Long Term Community Plan 2012-2022 - Hurunui District Council

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www.hurunui.govt.nz Risks and Uncertainties 12. Useful Lives of Significant Assets Inflation in some areas may increase at a rate different to that forecast. Some types of costs (e.g. Roading and Transport Costs) have been subject to wild fluctuations in recent years, and as a result, it is inherently difficult to predict trends with accuracy. Rating of Uncertainty: Medium 11. Funding Replacement of Significant Assets Capital Expenditure is funded by two key mechanisms: • General Reserve funding for those assets whose depreciation is funded via rates; and • Internal Financing for most other assets as set out in the Internal Financing Policy, which forms part of the Council’s Treasury Policy. General Reserve Funding A number of assets, principally those that are funded by the General Rate or a part of the Overhead component, are depreciated with the amount of depreciation being funded by income or rates. The funds from the funded depreciation are collected in a General Reserve. When the asset requires replacing, the funds are withdrawn from the General Reserve. Internal Financing For those activities that are funded by way of a Targeted Rate, Capital Expenditure can be funding through the Internal Financing system of Council. The full description of the Internal Financing system and how it is applied is in the Internal Financing Policy on page 268. Risks and Uncertainties There is a risk that some communities with significant capital requirements due to the condition of the asset or the requirement to upgrade their assets, that the level of debt that they owe becomes unsustainable. Council will monitor the level of debt on a regular basis to ensure such communities can sustain the costs associated with the provision of the asset. Rating of Uncertainty: Low Depreciation rates are as given in the Statement of Accounting Policies. Risks and Uncertainties The useful lives are based on historical information. Some assets may last longer than the life stated above because of differing factors and conversely, some assets may deteriorate at a faster rate than the lives stated above. Rating of Uncertainty: Low 13. Climate Change & Societal Changes The Sustainability section of the Plan (Page 44) states the Council’s position on Climate Change, and the discussion in the Financial Strategy (pages 21) indicates a major societal change in the District’s aging population. The Council has considered the effects of these in its planning, but are of the opinion that there is not sufficient certainty surrounding the detail of the projections in these areas for them to be incorporated as specific financial forecasting assumptions in the LTP. The Council is mindful of the current economic crisis and outlook and will look for increased efficiencies in this regard. Other potential societal changes were considered by the Council, but were not seen to be significant. Risks and Uncertainties These factors may have a stronger impact than anticipated. The Council will monitor the situation and seek to adapt accordingly. Rating of Uncertainty: Low 152
Statement of Accounting Policies Reporting Entity Hurunui District Council is a territorial local authority as governed by the Local Government Act 2002 and is domiciled in New Zealand. The Hurunui District Council group consists of the ultimate parent Hurunui District Council (HDC) and its subsidiary Hurunui Holdings Limited (HHL) (100% owned), associate Enterprise North Canterbury (50% equity share), Canterbury Economic Development Company Limited (10%) and Transwaste Canterbury Limited (1.2%). All HDC subsidiaries and associates are incorporated and domiciled in New Zealand. The primary objective of HDC is to provide goods and services for the community for social benefit rather than making a financial return. Accordingly, HDC has designated itself and the group as public benefit entities for the purposes of New Zealand equivalents to International Financial Reporting Standards (“NZ IFRS”). The seat of the Council is at Amberley. Basis of Preparation of the Forecast Information Hurunui Community Long Term Plan 2012 - 2022 assumptions underlying these prospective financial statements are appropriate, has approved the Long Term Plan for distribution. The Council and management of the Hurunui District Council accept responsibility for the preparation of their prospective financial statements, including the appropriateness of the assumptions underlying the prospective financial statements and all other required disclosures. No actual financial results have been incorporated within the prospective financial statements. Statement of Compliance The financial information contained within this report has been prepared in accordance with the generally accepted accounting practice in New Zealand as required under section 111 of the Local Government Act 2002, and the Long Term Plan requirements of section 93. It is audited under section 84 of the Local Government Act 2002. The prospective financial statements comply with applicable Financial Reporting Standards, which include New Zealand equivalents to International Financial Reporting Standards (NZ IFRS). The financial statements incorporated in the Long Term Plan have been prepared in compliance with Financial Reporting Standard (FRS) number 42; Prospective Financial Statements. The prospective financial statements of the Hurunui District Council have been prepared in accordance with the requirements of the Local Government Act 2002. 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. The opening balances for the 2012/2013 year are based on forecast closing balances for the 2011/2012 year. The prospective financial statements have been prepared on a historical cost basis, modified by the revaluation of land and buildings, certain infrastructural assets, investments, biological assets and financial instruments (including derivative instruments). The Council authorised the prospective financial statements on 28 June 2012. The Council, who are authorised to do so and believe that the The Hurunui District Council is a Public Benefit Entity and has applied the PBE exemptions allowable under New Zealand equivalents to International Financial Reporting Standards (NZ IFRS). Cautionary Note The information in the prospective financial statements is to outline service and spending priorities in the statement of proposal for the Long Term Plan and may not be appropriate for any other use. Consolidation The Council has not consolidated the prospective financial statements to include the Council’s subsidiary Hurunui Holdings Limited. The Council believes consolidation for the purpose of the Long Term Plan will not be material as Hurunui Holdings Limited operates essentially as a shelf company and has no transactions. Measurement Base The prospective financial statements have been prepared on the historical cost basis, modified by the revaluation of certain assets. Functional and Presentation Currency The financial statements are presented in New Zealand dollars and all values are rounded to the nearest thousand dollars ($’000). The functional currency of the HDC is New Zealand dollars. 153
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Hurunui Community Long Term Plan 20
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About the Plan Introduction The Loc
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How Your Rates are Spent The Counci
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Water Supply Overview Water Supply
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Independent Auditor’s Report Huru
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Phone: 03 314 8816 Fax: 03 314 9181
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Long Term Community Plan 2012-2022 - Hurunui District Council

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