates) will 

materially exceed or fall short of projections included 

in the LTP and Annual Plan, so as to adversely impact 

revenue projections, cost control, and capital investment 

decisions/returns/and feasibilities. 

The primary objective of interest rate risk management 

is to reduce uncertainty relating to interest rate 

movements through fixing of investment returns or 

funding costs. Certainty around funding costs is to be 

achieved through the active management of underlying 

interest rate exposures. 

170 


Approved financial instruments 

Dealing in interest rate products must be limited to financial instruments approved by Council. 

Approved financial instruments are as follows: 

Category 

Cash management and borrowing 

Investments (term


Interest rate risk control limits 

Net debt/borrowings 

Council debt/borrowings should be within the following 

fixed/floating interest rate risk control limit where net 

debt exceeds $25million: 

Minimum Fixed Rate 

Master Fixed/Floating Risk Control Limits 

55% 90% 

Maximum Fixed Rate 

Fixed rate is defined as an interest rate repricing date 

(beyond 12 months forward) on a continuous rolling 

basis. 

Floating rate is defined as an interest rate repricing within 

12 months. 

The percentages are calculated on the rolling 12 month 

projected net debt level calculated by management 

(signed off by the CEO, or equivalent). Net debt is 

the amount of total debt net of liquid financial assets/ 

investments, cash/cash equivalents. This allows for pre 

hedging in advance of projected physical drawdown of 

new debt. When approved forecasts are changed, the 

amount of fixed rate cover in place may have to be 

adjusted to ensure compliance with the policy minimums 

and maximums. 

The fixed rate amount at any point in time should be 

within the following maturity bands: 

Fixed Rate Maturity Profile Limit 

Period Minimum Cover Maximum Cover 

1 to 3 years 15% 60% 

3 to 5 years 15% 60% 

5 years plus 15% 60% 

•• 

Floating rate debt may be spread over any maturity out 

to 12 months. Bank advances may be for a maximum 

term of 12 months 

•• 

Any interest rate swaps with a maturity beyond 

10 years, must be approved by Council 

•• 

Interest rate options must not be sold outright. 

However, 1:1 collar option structures are allowable, 

whereby the sold option is matched precisely by 

amount and maturity to the simultaneously purchased 

option. During the term of the option, only the sold 

side of the collar can be closed out (i.e. re-purchased), 

otherwise both sides must be closed simultaneously. 

The sold option leg of the collar structure must not 

have a strike rate in the money 

•• 

Purchased borrower swaptions mature within 

12 months 

•• 

Interest rate options with a maturity date beyond 

12 months that have a strike rate (exercise rate) higher 

than 2% above the appropriate swap rate, cannot be 

counted as part of the fixed rate cover percentage 

calculation 

•• 

Forward start period on swaps and collar strategies to 

be no more than 24 months, and the underlying cap or 

swap starts within this period. 

Financial investment risk 

Council manages short-term cash investment risk 

ensuring availability and access to financial investments 

held. In order to manage short-term cash risk, financial 

investments are required to have a term to maturity of 

less than 91 days. 

172 


Liquidity risk/funding risk 

Risk recognition 

Cash flow deficits in various future periods, based on 

long-term financial forecasts, are reliant on the maturity 

structure of cash, financial investments, loans, and bank 

facilities. Liquidity risk management focuses on the ability 

to access committed funding at that future time to fund 

the gaps. Funding risk management centres on the ability 

to refinance or raise new debt at a future time at the 

same or more favourable pricing (fees and borrowing 

margins) and maturity terms of existing loans and facilities. 

The management of Council’s funding risks is important 

as several risk factors can arise to cause an adverse 

movement in borrowing margins, term availability and 

general flexibility including: 

•• 

Local Government risk is priced to a higher fee and 

margin level 

•• 

Council’s own credit standing or financial strength as a 

borrower deteriorates due to financial, regulatory or 

other reasons 

•• 

A large individual lender to council experiences 

financial/exposure difficulties, resulting in council not 

being able to manage their debt portfolio as optimally 

as desired 

•• 

New Zealand investment community experiences a 

substantial over supply of council investment assets. 

A key factor of funding risk management is to spread and 

control the risk to reduce the concentration of risk at a 

point in time so that if any of the above events occur, the 

overall borrowing cost is not unnecessarily increased and 

desired maturity profile compromised due to market 

conditions. 

Liquidity/funding risk control limits 

•• 

External term loans and committed debt facilities 

together with available liquid investments must be 

maintained at an amount of 110% over existing 

external debt 

•• 

Council has the ability to pre fund up to 12 months 

forecast debt requirements including re financings 

•• 

The GMCS has the discretionary authority to re 

finance existing debt on more favourable terms. Such 

action is to be reported and ratified by Council at the 

earliest opportunity. 

•• 

The maturity profile of the total committed funding 

in respect to all loans and committed facilities, is to be 

controlled by the following system: 

Period Minimum Cover Maximum Cover 

0 to 3 years 15% 60% 

3 to 5 years 15% 60% 

5 years plus 10% 40% 

A maturity schedule outside these limits will require 

specific Council approval. 

Special and general reserve funds 

Given that Council may require funding for capital 

expenditure cash shortfalls over the remaining life of the 

existing special and general reserve funds, where such 

funds are deemed necessary, they should be used for 

internal borrowing purposes when external borrowing 

is required. Accordingly, council maintains its funds in 

short-term maturities, emphasising counterparty credit 

worthiness and liquidity. The interest rate yield achieved 

on the funds is therefore a secondary objective. 

This will negate counterparty credit risk and any interest 

rate repricing risk that occurs when council borrows at 

a higher rate compared to the investment rate achieved 

by Special/Reserve Funds. 

Liquid assets will not be required to be held against 

special funds or reserve funds unless such funds are held 

within a trust requiring such, instead, Council will manage 

these funds using internal borrowing facilities. 

Counterparty credit risk 

Counterparty credit risk is the risk of losses (realised or 

unrealised) arising from a counterparty defaulting on a 

financial instrument where council is a party. The credit risk 

to council in a default event will be weighted differently, 

depending on the type of instrument entered into. 


173


Credit risk will be regularly reviewed by Council. Treasury 

related transactions would only be entered into with 

organisations specifically approved by Council. 

Counterparties and limits can only be approved on the 

basis of either long-term credit ratings of A+ (Standard 

& Poor’s or Fitch) and above or short-term rating of A 1 

or above (Standard & Poor’s). 

Limits should be spread amongst a number of counterparties 

to avoid concentrations of credit exposure. 

The following matrix guide will determine limits. 

Interest rate risk 

management instrument 

maximum 

per counterparty ($m) 

Minimum long-term/ 

short-term credit rating – 

Investments maximum 


Counterparty/Issuer 

stated and possible 

NZ Government N/A Unlimited none Unlimited 

Local Government Funding Agency (LGFA) N/A Unlimited N/A Unlimited 

NZ Registered Bank A+/ A-1 10.0 10.0 35.0 

Local Government Stock/ Bonds/FRN/ CP A+/ A-1 (if rated) 10.0 none 10.0 

NZ Corporate CP* A+/ A-1 2.0 none 2.0 

This summary list will be expanded on a counterparty named basis which will be authorised by the GMCS 

Total maximum 


* Subject to a maximum exposure of no greater than 20% of the portfolio being invested in Local Government or New Zealand Corporate debt at any one point in time. 

The maximum portfolio exposure limit does not apply to the LGFA. 

In determining the usage of the above gross limits, the 

following product weightings will be used: 

•• 

Investments (e.g. bank deposits) – Transaction Notional 

x Weighting 100% (Unless a legal right of set off 

over corresponding borrowings exit whereupon a 0% 

weighting may apply) 

•• 

Interest Rate Risk Management (e.g. swaps, FRAs) – 

Transaction Notional x Maturity (years) x 3% 

•• 

Foreign Exchange – Transactional principal amount x 

the square root of the Maturity (years) x 15%. 

Each transaction should be entered into a treasury 

spreadsheet and a quarterly report prepared to show 

assessed counterparty actual exposure versus limits. 

Individual counterparty limits are kept in a spreadsheet 

by management and updated on a day to day basis. Credit 

ratings should be reviewed by the AFM on an ongoing 

basis and in the event of material credit downgrades this 

should be immediately reported to the FC and assessed 

against exposure limits. Counterparties exceeding limits 

should be reported to Council. 

Investments are normally held to maturity date. Where 

investments are liquidated before legal maturity date, 

approval is obtained from the CEO, who also approves 

guidelines for a minimum acceptable sale price. The 

FC evaluates quotes based on these instructions and 

proceeds with the transaction. 

174 


Risk management 

To avoid undue concentration of exposures, financial 

instruments should be used with as wide a range of 

approved counterparties as possible. Maturities should 

be well spread. The approval process must take into 

account the liquidity of the market the instrument is 

traded in and repriced from. 

Foreign currency 

Council has minor foreign exchange exposure through 

the occasional purchase of foreign exchange denominated 

services, plant and equipment. 

Generally, all significant commitments for foreign exchange 

may be hedged using foreign exchange contracts, once 

expenditure is approved. Both spot and forward foreign 

exchange contracts can be used by council. 

Council shall not borrow or enter into incidental 

arrangements, within or outside New Zealand, in 

currency other than New Zealand currency. 

Operational risk 

Operational risk is the risk of loss as a result of human 

error (or fraud), system failures, and inadequate 

procedures and controls. 

Operational risk is very relevant when dealing with 

financial instruments given that: 

•• 

Financial instruments may not be fully understood 

•• 

Too much reliance is often placed on the specialised 

skills of 1 or 2 people 

•• 

Most treasury instruments are executed over the 

phone 

•• 

Operational risk is minimised through the adoption 

of all requirements of this policy. 

Dealing authorities and limits 

•• 

Transactions will only be executed by those persons 

and within limits approved by Council. 

Segregation of duties 

As there are a small number of people involved in 

borrowing and investment activity, adequate segregation 

of duties among the core borrowing and investment 

functions of deal execution, confirmation, settling and 

accounting/reporting is not strictly achievable. The risk 

will be minimised by the following process: 

•• 

The FC reports to the GMCS 

•• 

There is a documented approval process for 

borrowing, interest rate, and investment activity 

•• 

The AFM will report directly to the FC to control the 

transactional activities of the BO. 

Procedures 

All treasury instruments should be recorded and diarised 

within a treasury spreadsheet, with appropriate controls 

and checks over journal entries into the general ledger. 

Deal capture and reporting must be done immediately 

following execution/confirmation. Details of procedures 

including templates of deal tickets should be compiled 

in a treasury procedures manual separate to this policy. 

Procedures should include: 

•• 

Regular management reporting 

•• 

Regular risk assessment, including review of procedures 

and controls as directed by Council or appropriate 

sub-committee of Council 

•• 

Organisational, systems, procedural, and reconciliation 

controls to ensure: 

a. All borrowing, interest rate and investment activity 

is bona fide and properly authorised 

b. Checks are in place to ensure Council accounts 

and records are updated promptly, accurately 

and completely 

c. All outstanding transactions are revalued regularly 

and independently of the execution function to 

ensure accurate reporting and accounting of 

outstanding exposures and hedging activity. 

Organisational controls 

•• 

The FC or equivalent has responsibility for establishing 

appropriate structures, procedures and controls 

to support borrowing, interest rate, and investment 

activity 

•• 

All borrowing, investment, cash management, and 

interest rate risk management activity is undertaken 

in accordance with approved delegations authorised 

by Council. 

Cheque/electronic banking signatories 

•• 

Positions approved by the FC as per register 

•• 

Dual signatures are required for all cheques and 

electronic transfers 


175


•• 

Cheques must be in the name of the counterparty 

crossed Not Negotiable, Account Payee Only, via 

council bank account. 

Authorised personnel 

•• 

All counterparties are provided with a list of personnel 

approved to undertake transactions, standard 

settlement instructions and details of personnel 

able to receive confirmations. 

Recording of deals 

•• 

All deals are recorded on properly formatted deal 

tickets by the BO and approved as required by the 

FC. Deal summary records for borrowing, investments, 

interest rate risk management, and cash management 

transactions (on spreadsheets) are maintained and 

updated promptly following completion of transaction. 

Confirmations 

•• 

All inward deal confirmations including registry confirmations 

are received and checked by the BO against 

completed deal tickets and the treasury spreadsheet 

records to ensure accuracy 

•• 

All deliverable securities are held in council’s safe 

•• 

Deals, once confirmed, are filed (deal ticket and 

attached confirmation) by the BO in deal date/ 

number order 

•• 

Any discrepancies arising during deal confirmation 

checks, which require amendment to council records, 

are signed off by the GMCS. 

Settlement 

•• 

The majority of borrowing, interest rate, and investment 

payments are settled by direct debit authority 

•• 

For electronic payments, batches are set up 

electronically. These batches are checked by the 

BO to ensure settlement details are correct. 

Payment details are authorised by 2 approved 

signatories as per council registers. 

Reconciliations 

•• 

Bank reconciliations are performed monthly by the BO 

and checked and approved by the FC. Any unresolved/ 

unreconciled items arising during bank statement 

reconciliation which require amendment to council’s 

records are signed off by the FC 

•• 

A monthly reconciliation of the treasury spreadsheet 

to the general ledger is carried out by the BO and 

approved by the AFM 

•• 

In no case can the originator of any treasury deal sign 

off any discrepancies. 

Legal risk 

Legal and regulatory risks relate to the unenforceability of 

a transaction due to an organisation not having the legal 

capacity or power to enter into the transaction, usually 

because of prohibitions contained in legislation. While 

legal risks are more relevant for banks, Council may be 

exposed to such risks with Council unable to enforce its 

rights due to deficient or inaccurate documentation. 

Council will seek to minimise this risk by adopting policy 

regarding: 

•• 

The use of standing dealing and settlement instructions 

(including bank accounts, authorised persons, standard 

deal confirmations, contacts for disputed transactions) 

to be sent to counterparties 

•• 

The matching of third party confirmations and the 

immediate follow up of anomalies 

•• 

The use of expert advice. 

Agreements 

Financial instruments can only be entered into with 

banks that have in place an executed International Swap 

and Derivatives Association(ISDA) Master Agreement 

with Council. 

Council’s internal/appointed legal counsel must sign off on 

all documentation for new loan borrowings, refinancing, 

and investment structures. 

Financial covenants and other obligations 

Council must not enter into any transactions where 

it would cause a breach of financial covenants under 

existing contractual arrangements. 

Council must comply with all obligations and reporting 

requirements under existing funding facilities and 

legislative requirements. 

176 


Measuring treasury performance 

In order to determine the success of Council’s treasury 

management function, the following benchmarks and 

performance measures have been prescribed. 

Those performance measures that provide a direct 

measure of the performance of treasury staff, (operational 

performance and management of debt and interest rate 

risk) are to be reported to Council or an appropriate 

sub-committee of Council on a quarterly basis. 

Operational performance 

All treasury limits must be complied with, including (but 

not limited to) counterparty credit limits, dealing limits, 

and control limits. All treasury deadlines are to be met, 

including reporting deadlines. 

Management of debt and interest rate risk 

The actual borrowing cost for Council (taking into 

consideration costs of entering into interest rate risk 

management transactions) should be below the budgeted 

borrowing costs. 

Cash management 

The BO has the responsibility to carry out the day to 

day cash and short-term debt management activities. All 

cash inflows and outflows pass through bank accounts 

controlled by the finance function. 

•• 

The BO will calculate and maintain comprehensive 

rolling cash flow projections on a daily (2 weeks 

forward), weekly (4 weeks forward) and monthly 

(12 months forward) basis. These cash flow forecasts 

determine Council’s borrowing requirements and 

surpluses for investment 

•• 

On a daily basis, electronically download all council 

bank account information 

•• 

Coordinate Council’s operating units to determine 

daily cash inflows and outflows with the objective 

of managing the cash position within approved 

parameters 

•• 

Undertake short-term borrowing functions as 

required, minimising overdraft costs 

•• 

Ensure efficient cash management through 

improvement to forecasting 

•• 

Minimise fees and bank/government charges by 

optimising bank account/facility structures 

•• 

Monitor Council’s usage of overdraft and committed 

bank facilities. Overdraft facilities are utilised as little 

as practical. Committed bank overdraft facilities of $3 

million are maintained. This facility is loaded to trigger 

at $1million for review by the FC 

•• 

Match future cash flows to smooth overall timeline 

•• 

Provide reports detailing actual cash flows during 

the month, compared with those budgeted 

•• 

Maximise the return from available funds by ensuring 

significant payments are made within the vendor’s 

payment terms, but no earlier than required, unless 

there is a financial benefit from doing so 

•• 

Interest rate management on cash management 

balances is not permitted 

•• 

Cash, for working capital purposes, is invested for 

a term of no more 91 days and in approved 

instruments and counterparties. 

Reporting – performance measurement 

When budgeting forecast interest costs/returns, the 

actual physical position of existing loans, investments, and 

interest rate instruments must be taken into account. 


177


Treasury reporting 

Reporting 

The following reports are produced: 

Report Name Frequency Prepared By Recipient 

Daily cash position 

Daily BO FC 

Treasury spreadsheet 

Treasury exceptions report Daily BO FC 

Treasury report 

Monthly/Quarterly AFM FC/GMCS/Council 

•• 

Policy limit compliance 

•• 

Borrowing limits 

•• 

Funding and interest position 

•• 

Funding facility 

•• 

New treasury transactions 

•• 

Cost of funds vs budget 

•• 

Cash flow forecast report 

•• 

Liquidity risk position 

•• 

Counterparty credit 

•• 

Treasury performance 

Quarterly treasury strategy paper Quarterly AFM FC/GMCS/Council 

Statement of public debt Quarterly AFM FC/GMCS/Council 

Revaluation of financial instruments Half yearly External consultants FC/GMCS/Council 

A twelve month phase in non compliance period is permitted. 

Accounting treatment of financial instruments 

Council uses financial market instruments for the primary 

purpose of reducing its exposure to fluctuations in 

interest rates. The accounting treatment for such financial 

instruments is to follow IFRS accounting standards. 

Valuation of treasury instruments 

All treasury financial instruments must be revalued 

(marked to market) every 6 months for risk management 

purposes. This includes those instruments that are used 

only for hedging purposes. 

Underlying rates to be used to value treasury instruments 

are as follows: 

•• 

Official daily settlement prices for established markets 

•• 

Official daily market rates for short-term treasury 

instruments (e.g. FRA settlement rates calculated by 

Reuters from price maker quotations as displayed on 

the BKBM page) 

•• 

Relevant market mid rates provided by the company’s 

bankers at the end of the business day (5.00pm) for 

other over the counter treasury instruments 

•• 

For markets that are illiquid, or where market prices 

are not readily available, rates calculated in accordance 

with procedures approved by the FC. 

178 


Policy review 

The Treasury Policy is to be formally reviewed on a 

triennial basis. 

The FC, or equivalent, has the responsibility to prepare a 

review report that is presented to Council or a relevant 

sub-committee of Council. The report will include: 

•• 

Recommendation as to changes, deletions, and 

additions to the policy 

•• 

Overview of the treasury management function in 

achieving the stated treasury objectives, including 

performance trends in actual interest cost against 

budget (multi year comparisons) 

•• 

Summary of breaches of policy and one off approvals 

outside policy to highlight areas of policy tension 

•• 

Analysis of bank and lender service provision, share 

of financial instrument transactions, etc 

•• 

Comments and recommendations from Council’s 

external auditors on the treasury function, particularly 

internal controls, accounting treatment, and reporting 

•• 

An annual audit of the treasury spreadsheets and 

procedures should be undertaken 

•• 

Total net debt servicing costs and debt should not 

exceed limits specified in the covenants of lenders 

to Council. 

Council receives the report, approves policy changes 

and/or reject recommendations for policy changes. 

Appendices 

Noted guidelines within the LGFA lending policy to the 

Local Government sector: 

Lending policy 

The LGFA sole purpose will be to provide debt funding 

to New Zealand Local Government (i.e. the Local 

Government borrowing counterparty will be the local 

authority itself, and will not be any Council Controlled 

Organisation, Council Controlled Trading Organisation, 

Council collaborative project, or partially owned entity). 

The LGFA board will have ultimate discretion on 

approving term funding to local authorities. 

All local authorities that borrow from the Company will: 

•• 

Provide debenture security in relation to their 

borrowing from the company and related obligations, 

and (if relevant), equity commitment liabilities to the 

company, and (if relevant) guarantee liabilities to a 

security trustee approved for the company’s creditors 

•• 

Issue securities (bonds/floating rate notes/ 

commercial paper) to the company (i.e. not enter 

into facility arrangements) 

•• 

Comply with their own internal borrowing policies 

•• 

Comply with the financial covenants outlined in the 

following table, provided that: 

a. Unrated local authorities or local authorities with 

a long-term credit rating lower than ‘A’ equivalent 

can have bespoke financial covenants that exceed 

the: 

i. Lending policy covenants outlined in the 

following table with the approval of the board 

ii. Foundation policy covenants outlined in the 

table on page 181 with the approval of an 

ordinary resolution 

iii. Local authorities with a long-term credit 

rating of ‘A’ equivalent or higher will not be 

required to comply with the lending policy 

covenants in the following appendix, and can 

have bespoke financial covenants that exceed 

the foundation policy covenants outlined in 

the following appendix with the approval of 

an ordinary resolution 

iv. Any board or ordinary resolution approval 

of bespoke financial covenants will only be 

provided after a robust credit analysis and any 

approval must also include bespoke reporting 

and monitoring arrangements 


179


v. If the principal amount of a local authority’s 

borrowings is at any time equal to, or greater 

than, NZD $20 million, be a party to a deed 

of guarantee and an equity commitment deed 

(in each case in a form set by the company) 

vi. Non compliance with the financial covenants 

will either preclude a local authority from 

borrowing from the LGFA or in the case of 

existing local authority borrowers trigger an 

event of review. An event of default will occur 

if (among other things) a local authority fails 

to meet an interest or principal payment 

(subject to grace periods). An event of default 

will enable the LGFA to accelerate all loans to 

the defaulting local authority 

•• 

Clarification around the reporting/use of Commercial 

Paper (CP). 

Commercial paper (CP) 

•• 

Commercial Paper (CP) should not be issued to 

fund core term debt unless there are committed 

bank facilities that are available to completely cover 

any outstanding CP. Accordingly, CP issued on this basis 

should be considered as drawings under these facilities 

from the treasury worksheet perspective, rather than 

adding the CP as separate funding. The reason for this 

is that in the event that the CP market became liquid, 

Council would need to immediately fund the CP from 

the unutilised bank facilities. By adding the CP as a 

separate debt issue, and leaving the bank facilities as 

unutilised committed funding, the liquidity calculation 

gives a rather generous interpretation of liquidity that 

does not capture the intention of the policy limit 

•• 

CP can be used to fund short-term working capital, 

so long as cash flow forecasts meet the CP repayment 

obligations. 

Foundation policies 

All foundation policies may be reviewed annually 

by principal shareholders at the annual meeting of 

shareholders. Any alteration requires approval pursuant 

to the general policy section of this document. 

180 


Credit risk 


All local authorities that borrow from the Company will: 

•• 

Provide debenture security in relation to their 

borrowing from the company and related obligations, 

and (if relevant), equity commitment liabilities to the 

company and (if relevant) guarantee liabilities to a 

security trustee approved for the company’s creditors 

•• 

Issue securities (bonds/FRNs/CP) to the company (ie 

not enter into facility arrangements) 

•• 

Comply with their own internal borrowing policies 

•• 

Comply with the financial covenants outlined in the 

following table, provided that: 

a. Unrated local authorities or local authorities with a 

long-term credit rating lower than ‘A’ equivalent can 

have bespoke financial covenants that exceed the: 

i. Lending policy covenants outlined in the 

following table with the approval of the board 

ii. Foundation policy covenants outlined in 

the following table with the approval of an 

ordinary resolution 

•• 

Local authorities with a long-term credit rating of ‘A’ 

equivalent or higher will not be required to comply 

with the lending policy covenants in the following table, 

and can have bespoke financial covenants that exceed 

the foundation policy covenants outlined in the 

following table, with the approval of an ordinary 

resolution 

•• 

Any board or ordinary resolution approval of bespoke 

financial covenants will only be provided after a robust 

credit analysis and any approval must also include 

bespoke reporting and monitoring arrangements 

•• 

If the principal amount of a local authority’s borrowings 

is at any time equal to, or greater than, NZD $20 

million, be a party to a deed of guarantee and an 

equity commitment deed (in each case in a form 

set by the company). 

Financial 

covenant 

Net debt/ 

total revenue 

Net interest/total 

revenue 

Net interest/ 

annual rates 

income 


covenants 


Financial covenants are measured on council only, not the 

consolidated group. 

During the initial 3 years of operation the Auckland 

Council will be limited to a maximum of 60% of the 

company’s total local authority assets. After 3 years 

Auckland Council will be limited to a maximum of 40% 

of the company’s total local authority assets. 

No more than the greater of NZD $100million or 25% 

of a local authority’s borrowings from the company will 

mature in any 12 month period. 

Derivative policy 

The Company will only enter into derivative transactions 

with the New Zealand Debt Management Office as 

counterparty. 

Counterparty 

Standard & Poors 

Credit Rating 

or equivalent 

(Short-term/ 

long-term) 

Maximum % Limit 

(Total Cash + 

Liquid Assets) 

Cash and liquid investment policy 

The company will only invest in NZD senior debt 

securities, money market deposits, and registered 

certificates of deposits within the counterparty limits 

outlined in the following table. 

New Zealand Local Authority securities are excluded 

from the company’s cash and liquidity portfolio. 

Maximum 

New Zealand Dollar 

counterparty 

Limit 

Annual 

Growth Related 

Expenditure 

(000,000’s) Maximum term (years) 100% Unlimited 10 

Category 2 A1+/AAA 100% 50 1 

Category 3 

A1+; A1/AA+; AA; 

AA- 

50% 20 1 

Category 4 A1+; A1/A+, A 20% 5 1 

182 


Market risk 

Interest rate risk policy 

The Company will limit any interest rate risk mismatch 

between assets and liabilities to a maximum of 3 months. 

The Company’s total 12 month forecast portfolio PDH 

(Partial Differential Hedge) Limit is $25,000 1 . 

The Company’s total portfolio Value at Risk (VaR) daily 

limit is $150,000 2 . 

Foreign exchange risk policy 

The Company will take no foreign exchange risk. 

Maturity risk policy 

All local authority term asset maturities will be matched 

with liability maturities. 

Operational risk 

The Company will outsource the following functions to 

the New Zealand Debt Management Office under a 

services agreement as follows: 

•• 

Domestic/vanilla offshore issuance/execution – 

under instructions 

•• 

Hedging – execution under instructions 

•• 

Investing – execution under instructions 

•• 

Payments and settlements as agent for the Company 

•• 

Accounting and management reporting. 

Dividend policy 

The policy is to pay a dividend that provides an annual 

rate of return to shareholders equal to the company’s 

cost of funds plus 2% over the medium-term, recognising 

that to assist in the start up period, the initial expectation 

is for no dividend for the part period to 30 June 2012, 

and for a dividend equal to 50% of the target dividend in 

the 2 periods to 30 June 2014 to be paid. Thereafter, the 

intention is to pay at least the full target dividend until 

the target dividend return is achieved as measured from 

commencement, including consideration of the time 

value of money at the target annual rate of return. 

At all times, payment of any dividend will be discretionary 

and subject to the board’s legal obligations and views 

obligations and views on appropriate capital structure. 

1 

PDH risk measures the sensitivity of a portfolio to a one basis point change in underlying interest rates. For example a PDH of $25,000 means that the portfolio value will fall by $25,000 for a 

one basis point fall in interest rates. The PDH limit will be set at .0025% of the 12 month forecast portfolio amount until this forecast reaches $1 billion, following which this $25,000 limit applies. 

2 

VaR measures expected loss for a given period with a given confidence. For example, 95% confidence, daily VaR of $150,000 means that it is expected that the portfolio will lose $150,000 on 

5% of days. i.e. 1 day in 20 the portfolio value will decrease by $150,000. 


183

Statement of Accounting Policies 

Reporting entity 

The Far North District Council is a territorial local 

authority governed by the LGA. The prospective financial 

statements reflect the operations of Far North District 

Council, and do not include the consolidated results of 

Council Controlled Organisations. 

Council has not presented group prospective financial 

statements, because it believes that the parent 

prospective financial statements are more relevant 

to users. The main purpose of prospective financial 

statements in the LTP is provide users with information 

about the core services that council intends to provide 

to ratepayers, the expected cost of those services, and 

as a consequence how much Council requires by way of 

rates to fund the intended levels of service. The level of 

rates funding required is not affected by the subsidiaries 

except to the extent that Council obtains distributions 

from, or further invests in, those subsidiaries. Such effects 

are included in the prospective financial statements of 


Far North District Council has designated itself to be a 

public benefit entity for the purposes of New Zealand 

equivalents to International Financial Reporting Standards 

(NZIFRS). Far North District Council’s primary objective 

is to provide goods and services for community or 

social benefit, and any equity has been provided with a 

view to supporting that primary objective rather than 

for a financial return. All available reporting exemptions 

allowed under the framework for public benefit entities 

have been adopted. 

The prospective financial statements are for the 10 year 

period to 30 June 2022 and were authorised by Far 

North District Council for issue on 8th March 2012. 

Basis of preparation 

The prospective financial statements have been prepared 

in accordance with the requirements of the LGA, Part 6, 

Section 93 and Part 1 of Schedule 10, which includes 

the requirement to comply with New Zealand Generally 

Accepted Accounting Practices (NZGAAP). 

In preparation of these prospective financial statements, 

Far North District Council has adopted the New Zealand 

equivalents to International Financial Reporting Standards 

(NZIFRS) and other applicable Financial Reporting 

Standards, as appropriate for public benefit entities. 

The prospective financial statements are in compliance 

with FRS42. The accounting policies set out below have 

been applied consistently to the financial statements. No 

changes have been made to these policies. 

The prospective financial information has been prepared 

on a historical cost basis, modified by the revaluation 

of forestry assets, certain classes of property, plant 

and equipment, certain classes of intangible assets and 

investment property. The preparation of the financial 

statements in conformity with NZIFRS requires 

management to make judgements, estimates, and 

assumptions that affect the application of policies and 

reported amounts of assets and liabilities, income and 

expenses. The estimates and associated assumptions 

are based upon historical experience and various 

other factors that are believed to be reasonable under 

the circumstances, the results of which form the basis 

of making judgements about carrying values of assets 

and liabilities that are not readily apparent from other 

sources. Actual results may differ from these estimates. 

The estimates and underlying assumptions are reviewed 

on an ongoing basis. Revisions to accounting estimates 

are recognised in the period in which the estimate is 

revised if the revision affects only that period, or in the 

period of the revision and future periods if the revision 

affects both current and future periods. 

The financial statements are presented in New Zealand 

Dollars (NZD) and are rounded to the nearest thousand 

dollars ($000’s). 

184 


Financial reporting requirements for public benefit 

entities frozen 

In May 2011 the ASRB and FRSB agreed on a Position 

Statement that all NZIFRS’s with a mandatory effective 

date for annual periods beginning on or after 1 January 

2012 will be applicable to profit orientated entities only. 

The result is that the financial reporting requirements 

for public benefit entities are effectively frozen from 

the 2012 year end onwards. This exemption from new 

pronouncements is provided in light of pending changes 

to the Statutory Financial Reporting Framework in 

New Zealand. 

In September 2011, the External Reporting Board issued 

a position paper and consultation papers proposing a 

new external reporting framework for public benefit 

entities (PBEs). The papers proposed that accounting 

standards for PBEs would be based on International 

Public Sector Accounting Standards, modified as necessary. 

The proposals in these papers do not provide certainty 

about any specific requirements of future accounting 

standards. Therefore, the accounting policies on which 

the forecast information for 2012-22 has been prepared 

are based on the current New Zealand equivalents to 

International Financial Reporting Standards. 

Specific accounting policies 

(a) Cost allocation 

The Far North District Council has derived the net cost of 

service for each significant activity of council using the cost 

allocation system outlined below. Direct costs are charged 

directly to significant activities. Indirect costs are charged 

to significant activities based on cost drivers and related 

activity/usage information. 

(b) Criteria for Direct and Indirect Costs 

Direct costs are those costs directly attributable to a 

significant activity. 

Indirect costs are those costs that cannot be identified in 

an economically feasible manner with a specific significant 

activity. 

The costs of internal services not directly charged to 

activities are allocated as overheads using appropriate cost 

drivers such as actual usage, staff numbers and floor area. 

(c) Financial Statements 

The financial statements, as provided within each of 

the council activities, report the net cost of services for 

significant activities of council, and are represented by 

the costs of providing the service, less all directly related 

revenue that can be allocated to these activities. 

(d) Property, plant and equipment 

Property, plant, and equipment are shown at cost or 

valuation, less accumulated depreciation and impairment 

losses. 

Property, plant, and equipment consist of the following: 

(i) Operational assets 

These include land, buildings, improvements, plant and 

equipment, and motor vehicles. 

(ii) Restricted assets 

Restricted assets are parks and reserves owned by council 

that provide a benefit or service to the community and 

cannot be disposed of because of legal or other restrictions. 

(iii) Infrastructural assets 

Infrastructure assets are the fixed utility systems owned by 

council. Each asset type includes all items that are required 

for the network to function; for example, sewer reticulation 

includes reticulation piping and sewer pump stations. 

(e) Revaluations 

Far North District Council accounts for revaluations of 

property, plant and equipment on a class of asset basis. 

Valuations are performed with sufficient regularity to 

ensure that there carrying amount is not materially different 

to their fair value. Carrying values of revalued assets are 

assessed annually to ensure they do not differ materially to 

fair value. If there is a material difference then a revaluation 

is performed. 


185


All assets are valued at historical cost, except the 

following assets which are shown at fair value, based 

on periodic valuations by independent valuers, less 

subsequent depreciation: 

Roading Infrastructural Assets_____________________ Carparks 

Stormwater Infrastructural Assets______ Refuse Transfer Stations 

Water and Sewerage Infrastructure Assets_______ Library Books 

Drainage Infrastructural Assets_ ________________ Ferry Assets 

Maritime Assets___________________________Heritage Assets 

Footpaths and Footbridges_ _____ Community Facilities Buildings. 

The results of revaluing are credited or debited to an 

asset revaluation reserve for that class of asset. Where 

this results in a debit balance in the asset revaluation 

reserve, this balance is expensed in the Statement 

of Comprehensive Income. Any subsequent increase 

on revaluation that offsets a previous decrease in 

value recognised in the Statement of Comprehensive 

Income will be recognised first in the Statement of 

Comprehensive Income up to the amount previously 

expensed, and then credited to the revaluation reserve 

for that class of asset. 

Additions 

Additions between valuations are recorded at cost, 

except for vested assets. Certain infrastructure assets 

and land have been vested in council as part of the sub 

divisional consent process. The vested reserve land has 

been valued at 50% of the surrounding residential land 

as per an appropriately certified government valuation. 

Vested infrastructure assets have been valued based on 

the actual quantities of infrastructure components vested 

and the current unit rates for that component provided 

by the most recent valuation. 

Depreciation 

Depreciation is provided for on a straight line basis 

on all property, plant and equipment, other than land, 

at rates that will write off the cost (or valuation) of 

the assets to their estimated residual values over their 

useful lives. Assessed economic life is calculated using 

the methodology in the New Zealand Institute of Asset 

Management (NZIAM) manual. 

The useful lives and associated depreciation rates of 

major classes of assets have been estimated as follows: 

Operational assets: 

Runways 10 yrs 10% 

Buildings 40 – 100 yrs 1 – 2.5% 

Motor vehicles 3 – 5 yrs 20 – 33% 

Plant and machinery 1 – 40 yrs 2.5 – 100% 

Wharves (concrete) 50 - 85 yrs 1.25 - 2% 

Wharves (timber), 

moorings and ramps 30 – 50 yrs 2.3 – 3% 

Office furniture and 

equipment 5 – 15 yrs 6.67 – 20% 

Computers 3 - 7 yrs 20 – 33% 

Library books 3 – 45 yrs 2.22 – 33% 

Heritage assets 10 – 140 yrs 0.71 – 6.7% 

Infrastructural assets: 

Roads 

Top surface (seal) 12 - 50 yrs 2 – 8.33% 

Pavement (base course) 

– sealed 10 - 40 yrs 2.5 - 10% 

Culverts, cesspits 5 - 170 yrs 0.6 – 20% 

Footpaths 15 – 70 yrs 1.4 – 6.7% 

Kerbs 50 – 80 yrs 1.3 – 2% 

Street lights 25 – 60 yrs 1.67 – 4% 

Signs 10 yrs 10% 

Bridges 50 – 120 yrs 0.83 – 2% 

Water reticulation 

Pipes 40 – 160 yrs 0.62 – 2.5% 

Valves, hydrants 40 - 150 yrs 0.67 – 2.5% 

Pump stations 3 – 60 yrs 1.67 – 33.3% 

Tanks/dams 5 – 80 yrs 1.25 – 20% 

Sewerage reticulation 

Pipes 30 - 125yrs 0.8 –3.33% 

Manholes 35 - 130 yrs 0.77 – 2.85% 

Treatment plant 2 – 80 yrs 1.25 – 50% 

Stormwater systems 

Pipes 30 – 120 yrs 0.83 – 3.33% 

Manholes 100 yrs 1% 

186 


Improvements to leased assets are depreciated over 

the shorter of the unexpired period of the leases and 

the estimated useful lives of the improvements. The 

residual value and useful life of an asset is reviewed, and 

adjusted if applicable, at each financial year-end. Land is 

not depreciated. 

Disposals 

Gains and losses are determined by comparing the 

proceeds with the carrying amount of the asset. Gains 

and losses on disposals are included in the Statement 

of Financial Performance. When revalued assets are sold, 

the amounts included in the asset revaluation reserves 

in respect of those assets are transferred to retained 

earnings. 

Subsequent costs 

Costs incurred subsequent to initial acquisition are 

capitalised only when it is probable that future economic 

benefits or service potential associated with the item will 

flow to Far North District Council, and the cost of the 

item can be measured reliably. 

Assets under construction 

Assets under construction are not depreciated. The total 

cost of a project is transferred to the relevant asset class 

on its completion and then depreciated. 

(f) Intangible assets 

Intangible assets that are acquired by the Far North 

District Council are stated at cost less accumulated 

amortisation. Easements, resource consents, public access 

rights, software, coastal permits and licences are included 

in this category. 

Computer software 

Acquired computer software systems are capitalised on 

the basis of costs incurred to acquire and bring to use 

the specific software. These costs are amortised over 

their estimated useful lives at a rate of 10 - 33% per 

annum. 

Costs associated with developing or maintaining 

computer software programmes are recognised as an 

expense as incurred. 

Other intangible assets 

Other intangible assets that are acquired by Far North 

District Council are stated at cost, less accumulated 

amortisation and impairment losses. Easements and 

resource consents are included in this category and have 

useful lives as follows: 

Resource consents 5-25 yrs 4 - 20% 

Easements 100 yrs 1% 

Software 3 – 10 yrs 10 – 33% 

Public access rights 15 yrs 6.67% 

Where council invests at least $100,000 in a project, but 

will not ultimately own an asset and the community has 

the right to use the facility, and in terms of the contract, 

that right exists for longer than 12 months. The cost 

of the right will be treated as an intangible asset. In all 

instances, the cost will be amortised over the shortest of 

60% of the expected life of the asset or the term of the 

contract rights. 

Coastal permits and licences 

The coastal permits and licences are recorded at 

fair value in accordance with annual independent 

valuation obtained from the same valuer who values 

the property, plant and equipment, and investment 

property. Assumptions made by the valuer are that the 

coastal permits and licences will be renewed. The coastal 

permits and licences are for a finite period, however, it is 

expected that these will be renewed on an ongoing basis. 

Due to signalled legislative changes and the uncertainty 

surrounding the future occupation of the seabed and 

foreshore, it has been deemed prudent to amortise the 

coastal permits and licences over the unexpired period. 

Subsequent expenditure 

Subsequent expenditure on capitalised intangible assets 

is capitalised only when it increases the future economic 

benefits embodied in the specific asset to which it 

relates, it meets the definition of, and recognition criteria 

for, an intangible asset. All other expenditure is expensed 

as incurred. 

Amortisation 

An intangible asset with a finite useful life is amortised 

over the period of that life, annually assessed for indicators 


187


of impairment and tested for impairment if indicators of 

impairment exist, and carried at cost less accumulated 

amortisation and accumulated impairment losses. 

An intangible asset with an indefinite useful life is not 

amortised, but is tested for impairment annually, and is 

carried at cost less accumulated impairment losses. 

(g) Forestry assets 

Forestry assets are stated at fair value, less point of 

sale costs and are independently revalued to estimated 

market valuation based on net present value. The net gain 

or loss arising from changes in the forest asset valuation 

is included in the Statement of Financial Performance. All 

revenues from harvesting are recognised in the Statement 

of Financial Performance when realised. Related costs are 

expensed as incurred. 

(h) Employee entitlements 

Sick leave is measured as the amount of unused 

entitlement accumulated at the balance sheet date that 

the entity anticipates employees will use in future periods 

in excess of the days that they will be entitled to in each 

of those periods. 

Wages and salaries, annual leave, and other entitlements 

that are expected to be settled within 12 months of 

reporting date are measured at nominal values on an 

actual entitlement basis at current rates of pay. 

The group recognises a liability and an expense for 

bonuses where contractually obliged, or where there is 

a past practice that has created a constructive obligation. 

(i) Equity 

Equity is the community’s interest in council, and is 

measured as the difference between total assets and 

liabilities. Public equity is disaggregated and classified into 

a number of reserves to enable clearer identification of 

the specified uses that council makes of its accumulated 

surpluses. The components of equity are: 

Accumulated funds 

•• 

Retained earnings 

•• 

Asset revaluation reserves 

•• 

Revenue reserves (including special funds) 

•• 

Capital reserves. 

Reserves 

Funds that are received or set aside for particular 

purposes, and have legislative restrictions placed upon 

them, are considered as restricted funds. These include 

some special funds or reserves. The portion of these 

funds not required in the current year has been shown 

as restricted funds. 

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 Council. 

Restricted reserves are those reserves subject to specific 

conditions accepted as binding by Council. Transfers from 

these reserves may be made only for certain specified 

purposes or when certain specified conditions are met. 

Council created reserves are reserves established 

by Council decision. Council may alter them without 

reference to any third party or the Courts. Transfers to 

and from these reserves are at the discretion of Council. 

(j) Trade and other receivables 

Trade and other receivables are stated at expected face 

value, less any provision for impairment. 

A receivable is impaired when there is objective evidence 

that council will not be able to collect amounts due. 

Significant financial difficulties of the debtor, probability 

that the debtor will enter into bankruptcy, receivership, 

or liquidation, and default in payments are considered 

indicators that the debtor is impaired. The amount of the 

impairment is the difference between the asset’s carrying 

amount and the present value of estimated future cash 

flows. The carrying amount of the asset is reduced 

through the use of an allowance account, and the amount 

of the loss is recognised in the surplus or deficit. When 

the receivable is uncollectible, it is written off against the 

allowance account for receivables. Overdue receivables 

that have been renegotiated are reclassified as current 

(that is, not past due). 

(k) Revenue 

Sale of goods 

Revenue from fees and charges is recognised in the 

Statement of Financial Performance when the significant 

risks and rewards of ownership have been transferred 

to the buyer. 

188 


Services rendered 

Revenue from services rendered is recognised in the 

Statement of Financial Performance in proportion to the 

stage of completion of the transaction at the Statement 

of Financial Position date. The stage of completion is 

assessed by reference to surveys of work performed. No 

revenue is recognised if there are significant uncertainties 

regarding recovery of the consideration due, associated 

costs, or the possible return of goods, or continuing 

management involvement with the goods. 


The revenue recognition point for development 

contributions is the later of the point when council provides 

or is ready to provide the service for which the contribution 

is levied, or the event that will give rise to a requirement for 

a development contribution under the legislation. 

Rental Income 

Rental income from investment property is recognised 

in the Statement of Financial Performance on a straight 

line basis over the term of the lease. Lease incentives 

granted are recognised as an integral part of the total 

rental income. 

Government grants 

Grants from the government, such as New Zealand 

Transport Agency roading subsidies, are recognised at 

their fair value where there is a reasonable assurance 

that the grant will be received, and Far North District 

Council will comply with all attached conditions. 

Rates revenue 

Rates are set annually by resolution from Council and 

relate to a financial year. All ratepayers are invoiced 

within the financial year to which the rates have been set. 

Rates revenue is classified as a non exchange transaction 

and is recognised when levied. Rates collected on behalf 

of the Northern Regional Council are not recognised in 

the financial statements, as council is acting as an agent. 

Water revenue 

Water billing revenue is recognised on an accrual basis. 

Unbilled sales, as a result of unread meters at year end, 

are accrued on an average usage basis. 

Other grants and bequests 

Other grants and bequests, and assets vested in council 

(with or without conditions) are recognised as revenue 

when control over the assets is obtained. Where a 

physical asset is acquired for nil or nominal consideration, 

the fair value of the asset received is recognised as 

revenue when control over the asset is obtained. 

Dividends 

Dividends are recognised on an accrual basis net of 

imputation credits when the right to receive the dividend 

is established. 

Third party/agency income 

Where revenue is derived by acting as an agent for 

another party, the revenue that is recognised is the 

commission or fee on the transaction. 

Interest 

Interest income is recognised using the effective interest 

method. 

(l) Trade and other payables 

A liability is recognised when the service has been 

received or the goods received or when it has been 

established that the rewards of ownership have been 

transferred from the seller/provider to council and when 

it is certain that an obligation to pay arises. Trade and 

other payables are initially measured at fair value and are 

subsequently measured at amortised cost. 


189


(m) Leases 

Finance lease 

Leases that effectively transfer to the lessee substantially 

all risks and benefits incident to ownership of the 

leased item are classified as finance leases. At the 

commencement of the lease term, Far North District 

Council recognises the finance leases as assets and 

capitalises them at the lower of the fair value of the asset 

or the present value of the minimum lease payments. 

The leased assets and corresponding lease liabilities are 

recognised in the Statement of Financial Position. The 

leased assets are depreciated over the shorter of the 

lease term or its useful life. 

Liabilities are recognised in the Statement of Financial 

Position. The leased assets are depreciated over the 

shorter of the lease term or its useful life. 

Operational lease 

Leases, where the lessor effectively retains substantially 

all the risks and benefits of ownership of the leased 

items, are classified as operating leases. Payments under 

these leases are charged as expenses in the periods in 

which they are incurred. 

(n) Borrowing 

Borrowing 

Interest bearing borrowings are recognised initially at fair 

value less attributable transaction costs. Subsequent to 

initial recognition, interest bearing borrowings are stated 

at amortised cost with any difference between cost and 

redemption value being recognised in the Statement of 

Financial Performance over the period of the borrowings 

on an effective interest basis. 

Borrowing costs 

A public benefit entity that elects to defer the application 

of NZ IAS 23 (revised 2008) shall expense borrowing 

costs in accordance with NZ IAS 23 (2004). Far North 

District Council has elected to defer application, and 

borrowing costs are recognised in the period in which 

they are incurred. 

(o) Development costs 

Expenditure on development projects is carried forward 

to be expended against future revenue to be derived 

from the project. Expenditure carried forward is 

expensed in the Statement of Financial Performance at 

such time council determines that the project has ceased 

or no identified future benefits will be derived. 

(p) Cash and cash equivalents 

Cash and cash equivalents includes cash in hand, deposits 

held at call with banks, other short-term highly liquid 

investments with original maturities of 3 months or less, 

and bank overdrafts. Bank overdrafts are shown within 

borrowings in current liabilities in the Statement of 

Financial Position. 

(q) Financial Assets 

Far North District Council classifies its investments in the 

following categories: 

i) Financial assets or financial liabilities at fair value 

through profit or loss 

This category has two sub categories: financial 

assets held for trading, and those designated at fair 

value through profit or loss at inception. A financial 

asset is classified in this category if acquired 

principally for the purpose of selling in the shortterm 

or if so designated by management. Far North 

District Council does not have any financial assets 

that meet this definition. 

ii) Loans and receivables 

Loans and receivables are non derivative financial 

assets with fixed or determinable payments that are 

not quoted in an active market. 

After initial recognition, they are measured at 

amortised cost using the effective interest method. 

Gains and losses when the asset is impaired or 

derecognised are recognised in the Statement of 

Financial Performance. Loans and receivables are 

classified as “trade and other receivables” in the 

Statement of Financial Position. 

iii) Held to maturity investments 

Held to maturity investments are non derivative 

financial assets with fixed or determinable payments 

and fixed maturities that management has the 

positive intention and ability to hold to maturity. Far 

190 


North District Council does not have any financial 

assets that meet this definition. 

iv) Available for sale financial assets 

Available for sale financial assets are non derivatives that 

are either designated in this category or not classified 

in any of the other categories. Financial assets that are 

included in this category are shares in Local Government 

Insurance Corporation Limited. 

The classification depends on the purpose for which the 

investments were acquired. 

Management determines the classification of its 

investments at initial recognition and re-evaluates this 

designation at every reporting date. 

For the purposes of the parent company financial 

statements, Far North District Council’s equity investment 

in its subsidiary company is stated at cost. 

(r) Goods and services tax (GST) 

All items in the financial statements are exclusive of GST, 

apart from trade payables and trade receivables. Where 

GST is not recoverable as an input tax, then it is recognised 

as part of the related asset or expense. 

The net amount of GST recoverable from, or payable to, 

the Inland Revenue Department (IRD) is included as part 

or receivables or payables in the Statement of Financial 

Position. 

The net GST paid to, or received from the IRD, including the 

GST relating to investing and financing activities, is classified 

as an operating cash flow in the Statement of Cash Flows. 

Commitments and contingencies are disclosed exclusive 

of GST. 

(s) Inventories and work in progress 

Inventories are valued at the lower of cost (determined 

on a first in first out basis) and net realisable value. 

This valuation includes allowances for slow moving and 

obsolete inventories. Work in progress is valued at cost. 

Inventories held for distribution at no charge, or for a 

nominal amount, are stated at the lower of cost and 

current replacement cost. 

The write down from cost to current replacement cost 

or net realisable value is recognised in the Statement of 

Financial Performance. 

(t) Investment properties and properties intended for 

resale 

Investment properties are properties which are held 

either to earn rental income or for capital appreciation 

or for both. 

Investment property is measured initially at its cost, 

including transaction costs. 

After initial recognition, Far North District Council 

measures all investment properties at fair value 

determined annually by an independent valuer. The fair 

values are based on market values, being the estimated 

amount for which a property could be exchanged 

on the date of valuation between a willing buyer and 

a willing seller in an arm’s length transaction after 

proper marketing, wherein the parties had each acted 

knowledgeably, prudently, and without compulsion. 

Any gain or loss arising from a change in fair value is 

recognised in the Statement of Financial Performance. 

There is no depreciation on investment properties. 

Rental income from investment property is accounted 

for as described in the accounting policy for revenue 

recognition. 

When an item of property, plant and equipment is 

transferred to investment property following a change 

in its use, any differences arising at the date of transfer 

between the carrying amount of the item immediately 

prior to transfer and its fair value is recognised directly 

in equity, if it is a gain. Upon disposal of the item, the gain 

is transferred to retained earnings. Any loss arising in this 

manner is recognised immediately in the Statement of 


If an investment property becomes owner/occupied, 

it is reclassified as property, plant and equipment and 

its fair value at the date of reclassification becomes its 

cost for accounting purposes of subsequent recording. 

When Far North District Council begins to redevelop an 

existing investment property for continued future use as 

investment property, the property remains an investment 

property, which is measured based on fair value, and is 


191


not reclassified as property, plant and equipment during 

the redevelopment. 

(u) Provisions 

A provision is recognised in the Statement of Financial 

Position when council has a present legal or constructive 

obligation as a result of a past event, and it is probable 

that an outflow of economic benefits, the amount of 

which can be reliably estimated, will be required to 

settle the obligation. If the effect is material, provisions 

are determined by discounting the expected future 

cash flows at a pre tax rate that reflects current market 

assessments of the time value of money and, where 

appropriate, the risks specific to the liability. 

Landfill post – closure costs 

Council as an operator of both closed and operational 

landfills has a legal obligation under the Resource 

Management Act (1991) to provide ongoing maintenance 

and monitoring services at the landfill sites after closure. 

A provision for post closure costs is recognised as a 

liability when the obligation for post closures costs arises. 

The provision is measured based on the present value 

of future cash flows expected to be incurred, taking 

into account ongoing future events including new legal 

requirements and known improvements in technology. 

The provision includes all costs associated with landfill 

post closure. 

Far North District Council measures landfill assets 

using the cost model with changes in the provision for 

decommissioning costs being added to, or deducted from, 

the asset value until closure of the asset, at which time all 

changes to the provision are taken to the Statement of 


The discount rate used is a pre tax rate that reflects 

current market assessments of time value of money and 

risks specific to council. 

(v) Statement of Cash Flows 

Cash or cash equivalents means cash balances on hand, 

held in bank accounts, demand deposits of 3 months or 

less and other highly liquid investments in which council 

invests as part of its day to day cash management. 

Operating activities include cash received from all income 

sources of council and record the cash payments made 

for the supply of goods and services. Agency transactions 

(for example, the collection of Regional Council rates) 

are recognised as receipts and payments in the Statement 

of Cash Flows given that they flow through council’s main 

bank account. 

Investing activities are those activities relating to the 

acquisition and disposal of non current assets. 

Financing activities comprise the change in equity and 

debt capital structure of council. 

(w) Taxation 

Income tax on the profit or loss for the year comprises 

current and deferred tax. Income tax is recognised in the 

Statement of Financial Performance except to the extent 

that it relates to items recognised directly in equity, in 

which case it is recognised in equity. 

Current tax is the expected tax payable on the taxable 

income for the year, using tax rates enacted at the 

Statement of Financial Position date, and any adjustment 

to tax payable in respect of previous years. 

Deferred tax is provided using the Statement of Financial 

Position liability method, providing for temporary 

differences between the carrying amounts of assets and 

liabilities for financial reporting purposes and the amounts 

used for taxation purposes. The following temporary 

differences are not provided for: goodwill not deductible 

for tax purposes, the initial recognition of assets or 

liabilities that affect neither accounting nor taxable profit, 

and differences relating to investments in subsidiaries 

to the extent that they will probably not reverse in the 

foreseeable future. The amount of deferred tax provided 

is based on the expected manner of realisation or 

settlement of the carrying amount of assets and liabilities, 

using tax rates enacted or substantively enacted at the 

Statement of Financial Position date. 

A deferred tax asset is recognised only to the extent 

that it is probable that future taxable profits will be 

available against which the asset can be utilised. Deferred 

tax assets are reduced to the extent that it is no longer 

probable that the related tax benefit will be realised. 

(x) Impairment 

Non financial assets that have an indefinite useful life are 

192 


not subject to amortisation and are tested annually for 

impairment. Assets that have a finite life are reviewed 

for impairment when ever events or changes in 

circumstances indicate that the carry amount may not 

be recoverable. An impairment loss is recognised for the 

amount by which the asset’s carrying amount exceeds 

the recoverable amount. The recoverable amount is the 

higher of an asset’s fair value less costs to sell and value 

in use. 

Value in use is depreciated replacement cost for an asset 

where the future economic benefits or service potential 

of an asset are not primarily dependent on the assets 

ability to generate net cash inflows and where the entity 

would, if deprived of the asset, replace its remaining 

future economic benefits or service potential. 

The carrying amounts of Far North District Council 

assets are reviewed at each Statement of Financial 

Position date to determine whether there is any 

indication of impairment. If any such indication exists, the 

asset’s recoverable amount is estimated. 

An impairment loss is recognised whenever the carrying 

amount of an asset exceeds its recoverable amount. 

Impairment losses are recognised in the Statement of 

Financial Performance. Impairment losses on revalued 

assets offset any balance in the asset revaluation reserve, 

with any remaining impairment loss being posted to the 

Statement of Financial Performance. 

The reversal of an impairment loss on a revalued asset 

is credited to the revaluation reserve. However, to the 

extent that an impairment loss for that class of asset 

was previously recognised in the Statement of Financial 

Performance, a reversal of the impairment loss is also 

recognised in the Statement of Financial Performance. 

For assets not carried at a revalued amount the reversal 

of an impairment loss is recognised in the Statement of 


(y) Non current assets held for sale 

Non current assets are classified as held for sale and 

stated at the lower of their carrying amount and fair value 

less costs to sell if their carrying amount will be recovered 

principally through a sale transaction rather than through 

continuing use. An impairment loss is recognised for any 

initial or subsequent write down of the asset to fair value 

less costs to sell. A gain is recognised for any subsequent 

increases in fair value less costs to sell of an asset but not 

in excess of any cumulative impairment loss previously 

recognised. A gain or loss not previously recognised by 

the date of the sale of the non current asset is recognised 

at the date of de-recognition. 

Non current assets are not depreciated or amortised 

while they are classified as held for sale. Interest and 

other expenses attributable to the liabilities classified as 

held for sale continue to be recognised. 

Non current assets classified as held for sale are presented 

separately from the other assets in the Statement of 

Financial Position. 

(z) Financial instruments 

Council undertakes financial instrument arrangement as 

part of its normal operations. These financial instruments 

include cash and bank balances, investments, derivatives, 

receivables, payables and borrowings. All financial 

instruments are recognised in the Statement of Financial 

Position and all revenues and expenses in relation to 

financial instruments are recognised in the Statement of 


(ab) Critical accounting estimates and assumptions 

In preparing these financial statements, Far North District 

Council has made estimates and assumptions concerning 

the future. These estimates and assumptions may differ from 

the subsequent actual results. Estimates and judgments 

are continually evaluated and are based on historical 

experience and other factors, including expectations or 

future events that are believed to be reasonable under the 

circumstances. The estimates and assumptions that have 

a significant risk of causing a material adjustment to the 

carrying amounts of assets and liabilities within the next 

financial year are discussed below: 

Landfill aftercare provision 

Infrastructural assets 

There are a number of assumptions and estimates used 

when performing depreciated replacement cost (DRC) 

valuations over infrastructural assets. These include: 

•• 

The physical deterioration and condition of an asset. Far 

North District Council may be carrying an asset at an 

amount that does not reflect its actual condition. This 

is particularly so for those assets that are not visible, 


193


such as stormwater, wastewater and water supply pipes 

that are underground. This risk is minimised by council 

performing physical inspections and assessments; 

•• 

Estimating any obsolescence or surplus capacity 

of an asset 

•• 

Estimates are made when determining the remaining 

useful lives over which the asset will be depreciated. 

If useful lives do not reflect the actual consumption 

of the benefits of the asset, then Far North District 

Council could be over or under estimating the annual 

depreciation charge recognised as an expense in the 

Statement of Financial Performance. 

To minimise this risk, Far North District Council’s 

infrastructural asset useful lives have been determined 

with reference to the New Zealand infrastructural asset 

valuation and depreciation guidelines published by the 

national asset management steering group and have 

been adjusted for local conditions based upon past 

experience. Experienced independent valuers perform 

council’s infrastructural asset revaluations. 

(ac) Derivative financial instruments and hedge accounting 

Far North District Council uses derivative financial 

instruments to hedge interest rate risks arising from 

financing activities. In accordance with its Treasury Policy, 

Far North District Council does not hold or issue 

derivative financial instruments for trading purposes. 

Derivatives are initially recognised at fair value on the date 

a derivative contract is entered into and are subsequently 

remeasured at their fair value at each balance date. The 

method of recognising the resulting gain or loss depends 

on whether the derivative is designated as a hedging 

instrument, and if so, the nature of the item being hedged. 

The associated gains or losses of derivatives that are 

not hedge accounted are recognised in the statement 

of financial performance. Far North District Council 

designates certain derivatives as either: 

•• 

Hedges of the fair value of recognised assets or 

liabilities or a firm commitment (fair value hedge) 

•• 

Hedges of highly probable forecast transactions 

(cash flow hedge). 

The Far North District Council documents, at the 

inception of the transaction, the relationship between 

hedging instruments and hedged items, as well as its 

risk management objective and strategy for undertaking 

various hedge transactions. Far North District Council 

documents its assessment, both at hedge inception and 

on an ongoing basis, of whether the derivatives that 

are used in hedging transactions are highly effective in 

offsetting changes in fair values or cash flows of hedged 

items. 

The full fair value of hedging derivatives is classified as 

non current, if the remaining maturity of the hedged item 

is more than 12 months, and as current if the remaining 

maturity of the hedged item is less than 12 months. 

Fair value hedge 

The gain or loss from remeasuring the hedging instrument 

at fair value, along with the changes in the fair value on the 

hedged item attributable to the hedged risk, is recognised 

in the Statement of Financial Performance. Far North 

District Council only applies fair value hedge accounting 

for hedging fixed interest risk on borrowings. The gain 

or loss relating to the effective portion of interest rate 

swaps hedging fixed rate borrowings is recognised in 

the Statement of Financial Performance within finance 

costs. The gain or loss relating to the ineffective portion 

is recognised in the Statement of Financial Performance 

as part of gains or other expenses. Changes in the fair 

value of the hedged fixed rate borrowings attributable 

to interest rate risk are recognised in the Statement of 

Financial Performance within finance costs. 

If the hedge no longer meets the criteria for hedge 

accounting, the adjustment to the carrying amount of a 

hedged item for which the effective interest method is 

used, is amortised to profit or loss over the period to 

maturity. 

Cash flow hedge 

The portion of the gain or loss on a hedging instrument 

that is determined to be an effective hedge is recognized 

directly in equity through the Statement of Changes in 

Equity and the ineffective portion of the gain or loss on 

the hedging instrument is recognised in the Statement of 

Financial Performance as part of gains or other expenses. 

If a hedge of a forecast transaction subsequently results in 

the recognition of a financial asset or a financial liability, the 

associated gains or losses that were recognised directly 

in equity will be reclassified into profit or loss in the same 

194 


period or periods during which the asset acquired or 

liability assumed affects profit or loss. However, if Far 

North District Council expects that all or a portion of a 

loss recognised directly in equity will not be recovered 

in one or more future periods, it will reclassify into profit 

or loss the amount that is not expected to be recovered. 

When a hedge of a forecast transaction subsequently 

results in the recognition of a non financial asset or a 

nonfinancial liability, or a forecast transaction for a non 

financial asset or non financial liability becomes a firm 

commitment for which fair value hedge accounting is 

applied, then the associated gains and losses that were 

recognised directly in equity will be included in the initial 

cost or carrying amount of the asset or liability. 

If a hedging instrument expires or is sold, terminated, 

exercised or revoked, or it no longer meets the criteria 

for hedge accounting, the cumulative gain or loss on the 

hedging instrument that remains recognised directly in 

equity from the period when the hedge was effective will 

remain separately recognised in equity until the forecast 

transaction occurs. When the forecast transaction is no 

longer expected to occur, any related cumulative gain or 

loss on the hedging instrument that remains recognised 

directly in equity from the period when the hedge was 

effective will be recognised in the Statement of Financial 

Performance. 

Critical judgments in applying Far North 

District Council’s Accounting Policies 

Management has exercised the following critical 

judgments in applying the Far North District Council 

accounting policies. 

Classification of property 

Far North District Council owns a number of properties 

which are maintained primarily to provide housing to 

pensioners. The receipt of market based rental from 

these properties is incidental to holding these properties. 

These properties are held for service delivery objectives 

as part of the Far North District Council’s Social Housing 

Policy. These properties are accounted for as property, 

plant and equipment. 


195

Policy on Determining Significance 

Background 

Section 90 of the LGA requires Council to adopt a 

significance policy setting out: 

•• 

Council’s general approach to determining the 

significance of proposals and decisions in relation to 

issues, assets or other matters 

•• 

Any thresholds, criteria, or procedures that are to be 

used by Council in assessing the extent to which issues, 

proposals, decisions or other matters are significant 

•• 

The policy adopted by Council must list the assets it 

considers to be strategic assets. 

Council adopted its first policy on 19 June 2003 and 

this revised policy is being proposed to incorporate any 

changes arising out of the Local Government Act 2002 

Amendment Bill 2010. 

Purpose 

All Council decisions must be made in accordance with 

the decision making requirements of the LGA. Council 

must judge the appropriate level of compliance with those 

requirements, largely in proportion to the significance of 

the matters affected by the decision. 

The judgment about how to achieve compliance with 

the decision-making requirements in the LGA includes 

judgments about: 

•• 

The extent to which different options are to be 

identified and assessed 

•• 

The degree to which benefits and costs are to 

be quantified 

•• 

The extent and detail of the information to be 

considered 

•• 

The extent and nature of any written records kept 

as to compliance. 

Definitions 

In this policy, the words “significance”, “significant” and 

“strategic asset” have the following meanings (a full 

definition is defined in Section 5 of the LGA). At the 

date of adoption of this policy, the definitions in the LGA 

were as follows: 

Significance - refers to the relative importance of a 

decision in relation to: 

•• 

The four wellbeings,(economic, social, environmental 

and cultural) 

•• 

How it affects people 

•• 

The capacity of Council. 

Significant – if an issue has been determined to have high 

significance then it is deemed to be significant. 

Strategic asset – assets held to be strategic by Council or 

determined by legislation (Appendix A) 

Policy goals 

To apply a disciplined, standardised process that enables 

Council to accurately assess the significance of issues, 

assets or other matters and which fulfils its legislative 

obligations under the LGA, particularly in relation to 

significant strategic assets, decision-making processes, 

and consultation procedures. 

General approach 

In considering how significant any issue, proposal, decision, 

or other matter under this Policy, Council will consider 

the likely impact on, and consequences of that decision 

or proposal for: 

•• 

Any persons who are likely to be particularly affected 

by or interested in the decision or proposal 

•• 

The current and future social, cultural, economic and 

environmental wellbeing of the District 

•• 

The present and future capability of Council to 

perform its role and the costs of it doing so, in terms 

of its capacity deliver services to the District and 

achieve or promote community outcomes. 

The policy provides indication of the degree of magnitude 

of the process to come to a decision in relation to 

the significance of the decision. The more significant 

or material the impact or consequences of the issue, 

proposal or matter, the higher will be the standard of 

compliance required to meet the provisions of this policy. 

196 


Criteria & thresholds for determining which proposals and decisions are significant 

Council will use the following criteria and thresholds: 

Criteria Description Threshold 

Consistency with or 

included in existing 

planning 

Financial 

Consequences 

The extent to which the decision or proposal flows logically and 

consequentially from a significant decision already made or from a 

decision in the Long-Term Plan or the Annual Plan. 

Where the decision or proposal is fully described in the Plan or 

significant decision, the significance in terms of this criterion will be 

small. Where the issue or proposal has no precedent Plan or significant 

decision, or where it is not consistent with a Plan or significant decision, 

it will be of greater significance. 

The magnitude of the proposal or decision in terms of its cost to Council. 

Most major decisions will be made in the context of the Long-Term 

Plan or the Annual Plan. Decisions involving unidentified or unbudgeted 

expenditure should be scrutinised carefully. Where the decision or proposal 

has no net cost, the significance in terms of this criterion will be small. 

As the net cost approaches the threshold, it will be of greater significance. 

The extent to which the decision or proposal that is materially inconsistent 

with a precedent Plan or significant decision will trigger this threshold. 

A proposal, decision, assets, or other matters for which Council will: 

•• 

Incur operational expenditure not provided for in the Annual Plan 

or Long-Term Plan exceeding 5% of its annual budget for that year, 

(estimated as $3.7 million in 2012). 

•• 

Incur capital expenditure not provided for in the Annual Plan or Long-Term 

Plan exceeding 1% of the total value of Council’s net assets, or where spent 

on a strategic asset or strategic asset as a complete unit as defined in the 

LGA, or listed in this policy, exceeds 25% of that assets value, (estimated 

as $19 million in 2012). 

Note: this limit will not be triggered where the expenditure in one 

category of asset or activity is offset by similar reductions in the 

expenditure on other assets of activities. 


197


Criteria Description Threshold 

Different Effects 

Controversy 

Disposal of Strategic 

Assets 

Capacity Reduction 

The extent to which the decision or proposal, (including decision or 

proposal options) has radically different effects from the status quo in 

terms of costs, benefits, extent of impact on members on a large number 

of ratepayers or a large impact on a small number of ratepayers. 

Where the effects are identical throughout the community or differences 

from the status quo are small, the significance in terms of this criterion will 

be small. As the effects of the decision or proposal vary more greatly, it will 

be of greater significance. 

The extent to which the decision or proposal is controversial. Where 

community views are uniform or the matter generates little interest, 

the significance in terms of this criterion will be small. A higher level of 

controversy will be of greater significance. 

The extent to which the decision or proposal will result in the disposal or 

abandonment of a strategic asset as defined by the LGA or listed in this 

policy, including the sale of Council’s shareholding in any Council Controlled 

Trading Organisation (CCTO), or Council Controlled Organisation (CCO). 

The extent to which a decision or proposal will, directly or indirectly, 

severely affect the capacity (including financial capacity) of Council to carry 

out any activity identified in the Long-Term Plan for subsequent years. 

A decision or proposal that will create radically different effects/impacts on 

ratepayers will trigger this threshold. 

A decision or proposal on a matter where community views generate 

considerable interest or the community is deeply divided will trigger this 

threshold. 

A decision or proposal to dispose of a strategic asset will trigger this 

threshold. 

A substantial decision or proposal to reduce Council’s capacity carry out 

any significant activity identified in the Long-Term Plan for future years will 

trigger this threshold. 

198 


Procedures 

Council will use the following procedures to help it 

decide whether or not specific proposals and decisions 

are significant. 

Decisions to be included in Plans - whenever practicable, 

Council will include major decisions within the Long- 

Term Plan or the Annual Plan. 

Assessment of decision-making requirements for 

significant matters – in achieving the objectives of this 

policy the following procedures will be followed: 

Every report to Council will consider the significance 

of the decision to be made in relation to definitions, 

thresholds and criteria as outlined in this Policy. 

•• 

The report will identify the issue, policy, decision or 

matter if it triggers one or more of the thresholds 

noted in this policy. Each report will include: 

a. A statement indicating that the issue, proposal, 

decision or other matter has been considered 

with regard to Council’s Policy on Determining 

Significance 

b. An assessment of the degree of significance of 

the issue, proposal, decision or other matter 

based on the criteria outlined in this Policy (high, 

medium, low) together with the reasons for the 

assessment level 

c. Make a recommendation to Council. 

•• 

If the issue, proposal, decision or other matter is 

considered to be significant (high), the report to 

Council will also include: 

a. A statement addressing the requirements of 

Sections 77, 78, 80, 81 and 82 of the LGA 

(refer Section 76(3b)). 

Exceptions 

Council may use the following exceptions to help it 

decide whether specific proposals and decisions are 

significant. 

Statutory processes if required by other Acts – Under 

the LGA, and except where expressly required to 

consult, Council may elect not to consult on a proposal 

or decision that is considered significant in terms of this 

Policy. One reason it may decide not to consult is that 

a proposal or decision is still subject, at a future date, to 

statutory processes (for example, those set out in the 

Resource Management Act 1991). Council will also take 

into account the financial implications of consulting on 

the matter. 

Emergency decisions or unforeseen situations – This 

policy does not restrict Council’s ability to respond to a 

hazardous situation, or to repair an asset to ensure public 

health and safety due to damage from an emergency or 

unforeseen situation. 


199


Appendix A 

Strategic assets 

The assets and groups of assets that Council considers to 

be strategic assets are: 

•• 

The roading network 

•• 

The stormwater network 

•• 

The wastewater network 

•• 

The water supply network 

•• 

Cemeteries 

•• 

Open space network – including parks, walkways, 

sports fields under the Reserves Act 1977 

•• 

Shares in Far North Holdings Limited 

•• 

Housing for the elderly (as required by Section 5 of 

the LGA which requires Councils to include any land 

or building owned by the local authority). 

Appendix B 

Relevant parts of the LGA to this Policy: 

•• 

Part 1, Section 5 – Interpretations 

•• 

Part 6 – Planning, decision-making and accountability. 

Appendix C 

Effect of significant decisions 

Decision process: 

a) The significance/risk of each criterion will be 

determined 

b) The total significance score will be calculated – 

the higher the score, the more significant 

Significance decision matrix 

Significance 

Criterion 

Low Medium High 

Consistency with 

existing plans/policies 

1 2 3 

Financial consequences 1 2 3 

Different effects 1 2 3 

Controversy 1 2 3 

Uncertainty 1 2 3 

Strategic asset disposal 1 2 3 

Capacity reduction 1 2 3 

Significance score 7 14 21 

c) The overall significance will be identified by reference 

to the Total Criteria Significance Chart. 

Significance Score 

23 

21 

19 

17 

15 

13 

11 

9 

7 

5 

Low 

Total Criteria Significance 

Med 

Individual Criterion Significance 

High Significance 

Moderate Significance 

Little Significance 

High 

200 


Linkages 

Council has developed its own policies and bylaws (see the following tables) which are available by request from Council Service Centres; and works in partnership with many other 

agencies, to fulfil its role and to align activities to other agencies and organisations throughout the district. This means that in establishing its programmes, Council must be aware of the 

following policies, bylaws, strategies and partnerships. 

Infrastructure and asset management 

Water 

Wastewater 



Solid waste 


Policy Number 

Policy Name 

Policy Number 

Policy Name 

Policy Number 

Policy Name 

4200 Policy For Bulk Water Supply 

4201 Water Conservation 

4202 Water Meters 

4203 Capital Contributions 

- sewage connections 

4400 Voluntary Rubbish/Litter Collection 

Council strategies 

•• 

Public health risk management plan (internal document) 

•• 

Water supply bylaw. 

External policies, strategies and guidelines 

•• 

Drinking Water Standards for New Zealand 2005 

(revised 2008) 

•• 

New Zealand Fire Code of Practice 1992 and amendments 

•• 

Water Supply Protection Regulations 1961 

•• 

Proposed National Environmental Standard for 

Sources of Human Drinking Water 

•• 

Regional Policy Statement (administered by NRC) 

•• 

Water and Soil Plan for Northland (administered by 

NRC) 

•• 

National Engineering Standards. Council strategies. 


•• 

Wastewater Bylaw. 


•• 

Ministry of Environment 

(Wastewater monitoring guidelines) 

•• 

Regional Air Quality Plan 

(administered by NRC) 

•• 

Regional Policy Statement 


•• 

Water and Soil Plan for Northland 


•• 

National Engineering Standards. 


•• 

Waste Management and Minimisation Plan 2011/17 

•• 

Disposal of Solid Waste Bylaw 

•• 

Wastewater Bylaw. 


•• 

Health Act 1956 

•• 

National Engineering Standards 

•• 

Waste Minimisation Act 2008 

•• 

Resource Management Act 1991 

•• 

Climate Change (Emissions Trading) 

Amendment Act 2008 

•• 

Water and Soil Plan for Northland 


•• 

Hazardous Substances and New Organisms Act 1996 

•• 

Zero Waste Initiative 

•• 

Clean Up New Zealand Trust. 


201

Linkages 

Transport 


Policy Number 

Policy Name 

4105 Private Roads and Right of Ways 

4106 Road Maintenance 

4108 Kerbing and Channelling 

4109 Safety Footpath Construction and 

Maintenance 

4110 Street and Flag Lighting 

4111 Unsubsidised Seal Extension 

5001 Community Facilities 

(local car parks, service lanes) 

5004 Safety Footpath Construction 

5102 Vegetation Policy (and guideline to be read 

in conjunction with this Policy) 

2104 Procurement Policy 

4103 and 4103a Limits of Responsibility for Formation / 

Maintenance of Roads 

4104 Māori Road Lines 

4107 Quarry Ownership and Management. 


Council policies - under development 


•• 

Parking and Traffic Control Bylaw 

•• 

Road Hierarchy 

•• 

Safety Management System 

•• 

Road Opening Notice 

•• 

Walking and Cycling Strategy 

•• 

Road Improvement Strategy 

•• 

Pavement Management Strategy 

•• 

Bridge Management Strategy 

•• 

Road Signage Guideline 

•• 

Tree and Vegetation Guidelines. 

•• 

Control of Vehicle Crossings Bylaw 

•• 

Speed limits Bylaw. 

Council strategies - under development 

•• 

Traffic Calming Guidelines due to be completed in 2012 

•• 

Car Parking Strategy due to be completed in June 2014. 


•• 

Far North District Council’s Procurement Strategy 

2010/13 for activities funded through the National 

Land Transport Programme (NZTA) 

•• 

New Zealand Transport Strategy 2010 

•• 

Regional Land Transport Plan for 

Northland 2003/08 (NRC) 

•• 

Land Transport Safety Authority, 

Northern Regional Road Safety Programme 

•• 

Transit New Zealand’s 10 year State Highway Plan 

•• 

Mangakahia Forestry study 

•• 

Northland Integrated Strategy 2002 

•• 

Land Transport Management Act 2003 

•• 

NRC’s Regional Coastal Plan for Northland 

•• 

NRC’s Regional Water and Soil Plan 

•• 

GPS on Land Transport Funding 

•• 

Transport Strategy for Northland 

•• 

National Engineering Standards. 

Policy Number 

4106a 

To be allocated 







Policy Name 

Restricted Bridges Policy 

Road Prioritisation Policy 

Dust Suppression Policy 

Traffic Count Policy 

Road Marking and Delineation Policy 

Access to Landlocked Land 

Road Stopping 

Stock Droving Bylaw 

202 


Community Facilities 


Enviromental Management 


Enviromental Protection 


Policy Number 

Policy Name 

Policy Number 

Policy Name 

Policy Number 

Policy Name 

2104a 

Procurement Policy and 

Procedure for Community Projects 

3201 Community Facility Partnership Policy 

3203 Arts and Cultural Funding 

3207 Community Sport Fund 

3208 Community Grant Fund 

3209 Community Funds 

5103 Volunteers and Health and Safety 

3211 Anti Graffiti Policy 

3212 Commercial Use of Reserves Policy 


•• 

Recreation Strategy. 

•• 

Event Strategy 2006 due to be completed in 

March 2012. 


•• 

Reserves Act Guide 

•• 

Reserves Act 1977 

•• 

Urban Design Protocol 

•• 

Territorial Authority/School Partnerships: A Guide. 

4302 Northland River Management Policy 


•• 

Hapu and Iwi Management Plans 

•• 

District Plan. 


•• 


•• 

Regional Policy Statement for Northland 

•• 

Regional Coastal Plan for Northland 

•• 

Regional Water and Soil for Northland 

•• 

Stormwater Reticulation 

•• 

Northland Catchment Strategy 

•• 

Regional Air Quality Plan for Northland 

•• 

Reserves Act 1977 

•• 

National Environmental Standards for Air Quality, 

Sources of Human Drinking Water Standard, 

Telecommunications Facilities, Electricity Transmission 

•• 

National Policy Statements including New Zealand 

Coastal Policy Statement, Electricity Transmission, 

Renewable Electricity Generation. 

3115 Advertising Signs 

3116 Al Fresco Dining Policy 

3117 Gaming and TAB Policy 

3118 Sale of Liquor Act Policy 

3121 Firearms 

3119 Dangerous, Insanitary, and 

Earthquake Prone Buildings 

5105 Urban and Rural Numbering 

3113 Dog Registration - Waiver of Penalty Fee 

and Withdrawal of Prosecution 

5001 Local Car Parks/Service Lanes 


•• 

Parking and Traffic Control Bylaw. 


•• 


•• 

Sale of Liquor Act 1989 

•• 

Building Act 2004 

•• 

Dog Control Act 2006 

•• 

Litter Act 1979 

•• 

Local Government Act 2002 

•• 


•• 

Impounding Act 1955 

•• 

Health Act 1956 

•• 

Food Regulations 1974 

•• 

Effluent Disposal under Delegation from the Regional 


•• 

Regional Policy Statement for Northland 

•• 

Regional Coastal Plan for Northland 

•• 

Regional Water and Soil for Northland 

•• 

Regional Air Quality Plan for Northland. 


203

Linkages 

Community and Customer Services 


•• 

Customer Services Online Strategy 

•• 

Bi-Cultural Plan 

•• 

Service Level Agreements with Members 

•• 

Service Level Agreements with Community Libraries. 


•• 

The e-Government Strategy 

(particularly on-line services) 

•• 

Destination Northland (business and marketing plan) 

•• 

Northland Tourism Strategy 

•• 

Tourism New Zealand Strategy 

•• 

Visitor Information Strategy 

•• 

Visitor Information Network Franchise Agreement 

•• 

Libraries and Information Association New Zealand 

Strategic Plan 

•• 

Northland i-SITE Review and Strategy 

•• 

Public Library Standards 

•• 

New Zealand Library and Information Association 

•• 

National Library Digital Strategy. 

Council advisory 


Policy Number 

Policy Name 

1304 Amenity Fund Policy 

(community boards) 

2115 Elected Members Expense Claims 

and Reimbursement 

3203 Arts Cultural Funding 


•• 

Local Governance Statement 2010. 


•• 

Triennial Agreement. 

•• 


•• 

Local Electoral Act 2001. 

204 


Independent Auditor’s Report 

To the readers of 

Far North District Council’s Long-Term Plan 

for the ten years commencing 1 July 2012 

The Auditor General is the auditor of Far North District Council (the District Council). 

The Auditor General has appointed me, John Scott, using the staff and resources of Audit 

New Zealand, to report on the Long Term Plan (LTP), on her behalf. We have audited the 

District Council’s LTP incorporating volumes one and two dated 28 June 2012 for the ten 

years commencing 1 July 2012. 

The Auditor General is required by section 94(1) of the Local Government Act 2002 

(the Act) to report on: 

• the extent to which the LTP complies with the requirements of the Act; and 

• the quality of information and assumptions underlying the forecast information 

provided in the LTP. 

Opinion 

Overall Opinion 

In our opinion the District Council’s LTP incorporating volumes one and two dated 28 

June 2012 provides a reasonable basis for long term integrated decision-making by the 

District Council and for participation in decision-making by the public and subsequent 

accountability to the community about the activities of the District Council. 

In forming our overall opinion, we considered the specific matters outlined in section 

94(1) of the Act which we report on as follows. 

Opinion on specific matters required by the Act 

In our view: 

•• 

the District Council has complied with the requirements of the Act in all material 

respects demonstrating good practice for a council of its size and scale within the 

context of its environment; and 

•• 

the underlying information and assumptions used to prepare the LTP provide a reasonable 

and supportable basis for the preparation of the forecast information. 

Actual results are likely to be different from the forecast information since anticipated 

events frequently do not occur as expected and the variation may be material. Accordingly, 

we express no opinion as to whether the forecasts will be achieved. 

Our report was completed on 28 June 2012. This is the date at which our opinion is 

expressed. 

The basis of the opinion is explained below. In addition, we outline the responsibilities of 

the Council and the Auditor, and explain our independence. 

Basis of Opinion 

We carried out the audit in accordance with the International Standard on Assurance 

Engagements (New Zealand) 3000 : Assurance Engagements Other Than Audits or 

Reviews of Historical Financial Information and the Auditor General’s Auditing Standards, 

which incorporate the International Standards on Auditing (New Zealand). We have 

examined the forecast financial information in accordance with the International Standard 


205

Audit Opinion 

on Assurance Engagements 3400: The Examination of Prospective Financial Information. 

Those standards require that we comply with ethical requirements and plan and carry 

out our audit to obtain all the information and explanations we considered necessary to 

obtain reasonable assurance that the LTP does not contain material misstatements. If we 

had found material misstatements that were not corrected, we would have referred to 

them in our opinion. 

An audit involves performing procedures to obtain audit evidence about the forecast 

information and disclosures in the LTP. The procedures selected depend on our 

judgement, including the assessment of risks of material misstatement of the information 

in the LTP. In making those risk assessments we consider internal control relevant to the 

preparation of the District Council’s LTP. We consider internal control in order to design 

audit procedures that are appropriate in the circumstances, but not for the purpose of 

expressing an opinion on the effectiveness of the District Council’s internal control. 

Our audit procedures also include assessing whether: 

• the LTP provides the community with sufficient and balanced information about the 

strategic and other key issues, and implications it faces and provides for participation 

by the public in decision making processes; 

• the District Council’s financial strategy, supported by financial policies is financially 

prudent, and has been clearly communicated to the community in the LTP; 

• the presentation of the LTP complies with the legislative requirements of the Act; 

• the decision-making and consultation processes underlying the development of the 

LTP are compliant with the decision-making and consultation requirements of the 

Act; 

• the information in the LTP is based on materially complete and reliable asset or 

activity information; 

• the agreed levels of service are fairly reflected throughout the LTP; 

• the District Council’s key plans and policies have been consistently applied in the 

development of the forecast information; 

• the assumptions set out within the LTP are based on best information currently 

available to the District Council and provide a reasonable and supportable basis for 

the preparation of the forecast information; 

• the forecast information has been properly prepared on the basis of the underlying 

information and the assumptions adopted and the financial information complies 

with generally accepted accounting practice in New Zealand; 

• the rationale for the activities is clearly presented; 

• the levels of service and performance measures are reasonable estimates and reflect 

the key aspects of the District Council’s service delivery and performance; and 

• the relationship of the levels of service, performance measures and forecast financial 

information has been adequately explained within the LTP. 

We do not guarantee complete accuracy of the information in the LTP. Our procedures 

included examining on a test basis, evidence supporting assumptions, amounts and other 

disclosures in the LTP and determining compliance with the requirements of the Act. We 

evaluated the overall adequacy of the presentation of information. We obtained all the 

information and explanations we required to support our opinion above. 

Responsibilities of the Council 

The Council is responsible for preparing a LTP under the Act, by applying the Council’s 

assumptions and presenting the financial information in accordance with generally 

accepted accounting practice in New Zealand. The Council is also responsible for such 

internal control as it determines is necessary to enable the preparation of a LTP that is 

free from material misstatement 

The Council’s responsibilities arise from section 93 of the Act. 

206 


Responsibilities of the Auditor 

We are responsible for expressing an independent opinion on the LTP and reporting that 

opinion to you based on our audit. This responsibility arises from section 15 of the Public 

Audit Act 2001 and section 94(1) of the Act. 

It is not our responsibility to express an opinion on the merits of any policy content within 

the LTP. 

Independence 

When reporting on the LTP we followed the independence requirements of the Auditor 

General, which incorporate the independence requirements of the External Reporting Board. 

Other than this report and in conducting the audit of the LTP Statement of Proposal and 

the annual audits, we have no relationship with or interests in the District Council or any 

of its subsidiaries. 

Matters Relating to the Electronic Presentation of the Report 

to readers of the Long-Term Plan 

This audit report relates to the Long Term Plan of Far North District Council for 

the ten years commencing 1 July 2012 included on the Council’s website. Far North 

District Council is responsible for the maintenance and integrity of its website. We 

have not been engaged to report on the integrity of Far North District Council’s 

website. We accept no responsibility for any changes that may have occurred to the 

Long Term Plan since they were initially presented on the website. 

The audit report refers only to the Long Term Plan named above. It does not provide 

an opinion on any other information which may have been hyperlinked to or from 

the Long Term Plan. If readers of this report are concerned with the inherent risks 

arising from electronic data communication they should refer to the published hard 

copy of the audited Long Term Plan as well as the related audit report dated 28 June 

2012 to confirm the information included in the audited Long Term Plan presented 

on this website. 

Legislation in New Zealand governing the preparation and dissemination of financial 

information may differ from legislation in other jurisdictions. 

John Scott 

Audit New Zealand 

On behalf of the Auditor-General 

Auckland, New Zealand 


207

Representatives 

Far North District Council 2010 

Back row - left to right: Fran Mikulicic - General Manager Environmental Management, David Penny - General Manager Infrastructure and Asset Management, Cr Colin Kitchen, 

Cr Tom Baker, Cr Steve McNally, Bernard Murphy - General Manager Corporate Services, David Edmunds - Chief Executive 

Front row - left to right: Cr Di Maxwell, Cr Monty Knight, Cr Ann Court, His Worship the Mayor Wayne Brown, Cr Tracy Dalton, Cr Mate Radich, Cr Sally Macauley 

If you need to contact a Councillor or General Manager then either refer to the contact details or www.fndc.govt.nz/contact-us 

208 


Elected Members 

Far North residents and ratepayers are represented 

by the 10 member Far North District Council and 3 

Community Boards. Elections are held every 3 years to 

elect Councillors and Elected Members. 


The Mayor and 9 Councillors run the district and ensure 

the needs of its residents are met. They plan the way 

forward and are accountable for delivering what the 

community has identified as necessary for its cultural, 

economic, environmental, and social wellbeing. 

Community Boards 

At a local level, the 3 Community Boards represent and 

act as advocates for the interests of their communities. 

Community Board Members advise Council on local 

needs, community views, and how Council proposals will 

affect their communities. 

The Community Boards are: 

•• 

Kaikohe – Hokinaga 

•• 

Te Hiku 

•• 

Bay of Islands – Whangaroa. 

Chief Executive 

The Mayor and Councillors appoint a Chief Executive 

to head the Council’s administrative organisation and 

oversee the management of Council infrastructure and 

services. The Chief Executive employs all other staff on 

behalf of Council. 

General Management Team 

The General Management Team comprises the Chief 

Executive and General Managers with responsibility 

for providing infrastructure and asset management, 

corporate services, and environmental management. 

The team is responsible for providing policy advice to 

Elected Members, and implementing and managing 

Council policies within budgetary constraints established 

by the Council. 

Effective teamwork is critical to the success of any 

democratically elected organisation. A Council Code of 

Conduct sets out the standards of behaviour deemed 

necessary for credible, accountable, and effective Local 

Government. 

Staff, Contractors and Consultants 

Staff, whether salaried or contracted, have an important 

role to play in delivering services. They are required 

to act professionally and serve the Council of the day 

regardless of their personal views. 


209


Bay of Islands - Whangaroa Community Board 

Back row - left to right: Johnson Davis (Elected: October 2010), Terry Greening (Elected: October 2010), Harko Brown (Elected: October 2010), Bruce Mills (Elected: October 2010) 

Front row - left to right: Sheryl Bainbridge (Advisory Services Officer), Belinda Ward (Elected: October 2010), Florence Annison (Elected: October 2007), 

Doug Turner (Elected: October 2010) 


210 


Kaikohe - Hokianga Community Board 

Back row - left to right: James Hikurangi (Hiku) Cherrington (Elected: October 2007), Mark Anderson (Elected: October 2010), John Schollum (Elected: May 2008 (By Election)), 

Warren Gundry (Elected: October 2010), Win Stephens (Elected: October 2007), Leif Pakai (Elected October 2010) 

Front row: Aisha Huriwai (Council Advisory Officer) 



211


Te Hiku Community Board 

Back row - left to right: Wilhelmus (Willy) Van Der Sluis (Elected: October 2007), Clara Lugnet (Elected: October 2010), Sydney Lawrence (Lawrie) Atkinson (Elected: October 2007), 

Dennis Bowman (Elected: October 2010), Yvonne Smith (Elected: October 2010), David Senior (Elected: October 2007), Sheryl Bainbridge (Advisory Services Officer) 


212 


Glossary 

Activity 

A good or service provided by or on behalf of a local 

authority. 

Activity management plans (AMPS) 

AMPs cover all aspects of managing an asset. They include 

policy, financial forecasting and engineering requirements 

for all major activities. They ensure that the required level 

of services is maintained over the long-term by helping 

Council anticipate and plan for future needs and renewals. 

Allocated costs 

Allocation of costs by support departments to other 

Council departments for services provided. They reflect 

the true cost of the provision of goods and services. 

Annual plan 

A plan produced by Council every year that sets out what 

it plans to do for the following year and into the future), 

how much it will cost and how Council plans to fund it. 

Every third year it is part of the LTP (Long-Term Plan, 

formerly LTCCP, Long-Term Council Community Plan). 

Annual report 

A document that Council prepares each year, which 

provides the public with information on the performance 

of the local authority during the past year (both in financial 

and non-financial terms). 

Appropriation 

Money that has been set aside from or brought into an 

operating revenue account. 

Assets 

Assets are available resources owned by Council. Non 

current assets are assets that have a useful life of more 

than 1 year, such as roads, parks, footpaths and buildings. 

AWPT 

Abbreviation for Area Wide Pavement Treatment 

Programme. AWPT is a Transfund subsidised programme 

of renewal of pavements including overlays and chemical 

stabilisation. It should not be confused with Council’s road 

sealing programme. 

Authority 

Power, responsibility. 

BERL 

(Business and Economic Research Ltd.) This is the index 

councils use for inflation figures across all areas like roading, 

water, and stormwater; all have different inflation rates. 

BKBM 

This is a bank bill mid rate. This is the official bank rate for 

90 days. 

Capacity 

Council’s ability to deliver a service. For some services, 

Council may not have legal or budgetary control and may 

only be able to act as an advocate or facilitator. 

Capital value 

The value of land plus any additions like buildings, 

driveways and fences. 

Capital expenditure (CAPEX) 

Capital expenditure is additions, improvements or renewals 

to fixed assets that have or will be built or purchased by 

the Council, where the benefit will be reflected over more 

than one financial year. 

CBEC 

Abbreviation for Community Business and Environment 

Centre. 

Chief Executive 

The person in charge of managing the Council organisation 

and the principal adviser to Council and employer of staff. 

Code of conduct 

A document that defines councillors’ roles and conduct 

while in office. 

CP 

Abbreviation for commercial paper. 

Community 

A network of people and organisations linked together by 

common factors. This might refer to a network of people 

linked by place (that is, a geographic community), common 

interest or identity (for example, a hapu, voluntary 

organisations or society), or an administrative community 

(such as a district). 

Community Board 

A local elected body within a community to advise a 

district council on issues affecting the community and to 

carry out functions delegated to it by the Council. 


213

Glossary 

Community development (CD) 

Is a broad term applied to the practices and disciplines 

for involving local people to improve of the economic 

and social progress of their communities. Community 

development seeks to provide individuals and groups of 

people with the skills they need to affect change in their 

own communities. These skills are often created through 

the forming and supporting of interest groups working 

for an agreed common agenda. 


The future that a community wants to achieve. These 

outcomes set the direction for Council plans and help in 

the coordination of activities. 

Constituency 

An electoral area within district boundaries. 

Council controlled organisation (CCO) 

An organisation where the Council has 50% or more of 

the voting rights. 

Council controlled trade organisation (CCTO) 

A Council controlled trading organisation. 

Consultation 

Listening to what people think about an issue. 


A territorial authority, being an elected group of people 

that by democratic process have the mandate of the 

community they represent to make decisions and provide 

local governance. In the context of this document, 

‘Council’ refers to the Far North District Council, while 

‘council’ refers to all territorial authorities generally. 

Councillor 

A person elected to be on the Council. 

Decision 

A resolution or agreement to follow a particular course 

of action, including an agreement not to take any action 

in respect of a particular matter. 

Delegate 

To give responsibility to someone else. 

Democracy 

Letting the community participate in decision-making. 


A mechanism provided under the Local Government Act 

2002 to fund capital expenditure needed to meet extra 

demand placed on utilities by development and to ensure 

the cost of providing services to and within subdivisions 

and developments, or upgrading of services as a result of 

subdivision, are met by the developer/subdivider. 

Depreciation 

The loss in value of an asset over time. This is an accounting 

device to ensure that an appropriate amount of capital 

expenditure is spread as an expense in each year and 

matched against the income of the Council (including 

rates) in the Statement of Financial Performance. 

Deighton Total Infrastructure Management 

System (dTIMS) 

dTIMS (Deighton’s Total Infrastructure Management 

System) is a decision support tool used by managers to 

plan, analyse and select maintenance and rehabilitation 

activities in the life-cycle of their infrastructure assets. 

Far North Holdings Limited (FNHL) 

A Council Controlled Trading Organisation in which 

the Far North District Council is the major shareholder. 

FNHL manages fixed and non commercial assets 

including maritime facilities and assets. 


Fees and charges are charges for a Council service that 

must be met by the user of the service (e.g. entrance fee 

to swimming pools, fees for dumping waste at tips etc). 

FNDC 

Abbreviation for Far North District Council. 

FRA’S 

Abbreviation for forward rate agreements. 

Grant 

Money given to a group for a particular purpose. 

Hearing 

Meeting to enable members of the public to speak about 

a particular issue. 

214 


Infrastructure 

The systems that help a district function such as roads, 

public water supply, refuse and effluent disposal. 

Internal recoveries 

Recovery of costs by support departments from other 

council departments. 

ISDA 

Abbreviation for International Swaps and Derivatives 

Agreement. 

Land Transport New Zealand (LTNZ) 

Formerly Transfund New Zealand. From 1 December 

2004, the Land Transport Safety Authority (LTSA) 

and Transfund New Zealand formed Land Transport 

New Zealand. 

Land value 

The probable price that would be paid for the bare land 

as the date of valuation. The value includes development 

work such as drainage, excavating, filling, levelling, retaining 

walls, clearing, fertility build up, flood protection. 

Levels of service 

A measure of the service that the council delivers i.e. a 

number of sports fields available for use, library opening 

hours, water quality, etc. 

LGA 

Local Government Act (2002). The purpose of the 

LGA (2002) is to provide for democratic and effective 

Local Government that recognises the diversity of New 

Zealand communities. The Act provides the general 

framework and powers under which New Zealand’s 

78 local authorities - regional, district and city councils 

operate. 

LGCI 

Local Government Cost Index. A measure of the cost of 

business for a local authority. 

Liabilities 

Amounts that the organisation owes. Non current 

liabilities are amounts that are not due to be paid within 

the next year. 

Loan funds 

This is money used by Council that it has obtained by 

raising a loan. 

Local Government statement 

A collection of information prepared under Section 

40 of the Local Government Act 2002 that includes 

information about the ways in which a local authority 

engages with its community, how it makes decisions, and 

the ways in which citizens can influence those processes. 

Long-term council community plan (LTCCP) 

A plan covering at least ten years adopted under Section 

93 of the Local Government Act 2002 that describes the 

activities the Council will engage in over the life of the 

plan, why the Council plans to engage in those activities, 

and how those activities will be funded. 

LTCCP 

Abbreviation for Long-Term Council Community Plan 

(see definition above). 

LTP 

Abbreviation for the Long-Term Plan. (Formerly the 

LTCCP). 

Mayor 

The leader of Council, elected from across the district. 

NZTA 

New Zealand Transport Agency. NZTA is a Crown entity 

established under the Land Transport Management Act 

2003. The objective of the Agency is to undertake its 

functions in a way that contributes to an affordable, 

integrated, safe, responsive and sustainable land 

transport system. Each year, the NZ Transport Agency 

funds innovative and relevant research that contributes 

to this objective. 

New Zealand transport strategy 

Government’s vision for transport for an affordable, 

integrated, safe, responsive, and sustainable transport 

system. 


215

Glossary 

NZGAPP 

New Zealand Generally Accepted Accounting Practices. 

NZIFRS 

New Zealand International Financial Reporting Standards. 

Operating expenditure 

Spending for the normal day to day services of Council. 

This also includes depreciation, interest on loans, and 

allocated costs. 

Outcomes 

Outcomes are the future that a community wants 

to achieve. There is often a relationship between a 

community outcome and a specific service or facility that 

Council provides. 

Performance indicators 

Performance indicators are used by Council to measure 

how well services are performing. They enable targets 

to be set for service improvement and comparisons of 

performance over time with other organisations. 

Private benefit 

This occurs when individuals who benefit from a service 

can be clearly identified and therefore charged for 

that service. It applies to user chares, application fees, 

purchase price and water by meter, though there are 

exceptions to the rule. 

Public benefit 

This relates to spending which benefits the community in 

general and for which no individual beneficiaries can be 

clearly identified. 

Rates 

Money that property owners pay to District and Regional 

Council for the provision of assets and services. 

Refuse 

Rubbish, garbage and waste management. 

Regional Council 

A Council that represents a regional community, manages 

natural resources and deals with issues that affect the 

environment. Our Regional Council is the Northland 

Regional Council. 

Regulatory 

A function of Local Government concerning legal (usually 

bylaw) enforcement. 

Renewal expenditure 

This is spending that replaces deteriorating assets with new 

assets that have the same service potential as the originals. 

Reserve contribution 

A contribution made either in money or land (at 

Council’s discretion) to the district’s reserves, payable for 

any subdivision in which the number of lots is increased, 

or for any significant development of land. 

Resource consent 

Special permission from Council for an activity related 

to land. 

Restricted assets 

Assets that cannot be disposed of because of legal or 

other restrictions and that provide benefit or service to 

the community. They include reserves vested under the 

Reserves Act 1977, endowments and property held in 

Trust for specific purposes. 

Reticulation 

When water is supplied from a main source and 

distributed within a defined area, for a cost. Also a means 

of wastewater disposal where sewage is discharged to a 

main source where it is treated for disposal. 

Revenue 

Money received by Council. 

Revenue and financing policy 

This is a statement about who should pay for the services 

provided by Council. The Policy outlines who will benefit 

for each activity and who should pay for it, taking into 

account fairness and what is practical. 

RFS 

Request For Service. This is Council’s system for tracking 

all public requests such as maintenance requests, 

questions and complaints. 

216 


Service levels 

The defined service parameters or requirements for 

a particular activity or service against which service 

performance may be measured. Service levels usually 

relate to quality, quantity, reliability, responsiveness, 

environmental acceptability, and cost. 

Significance 

The degree of importance of an issue, proposal, decision 

or matter, as asses by the authority, in terms of its likely 

impact on and likely consequences for: 

•• 

The current and the future wellbeing of the district or 

region; 

•• 

Any persons who are likely to be particularly affected 

by, or interested in, the issue, proposal, decision, or 

matter; and 

•• 

The capacity of the Council to perform its role and the 

financial and other costs of doing so. 

Special consultative procedure 

A formal consultation process defined in legislation, 

setting out a series of steps that must be followed when 

councils consult on particular types of decisions. 

Special funds /reserve funds 

Money set aside for a specific purpose. Some uses are 

legally restricted and others are created by Council. 

Stormwater catchment management plans 

The sustainable management of stormwater run off 

within a defined catchment utilising piped networks 

and overland flows giving consideration to current and 

future development, climate change, system capacity and 

condition, water quality, financial affordability, and the 

environment. 

Submission 

Individuals or organisation giving Council formal feedback 

when Council has initiated a consultation process. 

Subsidies 

Money to help pay for some particular service, activity or 

infrastructure; usually paid by central government. 

Sustainability 

Sustainability focuses on improving the quality of life for 

all people without increasing the use of natural resources 

beyond the capacity of the environment to supply them 

indefinitely. Sustainable activities utilise resources and 

build capacity in a way that ensures the activity can be 

safely maintained over time. 

Sustainable development 

Sustainable development has many definitions. Most 

interpretations share the fundamental idea that it is 

development that maintains or enhances economic 

opportunity and community wellbeing while protecting 

and restoring the natural environment upon which 

people and economies depend. Sustainable development 

meets the needs of the present without compromising 

the ability of future generations to meet their own needs. 

Territorial authority 

A city or district council. 

Triennial agreement 

An agreement entered into by all of the local authorities 

within a region that sets out the basis for communication 

and coordination between authorites. 

Trust 

Money or property looked after by an organisation. 

Uniform annual general charge (UAGC) 

The contribution to the costs of the activities, works or 

services, whose costs are not otherwise recovered from 

separate and special rates and charges and shall be levied 

in respect of every separately rateable property. This 

amount does not vary with the value of the property. 

User fees and charges 

Fees charged to users of specific services and facilities 

provided by the Council. 

Utilities (utility assets) 

Utilities are network infrastructures that provide 

mechanisms for the delivery of services. In a Local 

Government context, utilities are commonly public water 

supply, wastewater, sewerage, and solid waste. 

Ward 

An area within the district administered by Council. 


217

Contact Details 

Council service centres 

Headquarters – Kaikohe 

Memorial Avenue 

Kaikohe 

Tel: 09 401 5200 

Monday – Friday 

8.00am – 5.00pm 

Kaitaia 

Kaitaia 


8.30am – 5.00pm 

Kaeo 

Leigh Street 

Kaeo 

Tel: 09 401 5200 


8.30am – 5pm 

(closed 12.30 – 1.00) 

John Butler Centre Kerikeri 

60 Kerikeri Road 

Kerikeri 

Tel: 09 401 5200 


8.00am – 5.00pm 

Procter Library, Kerikeri 

Cobham Road 

Kerikeri 

Tel: 09 401 5200 


8.00am – 5.00pm 

Hokianga 

29 – 31 State Highway 12 

Opononi 

Tel: 09 405 8869 

Open 7 days (except Christmas Day) 

8.30am – 5.00pm 

Kawakawa 

Gillies Street 

Kawakawa 

Tel: 09 401 5200 


8.30am – 5.00pm 

Rawene 

Parnell Street 

Rawene 

Tel: 09 401 5200 

Tuesday’s and Thursday’s 

8.30am – 5pm 

(closed 12.30 – 1.00pm) 

Customer enquiries 

Customers can access a full range of services at any of our Service Centres or by contacting our Call Centre on 09 401 5200 or 0800 920 029 (Northland landline callers only), 

Facsimile 09 401 2137, website www.fndc.govt.nz/contact/email-us or by correspondence to Private Bag 752, KAIKOHE, 0440. 

218

Far North District Council

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