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					10 Year Plan 2009/19
              PART TWO of TWO
  LOng TeRm COunCiL COmmuniTY PLAn
                                                 10 Year Plan 2009/19
                                                 PART TWO of TWO
This 10 Year Plan (Long Term Council Community
Plan) has been prepared in accordance with the
                                                 Our Vision: Palmerston North is recognised as a
Local Government Act 2002 and was adopted by
Council on 24 June 2009.
                                                 vibrant, caring, creative and sustainable city.

Palmerston North City Council
                                                 City Goals:                                       Organisational Goals:
32 The Square                                    Palmerston North is a city where people           Palmerston North City Council is financially
Private Bag 11034                                want to live because of its easy lifestyle        responsible and residents are satisfied that
Palmerston North 4442                            and its many social, economic and leisure         they get value for money from their rates.
                                                 opportunities.
P:   06 356 8199
F:   06 351 4471                                                                                   Palmerston North City Council understands
E:   info@pncc.govt.nz                           Palmerston North is a leading city in the quest   the many views of the City’s people and
W:   www.pncc.govt.nz                            to become environmentally sustainable.            those people understand what the Council is
                                                                                                   doing and why.
Publication Design: Print Synergy, PNCC
                                                 Palmerston North is a city which attracts,
Publication Printing: Print Synergy, PNCC        fosters and retains businesses because of the
                                                 creativity and innovation of its education,
                                                 research and knowledge base.
This 10 Year Plan was adopted by the Council on 24 June 2009
in accordance with the Local Government Act 2002.
The 10 Year Plan states the Council’s intentions. It is based on          (2) A resolution to adopt a long–term council community plan or
the Council’s best information and planning at the time it was                an annual plan does not constitute a decision to act on any
developed. If circumstances change, the Council may have to                   specific matter included within the plan.
change its intentions. This is especially the case in light of current
uncertain economic conditions.                                            (3) Subject to section 80, and except as provided in section 97, a
                                                                              local authority may make decisions that are inconsistent with
All the decisions in this Plan are reviewable, especially during future       the contents of any long–term council community plan or an
10 Year Plans and Annual Plans.                                               annual plan.

This is made clear in the Local Government Act 2002, Section 96:          (4) No person is entitled to require a local authority to implement
                                                                              the provisions of a long–term council community plan or an
(1) The effect of a long–term council community plan and an                   annual plan.
    annual plan adopted by a local authority is to provide a formal
    and public statement of the local authority’s intentions in
    relation to the matters covered by the plan.
Contents
Introduction and Council’s Planning Framework .......5                                        Revenue and Financing Policy............................................57
What we provide and how it affects the average                                                Rates Remission and Postponement Policy ...............86
residential ratepayer ....................................................................8   Policy on Partnerships with the Private Sector ........93
                                                                                              Development Contributions Policy .................................96
                                                                                              Maori Participation in Council Decision Making....... 153
Section 1 – Financial and
Rating Information
Here you can see what assumptions have been made in preparing the                             Section 3 – Additional Information
financial information. You'll also see details about the rating system.
                                                                                              Community Outcomes ......................................................... 155
Corporate and Financial Assumptions ..........................11
                                                                                              The Role and Structure of the Council ....................... 173
Statement of Accounting Policies ....................................19
                                                                                              Elected Members ..................................................................... 174
Rating System, Rates and Funding Impact ................32
Statement                                                                                     Council Organisation Chart ............................................... 177
                                                                                              Council Contact Details........................................................ 178
                                                                                              Glossary .......................................................................................... 180
Section 2 – Funding and                                                                       Index................................................................................................. 182
Financial Policies
This section contains all of our policies.

Policy on Significance ..............................................................43
Liability Management and Investment Policy ..........47




PART TWO                                                                                                                                                                                                   3
Introduction                      What is a 10 Year Plan?                                                                    2008/09
                                                                                                                            Annual Plan
                                                                                                          2018/19                                2009/10
                                  Developing a city involves many decisions and                     10 Year Plan 2018/28                   10 Year Plan 2009/19
                                  compromises that can only be made by looking



and Council's
                                  at the ‘big picture’. Not only that, we have to                 2017/18
                                                                                          Annual Plan & Community
                                                                                                                                                         2010/11
                                                                                                                                                        Annual Plan
                                  look at issues from all angles – social, economic,       Outcomes Consultation
                                                                                                                          Council’s
                                  environmental, and cultural. We also have to take a                                  planning cycle                       2011/12
                                  long term view. All this requires a plan.                   2016/2017
                                                                                                                       2009 through                 Annual Plan & Community




Planning
                                                                                              Annual Plan                                            Outcomes Consultation
                                                                                                                          to 2019
                                  This document is our big picture plan. More                     2015/16                                               2012/13
                                  precisely, it is our Long Term Council Community          10 Year Plan 2015/25                                  10 Year Plan 2012/22

                                  Plan, or LTCCP. That’s a bit of a mouthful, so we are


Framework
                                                                                                                    2014/15                2013/14
                                                                                                                   Annual Plan            Annual Plan
                                  calling it our 10 Year Plan.

                                  Under the Local Government Act 2002 the                  this and what it will cost. (See page 17 of Part One
                                  Council has to place a lot more emphasis on long         for more information on the major goals.)
                                  term planning. We have to identify community
                                  outcomes every six years and prepare a 10 Year Plan      During years two and three of a 10 Year Plan the
“Kau kaupapa I au te aroha, ma    every three years.                                       Council still has to produce an Annual Plan. This
koutou e whakaoti”                                                                         Annual Plan has to be based on the 10 Year Plan, to
                                  “Community outcomes” is just a formal legal term         make sure that the Council does what it promised
                                  to describe the sort of city that people have said       the community it would do. It also makes sure we
I have laid the foundations       they want to live in.                                    have a consistent direction.
of togetherness for you (the
                                  The 10 Year Plan 2009/19 is based on the current
present and future generations)   community outcomes. The Council looked at
                                                                                           This 10 Year Plan shows what we are intending
                                                                                           to do over the period 2009/19, with particular
to bring to completion.           the community outcomes and worked out what               emphasis on the first three years. It also shows how
The Rangitaane leader             it can do to help achieve them. Based on this it         much we think this will cost and how we will
Te Peeti Te Awe Awe (1820-1884)   developed five major goals that it will focus on over    fund it.
                                  the next 10 years. This Plan shows how it will do



PART TWO                                                                                                                                                                  5
Finding your way around the                            What’s where… at a glance
10 Year Plan                                           Here’s a quick guide to some of the key issues in this Plan:
The Plan is in two parts.
                                                       If you want to know about...                                   See page(s)

This is Part Two. Here you can find out about our      The Council’s Vision and Goals                                 17        Part One
policies, the Council’s structure, and some of the
                                                       Financial Information                                          25        Part One
background information that has shaped this
Plan.                                                  High profile, costly, or ongoing projects                      34        Part One
                                                       The community outcomes and how they are achieved               155       Part Two
Part One explains the type of City we want to
create. It also sets out in detail what we intend to   What are the Council’s plans for:
do over the next 10 years, especially the next three   Supporting the community                                       63        Part One
years. It shows why we want to do this, how much
                                                       Marketing the City and creating more jobs                      85        Part One
it will cost, and how people can judge our success.
                                                       Creating more leisure opportunities                            95        Part One
                                                       Keeping Palmerston North easy to move about                    132       Part One
                                                       A new bridge                                                   136       Part One
                                                       Reviewing its Waste Minimisation Plan/recycling                152       Part One

                                                       The role and structure of the Council                          173       Part Two

                                                       To help you find your way around the plan we have included a detailed
                                                       index and a glossary at the back of each part.

                                                       The diagram on the next page shows the Council’s planning framework.




6                                                                                                                                          10 YeAR PlAn 2009/19
                                      OuR DesTinATiOn


                                Community Outcomes
                               Council Vision and Goals

                This shows the sort of community people said they want to live in.




   whAT we will DO TO GeT TheRe                                         OuR iTineRARY


         Key Strategies for:
                  Social
                Economic
               Environment
                 Leisure


     Other External Plans, eg
    Transportation Management Plan
     Water Supply Management Plan
        Asset Management Plans


         Internal Plans, eg
         Human Resources Plan
 Information Management Strategic Plan
       Activity Management Plans
            Risk Management
                                                                              10 Year Plan/Annual Plans




             Unit Work Plans



 These show what we will do to deliver out                    This is a summary of what we will do,
    share of the community outcomes.                            when and how much it will cost.




                     ARe we On The RiGhT TRACk? is eveRYThinG Ok?


                        Community Outcomes Monitoring
                                 Annual Report
                         Quarterly Performance Reviews
                           Monitoring Council's Vision
                          Monitoring Policies and Plans

These are reports showing what's happening in the community, what we did and how well we did it.
What we                                    ACTIVITY

                                           Councillor
                                           leadership and
                                                               LEVELS OF SERVICE

                                                               Opportunities for people to be involved in Council decision making
                                                               Meet statutory requirements for Council meetings
                                                                                                                                       COST PER WEEK

                                                                                                                                       $1.20




provide
                                                               Provide information to people on what Council is doing
                                           Decision Making
                                           Direction setting   Collaborate with key stakeholders on City plans                         $1.52
                                                               Provide good quality long-term advice
                                                               Have plans for the City’s well-being
                                                               Identify and monitor the community outcomes
And how it affects the average                                 Have a well designed and attractive city

residential ratepayer.
                                           Cemeteries          Accessible, well maintained cemeteries and crematoria                   $0.19
These are the services the Council                             Accurate and timely cemetery records and information

provides in each of its Activities and     Civil Defence       Plans in place for emergencies                                          $0.25
                                                               Resources and trained volunteers for response to emergencies
the cost per week to the average                               Ongoing public education
                                                               Work collaboratively with other organisations
residential ratepayer. (i.e. a ratepayer   Community           Grants to community groups                                              $0.96
                                           Development         Work collaboratively with other organisations
with a house on a property with a                              Maintain and promote community centres
                                                               Funding for community events
rateable land value of $136,000)
                                           housing             Housing opportunities for low income older people / people with         $0.11
                                                               special needs
                                                               Housing that is appropriate to peoples’ needs
                                                               Maintain and develop community housing in cost effective way


                                           economic            Funding and support to attract, retain and expand businesses and jobs   $1.53
                                           Development         Funding to market the City to residents, students, shoppers,
                                                               convention attendees and visitors
                                                               Work collaboratively with other groups and people



8                                                                                                                                      10 YeAR PlAn 2009/19
 ACTIVITY           LEVELS OF SERVICE                                                       COST PER WEEK

 Arts and Culture   Te Manawa                                                               $2.23
                    Regent
                    Other Arts and Cultural facilities
                    Grants to Arts and Culture Groups

 libraries          Collections and Services from Central Library, Branch Library, Mobile   $3.63
                    Library and website
                    Items loaned free of charge
                    Collections to meet community needs
                    Space for public events

 Parks and          Arena Manawatu                                                          $5.30
 Recreation         Well maintained parks throughout the City
                    Well maintained sportsfields
                    Grants to recreation groups
                    Easily accessible swimming pools
                    Public toilets


 Regulatory         Processing building and planning consents in accordance with            $1.89
                    statutory requirements
                    Providing responsive animal control and noise control services
                    Ensuring food and liquor outlets meet regulations
                    Enforcing bylaws
                    Providing advice and information on compliance

 Roading and        Safe well maintained roads & footpaths                                  $5.05
 Parking            Street lighting
                    On and off street parking
                    Minimum delays at intersections
                    Sustainable Asset Management Planning




PART TWO                                                                                                    9
 ACTIVITY            LEVELS OF SERVICE                                                 COST PER WEEK

 Rubbish and         Weekly kerbside rubbish and recycling household collections       $2.85
 Recycling           Rubbish and recycling collections for businesses
                     Waste transfer station at Ashhurst
                     Green waste disposal and recycling facilities
                     Sustainable Asset Management Planning

 stormwater          Protection of buildings from flooding                             $1.58
                     Efficient collection and disposal of stormwater
                     Minimising impact of stormwater discharge
                     Timely response to complaints
                     Sustainable Asset Management Planning

 wastewater          Collection and treatment of wastewater                            $2.38
                     Disposal of treated wastewater
                     Sustainable Asset Management Planning

 water               Good quality, safe and reliable water supply to households and    $4.27
                     businesses
                     Water for fire fighting
                     Environmental management of water catchment
                     Sustainable Asset Management Planning


 Commercial or       Investment Fund                                                   $1.44 surplus
 strategic           Airport
                     Forestry
 investment
                     Public rental housing

 Corporate support   Human resources                                                   Costs allocated to
                     Information Management                                            other activities
                     Financial Services

 Customer services   24/7 phone service                                                Costs allocated to
                     Customer Service Centre (8am-5pm, Mon- Fri, except Wed 9am-5pm)   other activities
                     Provide customers with information they are seeking
                     Website for people to get information




10                                                                                                          10 YeAR PlAn 2009/19
Part tWO SectiOn 1
Financial
and rating
information
Here you can see wHat assumptions

Have been made in preparing tHe

financial information. you’ll also

see details about tHe rating system.




                                       Numbers Sculpture
                                                          finAnciAl And RATing infORmATiOn Corporate and FinanCial assumptions




corporate       Population and Household Growth                         Reasons and financial effect of uncertainty:
                                                                        If the increases are less than predicted then some
                Assumption:                                             projects will not go ahead and expenditure will be



and financial
                A population growth assumption of 0.8% annual           lower than forecast. If population growth is higher
                growth has been used. This is based on the              than predicted, then some projects will go ahead
                Statistics New Zealand 2006 – 2031 medium               earlier than forecast and expenditure will be higher
                population growth projections for Palmerston            than forecast.



Assumptions
                North. These population projections assume a
                change in the composition of the city population:       Societal Change
                • 0.4% average annual growth in the population
                   aged 0 – 39 years                                    Assumption:
                • 0.6% average annual growth in the population          That there will be no long term significant
                   aged 40 – 64 years                                   economic or social threats such as increased
                • 2.9% average annual growth in the population          unemployment, homelessness, lack of income
                   aged 65 years and over.                              or reduced personal well-being which adversely
                                                                        effects residents as a result of the current
                Asset Management Plans (AMPs) also take account         worldwide economic crisis.
                of projected growth in the number of households
                in the city. This is projected to remain constant       That any change in the makeup of the City’s
                at 1.0% per annum, with average household size          population in terms of ethnicity or age will be
                projected to decline as population growth slows         gradual and have minimal impact on the activities
                over the period from 2009 to 2019.                      to be provided by the Council.

                Risk:                                                   Risk:
                Growth does not meet the assumption.                    That the worldwide economic crisis will be a
                                                                        significant threat to people in Palmerston North.
                Level of uncertainty:
                Medium




PART TWO                                                                                                                    11
finAnciAl And RATing infORmATiOn Corporate and FinanCial assumptions




That the change to the ethnicity or age of the            Risk:                                                   Risk:
City’s population will be more significant than           Changes in subsidy rate and variation in criteria for   Actual revaluation results differ from those in the
current projections.                                      inclusion in subsidised works programmes.               forecast.

Level of uncertainty:                                     Level of uncertainty:                                   Level of uncertainty:
Medium/Low                                                Low                                                     Low

Reasons and financial effect of uncertainty:              Reasons and financial effect of uncertainty:            Reasons and financial effect of uncertainty:
The impact of the worldwide economic crisis is            The Government has demonstrated a long term             Where the actual inflation rate is different from that
unknown. As a people focused Council the impact           commitment to funding roading infrastructure            forecast, the actual revaluation will be different
and affects on residents will be monitored.               which meets the funding agency’s benefit/cost ratios.   from that forecast.

Changes to the makeup of the City’s population will       Revaluation of Property, Plant and                      The 10 Year Plan for each subsequent year is
also be monitored.                                                                                                reviewed by way of the Annual Plan round and a
                                                          Equipment Assets                                        new 10 Year Plan is produced every three years.
If necessary the Council has the ability to modify it’s
priorities through the Annual Plan process each year.     Assumption:
                                                          Property, Plant and Equipment assets will be
                                                                                                                  Asset Lives
                                                          revalued using the following cycle:
New Zealand Transport Agency                              • Leisure assets – years 1, 4, 7 and 10                 Assumption:
Subsidy                                                   • Roading and Parking – years 2, 5 and 8                Useful lives of assets is as recorded in asset
                                                          • Water and Waste – years 2, 5 and 8                    management plans or based on professional
Assumption:                                               • Property – years 1, 4, 7 and 10.                      advice. These are summarised in the depreciation
For the 2009/10 year, subsidies from New Zealand                                                                  note within the accounting policies.
Transport Agency (NZTA) have been included at             The revaluation will be based on the Bureaux of
the approved rate determined by NZTA. For the             Economic Research (BERL) forecasts of price level       Risk:
remaining nine years it is assumed that the level of      change adjusters and revaluation movements will be      That assets wear out earlier than estimated.
subsidy to cost will not change.                          shown in the Statement of Financial Performance.
                                                                                                                  Level of uncertainty:
                                                                                                                  Low


12                                                                                                                                                   10 YeAR PlAn 2009/19
                                                                                                   finAnciAl And RATing infORmATiOn Corporate and FinanCial assumptions




Reasons and financial effects of uncertainty:         Interest Rates                                             Depreciation
Asset life is based on estimates of engineers,
valuers and asset managers.                           Assumption:                                                Assumption:
                                                      The interest rate on Term Debt is calculated at            Depreciation has been calculated on asset values
In the event assets need to be replaced in advance    7.5%. To allow for anticipated timing of capital           at their latest revaluation date, and on additions at
of the assumption, depreciation and interest          expenditure, interest expenditure is provided for on       cost afterwards. It is assumed that:
costs may increase. The extent of the increase will   only 50% of forecast new loan amounts in the year          • existing depreciation will continue
depend on the nature and value of the asset.          of the capital expenditure but the full amount in          • new assets’ depreciation will be the result of
                                                      each year thereafter.                                         their estimated lives and values;
Sources of Funds for Future                                                                                      • depreciation on new and renewal programmes
Replacement of Assets                                 Interest on investments is calculated at 7.1%.                will impact in the year following the capital
                                                                                                                    programme.
                                                      Risk:
Assumption:
                                                      That the interest rate will differ from those used in      Risk:
That adequate funding will be provided to replace
                                                      the calculations.                                          That more detailed analysis of planned capital
assets as scheduled. The funding approach is
                                                                                                                 works once complete may alter the depreciation
detailed in the Revenue and Financing Policy.
                                                      Level of uncertainty:                                      expense.
                                                      Medium.
Risk:
                                                                                                                 That asset lives may alter due to new technology
That a particular funding source is unavailable.
                                                      Reasons and financial effect of uncertainty:               improving asset lives.
                                                      This will be managed through the Liability
Level of uncertainty:
                                                      Management and Investment Policy. Financial                Level of uncertainty:
Low
                                                      markets are very volatile however the Council              Low
                                                      has hedging strategies to protect against upward
Reasons and financial effect of uncertainty:
                                                      movement in interest rates. The financial impact is
As the Council operates a central treasury
                                                      not able to be measured.
function, should one source of funding be
unavailable for asset replacement, a further option
would be available.



PART TWO                                                                                                                                                             13
finAnciAl And RATing infORmATiOn Corporate and FinanCial assumptions




Reasons and financial effect of uncertainty:              Risk:                                                Level of Uncertainty:
Council has asset management planning and                 That market conditions will not enable an orderly    Medium
upgrade programmes in place. Asset capacity               winding down of the Fund within the planned
and condition is monitored with replacement               timeframes and returns from the Fund will be less    Reasons and Financial Effect of Uncertainty:
works being planned in accordance with standard           than assumed.                                        Palmerston North Airport Ltd’s ability to pay
asset management and professional practices.                                                                   dividends is dependent on the Company’s net
Depreciation is calculated in accordance with normal      Level of Uncertainty:                                surplus each year. To maintain and grow its
accounting and asset management practices.                High                                                 position in the market the Company currently
                                                                                                               plans significant capital expenditure. Servicing
Investments and Return on                                 Reasons and Financial Effect of Uncertainty:         the borrowings required could impact on the
                                                          Financial markets have been very volatile. If        Company’s operating surpluses in the short
Investments                                               withdrawals from the Fund are made sooner            to medium term. The financial effect of the
                                                          than planned then external debt will be lower        uncertainty is unknown.
Assumption:                                               than assumed. Interest income and expense will
The Council has resolved that the Long Term               therefore be lower than assumed. The reverse will
Investment Fund be progressively wound down
                                                                                                               Forestry
                                                          happen if withdrawals are made later than assumed.
and utilised to repay term debt or in substitution
for new debt. The Plan assumes this will occur over                                                            Assumption:
                                                          Due to market uncertainties, investment assets,
a period of ten years. During that time it is assumed                                                          That the majority of the Gordon Kear forest will be
                                                          including property and forestry, have not been
the Fund will achieve a return of 7.1% per annum                                                               clearfelled and replanted during the 10 year period.
                                                          revalued during the 10 years.
and that there will be no market movements in the                                                              Proceeds from asset realisation will be fully utilised
value of the Fund. This interest rate is considered       Airport Dividend                                     to cover harvest costs and repay outstanding
appropriate because the majority of the Fund is                                                                forestry encouragement loans.
invested in bonds which were purchased prior to           Assumption:
the downward movement in market interest rates.           A dividend of $0.25 million per annum will be        Risk:
                                                          received from Palmerston North Airport Ltd.          That sale proceeds and costs and timing of harvest
                                                                                                               differ from those assumed.
                                                          Risk:
                                                          That the actual dividends may differ from            Level of Uncertainty:
                                                          that assumed.                                        Medium


14                                                                                                                                                10 YeAR PlAn 2009/19
                                                                                                       finAnciAl And RATing infORmATiOn Corporate and FinanCial assumptions




Reasons and Financial Effect of Uncertainty:                 YEAR                                                    Level of Uncertainty:
                                                                       RoADING PRoPERTY      WATER     oTHER
Log prices and costs of harvest are subject to              ENDING                                                   Medium
change in the market place and are difficult                Jun 2010    3.3%       2.7%      3.8%       3.5%
to predict. World economic conditions are                   Jun 2011    2.9%       3.1%      3.0%       3.3%         Reasons and Financial Effect of Uncertainty:
currently volatile and uncertain meaning there              Jun 2012    2.9%       2.6%      2.8%       2.3%         Where the actual inflation rate is different from that
is uncertainty about the ability to sell the timber         Jun 2013    2.4%       2.8%      2.7%       2.4%         forecast, the cost of projects and expenditure will
within the timeframes assumed. In addition there            Jun 2014    2.3%       2.8%      3.3%       2.1%         be different from that forecast. In the two years
is a shortage of skilled logging crews and trucks           Jun 2015    2.2%       2.9%      2.9%       2.2%         following the adoption of the 10 Year Plan this will
nationwide to harvest an increasing volume of               Jun 2016    2.3%       3.0%      3.5%       2.3%         be addressed through the Annual Plan process and
mature forest and there is volatility in diesel prices.     Jun 2017    2.4%       2.6%      3.1%       2.3%         in the third year a new 10 Year Plan is produced.
To mitigate risks the Council retains control over          Jun 2018    2.4%       2.2%      3.2%       2.4%
when harvest occurs. Where prices and costs of                                                                       Emissions Trading Scheme
                                                            Jun 2019    2.2%       2.3%      3.3%       2.5%
harvest are different from that forecast, the forest
revenue will differ. The financial effect is not able to
                                                           BERL issued updated forecasts in March 2009 but           Assumption:
be measured.
                                                           these were not used as the impact of changes were         That the NZ Emissions Trading Scheme (ETS) will be
                                                           not material.                                             retained in a form similar to that contained in the
Due to the uncertainties mentioned, forestry assets
                                                                                                                     legislation passed in 2008.
have not been revalued during the 10 years.
                                                           Due to the level of uncertainty surrounding
                                                           the government’s future intentions no specific            Risk:
Inflation                                                  additional provision has been made to cover               That the current review being undertaken will lead
                                                           any possible effects of the application of the NZ         to changes in the legislation.
                                                           Emissions Trading Scheme.
Assumption:
2009/10 costs and revenues have been predicted.                                                                      Level of Uncertainty:
                                                           Risk:                                                     High
Beyond this, inflation has been included in the 10
                                                           That actual inflation differs from that predicted
Year Plan using the BERL forecasts of price level
                                                           and that decisions are made based on predicted
change adjustors, issued in September 2008, as
                                                           inflation levels.
follows:




PART TWO                                                                                                                                                                 15
finAnciAl And RATing infORmATiOn Corporate and FinanCial assumptions




Reasons and Financial Effect of Uncertainty:              Level of Uncertainty:                                    Reasons and Financial Effect of Uncertainty:
The national lead government has signalled that           Low                                                      The Bill to give effect to the change is before
it supports the need for an emissions trading                                                                      Parliament but the rate of progress toward
scheme as the best form of regulation to reduce           Reasons and Financial Effect of Uncertainty:             enactment is out of Council’s control. Budgets
carbon-based emissions in the most economically           The Council contributes to the Local Authority           have been prepared on the assumption that the
efficient way. However it has established a special       Protection Programme, a fund designed to cover           change will occur from 1 July 2009. If this does not
select committee to review the present ETS with           40% of the repair costs to damaged infrastructure.       occur the Arena Board will continue to incur the
particular emphasis on the major issues raised at         In certain circumstances Central Government may          operating costs and receive the operating revenue
the time the legislation was passed.                      fund the remainder of the costs. However roads and       and the Council will pay a grant to meet the
                                                          bridges are not covered by this programme with the       operating deficit. There will be no net impact on
The Council owns pre-1990 forests and the 10 Year         only relief available being from NZ Transport Agency     the Council’s operating position.
Plan assumes these will be replanted. No provision        who fund some of these repair costs.
is made for any potential free allocation of emission                                                              Services provided by Council
units from forest ownership.                              Arena Manawatu
                                                                                                                   Assumption:
Due to the level of uncertainty surrounding
                                                          Assumption:                                              Unless otherwise stated in the individual activity
the government’s future intentions no specific
                                                          That legislation will be passed which enables Arena      sections, service levels are generally assumed
additional provision has been made to cover any
                                                          Manawatu (The Showgrounds Board of Control) to           to remain the same. Increases to service levels
possible effects of the application of the ETS.
                                                          be disestablished and the management and control         are shown in the individual activity sections as
                                                          of the land to be transferred to the Council effective   operating and capital programmes. It has been
Natural Disasters                                         from 1 July 2009.                                        assumed there will be no unexpected changes to
                                                                                                                   legislation or other external factors that alter the
Assumption:                                               Risk:                                                    nature of services provided by Council.
That there will be no significant natural disasters       That the legislation will not be passed by 1 July
such as storms, floods, earthquakes and volcanic          2009.                                                    Risk:
eruptions which damage City infrastructure.                                                                        That there will be some unexpected change to
                                                          Level of Uncertainty:                                    legislation or other factors.
Risk:                                                     Medium
That there will be a significant natural disaster.


16                                                                                                                                                     10 YeAR PlAn 2009/19
                                                                                                finAnciAl And RATing infORmATiOn Corporate and FinanCial assumptions




Level of Uncertainty:                               Reasons and Financial Effect of Uncertainty:              Continuity of External Funding
Medium                                              Climate change is a long term phenomenon.
                                                                                                              Assumption:
Reasons and Financial Effect of Uncertainty:        Council monitors changing weather patterns                Unless otherwise stated in the individual Activity
In the past changes have usually taken time to      and takes this into account in designing new and          sections, it is assumed that external funding sources
be developed then passed into legislation. The      upgraded infrastructure.                                  will continue at present levels for the duration of the
new government is moving quickly to introduce                                                                 10 Year Plan. The most significant of these is funding
changes to reflect their policies and these could   Resources Consents                                        from NZTA for roading and transportation.
impact on the Council’s operations. Possible
changes have been signalled to the Emissions                                                                  Risk:
                                                    Assumption:
Trading legislation and the Resource Management                                                               That qualifying criteria or subsidy rates will be
                                                    Conditions of resource consents held by the
legislation. The impact is unknown at this stage.                                                             changed.
                                                    Council will not be altered significantly except for
                                                    the wastewater ponds in Ashhurst and Aokautere.           Level of Uncertainty:
Climate Change                                                                                                Low
                                                    Risk:
Assumption:                                         That other resource consent conditions are altered.       Reasons and Financial Effect of Uncertainty:
That any climate changes will not be significant                                                              Qualifying criteria and subsidy ratios have
during the 10 Year Plan period.                     Level of Uncertainty:                                     traditionally been very stable and there is no
                                                    Low                                                       indication they are likely to be changed. In
Risk:                                                                                                         the event they are, the Council will reassess its
That changes to climate will be more significant    Reasons and Financial Effect of Uncertainty:              commitment to undertake the projects concerned.
than assumed.                                       Council’s significant resource consents do not
                                                    expire until beyond the 10 Year Plan period
Level of Uncertainty:                               and there is a low likelihood that the Horizons
Low                                                 Regional Council’s ‘one Plan’ will require standards
                                                    significantly higher than the present ones. The
                                                    budgets include provision to upgrade the Ashhurst
                                                    and Aokautere wastewater disposal systems.



PART TWO                                                                                                                                                           17
finAnciAl And RATing infORmATiOn Corporate and FinanCial assumptions




Turitea Windfarm                                          Year Plan. In the event Mighty River Power does         Level of Uncertainty
                                                          receive consent it will take a considerable period to   High
Assumption                                                construct the windfarm. It is therefore unlikely the
That any revenue received from Mighty River Power         Council will receive any lease income for at least      Reasons and financial effect of uncertainty
pursuant to a contract relating to the lease of land      two years. Due to the restrictions on the use of any    The Council has reviewed the number of claims and
in the Council’s Turitea water reserve will be used       lease revenue, the revenue if received will have only   potential claims lodged with the Council and the
for the purposes outlined in the Reserves Act 1977.       minimal impact on the day to day operations of the      Weathertighthomes Resolution Service. There has
Any expenditure proposals to utilise the revenue          Council. Proposals for utilising the revenue will be    been an increase in the number of these during
will be the subject of a specific resolution of the       separately considered by the Council if the revenue     2008 and 2009. Recent changes to the Council’s
Council. The proposed lease enables Mighty River          source becomes more certain.                            liability insurance arrangements through RiskPool
Power to operate a windfarm from the site provided                                                                mean Council’s exposure to new leaky homes
they are successful in obtaining the necessary                                                                    claims will be higher after 1 July 2009. The Council
resource consents. No revenue has been included           Weathertightness (‘Leaky’)                              has included a Regulatory activity operating
in the 10 Year Plan and no expenditure programmes                                                                 programme in the 10 Year Plan to fund claims and
                                                          Homes Claims                                            associated costs from rates. If the Council is faced
utilising this revenue have been included.
                                                                                                                  with paying more than budgeted in any particular
                                                          Assumption                                              year it will determine at the time whether it has
Risk
                                                          That the Council will continue to receive claims in     the financial capacity to fund from operations or
That Mighty River Power will not be successful in
                                                          relation to leaky homes and that it will be required    whether short term borrowing will be required.
obtaining the necessary resource consents.
                                                          to pay contributions toward settlement of up to         The appropriateness of the level of expenditure
                                                          $1 million pa over the next three years reducing        assumed will be reviewed in each year’s Annual
Level of Uncertainty
                                                          thereafter.                                             Plan.
High
                                                          Risk
Reasons and financial effect of uncertainty
                                                          That the number of claims and/or the level of
As the resource consent process is complex and
                                                          settlement per claim varies significantly from the
there is a high level of uncertainty as to its outcome
                                                          levels assumed.
the Council has taken a conservative approach
and not included any lease income in the 10




18                                                                                                                                                  10 YeAR PlAn 2009/19
                                                               finAnciAl And RATing infORmATiOn statement oF aCCounting poliCies




Statement of   Reporting Entity                                         These financial statements have been prepared
               The Palmerston North City Council (the Council) is       in accordance with NZ GAAP. They comply with
               a territorial local authority governed by the Local      NZ IFRS, and other applicable Financial Reporting



Accounting
               Government Act 2002 and is domiciled in New              Standards, as appropriate for public benefit entities.
               Zealand.
                                                                        Measurement base
               The financial statements in the 10 Year Plan are         The financial statements have been prepared on



Policies
               those of the Council as a separate legal entity and      a historical cost basis, modified by the revaluation
               not of the Council group.                                of land and buildings, infrastructural assets,
                                                                        investment property, biological assets and
               The primary objective of the Council is to provide       certain financial instruments (including derivative
               goods or services for the community or social benefit    instruments).
               rather than making a financial return. Accordingly,
               the Council has designated itself and the group          Functional and presentation currency
               as public benefit entities for the purposes of New       The financial statements are presented in New
               Zealand equivalents to International Financial           Zealand dollars and all values are rounded to the
               Reporting Standards (NZIFRS).                            nearest thousand dollars ($’000). The functional
                                                                        currency of the Council is New Zealand dollars.

               Basis of Preparation                                     Changes in accounting policies
                                                                        The accounting policies set out below have been
               Statement of compliance                                  applied consistently to all periods presented in
               The financial statements of the Council have been        these financial statements.
               prepared in accordance with the requirements of
               the Local Government Act 2002, which includes the
               requirement to comply with New Zealand generally
               accepted accounting practice (NZ GAAP).




PART TWO                                                                                                                       19
finAnciAl And RATing infORmATiOn statement oF aCCounting poliCies




Significant Accounting Policies                             incurred or assumed, in exchange for control of the          Revenue
                                                            subsidiary plus any costs directly attributable to the       Revenue is measured at the fair value of
Basis of consolidation                                      business combination.                                        consideration received or receivable. Where
The purchase method is used to prepare the                                                                               revenue is derived by acting as an agent for
consolidated financial statements, which involves           Any excess of the cost of the business combination           another party, the revenue that is recognised is the
adding together like items of assets, liabilities,          over the Council’s interest in the net fair value of         commission or fee on that transaction.
equity, income and expenses on a line-by-                   the identifiable assets, liabilities and contingent
line basis. All significant intra-group balances,           liabilities is recognised as goodwill. If the Council’s      Rates revenue
transactions, income and expenses are eliminated            interest in the net fair value of the identifiable assets,   Rates are set annually by a resolution from Council
on consolidation.                                           liabilities and contingent liabilities recognised            and relate to a financial year. All ratepayers are
                                                            exceeds the cost of the business combination, the            invoiced within the financial year to which the
Subsidiaries                                                difference will be recognised immediately in the             rates have been set. Rates revenue is recognised
The Council consolidates as subsidiaries in the             statement of financial performance.                          when payable.
group financial statements all entities where the
Council has the capacity to control their financing         The Council’s investment in its subsidiaries are             Revenue from water rates by meter is recognised
and operating policies so as to obtain benefits from        carried at cost in the Council’s own “parent entity”         on an accrual basis. Unbilled usage, as a result
the activities of the entity. This power exists where       financial statements.                                        of unread meters at year end, is accrued on an
the Council controls the majority voting power on                                                                        average usage basis.
the governing body or where such policies have              Joint ventures
been irreversibly predetermined by the Council              A joint venture is a contractual arrangement                 Government subsidies
or where the determination of such policies is              whereby two or more parties undertake an                     The Council receives government subsidies from New
unable to materially impact the level of potential          economic activity that is subject to joint control.          Zealand Transport Agency, which subsidises part of
ownership benefits that arise from the activities of                                                                     the Council’s costs in maintaining the local roading
the subsidiary.                                             For jointly controlled assets, the Council recognises        infrastructure. The subsidies are recognised as
                                                            in its financial statements its share of jointly             revenue upon entitlement as conditions pertaining
The Council measures the cost of a business                 controlled assets, the liabilities and expenses it           to eligible expenditure have been fulfilled.
combination as the aggregate of the fair values,            incurs, its share of liabilities and expenses incurred
at the date of exchange, of assets given, liabilities       jointly, and income from the sale or use of its share
                                                            of the output of the joint venture.



20                                                                                                                                                         10 YeAR PlAn 2009/19
                                                                                                         finAnciAl And RATing infORmATiOn statement oF aCCounting poliCies




Provision of services                                   interest method. Dividends are recognised when            of the grant application and are recognised as
Revenue from the rendering of services is               the right to receive payment has been established.        expenditure when a successful applicant has been
recognised by reference to the stage of completion                                                                notified of the the Council’s decision.
of the transaction at balance date, based on the        Development contributions
actual service provided as a percentage of the total    Development and financial contributions are               Income Tax
services to be provided.                                recognised as revenue when the Council provides,          Income tax expense comprises both current tax
                                                        or is able to provide, the service for which the          and deferred tax, and is calculated using tax rates
Sale of goods                                           contribution was charged. otherwise development           that have been enacted or substantively enacted by
Sales of goods are recognised when a product is         and financial contributions are recognised as             balance date.
sold to the customer. Sales are usually in cash or      liabilities until such time that the Council provides,
by credit card. The recorded revenue is the gross       or is able to provide, the service.                       Current tax is the amount of income tax payable
amount of the sale, including credit card fees                                                                    based on the taxable profit for the current year,
payable for the transaction. Such fees are included     Development contributions are classified as part of       plus any adjustments to income tax payable in
in other expenses.                                      “other Revenue”.                                          respect of prior years.

Traffic and parking infringements                       Borrowing costs                                           Deferred tax is the amount of income tax payable
Traffic and parking infringements are recognised        Borrowing costs are recognised as an expense in           or recoverable in future periods in respect of
when tickets are issued.                                the period in which they are incurred.                    temporary differences and unused tax losses.
                                                                                                                  Temporary differences are differences between
Vested assets                                           Grant expenditure                                         the carrying amount of assets and liabilities in the
Where a physical asset is acquired for nil or nominal   Non-discretionary grants are those grants that            financial statements and the corresponding tax
consideration the fair value of the asset received is   are awarded if the grant application meets the            bases used in the computation of taxable profit.
recognised as revenue. Assets vested in the Council     specified criteria and are recognised as expenditure
are recognised as revenue when control over the         when an application that meets the specified              The measurement of deferred tax reflects the tax
asset is obtained.                                      criteria for the grant has been received.                 consequences that would follow from the manner
                                                                                                                  in which the entity expects to recover or settle the
Interest and dividends                                  Discretionary grants are those grants where the           carrying amount of its assets and liabilities.
Interest income is recognised using the effective       Council has no obligation to award on receipt




PART TWO                                                                                                                                                                 21
finAnciAl And RATing infORmATiOn statement oF aCCounting poliCies




Deferred tax liabilities are generally recognised           Leases                                                    ownership of an asset. Lease payments under an
for all taxable temporary differences. Deferred                                                                       operating lease are recognised as an expense on a
tax assets are recognised to the extent that it is          Finance leases                                            straight-line basis over the lease term.
probable that taxable profits will be available             A finance lease is a lease that transfers to the lessee
against which the deductible temporary differences          substantially all the risks and rewards incidental        Cash and cash equivalents
or tax losses can be utilised.                              to ownership of an asset, whether or not title is         Cash and cash equivalents includes cash in hand,
                                                            eventually transferred.                                   deposits held at call with banks, other short-term
Deferred tax is not recognised if the temporary                                                                       highly liquid investments with original maturities of
difference arises from the initial recognition of           At the commencement of the lease term, the                three months or less, and bank overdrafts.
goodwill or from the initial recognition of an asset        Council recognises finance leases as assets and
and liability in a transaction that is not a business       liabilities in the statement of financial position at     Bank overdrafts are shown within borrowings
combination, and at the time of the transaction,            the lower of the fair value of the leased item or the     in current liabilities in the statement of financial
affects neither accounting profit nor taxable profit.       present value of the minimum lease payments.              position.

Deferred tax is recognised on taxable temporary             The finance charge is charged to the statement of         Trade and other receivables
differences arising on investments in subsidiaries          financial performance over the lease period so as to      Trade and other receivables are initially measured
and associates, and interests in joint ventures,            produce a constant periodic rate of interest on the       at fair value and subsequently measured at
except where the company can control the reversal           remaining balance of the liability.                       amortised cost using the effective interest method,
of the temporary difference and it is probable that                                                                   less any provision for impairment.
the temporary difference will not reverse in the            The amount recognised as an asset is depreciated
foreseeable future.                                         over its useful life. If there is no certainty as to      Financial assets
                                                            whether the Council will obtain ownership at the          Financial assets and liabilities are initially
Current tax and deferred tax is charged or credited         end of the lease term, the asset is fully depreciated     recognised at fair value plus transaction costs
to the statement of financial performance, except           over the shorter of the lease term and its useful life.   unless they are carried at fair value through
when it relates to items charged or credited directly                                                                 profit or loss in which case the transaction costs
to equity, in which case the tax is dealt with in           Operating leases                                          are recognised in the statement of financial
equity.                                                     An operating lease is a lease that does not transfer      performance.
                                                            substantially all the risks and rewards incidental to




22                                                                                                                                                         10 YeAR PlAn 2009/19
                                                                                                           finAnciAl And RATing infORmATiOn statement oF aCCounting poliCies




Purchases and sales of investments are recognised        A financial asset is classified as held for trading if     Loans and receivables
on trade-date, the date on which the Council             acquired principally for the purpose of selling in         Loans and receivables are non-derivative financial
commits to purchase or sell the asset. Financial         the short term. Derivatives are categorised as held        assets with fixed or determinable payments that are
assets are derecognised when the rights to receive       for trading unless they are designated as hedges           not quoted in an active market. They are included
cash flows from the financial assets have expired        (The Council does not hedge account). Assets               in current assets, except for maturities greater
or have been transferred and the Council has             in this category are classified as current assets          than 12 months after the balance date, which
transferred substantially all the risks and rewards of   unless settlement is beyond twelve months and in           are included in non-current assets. the Council’s
ownership.                                               managements assessment are likely to be held to            loans and receivables comprise cash and cash
                                                         maturity.                                                  equivalents, trade and other receivables, term
The Council classifies its financial assets into the                                                                deposits, community and related party loans.
following categories:                                    A financial asset is designated at fair value through
                                                         profit or loss at inception if acquired principally as     After initial recognition they are measured at
•   fair value through profit or loss                    part of a group of financial assets which is managed       amortised cost using the effective interest method
•   held-to-maturity investments                         and its performance is evaluated on a fair value           less impairment. Gains and losses when the asset
•   loans and receivables                                basis. Assets in this category are classified as non-      is impaired or derecognised are recognised in the
•   fair value through equity.                           current assets as they are not expected to be realised     statement of financial performance.
                                                         within 12 months of the balance sheet date. Assets
The classification depends on the purpose for            in this category include the Long Term Investment          Loans to community organisations made by the
which the investments were acquired. Management          Fund on the basis that they are managed and their          Council at nil, or below-market interest rates are
determines the classification of its investments at      performance is evaluated on a fair value basis in          initially recognised at the present value of their
initial recognition.                                     accordance with the Council’s approved Liability           expected future cash flows, discounted at the
                                                         Management and Investment Policy.                          current market rate of return for a similar financial
Financial assets at fair value through profit or loss                                                               instrument. The loans are subsequently measured
Financial assets at fair value through profit or loss    After initial recognition they are measured at their       at amortised cost using the effective interest
include two sub-categories: financial assets held for    fair values with gains or losses on re-measurement         method. The difference between the face value
trading, and those designated at fair value through      recognised in the statement of financial                   and present value of expected future cash flows of
profit or loss at inception.                             performance.                                               the loan is recognised in the statement of financial
                                                                                                                    performance as a grant.




PART TWO                                                                                                                                                                  23
finAnciAl And RATing infORmATiOn statement oF aCCounting poliCies




Held to maturity investments                                  long-term but which may be realised before           The fair value of financial instruments (including
Held to maturity investments are non-derivative               maturity (i.e. unlisted shares held in Civic         financial assets at fair value through profit or
financial assets with fixed or determinable payments          Assurance); and                                      loss) that are not traded in an active market is
and fixed maturities that the Council has the positive      • Shareholdings that the Council holds for             determined using valuation techniques. the Council
intention and ability to hold to maturity.                    strategic purposes.                                  uses a variety of methods and makes assumptions
                                                                                                                   that are based on market conditions existing at
After initial recognition they are measured at              The Council’s investments in its subsidiary            each balance date. Quoted market prices or dealer
amortised cost using the effective interest method          companies are not included in this category as         quotes for similar instruments are used for long-
less impairment. Gains and losses when the asset            they are held at cost (as allowed by NZ IAS 27         term debt instruments held. other techniques,
is impaired or derecognised are recognised in the           Consolidated and Separate Financial Statements         such as discounted expected cash flows, are used
statement of financial performance.                         and NZ IAS 28 Investments in Associates) whereas       to determine fair value for the remaining financial
                                                            this category is to be measured at fair value.         instruments.
Assets in this category include the directly held NZ
bonds as part of the Long Term Investment Fund              After initial recognition these investments are        Impairment of financial assets
on the basis that they are intended to be held to           measured at their fair value, with gains and losses    At each balance sheet date the Council assesses
maturity.                                                   recognised directly in equity except for impairment    whether there is any objective evidence that
                                                            losses, which are recognised in the statement of       a financial asset or group of financial assets is
Financial assets at fair value through equity               financial performance.                                 impaired. Any impairment losses are recognised in
Financial assets at fair value through equity are                                                                  the statement of financial performance.
those that are designated as fair value through             on de-recognition the cumulative gain or loss
equity or are not classified in any of the other            previously recognised in equity is recognised in the   Impairment of a loan or receivable is established
categories above. They are included in non-current          statement of financial performance.                    when there is objective evidence that the Council
assets unless management intends to dispose of                                                                     will not be able to collect all amounts due
the investment within 12 months of the balance              Fair value                                             according to the original terms. The amount of
date. The Council’s financial assets at fair value          The fair value of financial instruments traded in      the impairment is the difference between the
through equity includes:                                    active markets is based on quoted market prices at     asset’s carrying amount and the present value of
                                                            the balance sheet date. The quoted market price        estimated future cash flows, discounted using the
• Investments that the Council intends to hold              used is the current bid price.                         original effective interest rate.




24                                                                                                                                                  10 YeAR PlAn 2009/19
                                                                                                           finAnciAl And RATing infORmATiOn statement oF aCCounting poliCies




Impairment for all other financial assets is              Any impairment losses for write-downs of non-             include roading and parking, water, wastewater
established when there is objective evidence that         current assets held for sale are recognised in the        and stormwater networks, waste management
the Council will not be able to collect amounts           statement of financial performance.                       assets. Each asset class includes all items that are
due on original terms or there is a significant or                                                                  required for the network to function, for example,
prolonged decline in fair value of an investment.         Any increases in fair value (less costs to sell) are      wastewater reticulation includes reticulation piping
Any impairment losses are recognised in the               recognised up to the level of any impairment losses       and sewer pump stations.
statement of financial performance.                       that have been previously recognised.
                                                                                                                    Property, plant and equipment is shown at cost
Inventories                                               Non-current assets (including those that are part of      or valuation, less accumulated depreciation and
Inventories (such as spare parts and other items)         a disposal group) are not depreciated or amortised        impairment losses.
held for distribution or consumption in the               while they are classified as held for sale.
provision of services that are not supplied on a                                                                    Revaluation
commercial basis are measured at cost adjusted for        Property, plant and equipment                             The following plant, property and equipment
any loss of service potential.                            Property, plant and equipment consists of:                asset groups are revalued at least every three years
                                                                                                                    to ensure their carrying amount does not differ
The amount of any write down from cost for                operational assets – These include land, buildings,       materially from fair value:
any loss of service potential is recognised in the        recreation and community facilities, landfill post
statement of financial performance.                       closure, library books, heritage and art collections,     1. roading (except land under roads) and parking
                                                          plant and equipment, and motor vehicles.                     network
Non-current assets held for sale                                                                                    2. water, wastewater and stormwater networks
Non-current assets held for sale are classified as held   Restricted assets – Restricted assets are parks and       3. parks, building property, recreation, sportsfields
for sale if their carrying amount will be recovered       reserves owned by the Council which provide a                and community facilities.
principally through a sale transaction, rather than       benefit or service to the community and cannot be
through continuing use. Non-current assets held           disposed of because of legal or other restrictions.       All other asset classes are carried at depreciated
for sale are measured at the lower of their carrying                                                                historical cost.
amount and fair value less costs to sell.                 Infrastructure assets – Infrastructure assets are
                                                          the fixed utility systems owned by the Council.           The Council assesses the carrying values of its re-
                                                          The infrastructure networks owned by the Council          valued assets annually to ensure that they do not




PART TWO                                                                                                                                                                  25
finAnciAl And RATing infORmATiOn statement oF aCCounting poliCies




differ materially from the assets’ fair values. If there    Additions                                                   Depreciation
is a material difference, then the off-cycle asset          The cost of an item of property, plant and equipment        Depreciation is provided on a straight-line basis on
classes are revalued.                                       is recognised as an asset if, and only if, it is probable   all property, plant and equipment (except as referred
                                                            that future economic benefits or service potential          to in the following paragraph), at rates that will
The Council accounts for revaluations of property,          associated with the item will flow to the Council and       write off the cost (or valuation) of the assets to their
plant and equipment on a class of asset basis.              the cost of the item can be measured reliably.              estimated residual values over their useful lives.

Land under roads are generally considered ‘non              In most instances, an item of property, plant and           Land, land under roads, restricted assets, assets
tradable’ due to the perpetual nature of community          equipment is recognised at its cost. Borrowing              under construction, investment properties,
use. As there is no generally accepted methodology          costs incurred during construction of an asset have         biological assets, and the museum, art gallery and
for the valuation of land under roads, the Council is       not been capitalised. Where an asset is acquired at         heritage assets are not depreciated.
not revaluing this land and will carry this at deemed       no cost, or for a nominal cost, it is recognised at fair
cost. Under NZ IFRS the Council has elected to use          value as at the date of acquisition.                        The heritage and art collection assets of Te Manawa
the fair value of land under roads as at 1 July 2005                                                                    Museums Trust have not been depreciated, as it is the
as deemed cost.                                             Disposals                                                   Trust’s Policy to maintain the collections in its current
                                                            Gains and losses on disposals are determined by             state, in accordance with the Trust’s Conservation
Accounting for revaluation                                  comparing the proceeds with the carrying amount of          Policy. Donated objects are recorded at fair value,
The results of revaluing are credited or debited            the asset. Gains and losses on disposals are reported       or depreciated replacement cost, or nil value if
to an asset revaluation reserve for that class of           net in the statement of financial performance. When         considered unrealisable or irreplaceable. There is a
asset. Where this results in a debit balance in the         revalued assets are sold, the amounts included in           portion of the heritage and art collection that is not
asset revaluation reserve, this balance is expensed         asset revaluation reserves in respect of those assets       formally owned by the Te Manawa Museums Trust.
in the statement of financial performance. Any              are transferred to retained earnings.                       These assets are held and maintained by the Trust by
subsequent increase on revaluation that off-                                                                            agreement with the owners.
sets a previous decrease in value recognised in             Subsequent costs
the statement of financial performance will be              Costs incurred subsequent to initial acquisition
recognised first in the statement of financial              are capitalised only when it is probable that future
performance up to the amount previously                     economic benefits or service potential associated
expensed, and then credited to the revaluation              with the item will flow to the Council and the cost
reserve for that class of asset.                            of the item can be measured reliably.



26                                                                                                                                                           10 YeAR PlAn 2009/19
                                                                                            finAnciAl And RATing infORmATiOn statement oF aCCounting poliCies




The useful lives and associated depreciation rates   Carparks                                        Tobies                                     55-70
of major classes of assets have been estimated as    Carpark buildings                50-100         Valves                                     80
follows:                                             Sub base and base course         20-100         Water meters                               15-30
                                                     Surfaces                         2-20           Pumping stations                           10-100
OPERATING ASSETS                         YEARS                                                       Dams                                       15-1000
                                                     Waste Management                                Reservoirs                                 100
Buildings                                50-100      Safety fence, portable screens   40
Building fit-out                         10-50       Pumps                            30             The residual value and useful life of an asset is
Plant and equipment                      4-25        Sumps, drainage                  100            reviewed, and adjusted if applicable, at each
Furniture and fittings                   4-25        Weighbridge                      30             financial year end.
Motor vehicles                           3-18
Computer equipment                       2-7         Stormwater                                      Intangible assets
Library books                            3-10        Pipework                         60-150
Exhibitions                              1-5         Sumps                            60             Goodwill
Leasehold improvements                   1-30        Laterals, manholes               100-150        Goodwill represents the excess of the cost of an
                                                     Pumping station/pumps            10-100         acquisition over the fair value of the Council’s share
INFRASTRUCTURAL ASSETS                   YEARS       Land drainage/stopbank           50-120         of the identifiable assets, liabilities and contingent
                                                                                                     liabilities of the acquired subsidiary/associate at
Roading                                              Wastewater                                      the date of acquisition. Goodwill on acquisition of
Bridges and culverts                     25-125      Pipeworks, laterals, manholes    120            subsidiaries is included in “Intangible Assets”.
Sub base and base course                 20-100      Pumps                            30
Surfaces                                 2-25        Pumping stations                 15-100         Separately recognised goodwill is tested for
Footpaths                                8-80        Buildings                        50-100         impairment annually and carried at cost less
Kerb and channel                         25-80       Treatment plants                 15-100         accumulated impairment losses. An impairment
Signage                                  10-20                                                       loss recognised for goodwill is not reversed in any
Signals, streetlights                    5-45        Water                                           subsequent period.
Trees                                    70          Pipeworks, laterals              50-120
Vehicle crossing                         25-80       Hydrants                         80




PART TWO                                                                                                                                                   27
finAnciAl And RATing infORmATiOn statement oF aCCounting poliCies




Goodwill is allocated to cash generating units for          asset is derecognised. The amortisation charge            dependent on the asset’s ability to generate net
the purposes of impairment testing. The allocation          for each period is recognised in the statement of         cash inflows and where the entity would, if deprived
is made to those cash generating units or groups of         financial performance.                                    of the asset, replace it’s remaining future economic
cash generating units that are expected to benefit                                                                    benefits or service potential.
from the business combination, in which the                 The useful lives and associated amortisation rates
goodwill arose.                                             of major classes of intangible assets have been           The value in use for cash generating assets and cash
                                                            estimated as follows:                                     generating units is the present value of expected
Software acquisition and development                                                                                  future cash flows.
Acquired computer software licenses are                     Computer software and licences               3-7 years
capitalised on the basis of the costs incurred to           Athletic track                               9 years      If an asset’s carrying amount exceeds its recoverable
acquire and bring to use the specific software.                                                                       amount, the asset is impaired and the carrying
                                                            Impairment of property, plant and equipment               amount is written down to the recoverable
Costs that are directly associated with the                 and intangible assets                                     amount. For revalued assets the impairment loss is
development of software for internal use by the             Intangible assets that have an indefinite useful          recognised against the revaluation reserve for that
Council, are recognised as an intangible asset.             life, or not yet available for use, are not subject to    class of asset. Where that results in a debit balance in
Direct costs include the software development               amortisation and are tested annually for impairment.      the revaluation reserve, the balance is recognised in
employee costs and an appropriate portion of                Assets that have a finite useful life are reviewed        the statement of financial performance.
relevant overheads.                                         for indicators of impairment at each balance date.
                                                            When there is an indicator of impairment the asset’s      For assets not carried at a revalued amount, the total
Costs associated with maintaining computer                  recoverable amount is estimated. An impairment            impairment loss is recognised in the statement of
software and staff training costs are recognised as         loss is recognised for the amount by which the            financial performance.
an expense when incurred.                                   asset’s carrying amount exceeds its recoverable
                                                            amount. The recoverable amount is the higher of an        The reversal of an impairment loss on a revalued
Amortisation                                                asset’s fair value less costs to sell and value in use.   asset is credited to the revaluation reserve. However,
The carrying value of an intangible asset with a                                                                      to the extent that an impairment loss for that class of
finite life is amortised on a straight-line basis over      Value in use is optimised depreciated replacement         asset was previously recognised in the statement of
its useful life. Amortisation begins when the asset         cost for an asset where the future economic benefits      financial performance, a reversal of the impairment
is available for use and ceases at the date that the        or service potential of the asset are not primarily       loss is also recognised in the statement of financial
                                                                                                                      performance.



28                                                                                                                                                        10 YeAR PlAn 2009/19
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For assets not carried at a revalued amount (other        the property is held to meet service delivery               These include salaries and wages accrued up to
than goodwill) the reversal of an impairment loss is      objectives, rather than to earn rentals or for capital      balance date, annual leave earned to, but not yet
recognised in the statement of financial performance.     appreciation.                                               taken at balance date, retiring and long service
                                                                                                                      leave entitlements expected to be settled within 12
Forestry assets                                           Investment property is measured initially at its cost,      months, time in lieu and sick leave.
Standing forestry assets are independently                including transaction costs.
revalued annually at fair value less estimated costs                                                                  The Council recognises a liability for sick leave
to sell for one growth cycle. Fair value is determined    After initial recognition, the Council measures all         to the extent that absences in the coming year
based on the present value of expected net cash           investment property at fair value as determined             are expected to be greater than the sick leave
flows discounted at a current market determined           annually by an independent valuer.                          entitlements earned in the coming year. The
pre-tax rate. This calculation is based on existing                                                                   amount is calculated based on the unused sick leave
sustainable felling plans and assessments regarding       Gains or losses arising from a change in the fair           entitlement that can be carried forward at balance
growth, timber prices, felling costs and silvicultural    value of investment property are recognised in the          date, to the extent that the Council anticipates it will
costs and takes into consideration environmental,         statement of financial performance.                         be used by staff to cover those future absences.
operational and market restrictions.
                                                          Trade and other payables                                    Long-term employee benefits
Gains or losses arising on initial recognition of         Trade and other payables are initially measured at          Entitlements that are payable beyond 12 months,
biological assets at fair value less estimated costs to   fair value and subsequently measured at amortised           such as long service leave and retiring leave,
sell and from a change in fair value less estimated       cost using the effective interest method.                   have been calculated on an actuarial basis. The
costs to sell are recognised in the statement of                                                                      calculations are based on:
financial performance.                                    Employee benefits                                           • likely future entitlements accruing to staff,
                                                                                                                         based on years of service, years to entitlement,
The costs to maintain the forestry assets are             Short-term employee benefits                                   the likelihood that staff will reach the point
included in the statement of financial performance.       Employee benefits that the Council expects to                  of entitlement and contractual entitlements
                                                          be settled within 12 months of balance date are                information; and
Investment property                                       measured at nominal values based on accrued                 • the present value of the estimated future
Properties leased to third parties under operating        entitlements at current rates of pay.                          cash flows discounted at a current market
leases are classified as investment property unless                                                                      determined rate.




PART TWO                                                                                                                                                                    29
finAnciAl And RATing infORmATiOn statement oF aCCounting poliCies




Superannuation schemes                                      probable that expenditures will be required to           of the guarantee that remains unrecognised,
Defined contribution schemes                                settle the obligation and a reliable estimate can be     prior to discounting to fair value, is disclosed as a
obligations for contributions to defined                    made of the amount of the obligation.                    contingent liability.
contribution superannuation schemes are
recognised as an expense in the statement of                Provisions are measured at the present value of the      Financial guarantees are subsequently measured
financial performance as incurred.                          expenditures expected to be required to settle the       at the initial recognition amount less any
                                                            obligation using a pre-tax discount rate that reflects   amortisation, however if the Council assesses that
Defined benefit schemes                                     current market assessments of the time value of          it is probable that expenditure will be required
The Council belongs to the Defined Benefit Plan             money and the risks specific to the obligation. The      to settle a guarantee, then the provision for the
Contributors Scheme (the scheme), which is                  increase in the provision due to the passage of time     guarantee is measured at the present value of the
managed by the Board of Trustees of the National            is recognised as an interest expense and is included     future expenditure.
Provident Fund. The scheme is a multi-employer              in “finance costs”.
defined benefit scheme.                                                                                              Borrowings
                                                            Financial guarantee contracts                            Borrowings are initially recognised at their fair
Insufficient information is available to use                A financial guarantee contract is a contract that        value net of transaction costs incurred. After
defined benefit accounting, as it is not possible           requires the Council to make specified payments to       initial recognition, all borrowings are measured at
to determine from the terms of the scheme, the              reimburse the holder for a loss it incurs because a      amortised cost using the effective interest method.
extent to which the surplus/deficit will affect             specified debtor fails to make payment when due.
future contributions by individual employers, as                                                                     Borrowings are classified as current liabilities unless
there is no prescribed basis for allocation. The            Financial guarantee contracts are initially              the Council has an unconditional right to defer
scheme is therefore accounted for as a defined              recognised at fair value. If a financial guarantee       settlement of the liability for at least 12 months after
contribution scheme.                                        contract was issued in a stand-alone arm's length        the balance date.
                                                            transaction to an unrelated party, its fair value at
Provisions                                                  inception is equal to the consideration received.        Equity
The Council recognises a provision for future               When no consideration is received a provision is         Equity is the community’s interest in the Council
expenditure of uncertain amount or timing                   recognised based on the probability the Council          and is measured as the difference between total
when there is a present obligation (either legal            will be required to reimburse a holder for a loss        assets and total liabilities. Equity is disaggregated
or constructive) as a result of a past event, it is         incurred discounted to present value. The portion        and classified into a number of reserves.




30                                                                                                                                                        10 YeAR PlAn 2009/19
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The components of equity are:                          The Council’s objectives, policies and processes for           Direct costs are those costs directly attributable to
• Retained earnings                                    managing capital are described in a separate note              a significant activity. Indirect costs are those costs
• Special funds reserves                               to its Annual Report.                                          which cannot be identified in an economically
• Asset revaluation reserves                                                                                          feasible manner with a specific significant activity.
• Investment fluctuation reserve and                   Good and Service Tax (GST)
• Fair value through equity reserve.                   All items in the financial statements are stated               Direct costs are charged directly to significant
                                                       exclusive of GST, except for trade and other                   activities. Indirect costs are charged to significant
Special funds reserves                                 receivables and trade and other payables, which                activities using appropriate cost drivers such as
Special funds reserves are a component of equity       are stated on a GST inclusive basis. Where GST is              actual usage, staff numbers and floor area.
generally representing a particular use to which       not recoverable as input tax then it is recognised as
various parts of equity have been assigned. Special    part of the related asset or expense.                          Critical accounting estimates and assumptions
funds reserves may be legally restricted or created                                                                   In preparing these financial statements the Council
by the Council.                                        The net amount of GST recoverable from, or                     has made estimates and assumptions concerning
                                                       payable to, the Inland Revenue Department (IRD)                the future. These estimates and assumptions may
Special funds reserves are those subject to specific   is included as part of receivables or payables in the          differ from the subsequent actual results. Estimates
conditions accepted as binding by the Council and      statement of financial position.                               and assumptions are continually evaluated and are
which may not be revised by the Council without                                                                       based on historical experience and other factors,
reference to the Courts or a third party. Transfers    The net GST paid to, or received from the IRD,                 including expectations or future events that are
from these reserves may be made only for certain       including the GST relating to investing and                    believed to be reasonable under the circumstances.
specified purposes or when certain specified           financing activities, is classified as an operating            The estimates and assumptions that have a
conditions are met.                                    cash flow in the statement of cash flows.                      significant risk of causing a material adjustment
                                                                                                                      to the carrying amounts of assets and liabilities or
Also included in special funds reserves are reserves   Commitments and contingencies are disclosed                    the Council’s financial performance are disclosed
restricted by Council decision. The Council may        exclusive of GST.                                              in the note “Corporate and Financial Forecasting
alter them without references to any third party or                                                                   Assumptions”.
the Courts. Transfers to and from these reserves are   Cost allocation
at the discretion of the Council.                      The Council has derived the cost of service for each
                                                       significant activity of the Council using the cost
                                                       allocation system outlined below.



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The Rating                                                 [1] Introduction                                          • to ensure that all citizens contribute to the cost
                                                                                                                       of providing City services by charging for use on
                                                           Rating incidence is governed by the Council’s               a user pays basis where practicable



System, Rates
                                                           Revenue and Financing Policy and its Rating               • to foster the sense of a single community by
                                                           Policies. This section outlines details of the present      operating a common system throughout the City.
                                                           rating system used by the Council.
                                                                                                                     [3] Components of the Present

And funding
                                                           At various points within this section a level of rate     Rating System - A Summary
                                                           or charge is outlined. These are indicative figures
                                                           included to give ratepayers an estimate of what
                                                                                                                     The Council’s rating system, designed to meet
                                                           their level of rates is likely to be in the forthcoming


impact
                                                                                                                     these objectives, is utilised to fund the net cost of
                                                           year. They are not necessarily the actual figures as
                                                                                                                     operations and programmes outlined in the 10 Year
                                                           these will not be known until the Council’s rating
                                                                                                                     Plan and Annual Plan. It comprises the following
                                                           information database is finalised. Rates figures
                                                                                                                     components:


Statement
                                                           in this section are GST inclusive unless otherwise
                                                           specified.
                                                                                                                     A common system applies throughout the City.

                                                           [2] Rating objectives                                     Targeted rates, in the form of fixed charges (as
                                                                                                                     proxy user charges) are made to cover the costs of
                                                           For many years the Council has embraced the               those services which are identifiable by property
                                                           following as being its rating objectives:                 (water supply, wastewater disposal, and rubbish
                                                           • to encourage growth and confidence in the City          and recycling). In addition significant non-
                                                              by operating a stable, easily understood method        residential users of water are metered and some
                                                              of setting rates                                       non-residential wastewater users are charged on
                                                           • to set rates in a manner which is fair and              the basis of the number of pans.
                                                              equitable as between various ratepayers and
                                                              classes of ratepayer and which is consistent with
                                                              Council’s planning objectives



32                                                                                                                                                      10 YeAR PlAn 2009/19
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A Uniform Annual General Charge (UAGC) is                 [4] Examples of Proposed Rates for                          The three yearly revaluation of the City for rating
applied as a fixed amount to every rating unit                                                                        purposes was undertaken in 2006 and those
within the City. It is used as a mechanism to ensure
                                                          2009/10                                                     valuations will be the base for general rates set in
each rating unit contributes a minimum amount                                                                         2009/10.
of the general rate and also to moderate rates on         Examples of proposed rates for 2009/10 are shown
high land value properties.                               in the following table:                                     The examples should be read having regard for the
                                                                                                                      following assumptions:
                                                                               LAND       ACTUAL     PRoPoSED
A General Rate, based on the land value, is                                                                           • the Council’s total rates revenue will increase
                                                                              VALUE         RATES        RATES
applied to each rating unit, with different rates                                         2008/09      2009/10           by 6.5%
(differentials) applying to each property category.                                                                   • the Uniform Annual General Charge will be
                                                           Single unit residential
                                                                                                                         $550 per rating unit ($480 in 2008/09)
The categories in the Council’s differential rating        Average           136,000         1,645        1,742       • targeted rates in the form of fixed annual
                                                           Median            112,000         1,530        1,618
scheme reflect differing property use and can be                                                                         charges will be applied for water supply ($222);
                                                           Quartile 1         90,000         1,425        1,506
broadly grouped as follows:                                Quartile 3        155,000         1,736        1,839          wastewater disposal ($124); rubbish and
• Single unit residential                                                                                                recycling ($148) ($217, $173, $124 respectively
                                                           Non-residential
• Multi-unit residential                                                                                                 in 2008/09)
• Non-residential                                          Average           584,000       10,621        11,393       • a targeted rate for wastewater disposal will be
• Rural and semi-serviced.                                 Median            320,000        6,115         6,548          set on non-residential properties on the basis
                                                           Quartile 1        175,000        3,640         3,886          of the number of pans on the rating unit. The
                                                           Quartile 3        630,000       11,406        12,238
Differential surcharges (ie a higher rate in the $) are                                                                  charge per pan will be $124 reducing from $173
applied to multi-unit residential and non-residential      Rural & semi-serviced (>5ha)                                  per pan in 2008/09
properties whilst lower rates are applied to single        Average           831,000         1,274        1,404       • the examples shown for non-residential and
unit residential and rural/semi-serviced properties.       Median            440,000           901        1,002          rural properties do not include the charges
                                                           Quartile 1        255,000           724          812          (either fixed or metered) for water, wastewater
                                                           Quartile 3      1,035,000         1,469        1,614          or recycling.




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finAnciAl And RATing infORmATiOn the rating system, rates and Funding impaCt statement




[5] Components of the Rating                                GRoUP CoDE           BRIEF DESCRIPTIoN                                           DIFFERENTIAL                        CENTS IN $ oF LV
                                                                                                                                             (ExPRESSED AS %                     (ESTIMATED)
System - More Detail                                                                                                                         GRoUP CoDE MS)
                                                            R1                   Single unit residential                                     Balance (approx 70)                 0.5129
[5.1] General Rate                                          R2                   Two unit residential                                        120                                 0.8810
The Council proposes to set a general rate based on
                                                            R3                   Three unit residential                                      130                                 0.9545
the land value of each rating unit in the City.
                                                            R4                   Four unit residential                                       140                                 1.0279
The general rate will be set on a differential basis        R5                   Five unit residential                                       150                                 1.1013
based on land use (see description below), with the
                                                            R6                   Six unit residential                                        160                                 1.1747
differential factors as shown in the following table.
                                                            R7                   Seven unit residential                                      170                                 1.2481
                                                            R8                   Eight or more unit residential                              180                                 1.3216
                                                            MS                   Miscellaneous                                               100                                 0.7342
                                                            CI *                 Non residential (Commercial/industrial)                     250                                 1.8355
                                                            CR                   Commercial research                                         250                                 1.8355
                                                            CA                   Commercial accommodation                                    250                                 1.8355
                                                            FL                   Rural & semi-serviced (5 Ha or more)                        14                                  0.1028
                                                            FS                   Rural & semi-serviced (0.2 Ha or less)                      50                                  0.3671
                                                            FM                   Rural & semi-serviced (Between 0.2 & 5 Ha)                  30                                  0.2203

                                                           * In respect of multi-storey buildings in group code CI an additional surcharge shall be applied equivalent to 5% on the basic general rate (ie
                                                             group code MS - miscellaneous) for each storey four and over to a maximum of 25%.




34                                                                                                                                                                                 10 YeAR PlAn 2009/19
                                                                                     finAnciAl And RATing infORmATiOn the rating system, rates and Funding impaCt statement




[5.2] Uniform Annual General Charge                       operated waterworks but is within 100 metres of           150mm                 520
The Council proposes to set a uniform annual              such waterworks.                                          200mm                 820
general charge of $550 ($480 for 2008/09) on each
rating unit.                                              Rating units which are not connected to the               [5.3.2] Wastewater Disposal
                                                          scheme, and which are not serviceable will not be         The Council proposes to set a targeted rate for
[5.3] Targeted Rates                                      liable for this rate.                                     wastewater disposal. For residential rating units
For the purposes of the targeted rates proposed                                                                     it shall be set on the basis of a fixed charge per
below, a ’separately used or inhabited part of a rating   The estimated rates for the 2009/10 year are:             separately used or inhabited part and for all other
unit’ is defined as:                                      Connected:      $222 per part                             properties a fixed sum per rating unit. The charge
“Any part of the rating unit separately used or           Serviceable:    $111 per part                             will be set on a differential basis based on the
inhabited by the owner or any other person who                                                                      availability of the service (either “connected” or
has the right to use or inhabit that part by virtue of    Instead of the above the Council proposes to set a        “serviceable”). Connected means the rating unit
a tenancy, lease, licence or other agreement. At a        metered water targeted rate for water supply that is      is connected to a public wastewater drain whilst
minimum, the land or premises intended to form the        based on the volume of water supplied to all rating       serviceable means the rating unit is not connected
separately used or inhabited part of the rating unit      units where the volume supplied is considered             to a public wastewater drain but is within 30 metres
must be capable of actual habitation, or actual use       to be ‘extraordinary’ as defined in the City’s water      of such a drain.
by persons for purposes of conducting a business.”        supply bylaw. All water consumed will be charged
                                                          at an estimated rate of $0.73 per cubic metre with        Rating units which are not connected to the
[5.3.1] Water Supply                                      additional charges based on the size of the meter         scheme, and which are not serviceable will not be
The Council proposes to set a targeted rate for           connection as follows:                                    liable for this rate.
water supply on the basis of a fixed amount per
separately used or inhabited part of a rating unit        Meter Size          Annual Charge $                       The estimated rates for the 2009/10 year are:
which is either connected to the scheme or for            Up to 20mm          35                                    Connected:      $124 per part
which connection is available. The charge will be         25mm                45                                    Serviceable:    $62 per part
set on a differential basis based on the availability     32mm                110
of the service (either “connected” or “serviceable”).     40mm                180                                   In addition for the 2009/10 year the Council proposes
Connected means the rating unit is connected to           50mm                220                                   to set a targeted rate for non-residential rating units of
a Council operated waterworks whilst serviceable          75mm                300                                   $124 per pan for each pan in excess of three.
means the rating unit is not connected to a Council       100mm               390



PART TWO                                                                                                                                                                    35
finAnciAl And RATing infORmATiOn the rating system, rates and Funding impaCt statement




[5.3.3] Rubbish and Recycling                              applied to each land use category. The factors            [5.4.2] Differentials based on Land Use
The Council proposes to set a targeted rate for            proposed for 2009/10 are outlined in 5.1 and              The Council proposes to differentiate the General
rubbish and recycling on the basis of a fixed              remain unchanged from 2008/09.                            Rate on the basis of land use. The following
amount per separately used or inhabited part of                                                                      differential categories will be used:
a rating unit for which the Council is prepared to         The factors have been developed to address the
provide the collection service. Rating units for           following matters:                                        R1 Single Unit Residential
which the Council is not prepared to provide the           • rating units containing more than one residential       All rating units:
service will not be liable for these rates.                   unit will place an increasing demand on Council        • one hectare or less in area having a predominant
                                                              services as the number of units increase                  or exclusive residential use and on which is
The estimated rates for the 2009/10 year are:              • the land value for non-residential property is             erected one residential unit
Rubbish and Recycling $148 per part                           often driven by different influences than the land     • one hectare or less in area and having no
                                                              value for residential or rural land and therefore is      predominant use, on which no building
[5.4] Differential Matters and Categories                     not directly comparable as a rating base                  is erected but upon which the erection of
                                                           • the Council’s Revenue and Financing Policy                 residential units is a permitted activity under the
[5.4.1] Objectives of Differentials for General Rate          identifies a number of activities where it believes       City’s District Plan.
The Council believes that a uniform general rate              non-residential users gain a greater benefit than
based on land value would not produce a fair                  other users so should bear a greater share of the      R2 - R8 Multi-unit residential
and equitable allocation of rates and so operates             cost                                                   • Every rating unit not otherwise classified on
a system of differentials based on land use.               • for large rural rating units a pure land value            which is erected:
Descriptions of the land use categories are shown             system would produce rates charges, which were
in 5.4.2.                                                     unsustainable                                             R2   – two residential units
                                                           • rural and semi-serviced rating units generally             R3   – three residential units
The Council describes the relationship between                have limited or in some cases no access to some           R4   – four residential units
the rates charged to each group in terms of a factor          Council activities funded through the general rate        R5   – five residential units
expressed as a percentage of the rate which would          • rating units containing multi-storey buildings             R6   – six residential units
apply were there no differential rating in place ie           gain more benefit from the provision of Council           R7   – seven residential units
the group described as Miscellaneous (MS). Each               activities than is reflected by the application of a      R8   – eight or more residential units
year the Council reviews the differential factors             uniform rate in the dollar of land value.




36                                                                                                                                                      10 YeAR PlAn 2009/19
                                                                                     finAnciAl And RATing infORmATiOn the rating system, rates and Funding impaCt statement




MS Miscellaneous                                          CR – Every rating unit not otherwise classified           • the Council may, however, resolve that only a
Every rating unit (or division thereof ) of the           which is predominantly used for research purposes           portion of the property shall be reclassified into
following types:                                          in accordance with criteria determined by the               a higher rated group code.
• non-rateable property as defined in the Local           Council.
   Government (Rating) Act 2002                                                                                     in determining what proportion of the property
• property that is used for parking that is available     CA – Every rating unit on which is erected a              shall be reclassified the Council shall have regard to
   for public use in accordance with criteria             licensed hotel or an apartment building or                inter alia:
   determined by the Council                              residential institution and including a guest house,      • the scope of any sub-divisional plan deposited
• where the ratepayer conducts or permits to be           rooming house, boarding house, private hotel,                with the District Land Registrar
   conducted a business, being a Home occupation          motel, residential club or hostel. (Taverns which         • the portion of the property with access to
   as defined in the City’s District Plan, and which      have no residential accommodation shall be                   services, which, in the opinion of the Council
   would otherwise qualify for inclusion in group         included in group code CI).                                  would form a reasonable first stage of
   code R1                                                                                                             subdivision
• vacant, serviced property not classified in group       FL, FS & FM Rural & Semi-serviced                         • the prevailing economic climate as far as it
   codes R1 or FL or elsewhere as follows:                FL – Every rating unit not otherwise classified which        affects subdivision and the supply of serviced
   • property where non-residential use is a              does not have access to the City’s sewage disposal           land within the City.
      permitted activity under the City’s District Plan   system and either (a) has an area of five hectares or
   • property over one hectare in area where              more or (b) has an area less than five hectares but       FS – Every rating unit which would otherwise
      residential use is a permitted activity under       on which there is no residential dwelling unit or         qualify for inclusion in group code FL but which has
      the City’s District Plan.                           non-residential improvements.                             an area of 0.2 hectares or less and on which there
                                                          In determining whether for rating purposes access         is either a residential dwelling or non-residential
CI, CR & CA Non Residential                               is deemed to be available the Council will have           improvements.
CI – Every rating unit not otherwise classified which     regard to the following:
has not a predominant or exclusive residential use        • in the normal course if access to the sewage            FM – Every rating unit which would otherwise
(except property used for parking and/or vacant               disposal system becomes available and the             qualify for inclusion in group code FS but which has
serviced property as defined in group code MS).               property concerned is subdivided and/or               an area greater than 0.2 hectares and less than five
Multi-storey properties, four storeys and over will           developed then the property will be reclassified      hectares. The Council may consider reclassifying
be levied an additional differential surcharge.               to the appropriate group code with effect from        only a portion of the property into a higher rated
                                                              the immediately succeeding rating year                group code once access is available to the City’s



PART TWO                                                                                                                                                                 37
finAnciAl And RATing infORmATiOn the rating system, rates and Funding impaCt statement




sewage disposal system. In that event the same             8] Rates Payable by Instalment                          Rates may be paid using any one of a number
criteria as for group code FL will apply.                                                                          of payment methods acceptable to the Council
                                                           The Council provides for rates to be paid in four       including direct debits, cheques by mail, cheques
Properties which have more than one use (or where          equal instalments but it reserves the right to issue    or cash or EFTPoS at Council’s main office or service
there is doubt as to the relevant primary use) will        the first instalment as an interim one based on 25%     centre in Ashhurst, direct credits and other bank
be placed in a category with the highest differential      of the rates payable in the previous rating year. For   transfer methods. Payment by credit card can be
factor. Note that, subject to the rights of objection      the 2009/10 year the due dates (ie final dates for      made using the internet, subject to the payment
to the rating information database set out in section      payment without incurring penalty charges) will be:     of a convenience fee. The due date for metered
28 of the Local Government (Rating) Act 2002 the                                                                   water targeted rates will be the 20th of the month
Council is the sole determiner of the categories.          Instalment one:          28 August 2009                 following invoice date.
                                                           Instalment Two:          27 November 2009
[6] Early Payment of Rates                                 Instalment Three:        26 February 2010               [9] Rates Penalties
                                                           Instalment Four:         28 May 2010
Sections 55 and 56 of the Local Government                                                                         To provide an incentive for rates to be paid by the
(Rating) Act 2002 empowers councils to accept              Ratepayers may elect to pay on a more regular basis     due date, penalties will be imposed when rates are
early payment of rates.                                    if they choose. They may also elect to pay the full     not paid on time. A penalty of 10 per cent will be
                                                           year’s rates in one lump sum prior to the data for      added to any portion of an instalment remaining
The Council will accept any payment of rates for           Instalment Two without incurring penalty charges        unpaid after the due date for payment.
either the current or future years in advance of the       on Instalment one.
due date.                                                                                                          A second ten percent penalty will be added to all
                                                                                                                   rates (including penalties) remaining unpaid as at
[7] Revenue & Financing Mechanisms                                                                                 1 July 2010 with further additional charges of up
                                                                                                                   to 10 percent to be added at six monthly intervals
                                                                                                                   thereafter to all such rates which continue to
The revenue and financing mechanisms to be used
                                                                                                                   remain unpaid.
by the Council, including the estimated amount
(GST exclusive) to be produced by each mechanism
                                                                                                                   Penalties will not be applied to the metered water
are as shown on the following page.
                                                                                                                   targeted rate.



38                                                                                                                                                   10 YeAR PlAn 2009/19
                                                                                                  finAnciAl And RATing infORmATiOn the rating system, rates and Funding impaCt statement




revenue & FinanCing meChanisms

  2008/09                              2009/10     2010/11     2011/12     2012/13     2013/14        2014/15     2015/16     2016/17     2017/18     2018/19
    $000's                               $'000s      $'000s      $'000s      $'000s      $'000s         $'000s      $'000s      $'000s      $'000s      $'000s

   32,216    General Rate              34,974      38,038      40,703      43,081      45,440         47,436      49,455      50,063      51,478      53,017
   12,587    UAGC                      14,569      14,775      15,117      15,596      16,078         16,701      17,056      17,276      17,636      17,998
             TargeTed raTes
    5,448       Water                   5,587       5,624       5,994       6,233       6,750         6,979        7,331       7,295       7,482       7,470
    1,650       Metered Water           1,650       1,700       1,747       1,794       1,853         1,907        1,974       2,035       2,100       2,170
    4,618       Wastewater              3,323       3,327       3,302       3,465       3,883         4,673        4,813       5,075       5,332       5,489
    1,227       Wastewater (by pan)       862         859         849         886         988         1,183        1,213       1,273       1,331       1,363
    3,089       Rubbish & Recycling     3,714       4,385       4,613       4,971       5,387         5,694        5,822       5,929       6,059       6,160
   23,605    Other Revenue             28,084      28,724      30,398      31,446      31,894        32,337       33,027      33,940      34,674      35,490
        -    Sale of Investments        1,350       1,450       9,830       7,430         700         1,790          880       3,020       7,370       1,680
    4,390    Capital Receipts           9,620       8,152       7,682      17,710      19,758        15,226        6,527       5,777       6,499       6,781
    5,076    Interest & Dividends       2,852       2,826       2,502       1,916       1,664         1,604        1,541       1,421       1,028         665
   15,089    Loans                     12,618      14,541       4,194      25,478      18,138        18,521        1,762       2,412           -           -
 108,995                              119,203     124,401     126,931     160,006     152,533       154,051      131,401     135,516     140,989     138,283




PART TWO                                                                                                                                                                              39
Part tWO SectiOn 2
Funding and
Financial
Policies
                                                                                               funding And finAnciAl POlicies




funding and
              The 10 Year Plan includes the Council’s Policy on         budgets for the funding of debt repayment over
              Significance.                                             the average life of the class of assets for which
              In accordance with section 102 of the Local               the debt has been raised.



financial
              Government Act 2002, the following policies are
              included in the 10 Year Plan:                           Revenue and Financing Policy
              • Liability Management and Investment Policy            This policy has been updated to incorporate the
              • Revenue and Financing Policy                          following:



Policies
              • Rates Remission and Postponement Policy               • revised formatting and expansion of the
              • Development Contributions Policy                         description of the policies regarding the use
              • Policy on Partnerships with the Private Sector.          of varying funding sources for operating and
                                                                         capital expenditure
              These policies were updated as part of the              • an expanded rationale for the choice of funding
              10 Year Plan, process as follows:                          source for each activity
                                                                      • revised policies regarding the portion of costs
              Liability Management and Investment Policy                 to be funded from user fees and charges for the
              This policy has been updated to incorporate the            Resource Consents and Community Housing
              following:                                                 activities.
              • recognition of the Council’s decision to wind
                 down the Long Term Investment Fund in an             Rates Remission and Postponement Policy
                 orderly way and to use the withdrawals to repay      No changes were made to this policy.
                 term debt or in substitution for new debt
              • revised terms for describing and measuring            Development Contributions Policy
                 what the Council considers to be prudential          This policy has been updated to incorporate the
                 borrowing limits to better reflect the most recent   following:
                 standards within local government                    • Updated growth forecast information from the
              • a revised approach to debt repayment                     relevant asset management plans making sure
                 which involves debt still being managed in a            these take into account both estimated capital
                 consolidated way but provision being made in            expenditure expected to be incurred as a result




PART TWO                                                                                                                  41
finAnciAl And finAnciAl POlicies




  of growth and that which has already been
  incurred in anticipation of growth
• Minor amendments relating to Massey University,
  retirement villages and small dwellings
• An updated fee schedule.

Policy on Partnerships with the Private Sector
No changes were made to this policy.




42                                                  10 YeAR PlAn 2009/19
                                                                           funding And finAnciAl POlicies Policy on Significance




Policy on      Introduction                                             proposals or decisions and other proposals or
               The Local Government Act 2002 (herein referred           decisions.
               to as ‘the Act’) sets out the framework for Council’s



significance
               planning, decision making and accountability             In deciding whether or not an issue, proposal or
               processes. Significance is a key concept in this         decision or other matter is significant the Council
               framework. The Act sets up two types of decision         will assess “its degree of importance ..... in terms of
               – those that are ‘significant’ and those that are        its likely impact on and likely consequences for:
               not ‘significant’. If a decision is ‘significant’ then   • the current and future social, economic,
               the Council must meet a higher standard of                   environmental, or cultural well-being of the City
               consultation and decision making. This is to ensure      • any persons who are likely to be particularly
               appropriate levels of community input into the               affected by, or interested in, the issue, proposal,
               Council’s decision making processes.                         decision or matter
                                                                        • the capacity of the Council to perform its role,
               Every Council must have a Policy on Significance             and the financial and other costs of doing so.”
               that sets out how it will determine the significance
               of a proposal or decision.                               This wording is from the definition of significance
                                                                        in section 5 of the Act. Section 5 also says that to
                                                                        be significant an issue, proposal, decision or other
               Council’s general approach to                            matter must have ‘a high degree of significance’.
               determining significance
               Significance is a continuum that ranges from             As general guidance the Council will use the
               proposals and decisions of minor importance              following thresholds and criteria to assess what is
               to proposals and decisions of vital importance.          significant (i.e. to help it decide what a high degree
               At some point on the continuum a proposal or             of significance means):
               decision will become ‘significant’. The point at         • the issue, proposal or decision or other matter
               which a proposal or decision becomes significant            is likely to have a major and long term impact
               will vary depending on the issue. There is no               on the current and future social, economic,
               clear cut, single distinction between significant           environmental or cultural well-being of the City




PART TWO                                                                                                                       43
funding And finAnciAl POlicies Policy on Significance




• the issue, proposal or decision or other matter         significant a recommendation confirming this will       The Council cannot transfer ownership or control of
  is likely to have a major and ongoing impact on         be included. A statement showing how the Council        a strategic asset, or construct, replace or abandon
  those persons who are particularly affected by          has (or will) appropriately observe(d) the applicable   a strategic asset unless it has first consulted with
  or interested in the issue, proposal or decision or     sections of the Act will be also included.              the community through the Special Consultative
  other matter.                                                                                                   Procedure and included the proposal in the Long
                                                          If the Council substantially changes the                Term Council Community Plan (section 97 of the Act).
Application of these criteria or thresholds is not        report’s recommendations then it will be
necessarily conclusive as to whether an issue,            necessary to assess the significance of the new         The Council has identified its strategic assets as:
proposal, decision or other matter is significant         recommendations.                                        • elderly and special needs housing as a whole
or not significant. In determining significance,                                                                  • public rental housing as a whole
reference must also always be made to the definition      Strategic assets owned by                               • shares in Palmerston North Airport Ltd
of significance in section 5 of the Act (and set out in                                                           • roading and traffic network as a whole (including
Council’s general approach – see above).                  the council                                               footpaths, street lighting & parking)
                                                          The Policy on Significance must also list Council’s     • wastewater reticulation network and treatment
While it is the Council that decides whether or           strategic assets.                                         plant as a whole
not a specific proposal or decision is significant,                                                               • water supply, treatment, storage and
community views and the views of major                    A strategic asset is ‘any asset or group of assets        reticulation network as a whole
stakeholders and other affected parties in relation       that the local authority needs to retain if the         • stormwater network and land drainage system
to the proposal or issue will be given consideration      local authority is to maintain the local authority’s      as a whole
by the Council.                                           capacity to achieve or promote any outcome that         • reserves zoned for recreation purposes or
                                                          the local authority determines to be important to         subject to the Reserves Act as a whole
In making its decision the Council will take into         the current or future well-being of the community’      • the Esplanade, Ongley Park, Fitzherbert Park and
consideration the annual or cumulative value or           (section 5 of the Act).                                   Manawaroa Park as a whole
impact of the proposal or decision as appropriate.                                                                • The Square and Te Marae o Hine as a whole
                                                          The Act also says that any housing Council owns         • that portion of the Civic Administration Building
All reports to Council will include an assessment of      to provide affordable housing as part of its social       sited on The Square
the significance of the report’s recommendations.         policy and any airport company shares must be           • Te Manawa
If the recommendations are considered to be               included in the list of strategic assets.               • the Regent Theatre




44                                                                                                                                                  10 YeAR PlAn 2009/19
                                                                                                                     funding And finAnciAl POlicies Policy on Significance




• aquatic facilities                                    relating to these assets. In these cases proposals or     to select appropriate forms of consultation to be
• City Library (including branch libraries and          decisions regarding these assets may be significant.      used in relation to a decision or proposal.
  mobile library) as a whole
• Arena Manawatu as a whole                             Links between significance and                            Section 79 of the Act says that ‘it is the
• community centres as a whole                                                                                    responsibility of a local authority to make, in
• cemeteries and crematorium as a whole                 compliance with the act’s decision                        its discretion, judgments about how to achieve
• archives as a whole                                   making processes                                          compliance with sections 77 and 78 that is largely
• walkways as a whole                                   The significance of a proposal or decision will           in proportion to the significance of the matters
• Ashhurst Domain as a whole.                           help determine the appropriate nature and extent          affected by the decisions’.
                                                        of compliance with the Acts decision making
The Council considers all assets and groups of assets   processes. A higher degree of compliance is               In making such decisions the Council must have
listed above as single whole assets. This is because    required for significant proposals and decisions.         regard to the significance of all relevant matters,
the asset or group of assets as a whole delivers the                                                              the principles relating to local authorities, the
service. Strategic decisions, therefore only concern    However, there is still some flexibility in determining   Council’s resources and the extent to which the
the whole asset or group of assets and not individual   appropriate processes as to how this higher degree        nature of the decision and the circumstances allow
components, unless that component substantially         of compliance will be met. In this way the aim of         consideration of a range of options or the views of
affects the ability of the Council to deliver the       the Act is to ensure that Councils consult and decide     other people.
service. If the Council is considering a decision on    properly on major issues while recognising that
any individual component of a strategic asset that      proper consultation and decision making requires          Section 82 sets out the principles of consultation.
substantially affects the ability of the Council to     the flexibility to match the processes to the issue and   The Council must comply with these principles in
deliver or promote one of its strategic goals then      the communities being consulted.                          such a manner that it considers in its discretion to
that component will be treated as strategic.                                                                      be appropriate. In determining what is appropriate
                                                        For example, the Council may use different                the Council must take account, amongst other
The Council recognises that there will be some          consultation techniques to consult with Maori on          things, the significance of a decision or matter,
assets that, although do not fit the legal definition   issues that are significant for them, than it may use     including its likely impact from the perspective of
of strategic asset, are of high community               for consulting with the general community.                affected or interested people.
importance and interest. The Council will               The Council will use the consultation provisions
appropriately consult the community on issues           and principles of the Act and its consultation policy




PART TWO                                                                                                                                                                45
funding And finAnciAl POlicies Policy on Significance




If a significant decision is in relation to a body of    assessed by the local authority, in terms of its likely
water, then the Council must take into account the       impact on, and the likely consequences for,-
relationship of Maori and their culture and traditions   • the current and future social, economic,
with their ancestral land, water, sites, waahi tapu,        environment or cultural well-being of the district
valued flora and fauna and other taonga.                    or region
                                                         • any persons who are likely to be particularly
Review of this policy                                       affected by, or interested in, the issue, proposal,
                                                            decision or matter
The Council will review this Policy on Significance
                                                         • the capacity of the local authority to perform its
after each process of identifying Community
                                                            role, and the financial and other costs of doing
Outcomes. This means the policy will be reviewed
                                                            so ‘significant’, in relation to any issue, proposal,
at least every six years. If necessary the policy can
                                                            decision, or other matter, means that the issue,
be amended in the intervening years. The Council
                                                            proposal, decision or other matter has a high
must use the Special Consultative Procedure to
                                                            degree of significance.
amend the policy on significance.

The Council reviewed the Policy as part of the
2009/19 10 Year Plan. Two minor additions were
made to the schedule of strategic assets.


Appendix
Section 5 of the Act includes definitions of
‘significance’ and ‘significant’ as follows:

‘significance’, in relation to any issue, proposal,
decision, or other matter that concerns or is before
a local authority, means the degree of importance
of the issue, proposal, decision, or matter, as




46                                                                                                                  10 YeAR PlAn 2009/19
                                                    funding And finAnciAl POlicies liability ManageMent and inveStMent Policy




liability    [1] Philosophy and Objectives                            • to ensure adequate internal controls exist to
                                                                        protect the Council’s financial assets and to
             The Council has risks arising from debt raising,           prevent unauthorised transactions



Management
             investments and associated interest rate                 • ensure the council, management and relevant
             management activity. Other liabilities may arise as        staff are kept abreast of latest treasury products,
             a result of Council’s normal activities.                   methodologies, and accounting treatments
                                                                        through training and in-house presentations



and
             The Council’s broad objectives in relation to this       • comply with the Local Government Act 2002 and
             activity are as follows:                                   other relevant local authority legislation
             • manage all of its investments within its strategic     • to be consistent with Council’s Long Term
                objectives and invest surplus cash in liquid and        Council Community Plan and Council’s Revenue



investment      creditworthy investments                                and Financing Policy.
             • arrange and structure long term funding for
                Council at the lowest achievable interest margin      In meeting these objectives Council is a risk
                                                                      averse entity and subject to particular policies,


Policy
                from debt lenders. Optimise flexibility and spread
                of debt maturity within the funding risk limits       and generally does not wish to seek risk from its
             • borrow funds and transact interest rate hedging        borrowing and investment activities. Interest rate
                financial instruments within an environment of        risk, liquidity risk, funding risk and credit risk are
                control and compliance                                risks Council seeks to manage, not capitalise on.
             • develop and maintain professional relationships        Speculative activity is forbidden.
                with the Trustee, investors and financial markets
             • maintain liquidity levels and manage cash flows        The key elements in the management of risk are
                within Council to meet known and reasonable           shown on the following pages.
                unforeseen funding requirements
             • monitor, evaluate and report on treasury
                performance




PART TWO                                                                                                                       47
funding And finAnciAl POlicies liability ManageMent and inveStMent Policy




RISk TYPE            AIM                                     RISk MANAGED BY
                                                                                                                           [2] Delegated Authorities
Liquidity and        Funds available when required at cost   Maintain accurate cash forecasting systems. Limit and
                                                                                                                           Treasury transactions entered into by Council
funding risks        effective rate.                         spread concentration of debt maturities.
                                                                                                                           without the proper authority are difficult to cancel
                     Successfully refinance and raise new    Maintain professional relationships with investors and        given the legal doctrine of “apparent authority”.
                     debt at a future time at the same or    financial market.
                                                                                                                           Also, insufficient authorities for a given bank account
                     more favourable pricing and maturity
                     terms
                                                                                                                           or facility may prevent the execution of certain
                                                                                                                           transactions (or at least cause unnecessary delays).
                                                             Maintain committed available bank facilities and/or
                                                             an appropriate liquid component (short dated liquid
                                                                                                                           To prevent these types of situations, clear schedules
                                                             instruments) of the Long Term Investment Fund.
                                                                                                                           of delegated authorities and signatories will be
                                                             Adhere to self-imposed prudent debt limits.                   maintained and regularly reviewed.
                                                             Demonstrate prudent financial management practice.
                                                                                                                           A detailed Treasury Policy will be prepared for
Interest Rate        Minimise exposure to interest rate      Use a high percentage of long term fixed rate or hedged       adoption by the Council and it will be reviewed at a
                     movements.                              borrowing.
                                                                                                                           minimum annually.
Credit               Eliminate risk through failure of       Use hedging instruments in a controlled manner.
                     counterparty.
                                                                                                                           [3] Liability Management Policy
                                                             Invest cash only in entities with strong credit ratings (by
                                                             Standard and Poor’s or equivalent)
                                                                                                                           [3.1] Borrowing Activity
                                                             Spread investments and risk management instruments            The Council may borrow to:
                                                             across issuers and counterparties.                            • fund its balance sheet activities, including
                                                                                                                              borrowing to fund its investments in Council
                                                                                                                              Controlled Trading Organisations and other
                                                                                                                              trading enterprises
                                                                                                                           • fund “special one-off” projects and capital
                                                                                                                              expenditure




48                                                                                                                                                             10 YeAR PlAn 2009/19
                                                                                                funding And finAnciAl POlicies liability ManageMent and inveStMent Policy




• fund assets with intergenerational qualities.        • direct bank borrowing                                    repricing within 12 months.
                                                       • hire purchase and leasing arrangements.                  Pre-hedging in advance of projected physical
The level of borrowing will be determined by the                                                                  drawdowns of new debt is allowed.
Long Term Council Community Plan as confirmed          All borrowing in currencies other than NZ dollars is
or modified each year by the Annual Plan. All          forbidden.                                                 The fixed rate amount at any point in time must be
external debt of the Council must be authorised by                                                                within maturity bands outlined in the Treasury Policy.
resolution of the Council.                             [3.2] Interest Rate Risk
                                                       Due to the long term nature of Council’s assets,           Management implements the interest rate risk
A resolution of the Council is not required for hire   projects and intergenerational factors, and                management strategy through the use of the
purchase, credit or deferred purchase of goods if:     Council’s preference to avoid an adverse impact            following approved instruments in the manner
• the period of indebtedness is less than 91 days      on rates, there is a preference for a significant          outlined in the Treasury Policy:
   (including rollovers); or                           percentage of long term fixed rate or hedged debt.         • forward rate agreements (“FRAs”) on bank bills
• the goods or services are obtained in the            In addition interest rate repricing risk is spread over       or government bonds
   ordinary course of operations on normal terms       a range of maturities.                                     • interest rate swaps
   for amounts not exceeding in aggregate, an                                                                     • interest rate options on bank bills, government
   amount determined by resolution of the Council.     Council’s debt/borrowings are maintained within               bonds or swaps.
                                                       the following fixed/floating interest rate risk
The debt portfolio will be managed, within the         control limit:                                             Any other financial instrument must be specifically
framework of this policy, by the Chief Executive and                                                              approved by Council on a case-by-case basis and
Council staff under delegated authority.               Fixed/Floating Risk Control Limit                          only be applied to the one singular transaction
                                                       Minimum Fixed Rate:     55%                                being approved. Credit exposure on these financial
Council is able to borrow through a variety of         Maximum Fixed Rate:     95%                                instruments is restricted by specified counterparty
market mechanisms including:                                                                                      credit limits as set out in section 3.4.
• wholesale and retail registered commercial           “Fixed Rate” is defined as an interest rate repricing
  paper, stock and bond issues                         date beyond 12 months forward on a continuous              [3.3] Liquidity/Funding Risk
• debentures                                           rolling basis.                                             Council is exposed to liquidity risk in that due to
• MAF Forestry Encouragement Loans                                                                                unforeseen circumstances or events, it may not
• Housing New Zealand Corporation Loans                “Floating Rate” is defined as an interest rate             be able to meet its commitments, including debt




PART TWO                                                                                                                                                                49
funding And finAnciAl POlicies liability ManageMent and inveStMent Policy




maturities. Liquidity risk management focuses on           As a prime borrower Council should always be in a     [3.4] Counterparty Credit Risk
the ability to borrow at that future time to fund the      position to raise additional funds when required.     Council ensures that all investment, interest rate
liquidity gaps. Funding risk management centres            However to minimise liquidity and funding risk,       and foreign currency risk management activity is
on the ability to re-finance or raise new debt at a        Council will ensure:                                  undertaken with institutions that have a strong
future time at the same or more favourable pricing         • comprehensive daily and weekly cash                 credit rating. This is to ensure that the amounts
(fees and funding margins) and maturity terms of              management reporting, together with rolling 12     owing to Council are paid fully and on due date.
existing facilities.                                          month forecasting                                  More specifically, Council minimises its credit
                                                           • term debt and committed debt facilities must be     exposure by:
Council’s objective is to always be in a position to          maintained at an amount of 110% of projected       • transacting with entities that have a strong or
meet its day-to-day commitments, to maintain its              peak net debt forecasts over the next 12 months       better Standard & Poor’s or equivalent credit
reputation and prevent any financial loss occurring,       • the maturity profile of the total committed            rating
whilst ensuring the level of cash balances and/               funding in respect to all loans and committed      • limiting total exposure to prescribed amounts
or committed unutilised bank facilities are kept              facilities, is to be controlled by the following   • diversifying transactions across bank
to a minimum in accordance with good cashflow                 system:                                               counterparties
management practices.                                                                                            • monitoring of compliance against set limits.
                                                            PERIOD              MINIMUM          MAxIMUM
Managing Council’s funding risks is important since         0 to 3 years          15%              60%           [3.5] Debt Repayment
several risk factors can arise to cause an adverse          3 to 5 years          15%              60%           The Council will generally use a “consolidated debt”
movement in funding margins, term availability              5 years plus          10%              60%           approach to manage its financial position. Debt
and general flexibility.                                                                                         repayment and new debt creation are managed by
                                                                                                                 application of the specific borrowing limits. Within
                                                           • A maturity schedule outside these limits requires
A key factor of funding risk management is                                                                       this framework the Council may, from time to time,
                                                             specific Council approval.
to spread and control the risk to reduce the                                                                     allocate debt and interest cost to a specific activity.
                                                           • Membership of the Local Authority Protection
concentration of risk at one point in time so that                                                               The Council’s aim is to fund debt repayment over
                                                             Programme (LAPP) is retained.
if any of the adverse events occur, the overall                                                                  the average life of the class of assets for which the
borrowing cost is not unnecessarily increased                                                                    debt has been raised.
and desired maturity profile compromised due to
market conditions.




50                                                                                                                                                   10 YeAR PlAn 2009/19
                                                                                                             funding And finAnciAl POlicies liability ManageMent and inveStMent Policy




Funds from the sale of investment assets out of         * Revenue is defined as income from rates, government grants            Physical assets will be pledged only where:
                                                          and subsidies, user charges, interest, dividends, financial and
the Long Term Investment Fund will be applied to                                                                                • there is a direct relationship between the
                                                          other revenue. Excludes grants and contributions for capital
the reduction of debt and/or a reduction in new           programmes.
                                                                                                                                  debt and the asset purchase/construction eg.
borrowing requirements.                                 # Net debt is defined as total debt less liquid financial assets that     operating lease or project finance
                                                          would be available to repay debt.                                     • Council considers a pledge of physical assets to
Operating surpluses will be applied to the              ^ ‘Rates’ includes deemed rates such as metered water.                    be appropriate.
reduction of debt.
                                                        The Council may approve borrowings which would                          Any pledging of physical assets must comply with
[3.6] Specific Borrowing Limits                         result in these limits being exceeded by up to                          the terms and conditions contained within the
In managing borrowing, the Council considers the        25% of the base limit where it determines that in                       Debenture Trust Deed.
following to be prudent limits (based on Council’s      the particular circumstances it is reasonable and
core financial statements):                             prudent to do so.                                                       [3.8] Contingent Liabilities
                                                                                                                                From time to time the Council provides financial
                                                        In making such a determination the Council will                         guarantees to recreation and community
Borrowing Limits
                                                        have particular regard for the principles of financial                  organisations to enable them to undertake capital
# Net debt as a percentage of equity            <20%    management contained in the Local Government                            projects on Council land. Applications for guarantee
                                                        Act 2002, and will outline its reasons.                                 support will be considered only if the community
# Net debt as a percentage of total revenue*    <180%                                                                           group is based in the City and satisfactory projections
                                                        [3.7] Security                                                          of the financial strength and long term viability
Net Interest as a percentage of total revenue*          The security for Council debt will be the ability                       of the group or club are received by the Council.
                                               <15%     to levy rates. This policy authorises the use of
(debt secured under debenture)                                                                                                  The guaranteed party’s performance is monitored
                                                        Deed of Charge or Debenture Trust Deed security                         through communications with the lending institution
Net Interest as a percentage of annual rates^
                                                <20%    documents as well as the appointment of a                               and by assessing their financial statements.
income (debt secured under debenture)
                                                        professional Trustee if this approach is assessed as
Liquidity (Term debt + committed loan                   being the most cost effective means of borrowing.                       [3.9] Internal Borrowing
facilities + liquid investments) over projected >110%   In unusual circumstances, with prior Council
peak net debt levels over the next 12 months                                                                                    The use of Council investment funds, structured as an
                                                        approval, a specific charge may be given over one                       internal loan is allowed as a valid means of funding
                                                        or more of the Council’s assets.                                        projects, minimising the cost of borrowing and still




PART TWO                                                                                                                                                                             51
funding And finAnciAl POlicies liability ManageMent and inveStMent Policy




providing a market return on investment funds.             Any potential risk from such activities will be          it does hold should be low risk and that lower risk
                                                           managed by implementing appropriate systems              usually means lower returns.
The treasury function is responsible for                   and procedures and ensuring Council staff are
administering the Council’s internal debt portfolio.       appropriately trained to recognise and mitigate          For the purposes of this policy the Council defines
Transparent operating procedures will apply to the         such risks.                                              investment as relating to financial assets and other
setting up and repayment of the notional loan and                                                                   assets not directly related to service delivery as
the charging and payment of interest.                      [4] Investment Policy                                    outlined below:
                                                                                                                    • treasury investments
[3.10] Performance Measurement                                                                                      • investments related to Long Term Investment Fund
                                                           [4.1] General Policy
Performance of Council’s borrowing management                                                                       • equity investments
                                                           In its treasury investment activity, Council’s primary
activities shall be judged against a number of                                                                      • other investments (including forestry, real estate
                                                           objective when investing is the protection of its
subjective and objective measures including:                                                                           investments not relating to service delivery and
                                                           investment so only creditworthy counterparties are
• adherence to all policy limits                                                                                       sundry advances).
                                                           acceptable. The Council invests in non speculative
• number and cost of processing errors
                                                           strongly credit rated, liquid negotiable investments
• breaches of borrowing limits                                                                                      [4.2] Investment Policy – Treasury Investments
                                                           which are readily convertible into cash.
• comparison of actual interest costs to budget
• all treasury deadlines are to be met, including                                                                   [4.2.1] General Management Policy
                                                           It is planned that the Long Term Investment Fund
   reporting deadlines.                                                                                             The Council will hold treasury investments to:
                                                           will be reduced over time and that Council will
                                                                                                                    • meet statutory obligations by funding certain
                                                           ultimately be in a net borrowing position, where
[3.11] Management of Other Liabilities                                                                                 reserves
                                                           Council will have only operational cash surpluses.
From time to time the Council will also enter into                                                                  • manage short or medium term cash surpluses
                                                           The Council will, from time to time, make
transactions and agreements that can expose the                                                                     • maintain operating cash levels.
                                                           investments in activities which support a specific
Council to financial liability. Such transactions may
                                                           strategic policy or aim. Its philosophy in the
include employee contracts, contract for service                                                                    [4.2.2] Mix of Investments
                                                           management of investments is to optimise returns
(eg issue of consents, provision of infrastructure                                                                  Investments will be held in a form consistent with
                                                           in the long term while balancing risk and return
services) and loan guarantees for assets                                                                            the anticipated funding requirement. For short
                                                           considerations. The Council recognises that as a
constructed on Council-owned land.                                                                                  term investments, that are generally held for
                                                           responsible local authority any investments that
                                                                                                                    liquidity management purposes, investments are




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held for periods up to three months and in the form    [4.2.7] Risks                                                Over succeeding years the Council’s financial position
of call deposits or negotiable instruments with                                                                     moved from that of a net investor to a net borrower
registered banks. For investments held for periods     [4.2.7.1] Counterparty Creditworthiness                      and the Council was increasingly of the view that
beyond three months, government securities or          Funds will be placed with strongly credit rated              it was no longer prudent to retain the Fund. In
other strongly credit rated securities will be held.   counterparties rated long term “A” or higher under           2007 the Council resolved that the Fund should be
The Council will maintain a schedule of approved       the Standard and Poor’s or equivalent credit rating          progressively wound down and used to repay term
counterparties and issuers.                            system and be spread across issuers within a                 borrowing or in substitution for new borrowing.
                                                       defined set of parameters.
 [4.2.3] Acquisition of New Investments                                                                             The process of winding down the Fund will be
The Council will source its approved investment        [4.2.7.2] Liquidity Risk                                     managed under delegated authority by the Chief
instruments from major financial institutions at the   Funds will be invested in instruments which have             Executive and Council staff and will be subject to
“best price”.                                          a readily accessible secondary market. Short-term            quarterly reporting. It is expected that they will
                                                       operational liquidity is monitored and controlled            utilise the services of an investment advisor. The
[4.2.4] Treatment of Income                            through daily cash management activities. Long-term          aim is to realise the Fund in an orderly manner
Interest (or other) revenue from invested funds        financial liquidity is monitored and controlled through      without incurring capital losses.
will be credited to Council’s general income. The      long-term financial planning. Although overdraft
interest income from statutory reserves will be        facilities are utilised as little as practical the Council   Significant assumptions in relation to the Fund will
credited to those funds.                               will maintain a committed bank overdraft facility to         be outlined in each year’s Annual Plan.
                                                       meet interim cash and liquidity requirements.
[4.2.5] Proceeds of Sale                                                                                            [4.4] Investment Policy – Equity Investments
Funds from the sale of financial investments will      [4.3] Investment Policy – Long Term                          The Council currently maintains equity investments
be applied to the repayment of debt, reduce new        Investment Fund                                              in the following entities:
borrowing requirements or expenditure generally.       In 2001 the Council resolved to invest the sum               • Palmerston North Airport Ltd – the owner and
                                                       of $70M from the sale of its investments in the                 operator of Palmerston North International
[4.2.6] Management and Reporting                       electricity sector in a long term fund managed                  Airport
The assets will be managed under delegated             with the objectives of growing its capital value in          • New Zealand Local Government Insurance
authority by the Chief Executive and Council staff.    real terms and providing annual distributions to                Corporation Ltd – a provider of a range of risk
The funds will be subject to quarterly reporting.      supplement operating revenue.                                   management products for NZ local government




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Further capital investments in these entities will         [4.4.2] Monitoring Mechanism                             [4.4.5] Management of the Investment
only be contemplated to achieve stated strategic           The Council will manage its shareholding in a            The shareholding will be managed through the
objectives and will be by specific resolution of the       manner which is dependent on the size and nature         shareholder representatives who are appointed
Council. Sale of the investments would also require        of the shareholding and in instances where it is         by the Council. In instances where the company
a specific resolution of the Council and be subject to     not the 100% shareholder will seek to do so in           concerned is required to prepare a statement of
the requirements of the Local Government Act 2002.         conjunction with other major shareholders. It will       intent the Council will review these and actively
                                                           do so by:                                                make its views known to the company.
It is envisaged that any other equity investments          • participating in the appointment of directors
which the Council may hold in the future would             • monitoring the developments in the particular          [4.4.6] Risks
only be as a result of a gift, through a restructuring        industry                                              The Council will assess the risks associated with
of the Council or to enable the Council to                 • monitoring company performance;                        each investment. In the normal course, if the
participate in a central Government or regional            • acting to preserve the value of the Council’s          principal reason for the investment is for financial
initiative associated with the provision of a key             investment                                            return then the Council will expect the commercial
infrastructural activity. From time to time the            • monitoring the impact of the company’s                 risks associated with the investment to be low.
Council will establish “shelf” companies so it is able        operations on the people of Palmerston North.         If the reason for the investment is to achieve some
to respond appropriately to any opportunities                                                                       other stated strategic purpose the Council may be
which arise.                                               [4.4.3] Income from the Investment                       prepared to accept higher commercial risks.
                                                           In the normal course income from each investment
Each equity investment is evaluated and managed            will be applied against current expenditure.             [4.4.7] Public Consultation
within the following framework.                                                                                     In the event that the Council contemplates
                                                           [4.4.4] Proceeds of Any Future Sale                      divesting its shareholding, public consultation
[4.4.1] Objectives                                         If the Council were to sell its shareholding, the sale   would be undertaken to an extent that was
The rationale for the investment is determined and         proceeds would be applied to:                            consistent with the size and public sensitivity of the
reviewed from time to time.                                • reduction of debt                                      investment.
                                                           • developing new assets
The present investments are held primarily to meet         • investment in an appropriately managed                 At the present time the Council contemplates
strategic economic and transportation objectives.              diversified fund.                                    maintaining each of its present equity investments
                                                                                                                    at least for the medium term.




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In the event of a sudden occurrence where either        No decision has yet been made on the long term              function. From time to time the Council reviews its
the company or industry is severely impacted,           future objectives for the forest though at this stage       ownership by assessing the benefit of continued
the Council could possibly see a large drop in the      it is anticipated the forest will be replanted following    ownership in comparison to other arrangements.
value of its shares. Under these circumstances, the     harvest particularly given the implications of the          This assessment is based on the most financially
public would not be consulted and the Council           New Zealand Emissions Trading Scheme.                       viable method of achieving the delivery of Council
could resolve to sell the shares. All actions will be                                                               services. The Council generally follows the same
in a manner which is consistent with the Council’s      The Council also owns a neighbouring forest                 assessment criterion in relation to new real estate
policy on determining significance and the              (known as the Woodpecker forest) for the principal          acquisitions. From time to time these assets
requirements of the Local Government Act 2002.          purpose of developing a recreational park. The              become surplus to operational requirements
                                                        forestry crop is incidental to the principal use and is     and then are considered investments, which are
[4.5] Investment Policy – Other Investments             classified as Plant, Property and Equipment rather          assessed for sale.
                                                        than an investment. However the Council will
[4.5.1] Forestry                                        attempt to extract value from the forest through            The major real estate holdings which do not form
The Council owns a forestry crop (known as the          the development of a harvest plan.                          part of the operational activities are:
Gordon kear forest) at the head of the kahuterawa                                                                   • library building shops
Valley as a joint venture with the Manawatu             The Council also has a forestry plantation within the       • Regent Theatre shops
District Council. The Council currently has a           Turitea water supply catchment area. The forestry           • public rental housing.
76.7% share. Although the principal reason for          activity is not expected to generate significant
the investment is as an alternate funding source        revenue and is ancillary to the water supply activity.      From time to time, usually in the process of selling
for future city development, log prices are subject     There are no plans to expand the Council’s                  one of these investments, the Council may consider
to significant price changes and therefore there        investment in forestry.                                     it necessary to invest in commercial mortgages and
is a high commercial risk. Management of the                                                                        deferred payment licences.
investment through to harvest will be effected          [4.5.2] Real Estate Held For Investment Purposes
through an administering committee comprising           The Council holds real estate when it considers             [4.5.3] Sundry Advances
representatives of the two Councils. The net            ownership to be essential to the delivery of relevant       From time to time the Council makes loan advances
proceeds of harvest or sale will be utilised to repay   services. These assets are not accounted for as             to charitable trusts and incorporated societies
significant forestry encouragement loans and the        investments but form part of the plant, property            for the furtherance of their activities which are
balance, if any, to repay debt.                         and equipment of the appropriate activity or                consistent with the Council’s objectives. The




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Council will only consider such advances on rare           setting up and repayment of the notional loan and       The Council also has foreign exchange exposure
occasions where is not practical to offer financial        the charging and payment of interest.                   through the sale of kyoto credits to foreign
guarantees. Any such advances would be the                                                                         entities. This policy enables the exposure to be
subject of specific resolution by the Council              Where possible the Council’s internal reserves are      managed through forward exchange rate contracts
following an assessment of the financial strength          utilised to minimise the need for external debt,        or by investing the proceeds for a period prior to
and long term viability of the entity concerned.           effectively reducing the Council’s net interest cost.   conversion to New Zealand dollars.

Interest and principal repayments are monitored to                                                                 Credit exposure on these instruments is restricted
                                                           [5] Foreign Exchange Policy                             by specified counterparty credit limits as set out in
ensure they comply with the loan agreement. In the
case of default on such advances the assets of the                                                                 section 3.4.
                                                           Borrowing and investing in foreign currencies
organisation will be required to revert to the Council.
                                                           is prohibited apart from the one exception
                                                           mentioned below.
                                                                                                                   [6] Accounting Treatment of
Under exceptional circumstances the Council may
                                                                                                                   Financial Instruments
make advances to residential and commercial
                                                           The Council has foreign exchange exposure through
property owners to encourage them to connect
                                                           the occasional purchase of foreign exchange             As a general rule, financial risk management
to basic reticulation systems such as water and                                                                    instruments on initial recognition are valued at
                                                           denominated plant, equipment and services. Most
wastewater. Any such advances will be subject to a                                                                 cost and thereafter carried at fair value with any
                                                           of these transactions are small and are considered to
charge being placed over the land.                                                                                 period unrealised fair value gains or losses booked
                                                           carry no significant foreign exchange risk.
                                                                                                                   through the Statement of Financial Performance, at
[4.6] Internal Investment/Borrowing                                                                                any particular reporting date.
                                                           For foreign exchange requirements over
The use of Council investment funds, structured as an
                                                           NZ$100,000 consideration will be given to
internal loan is allowed as a valid means of funding                                                               All financial risk management instruments are
                                                           managing Council’s exposure to exchange rates
projects, minimising the cost of borrowing and still                                                               fair valued (marked-to-market) on a consistent
                                                           movements using forward exchange rate contracts.
providing a market return on investment funds.                                                                     basis, at least six monthly for internal treasury
                                                           Forward exchange rate contracts would be entered
                                                                                                                   management and accounting purposes. As a
                                                           into once the exact timing and amount of the
The treasury function is responsible for                                                                           general rule bank and loan stock funding is held
                                                           approved exposure is known and/or an approved
administering the Council’s internal debt portfolio.                                                               to maturity and consequently accounted for on an
                                                           purchase order is raised.
Transparent operating procedures will apply to the                                                                 amortised cost basis.




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Revenue and   Introduction                                             • the costs and benefits, including consequences
              The Local Government Act 2002 (The Act) requires           for transparency and accountability, of funding
              the adoption of policies which outline how                 the activity distinctly from other activities; and



financing
              operating and capital expenditure for each activity      • the overall impact of any allocation of liability for
              will be funded. They are aimed at providing                revenue needs on the current and future social,
              predictability and certainty about sources and             economic, environmental and cultural well being
              levels of funding.                                         of the community.



Policy        The Act requires the Council to manage its finances
              prudently and in a manner which promotes the
              current and future interests of the community. The
                                                                       In its Long Term Council Community Plan (10 Year
                                                                       Plan) the Council identifies nine key Community
                                                                       Outcomes:
                                                                       • People have lots of fun things to do
              Council must ensure that each years projected
              operating revenues are set at a level sufficient to      • People feel safe
              meet that years projected operating expenses and         • Palmerston North is attractive, clean and green
              that its long-term development programme is              • Businesses grow here and people have lots of
              financially sustainable.                                     job opportunities
                                                                       • People have lots of learning opportunities
              In deciding the most appropriate funding source          • People can move easily around Palmerston
              for each activity the Council must show:                     North
              • the community outcomes to which the activity           • Palmerston North’s physical infrastructure is
                 primarily contributes; and                                reliable
              • the distribution of benefits between the               • The community is supportive and people and
                 community as a whole, any identifiable part of            organisations work together
                 the community, and individuals; and                   • People are well-housed and healthy.
              • the period in or over which those benefits are
                 expected to occur; and                                The activities of the Council itself have been
              • the extent to which the actions or inactions of        grouped into six major groups of activities as
                 particular individuals or a group contribute to       follows:
                 the need to undertake the activity; and


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•    Leadership
•    Community Support                                                                                        LEADERSHIP
•    Economic Development                                                             Councillor Leadership and Decision Making      Direction Setting
•    Leisure
•    Environmental Sustainability & Health                                                                                                               ENvIRONMENTAL
                                                                  COMMuNITY                    ECONOMIC                           LEISuRE
•    Support Services                                                                                                                                    SuSTAINABILITY
                                                                   SuPPORT                    DEvELOPMENT
                                                                                                                                                           AND HEALTH
The relationships between these groups of
                                                                   Cemeteries                    Economic                    Arts and Culture                 Regulatory
activities and the identified community outcomes                  Civil Defence                 Development                    City Libraries             Roading and Parking
are outlined in detail in the 10 Year Plan and in             Community Development                                        Parks and Recreation          Rubbish and Recycling
summary in the appendix to this policy.                             Housing                                                                                   Stormwater
                                                                                                                                                              Wastewater
                                                                                                                                                                 Water



                                                                                                          SuPPORT SERvICES
                                                                           Commercial or Strategic Investments       Corporate Support       Customer Services




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Funding of Operating Expenditure                              in equivalent proportions, and the costs of                      public parking if someone parks over time. The
The Council has made a determination as to the                the activity cannot easily be attributed to an                   individual that parked over time can be held directly
most appropriate way of funding the operating                 individual or group of individuals.                              responsible for that cost. Therefore the public cost
expenses for each activity. This was based on an                                                                               can be privately borne completely by that individual.
assessment of the nature of the benefits provided             For example: Civil Defence
from the activity, who benefits (ie the whole                 Everyone benefits. No individual can be responsible           • An activity can be funded from other sources if
community, identifiable groups or individuals) and            for the costs. Therefore it is entirely publicly funded.        the benefits of the activity are largely received by
for what period. Funding source proportions were                                                                              the broader community without differentiation,
then attributed using the following scale:                 • An activity should be funded on a user-pays basis                in equivalent proportions, but the costs of the
                                                             if an individual or group of individuals directly                activity can be met by other means.
           High            80-100%                           receives benefits of the activity exclusively, and
           Med/high        60-79%                            the costs of the activity can easily be attributed to             For example: Roading
           Med             40-59%                            that individual or group of individuals.                          Everyone benefits. No individual can be responsible
           Med/low         20-39%                                                                                              for the costs. However, the Council is eligible for
           Low             1-19%                              For example: Public Rental housing                               central government grants from organisations such
                                                              Only individuals that live in the housing benefit                as New Zealand Transport Agency. Therefore it is
The specified funding source proportions are                  directly. Those individuals can be held responsible              entirely publicly funded, but a proportion of the
indicative only. They are not intended as an exact            for the costs. Therefore it is entirely funded by users.         costs is recouped from ‘other’ sources.
realisable proportion, rather as a guideline. It is
recognised that within each activity there may be          • An activity should be funded by an exacerbator if              • Although the Council believes that it would be
justification for variation from those proportions on        the benefits of the activity are largely received by             appropriate to charge for some activities on a
a case by case basis. The basis for such variations will     the broader community without differentiation,                   user-pays basis this is not always practicable and
need to rest in the criteria outlined below.                 in equivalent proportions, but the costs of the                  sometimes a proxy is required.
                                                             activity can be attributed to an individual or
In general terms the Council believes:                       group of individuals.                                             For example: Wastewater
• An activity should be collectively funded if the                                                                             Everyone benefits though the extent of use depends
   benefits of the activity are largely received by           For example: Parking enforcement                                 on the nature of the use of the property. Trade waste
   the broader community without differentiation,             Everyone faces the cost of unavailability of                     can be measured and separately charged for. It is not




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     practical to measure other non-residential users with      – these latter rates and charges will be set on a      Renewals are funded from subsidies and grants
     higher volumes, such as motels or hospitals but a          differential basis in accordance with Council’s        (when available), revenue and if necessary from
     proxy of the number of pans can be used. Likewise, a       rating policies. For the purposes of this policy any   borrowing.
     targeted rate in the form of a fixed annual charge for     reference to general rates as a funding source is
     each separately occupied portion of a rating unit is       considered to include UAGCs                            New capital developments are funded from
     seen as a reasonable proxy for residential property.     • rating policies including the details of targeted      subsidies and grants (when available), user
                                                                rates, the level of the UAGC, the choice of            contributions, reserves, asset sales, and where
The tables which follow show this analysis for                  valuation base for the general rate and the details    necessary from borrowing.
each activity within the six groups of activities. A            of the differential system will be outlined in the
summary is provided on the final page of the policy.            Funding Impact Statement in the 10 Year Plan or        Through the application of its ‘Development
                                                                Annual Plan as appropriate.                            Contributions’ policy the Council seeks to obtain
The process for funding operating costs of these                                                                       contributions to fund infrastructure required due to
activities is as follows:                                     Funding of Capital Expenditure                           City growth.
• any operating grants or subsidies for a particular          The Council takes a consolidated corporate approach
   activity are used to reduce the gross cost                 to the management of its financial position.             Borrowing is an appropriate funding mechanism to
• where it is practical to recover the designated             Through its 10 Year Plan it determines what capital      enable the effect of peaks in capital expenditure to
   portion of the net operating cost of an activity           expenditure is sustainable within the prudential         be smoothed and also to enable the costs of major
   from a private user or exacerbator, fees and               guidelines it has set itself. These parameters           developments to be borne by those who ultimately
   charges are set at levels designed to achieve this         are contained in the Liability Management and            benefit from the expenditure. This is known as the
   provided there are no legislative constraints on           Investment Policy.                                       ‘intergenerational equity principle’ and means that
                                                                                                                       the costs of any expenditure should be recovered
   doing this
                                                              Asset management plans are maintained for all            from the community at the time or over the period
• where a fee or charge is not practical, targeted
                                                              infrastructural services and these provide information   the benefits of that expenditure accrue. It is not
   rates may be set in accordance with Council’s
                                                              about asset condition and asset renewals required to     appropriate or sustainable for all capital expenditure
   rating policies
                                                              maintain desired service levels.                         to be funded from borrowings. In periods of low
• any net income from investments or petrol
                                                                                                                       capital expenditure borrowings should be reduced.
   taxes may then be applied and any residual
                                                              Routine on-going plant and equipment purchases
   requirement will be funded through general rates
                                                              are funded from operating revenue and proceeds
   and/or uniform annual general charges (UAGC)
                                                              of asset sales.



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REVENUE SOURCE                                             POLICY FOR FUNDING OPERATING ExPENDITURE 1                                     POLICY FOR FUNDING CAPITAL ExPENDITURE 2

General Rates
General rates are currently set at rates of cents in the   General rates will be primarily used to fund those activities, or parts        General rates may be used to retire debt.
dollar of land value, calculated differentially based      of activities, that benefit the community in general and where no
on the following classifications (and further sub-         identifiable individuals or groups benefit in a significantly different way    General rates may be used to purchase assets
classifications) of property:                              to the rest of the community.                                                  where the Council determines that funding the
Single Unit Residential                                                                                                                   assets from debt is not the preferred option.
Multi-unit Residential                                     General rates may also be used where the use of direct charging would
Non-residential                                            discourage use, when encouraging use of the service is an explicit
Miscellaneous                                              objective, or important to achieving the Community Outcomes to which
Rural/semi-serviced.                                       the activity is intended to contribute.

Its incidence is modified by a uniform annual general      General rates may also be used where it is impractical, or too
charge (UAGC).                                             administratively expensive, to fund the activity from other funding
                                                           sources.

                                                           General rates are currently apportioned according to the land value and
                                                           deemed use of each property.

                                                           National studies have concluded that capital value is a better measure
                                                           of benefits received from Council services and of a ratepayer’s ability to
                                                           afford rates. To date the Council has not been convinced the benefits are
                                                           so superior as to justify a change to the system. Further investigation is
                                                           continuing and this policy would enable a change to a capital value base
                                                           following appropriate public consultation.




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REVENUE SOURCE                                          POLICY FOR FUNDING OPERATING ExPENDITURE 1                                    POLICY FOR FUNDING CAPITAL ExPENDITURE 2

(General Rates continued)                               Use of property is determined according to whether its primary
                                                        use is single unit residential, multi-unit residential, non-residential,
                                                        miscellaneous or rural/semi-serviced. Each type of property pays
                                                        different rates (cents in the dollar of land value). These differentials
                                                        are designed to achieve an apportionment of rates which more closely
                                                        reflects the estimated value of services received by each classification of
                                                        property, after modification by the use of the UAGC and uniform charges
                                                        (targeted rates).

                                                        The UAGC is a fixed charge per rating unit which the Council treats as a
                                                        part of the general rate. It is used as a mechanism to ensure each rating
                                                        unit contributes a minimum amount of the general rate and also to
                                                        moderate rates on high value properties.

Targeted Rates
Targeted rates, in the form of fixed charges are made   Targeted rates may be used to fund activities which identifiable              Targeted rates may be used to retire debt, where
to cover the cost of water, wastewater and rubbish/     categories of ratepayer, or ratepayers in identifiable locations, receive     the debt arose from the purchase of assets used
recycling.                                              benefits from the activity to be funded in a significantly different way      for the activity funded from the targeted rate.
                                                        from other ratepayers.
                                                                                                                                      Targeted rates may be used to purchase physical
                                                        Targeted rates may be set as a fixed annual charge, or based on some          assets, where the Council determines that
                                                        other legally permissible basis such as land or capital value. They may be    funding the assets from debt is not the preferred
                                                        set differentially depending the location or classification of ratepayer or   option, and the assets are to be used for the
                                                        the nature of the service being provided.                                     activity funded from the targeted rate.

                                                        Targeted rates may be set for the purpose of achieving a more fair,
                                                        efficient or transparent allocation of costs across the community.




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REVENUE SOURCE                                           POLICY FOR FUNDING OPERATING ExPENDITURE 1                                     POLICY FOR FUNDING CAPITAL ExPENDITURE 2

Lump Sum Contributions
These are a mechanism for enabling ratepayers to elect   Operating costs are not funded from lump sum contributions.                    The Council may fund capital projects in whole
to pay for capital projects by lump sums instead of by                                                                                  or part through lump sum contributions.
targeted rates.

Fees and Charges
A wide range of fees and charges are made to cover       Fees and charges will generally be used for those services where the           User charges may be used to retire debt, where
either the whole or part of the cost of activities.      benefit is entirely, or in part, to the direct user of the service and where   the debt arose from the purchase of assets used
                                                         the use of the service is at the discretion of the user. This includes fees    for the activity funded by the user charge.
                                                         for various consent, licenses, permits and property information. The user
                                                         charge may recover all, including a market return on the value of the          User charges may be used to purchase physical
                                                         Council’s investment, or part of the cost of the activity.                     assets, where the Council determines that
                                                                                                                                        funding the assets from debt is not the preferred
                                                         Where the Council needs to ration the use of an activity, it may charge at     option, and the assets are to be used for the
                                                         a level above that which would be necessary to recover the costs of the        activity funded from the user charge.
                                                         activity.

                                                         Fees and charges may be in the form of fines, penalties or similar and
                                                         used where the Council wishes to modify the behaviours that impose
                                                         cost, or inconvenience, on other members of the community.



Interest & Dividends from Investments
The Council receives interest and dividends from its     Ordinary budgeted interest and dividends, along with any other                 Investment income may be used to retire debt,
investments and short-term cash management.              investment income, is treated as general revenue.                              when that income has not been budgeted for
                                                                                                                                        other purposes.




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REVENUE SOURCE                                           POLICY FOR FUNDING OPERATING ExPENDITURE 1                                  POLICY FOR FUNDING CAPITAL ExPENDITURE 2

Borrowing
Borrowing involves the taking on of debt and in normal   Unless there are exceptional circumstances the Council will not borrow to   Borrowing is the preferred means of
circumstances is only appropriate to fund assets with    fund operating costs.                                                       funding capital expenditure as it promotes
long lives.                                                                                                                          intergenerational fairness. What is an
                                                                                                                                     appropriate level of borrowing is assessed
                                                                                                                                     against criteria in the Council’s Liability
                                                                                                                                     Management Policy.


Proceeds from Asset Sales
These are the sums received when physical assets are     Operating costs are not funded from asset sales.                            Proceeds from asset sales are an appropriate
sold.                                                                                                                                source for purchasing assets or retiring debt as it
                                                                                                                                     has a neutral effect on Council’s financial position
                                                                                                                                     (assets versus liabilities).

Development Contributions
Development contributions are sums payable, or assets    Operating costs are not funded from development contributions.              Development contributions will be used to fund
transferred to council, by developers or new service                                                                                 that proportion of new asset expenditure that is
users for the costs imposed on infrastructure and                                                                                    made necessary by increased demand as a result
facilities by growth in numbers of users.                                                                                            of growth in the number of users. Contributions
                                                                                                                                     will be calculated in accordance with the
                                                                                                                                     Council’s Development Contributions Policy.




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REVENUE SOURCE                                                      POLICY FOR FUNDING OPERATING ExPENDITURE 1                                             POLICY FOR FUNDING CAPITAL ExPENDITURE 2

Financial Contributions under Resource Management Act
Financial contributions are sums payable, or assets                 Operating costs are not funded from financial contributions.                           Financial contributions may be used to fund
transferred to council, by developers or new service                                                                                                       that proportion of new asset expenditure that is
users to enable mitigation, avoidance or remedying                                                                                                         made necessary by the effects of subdivision and
of adverse effects arising from subdivision or                                                                                                             development. The contribution may be required
development.                                                                                                                                               as a condition of consent, in accordance with any
                                                                                                                                                           relevant rule in the District Plan.

Grants & Subsidies
These are payments from external agencies and are                   Grants and subsidies will be used for operating expenses only when this                Grants and subsidies will be used for capital
usually for an agreed specified purpose.                            is consistent with the purpose for which they were given.                              expenditure only when this is consistent with the
                                                                                                                                                           purpose for which they were given.
The main source of these is NZ Transport Agency
subsidies for road maintenance, renewals and
improvements.


1 Operating expenses are those incurred to provide the day to day activities of the Council and include the costs of staff and consumables.
  Operating expenses are funded from the following sources and for the following reasons.

2 Capital expenditures include those to purchase, build or acquire into council ownership, physical assets. Such assets have service lives of
  more than one year. The principle of “intergenerational equity” says that expenditure that provides benefits over time should be funded over
  the same period, so that each generation of users pays a fair share.

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

  It also includes debt repayment.




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Leadership
                                                                                                                                            FUNDING SOURCE
NATURE OF ACTIVITY                 WHO BENEFITS                                 PERIOD OF BENEFIT                 WHO CREATES NEED          (PROPORTION # )          FUNDING SOURCE RATIONALE

Councillor Leadership & Decision Making
• Elections                        • The entire community benefits              • Benefits of a good      • Need is created by              • General rates (High)   • No particular group or
• Councillor meetings &              from the ability to elect local              working relationship      entire community                • Other charges (Low)      individual benefits more
  administration                     representatives & influence                  between the Council       for knowledge of &                                         than others so the cost
• Mayoral & Chief                    Council decisions                            and the community are     involvement in Council                                     should be allocated to the
  Executive’s Offices              • Council benefits from the clarity            on-going                  decisions                                                  whole City as part of the
                                     of community needs & wants                 • Benefits of the         • Need is created by                                         general rate
                                                                                  Council being well        Council for guidance                                     • Additional costs are incurred
                                                                                  lead & operating as       from the public in                                         each third year to run the
                                                                                  an effective, efficient   decision making                                            elections. Part of the cost is
                                                                                  organisation are on-                                                                 recovered from the Regional
                                                                                  going                                                                                Council & Health Board

Direction Setting
• Environmental Policy &           • The entire community benefits              • Benefits of providing           • Need is created by      • General rates (High)   • No particular group or
  District Plan                      from transparent Council goals               clear direction for city          the entire community    • Fees & charges (Low)     individual benefits more
• Strategic Planning & 10            & clear paths to meet them                   development are on-               for a well structured                              than others so the cost
  Year Plan (LTCCP)                • Council benefits from defined                going                             community                                          should be allocated to the
                                     objectives & clear processes                                                   infrastructure with                                whole City as part of the
                                   • The entire community benefits                                                  adequate provision to                              general rate
                                     from pleasant, functional, safe                                                cope with growth                                 • Costs relating to processing
                                     urban environment                                                                                                                 private District Plan
                                   • Businesses benefit from                                                                                                           changes are recovered from
                                     attraction of visitors &                                                                                                          applicants
                                     effectiveness & accessibility of
                                     infrastructure

# This proportion relates to the whole of the activity, not the individual components of it, unless stated otherwise.



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Community Support
                                                                                                                                            FUNDING SOURCE
 NATURE OF ACTIVITY                WHO BENEFITS                               PERIOD OF BENEFIT                 WHO CREATES NEED            (PROPORTION # )            FUNDING SOURCE RATIONALE

Cemeteries
• Cemeteries &                     • Individual users particularly            • Benefits are on-going           • The entire community      • General rates (med/      • As the main beneficiaries of
  crematorium                        families of the deceased                                                     creates the need for        low)                       the activity are those who
                                   • The entire community benefits                                                cemeteries and related    • Fees and charges           use the service a significant
                                     from the comfort that there                                                  services                    (med/high)                 portion of the cost should be
                                     is adequate provision for                                                  • Families & genealogists                                borne by the users
                                     interring the deceased in an                                                 researching cemetery                                 • As there are public benefits
                                     appropriate manner & that                                                    records                                                from the service a portion of
                                     cemeteries are maintained as a                                                                                                      the cost should be funded
                                     place of remembrance                                                                                                                from general rates

Civil Defence
• Civil defence & rural            • The entire community benefits            • Benefits in terms of            • Need is created by        • General rates (High)     • No particular group or
  fire                               from having people who are                 peace of mind for                 entire community for      • Charges to                 individual benefits more than
                                     trained and organised to help              residents are on-                 an action plan in the       exacerbators for rural     others so the cost should be
                                     the community survive and                  going, although direct            event of a disaster or      fire (Low)                 allocated to the whole City as
                                     cope with natural disasters                benefits are short                emergency                                              part of the general rate
                                     and rural fires                            term in the event of a          • Need is created by                                   • Those who are responsible for
                                                                                disaster                          Council to meet legal                                  rural fires should bear the cost
                                                                                                                  obligations




# This proportion relates to the whole of the activity, not the individual components of it, unless stated otherwise.



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                                                                                                                                           FUNDING SOURCE
 NATURE OF ACTIVITY                WHO BENEFITS                               PERIOD OF BENEFIT                 WHO CREATES NEED           (PROPORTION # )          FUNDING SOURCE RATIONALE

Community development
• Community                        • Disadvantaged members of                 • Benefits are on-                • The entire community     • General rates (High)   • Council’s contribution is
  development                        society benefit directly                   going as sharing                  creates the need as      • Central Government       directed to community
• Community halls &                • Entire community benefits                  of experiences and                the more integrated        grant agency funding     groups rather than individuals
  facilities                         from the existence of a strong             expertise leads                   members of society         (Low)                    and to events & facilities
• Community events                   co-ordinated voluntary sector,             to community                      are, the more they                                  which benefit the entire
• Grants to community                community events which                     enhancement                       contribute to the                                   community so should be
  groups                             celebrate the richness of a                                                  economic, social and                                funded from general rates
                                     diverse community & places                                                   cultural well-being of                            • Although funding support
                                     to meet to foster community                                                  the City                                            is sought from external
                                     identity                                                                                                                         agencies this contribution is
                                                                                                                                                                      usually small

Housing
• Community rental                 • Those on low incomes with                • Benefits accrue                 • Need is created by       • General rates (Med/    • As the main beneficiaries of
  housing                            the least wealth or additional             through the period of             housing tenants            low)                     the activity are those who use
                                     needs                                      tenancy                                                    • Fees & charges (Med/     the service the cost should
                                   • Community as a whole                                                                                    high)                    be borne by the users having
                                     benefits from City residents                                                                          • Central Government       regard for the Council’s rental
                                     being appropriately housed                                                                              grant agency funding     policies based on tenant’s
                                                                                                                                             (Low)                    income
                                                                                                                                                                    • Central government funding
                                                                                                                                                                      assistance will be sought but
                                                                                                                                                                      from time to time it may be
                                                                                                                                                                      necessary to subsidise the
                                                                                                                                                                      activity from general rates

# This proportion relates to the whole of the activity, not the individual components of it, unless stated otherwise.



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Economic Development
                                                                                                                                  FUNDING SOURCE
 NATURE OF ACTIVITY                WHO BENEFITS                             PERIOD OF BENEFIT                  WHO CREATES NEED   (PROPORTION # )             FUNDING SOURCE RATIONALE

Economic Development
• Business & job                   • Individual businesses will             • Short-term business   • Entire economy              • General rates, but with   • As the entire City benefits from
  promotion                          benefit directly from specific           support initiatives,    displays need                 business differential       the economic returns from this
• City marketing &                   initiatives                              but on-going benefits   for economic                  (high)                      expenditure the cost should be
  branding                         • Entire economy benefits                  of infrastructure       development                 • Central Government          funded from general rates
• Convention Centre                  from improved economic                   development and flow- • Businesses display            funding (low)             • Most businesses benefit from
                                     activity, choice, employment             on effects              specific need for           • Other Territorial Local     increased economic activity
                                     opportunities and incomes              • On-going benefits for   support services and          Authorities (low)           so should contribute a greater
                                   • Individual users benefit                 entire economy          infrastructure              • Private sector (low)        portion of the cost through the
                                     from the provision of the                                                                    • Fees & charges (low)        application of a differential on
                                     Convention Centre                                                                                                          the general rate
                                                                                                                                                              • Individual users of the
                                                                                                                                                                Convention Centre should pay
                                                                                                                                                                market rates for its use




# This proportion relates to the whole of the activity, not the individual components of it, unless stated otherwise.




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Leisure
                                                                                                                                     FUNDING SOURCE
 NATURE OF ACTIVITY                WHO BENEFITS                             PERIOD OF BENEFIT              WHO CREATES NEED          (PROPORTION # )                FUNDING SOURCE RATIONALE

Arts and Culture
• Grants to arts & cultural • The entire community                         • On-going benefits             • Need is created by      • General rates (high)         • Those who use the facilities
  groups                      benefits from the                              from an informed,               entire community for    • Some entry charges (low)       should pay a reasonable charge
• Te Manawa (Museum,          educational opportunities &                    creative & innovative           access to information   • Sponsorship/grants (low)       but it is recognised that for
  Art Gallery & Science       cultural awareness that the                    population                      regarding cultural      • Central Government             some activities (eg Te Manawa)
  Centre)                     provision of activities and                                                    heritage and creative     (low)                          such a charge would be
• Other arts & cultural       facilities brings                                                              media as well as        • Rental income (low)            prohibitively high if set at a level
  facilities such as        • Business community                                                             for venues for the                                       to cover the entire cost
• Regent on Broadway          benefits from spending by                                                      performing arts         [Represents a consolidated     • Every effort will be made to
  Theatre                     visitors attending facilities &                                                                        view of funding sources ie       obtain grant funding from
• Globe Theatre               events                                                                                                 including revenue received       external agencies
• Caccia Birch House        • Specific benefit to those                                                                              directly by the organisation   • As the entire City benefits from
• Creative Sounds (The        who use facilities and attend                                                                          running the facility]            these activities any residual
  Stomach)                    activities                                                                                                                              expenditure should be funded
                                                                                                                                                                      from general rates




# This proportion relates to the whole of the activity, not the individual components of it, unless stated otherwise.




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                                                                                                                                      FUNDING SOURCE
 NATURE OF ACTIVITY                WHO BENEFITS                             PERIOD OF BENEFIT              WHO CREATES NEED           (PROPORTION # )              FUNDING SOURCE RATIONALE

City Libraries
•   Archives                  • The entire community                       • On-going                      • Need is created by       • General rates (high)      • Those who utilise some services
•   Central library             benefits from choice of                      educational benefits            entire community for     • Rentals on some             (eg CDs, DVDs, internet etc)
•   Collections                 leisure & recreational                       from an informed,               library facilities and     materials (low)             should pay a reasonable charge
•   External library services   activities & a healthy caring                creative population             access to information    • Penalty charges (low)     • City residents take great pride
    such as branches &          community                                                                    sources                                                in the facilities & expect the
    mobile                    • The entire community                                                                                                                resource to be available to all
                                benefits from the                                                                                                                   regardless of whether they
                                educational opportunities                                                                                                           actually use it
                                the library offers & from                                                                                                         • It is not practical to charge
                                being informed                                                                                                                      visitors of the facility nor for the
                              • Specific benefits to                                                                                                                lending of basic resources so the
                                borrowers of material                                                                                                               net cost should be funded from
                                                                                                                                                                    general rates




# This proportion relates to the whole of the activity, not the individual components of it, unless stated otherwise.




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                                                                                                                                        FUNDING SOURCE
 NATURE OF ACTIVITY                WHO BENEFITS                             PERIOD OF BENEFIT              WHO CREATES NEED             (PROPORTION # )              FUNDING SOURCE RATIONALE

Parks and Recreation
•    Arena Manawatu                • The entire community                  • Benefits are on-              • Need is created by         • General rates (med/high)   • Those who use the facilities
•    City-wide reserves              benefits from choice of                 going as long                   entire community for       • User charges (med/low)       should pay a reasonable charge
•    Local reserves                  recreational activities and a           as facilities are               recreational facilities,   • Lease and rental income      but it is recognised that for
•    Sportsfields                    healthy active community                maintained or                   activities and choice        (low)                        some activities (eg swimming
•    Swimming Pools                • Particular event organisers             enhanced in some              • Event organisers           • Corporate sponsorship        pools & sportsfields & Arena
•    Grants to recreation            also benefit from                       cases                           create a need for            (low)                        Manawatu) such a charge would
     groups                          commercial gains from                 • The benefit of events           infrastructure in order    • Grants from charitable       be prohibitively high if set at a
                                     activities                              are both immediate              to hold events               trusts (low)                 level to cover the entire cost
                                   • Business community                      & longer term,                                             • Central government (low)   • Also it is impractical to charge
                                     benefits from spending by               the latter being to                                        • [Represents a                users of some facilities such as
                                     visitors attending facilities &         the perception of                                            consolidated view            city-wide & local area reserves
                                     events                                  vibrancy of the City                                         of funding sources         • Every effort will be made to
                                   • Specific benefits to users of                                                                        ie including revenue         obtain grant funding from
                                     facilities and spectators of                                                                         received directly by the     external agencies
                                     events                                                                                               organisation running the   • As the entire City benefits from
                                                                                                                                          facility]                    these activities any residual
                                                                                                                                                                       expenditure should be funded
                                                                                                                                                                       from general rates




# This proportion relates to the whole of the activity, not the individual components of it, unless stated otherwise.




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Environmental Sustainability & Health
                                                                                                                                          FUNDING SOURCE
 NATURE OF ACTIVITY                WHO BENEFITS                                 PERIOD OF BENEFIT               WHO CREATES NEED          (PROPORTION # )               FUNDING SOURCE RATIONALE

Regulatory
•   Animal control                 • The entire community benefits              • Benefits of                  • Need is created by       General rates              Animal control
•   Building control                 from safe reliable infrastructure            regulation in general          entire community for     • Animal control (med/low) • A significant portion of the
•   Resources consents               and resources and consistent,                are on-going even              structure, consistency   • Building control (med/      costs should be borne by
•   Land administration              transparent Council procedures               though the specific            and certainty               low)                       dog owners as the majority
•   Public health                  • Animal control activity is                   regulations may              • Need is created by       • Resources consents (low)    of the activity relates to their
                                     principally related to the actions           change over time               those who do not         • Land admin (med)            actions or inactions.
                                     or inactions of dog owners -                                                comply with the rules    • Public health(med/high) • No particular group or
                                     owners & the public at large                                                (ie exacerbators)                                      individual benefits more
                                     (through reduced nuisance)                                                • Need is created by       Fees and Charges              than others so the residual
                                     benefit from this                                                           Council for rules to     • Animal Control (med/        cost should be allocated to
                                   • Developers & property owners                                                protect its position        high)                      the whole City as part of the
                                     benefit from the building                                                   and manage its risk      • Building Control (med/      general rate.
                                     control & resource consent                                                  exposure                    high)
                                     advice, information & certainty                                                                      • Resource Consents (high) Building control & Resource
                                     provided by the Council                                                                              • Land admin (med)         consents
                                   • Land administration includes                                                                         • Public Health (med/low)  • As the main beneficiaries
                                     a multitude of smaller                                                                                                             are property developers
                                     activities each with a range of                                                                                                    & building owners they
                                     beneficiaries                                                                                                                      should pay for the majority
                                   • Licenced business’ gain                                                                                                            of the cost of the activity.
                                     economic advantage from the                                                                                                        No particular group or
                                     public health activity of the                                                                                                      individual benefits more
                                                                                                                                                                        than others so the residual
                                     Council & the public benefit
                                                                                                                                                                        cost should be allocated to
                                     from a healthy, safe & clean city
                                                                                                                                                                        the whole City as part of the
                                                                                                                                                                        general rate

# This proportion relates to the whole of the activity, not the individual components of it, unless stated otherwise.



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                                                                                                                                   FUNDING SOURCE
 NATURE OF ACTIVITY                WHO BENEFITS                                 PERIOD OF BENEFIT               WHO CREATES NEED   (PROPORTION # )   FUNDING SOURCE RATIONALE

(Regulatory continued)                                                                                                                               Land administration
                                                                                                                                                     • Costs should be borne by
                                                                                                                                                        users where practicable with
                                                                                                                                                        the residual being allocated
                                                                                                                                                        to the whole City as part of
                                                                                                                                                        the general rate

                                                                                                                                                     Public health
                                                                                                                                                     • As licensed business’ are
                                                                                                                                                       major beneficiaries they
                                                                                                                                                       should bear a significant
                                                                                                                                                       portion of the cost of the
                                                                                                                                                       activity. The public at large
                                                                                                                                                       also benefit from the activity
                                                                                                                                                       so the residual cost should
                                                                                                                                                       be allocated to the whole
                                                                                                                                                       City as part of the general
                                                                                                                                                       rate




# This proportion relates to the whole of the activity, not the individual components of it, unless stated otherwise.



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                                                                                                                                   FUNDING SOURCE
 NATURE OF ACTIVITY                WHO BENEFITS                                 PERIOD OF BENEFIT               WHO CREATES NEED   (PROPORTION # )              FUNDING SOURCE RATIONALE

Roading and Parking
•   Roads                          • Entire community benefits from             • On-going benefits as • Entire community          • General rates with         • Roading & related costs
•   Parking                          accessibility of City and ease of            long as infrastructure creates the need for        business differential        which meet the benefit/
•   Footpaths                        transportation throughout the                is maintained          an accessible urban       • Roads (high)                 cost qualifying criteria
•   Street lighting                  City                                                                environment where         • Footpaths (high)             should be funded from
•   Street facilities              • Specific benefit to road                                            transport links are       • Street lighting (high)       NZTA subsidies as a proxy
•   Traffic services                 users including cyclists and                                        readily available for     • Street facilities (high)     for direct contributions from
                                     pedestrians                                                         both business and         • Traffic services (high)      road users, many of whom
                                   • Business benefits from an                                           public use                • Fees and fines               are not City residents
                                     effective roading infrastructure                                                              • Parking (high)             • It is impractical to charge
                                   • Specific benefit to parking                                                                   • New Zealand Transport        for road use by any direct
                                     facility users                                                                                  Agency (med for              mechanism such as tolls so
                                                                                                                                     qualifying expenditure)      the residual cost should be
                                                                                                                                                                  borne by whole City through
                                                                                                                                                                  the general or a targeted
                                                                                                                                                                  rate with a differential
                                                                                                                                                                  applied to business
                                                                                                                                                                • Parking users should pay at
                                                                                                                                                                  levels which are appropriate
                                                                                                                                                                  to manage demand &
                                                                                                                                                                  provide a net return which
                                                                                                                                                                  can be applied to reduce
                                                                                                                                                                  the net cost to ratepayers of
                                                                                                                                                                  roading & transportation




# This proportion relates to the whole of the activity, not the individual components of it, unless stated otherwise.




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                                                                                                                                   FUNDING SOURCE
 NATURE OF ACTIVITY                WHO BENEFITS                                 PERIOD OF BENEFIT               WHO CREATES NEED   (PROPORTION # )              FUNDING SOURCE RATIONALE

Rubbish and Recycling
• Recycling                        • Entire community benefits from             • On-going benefits as • Entire community          • Targeted rate with fixed   • To minimise the volume
• Waste collection                   safe and efficient disposal of               long as infrastructure   creates the need          annual property charge       of waste, collection costs
                                     solid waste                                  is maintained            for a safe urban        • Recycling (high)             should be funded by the
                                   • Direct households benefit from                                        environment where       • Waste collection (low)       users of the service –
                                     refuse collection and recycling                                       solid waste is          • Rubbish bag sales or         through rubbish bag sales
                                                                                                           adequately dealt with     similar                      or other mechanism having
                                                                                                         • Exacerbators            • Waste collection (high)      the same effect
                                                                                                           and individual          • Landfill charges (low)     • Recycling costs should be
                                                                                                           householders            • Sales                        funded as much as possible
                                                                                                                                   • Recyclable materials         from the sale of recyclables
                                                                                                                                                                  but as the Council wishes to
                                                                                                                                                                  encourage recycling it is not
                                                                                                                                                                  desirable or practicable to
                                                                                                                                                                  charge individual users by
                                                                                                                                                                  volume. The residual cost
                                                                                                                                                                  should be funded from a
                                                                                                                                                                  targeted rate set on a fixed
                                                                                                                                                                  annual charge basis




# This proportion relates to the whole of the activity, not the individual components of it, unless stated otherwise.




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                                                                                                                                         FUNDING SOURCE
 NATURE OF ACTIVITY             WHO BENEFITS                         PERIOD OF BENEFIT                    WHO CREATES NEED               (PROPORTION # )             FUNDING SOURCE RATIONALE

Stormwater
• Stormwater                    • Entire community                   • On-going benefits as               • Entire community creates     • General rates with        • As the whole community
  collection & disposal           benefits from safe and               long as infrastructure is            the need for a safe urban      business differential       benefits from this activity
                                  efficient discharge of               maintained                           environment where              (high)                      the costs should be funded
                                  stormwater                                                                stormwater discharges                                      from the general rate with a
                                • Specific benefit to                                                       are adequately dealt with                                  business differential due to
                                  owners of property                                                      • Property owners directly                                   the nature & volume of run-
                                  more prone to effects of                                                  affected by stormwater                                     off from properties used for
                                  stormwater                                                                create a need for                                          business.
                                                                                                            infrastructure to maintain
                                                                                                            adequate protection




# This proportion relates to the whole of the activity, not the individual components of it, unless stated otherwise.




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                                                                                                                                        FUNDING SOURCE
 NATURE OF ACTIVITY             WHO BENEFITS                         PERIOD OF BENEFIT                    WHO CREATES NEED              (PROPORTION # )              FUNDING SOURCE RATIONALE

Wastewater
• Wastewater                    • Entire community                   • On-going benefits as               • Entire community creates    • Targeted rate with         • Although there is some overall
  collection                      benefits from safe and               long as infrastructure is            the need for a safe urban     fixed annual charge for      community benefit from the
• Wastewater                      efficient disposal of                maintained                           environment where             households and small         activity the major benefit is to
  treatment & disposal            wastewater                                                                wastewater is adequately      users (med/high)             those who use the facilities
                                • Commercial and                                                            dealt with                  • Targeted rate in form of   • Volumes of trade waste are
                                  industrial businesses                                                   • Commercial and                pan charges for larger       capable of being measured
                                  benefit specifically                                                      industrial enterprise         users (med/low)              so those who discharge trade
                                  from the provision of                                                     create need for             • Trade waste charges for      waste should be charged
                                  wastewater services                                                       wastewater services           exacerbators (low)           based on the nature & volume
                                • Direct household benefit                                                  applicable to their                                        of discharge
                                  from the provision of                                                     business                                                 • Those capable of being
                                  wastewater services                                                     • Property owners                                            connected to the wastewater
                                                                                                                                                                       system are identifiable so
                                                                                                                                                                       should bare the cost through a
                                                                                                                                                                       targeted rate
                                                                                                                                                                     • The cost of servicing each
                                                                                                                                                                       household is similar so a fixed
                                                                                                                                                                       annual charge is appropriate
                                                                                                                                                                     • Costs are higher for those
                                                                                                                                                                       with more discharge so it is
                                                                                                                                                                       appropriate to charge non-
                                                                                                                                                                       residential users on a per pan
                                                                                                                                                                       basis




# This proportion relates to the whole of the activity, not the individual components of it, unless stated otherwise.




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                                                                                                                                      FUNDING SOURCE
 NATURE OF ACTIVITY             WHO BENEFITS                         PERIOD OF BENEFIT                    WHO CREATES NEED            (PROPORTION # )               FUNDING SOURCE RATIONALE

Water
• Water collection              • Entire community                   • On-going benefits as               • Entire community           • Targeted rate with fixed   • Although there is some overall
• Water treatment                 benefits from safe and               long as infrastructure is            creates the need for a       annual household charge      community benefit from the
• Water distribution              efficient provision of               maintained                           safe urban environment       (med/high)                   activity the major benefit is to
                                  drinking water                                                            where water services       • Direct charges through       those who use the facilities
                                • Commercial businesses                                                     are adequately provided      metering of non-           • Volumes of water used are
                                  benefit specifically from                                                 and health standards         residential users (med/      capable of being measured so
                                  the provision of water                                                    maintained                   low)                         it would be desirable to charge
                                  services                                                                • Commercial and                                            by metered use
                                • Entire community                                                          industrial enterprise                                   • The Council does not currently
                                  benefits from provision                                                   create need for water                                     support a universal metering
                                  of water services to fire                                                 services applicable to                                    philosophy so only those non-
                                  fighting to maintain                                                      their business                                            residential users with use over
                                  community safety                                                        • Property owners create                                    a cut-off level are metered
                                  services                                                                  need for water services to                              • Those capable of being
                                • Direct household benefit                                                  aid fire fighting services                                connected to the water system
                                  from the provision of                                                                                                               are identifiable so should bare
                                  water services                                                                                                                      the cost through a targeted
                                                                                                                                                                      rate
                                                                                                                                                                    • The cost of servicing each
                                                                                                                                                                      household is similar so a fixed
                                                                                                                                                                      annual charge is appropriate




# This proportion relates to the whole of the activity, not the individual components of it, unless stated otherwise.




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Support Services
                                                                                                                                           FUNDING SOURCE
 NATURE OF ACTIVITY                WHO BENEFITS                                 PERIOD OF BENEFIT               WHO CREATES NEED           (PROPORTION # )               FUNDING SOURCE RATIONALE

Commercial or Strategic Investments
• Provision of services to         • The entire community benefits              • Benefits are on-             • Need for strategy         • General rates (high)        • Commercial investments
  external entities                  from the Council obtaining                   going or for the life          investments is created    • Net cost or return from       (incl. public rental housing)
• Investments (including             positive net financial returns on            of the particular              by community as a           investments or provision      are expected to generate a
  Investment Fund)                   its investments                              contract                       whole                       of services to external       net return which can benefit
• Investment property              • The entire community benefits                                             • Need for public rental      entities                      the City as a whole & lead to
• Investments in                     from the Council making sound                                               housing created by        • Rental from housing           lower rates, fees & charges
  companies (including               strategic investments                                                       tenants                     (high)                      • Strategic investments
  Airport)                         • Lessees & users benefit from the                                                                                                      benefit the whole City and
• Public Rental Housing              provision of property including                                                                                                       so it is appropriate to fund
                                     public rental housing                                                                                                                 any net cost from general
                                                                                                                                                                           rates

Corporate Support
• Civic Administration             • The entire community benefits              • Benefits are on-             • All of the Council’s      • Costs are allocated to      • Corporate support exists
  Building                           from access to Council                       going                          activities require some     other activities based on     not for itself, but to enable
• Communication                      information, efficient dealings                                             corporate support           appropriate drivers           the Council to provide its
• Financial services                 with Council, and basic channel                                                                                                       other activities. Support
• Human resources                    through which to communicate                                                                                                          costs should therefore be
• Information Services               with Council                                                                                                                          reflected in the overall costs
• Print Synergy                                                                                                                                                            of other activities




# This proportion relates to the whole of the activity, not the individual components of it, unless stated otherwise.




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                                                                                                                                         FUNDING SOURCE
 NATURE OF ACTIVITY                WHO BENEFITS                                 PERIOD OF BENEFIT               WHO CREATES NEED         (PROPORTION # )               FUNDING SOURCE RATIONALE

Customer Services
• Customer service                 • The entire community benefits              • Benefits are on-             • Need is created by      • Costs are allocated to      • Customer service exists not
  centre                             from access to Council                       going                          entire community for      other activities based on     for itself, but to enable the
                                     information, efficient dealings                                             knowledge and an          appropriate drivers           Council to provide its other
                                     with Council, and basic channel                                             accessible Council                                      activities. Customer service
                                     through which to communicate                                              • Need is created by                                      costs should therefore be
                                     with Council                                                                Council for efficient                                   reflected in the overall costs
                                   • Council benefits from clarity of                                            interface with public                                   of other activities
                                     community needs and wants,
                                     and efficient processing of
                                     public enquiries




# This proportion relates to the whole of the activity, not the individual components of it, unless stated otherwise.




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Funding Source Proportions For Operating Costs
                                                   GENERAL    TARGETED   USER FEES             key:
                                                   RATES      RATES      AND CHARGES   OTHER
                                                                                               High                80 – 100%
 Leadership                                                                                    Med/High            60 – 79%
 Councillor Leadership & Decision Making           High                  Low           Low     Med                 40 – 59%
 Direction Setting                                 High                  Low           Low     Med/Low             20 – 39%
                                                                                               Low                 1 – 19%
 Community Support
 Cemeteries                                        Med/Low               Med/High      Low
                                                                                               The funding proportions outlined in this table
 Civil Defence                                     High                  Low           Low
                                                                                               represent the Council’s desired consolidated
 Community Development                             High                  Low           Low
                                                                                               intention ie the share of the gross operating costs
 Community Housing                                 Med/Low               Med/High      Low     borne by each sector.
 Economic Development
 Economic Development                              High                  Low           Low
 Leisure
 Arts and Culture (note 1)                         High                  Low           Low
 City Libraries                                    High                  Low           Low
 Parks and Recreation (note 1)                     Med/High              Med/Low       Low
 Environmental Sustainability and Health
 Regulatory
 • Animal control                                  Med/Low               Med/High
 • Building control                                Med/Low               Med/High
 • Resource consents                               Low                   High
 • Land administration                             Med                   Med
 • Public health                                   Med/High              Med/Low




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                                                             GENERAL             TARGETED            USER FEES
                                                             RATES               RATES               AND CHARGES   OTHER

 Environmental Sustainability and Health
 Roading and Parking                                         Med/High                                Med/Low       Low
 Rubbish and Recycling
 • Rubbish                                                   Low                                     High
 • Recycling                                                                     High                Low           Low
 Stormwater                                                  High                                    Low
 Wastewater                                                                      High                Low
 Water                                                                           Med/High            Med/Low
 Support Services
 Commercial or Strategic Investments                         High                                    High
 Corporate Support                                                                                                 High
 Customer Services                                                                                                 High



Note 1
The Council has varying levels of control over the actual revenue obtained from users of these facilities.
Management and operations are contracted to other entities and revenue from entry fees is retained by them.




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Activities’ Contribution to Community Outcomes
                                                                              BUSINESS
                                            HAVING    FEELING   AT TRACTIVE   GROW TH      LEARNING        EASY         RELIABLE     SUPPORTIVE     HEALTHY & WELL
                                             FUN       SAFE         CITY      AND JOBS   OPPORTUNITIES   MOVEMENT   INFRASTRUCTURE   COMMUNITY      HOUSED PEOPLE
                           Leadership
Councillor Leadership & Decision Making                                                                                                          
                       Direction Setting                                                                                                           
                Community Support
                          Cemeteries                                                                                                   
                        Civil Defence                                                                                               
              Community Development                                                                                                                
                 Community Housing                                                                                                                     
            Economic Development
                Economic Development                                        
                                Leisure
                       Arts and Culture                                                  
                           City Libraries                                                                                        
                   Parks and Recreation                        
                     Environmental
             Sustainability & Health
                            Regulatory
                         Animal control                
                        Building control                                                                                                             
                     Resource consents                                        
                    Land administration                          
                          Public health                

                                                                                                           Primary Contribution        Secondary Contribution




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                                                                           BUSINESS
                                          HAVING   FEELING   AT TRACTIVE   GROW TH &     LEARNING        EASY            RELIABLE        SUPPORTIVE     HEALTHY & WELL
                                           FUN      SAFE         CITY        JOBS      OPPORTUNITIES   MOVEMENT      INFRASTRUCTURE      COMMUNITY      HOUSED PEOPLE

                   Environmental
           Sustainability & Health
                 Roading and Parking                                                                              
                Rubbish and Recycling
                             Rubbish                                                                                                                
                            Recycling                                                                                                                 
                          Stormwater                                                                                    
                          Wastewater                                                                                                                     
                               Water                                                                                                                  
                  Support Services
  Commercial or Strategic Investments
              Provision of services to
                      external entities                                       
                          Investments
        (including Investment Fund)                                           
                 Investment property                                          
           Investments in companies
                   (including Airport)                                                                               
               Public Rental Housing                                                                                                                         
                   Corporate Support                                                                                        
                   Customer Services                                                                                                                   



                                                                                                           Primary Contribution               Secondary Contribution




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Rates                                                      [1] Introduction                                        • make membership of the organisation more
                                                           The Local Government (Rating) Act 2002 requires           accessible to the general public, particularly
                                                           that if the Council wishes to remit or postpone rates     disadvantaged groups. These include children,



Remission and
                                                           it must do so in accordance with a policy prepared        youth, young families, aged people, and
                                                           and adopted using the special consultative                economically disadvantaged people.
                                                           procedure laid down in the Local Government Act
                                                           2002. This latter Act also requires the Council to      [2.2] Conditions and Criteria



Postponement
                                                           adopt a policy on the remission and postponement        This part of the policy will apply to land used
                                                           of rates on Maori freehold land.                        by a charitable organisation, which is used
                                                                                                                   exclusively or principally for sporting, recreation,
                                                           This policy embraces all situations in which the        or community purposes.



Policies                                                   Council would wish to remit or postpone rates.


                                                           [2] Remissions for Community,
                                                                                                                   The policy will not apply to organisations operated
                                                                                                                   for private pecuniary profit or which charge
                                                                                                                   commercial tuition fees.
                                                           Sporting and Other Non Profit
                                                           Organisations                                           The policy will also not apply to groups or
                                                                                                                   organisations whose primary purpose is to address
                                                                                                                   the needs of adult members (over 18 years) for
                                                           [2.1] Objective
                                                                                                                   entertainment or social interaction, or who engage
                                                           To facilitate the ongoing provision of non-
                                                                                                                   in recreational, sporting, or community services as
                                                           commercial community services and non-
                                                                                                                   a secondary purpose only.
                                                           commercial recreational opportunities for the
                                                           residents of Palmerston North City.
                                                                                                                   Applications for remission must be made in the
                                                                                                                   form prescribed by the Council.
                                                           The purpose of granting rates remission to an
                                                           organisation is to:
                                                                                                                   As far as practicable, applications for rates
                                                           • assist the organisation’s survival
                                                                                                                   remission are to be made to the Council prior to




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the commencement of the rating year. The Council         introduce a system which involves grants being            Remission of the penalty will be granted if the
reserves the right to consider any applications          given rather than rates remissions. Once this             ratepayer is able to provide evidence that their
received during a rating year to be applicable from      approach is adopted, the Remission Policy will be         payment has gone astray in the post or the late
the commencement of the following rating year. In        progressively phased out.                                 payment has otherwise resulted from matters
the normal course, applications will not be backdated.                                                             outside their control.
                                                         [3] Remissions of Penalties
Organisations making application should include                                                                    Remission of the penalty will be considered where
the following documents in support of their                                                                        payment is made by regular bank transaction
                                                         [3.1] Objective
application:                                                                                                       and where minor penalties occur due to timing
                                                         To enable the Council to act fairly and reasonably
• statement of objectives                                                                                          differences.
                                                         in its consideration of rates which have not been
• latest financial statements
                                                         received by the Council by the penalty date due to
• information on activities and programmes                                                                         Remission of penalties may be considered where
                                                         circumstances outside of the ratepayer’s control.
• details of membership or clients.                                                                                there is an offer for immediate settlement of all
                                                         To encourage ratepayers who are in arrears due
                                                                                                                   rates outstanding which can be facilitated by the
                                                         to financial difficulty or other genuine unusual
The policy shall apply to such organisations as                                                                    remission of penalties. This would apply where
                                                         circumstances to make arrangements to clear
approved by the Council as meeting the relevant                                                                    there are substantial arrears.
                                                         arrears and keep their payments up to date.
criteria. The Council may delegate the authority to
make such approvals to particular Council officers                                                                 Each application will be considered on its merits
                                                         [3.2] Conditions and Criteria
as specified by a resolution of the Council.                                                                       and remission will be granted where it is considered
                                                         Automatic remission of the penalties incurred on
                                                                                                                   just and equitable to do so. Remission will not be
                                                         instalment one will be made where the ratepayer
The extent of any remission to any qualifying                                                                      granted in cases of deliberate non-payment or
                                                         pays the total amount due for the year on or before
organisation shall be as determined by the                                                                         where there is repetitive omission.
                                                         the penalty date of the second instalment.
Council or by the officers to whom the authority
                                                         Remission of one penalty will be considered in any
is delegated. In the normal course, no remission                                                                   Decisions on remission of penalties will be
                                                         one rating year where payment has been late due
will be granted on targeted rates for water supply,                                                                delegated to officers as set out in the Council’s
                                                         to significant family disruption. Remission will be
wastewater disposal, waste collection or recycling.                                                                delegation resolution.
                                                         considered in the case of death, illness, or accident
As a means of achieving more equitable and
                                                         of a family member, as at due date.
transparent outcomes, the Council plans to




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[4] Remission of Uniform Annual                            Council will delegate authority to consider and           Applications for remission must be in the form
                                                           approve applications to Council officers.                 prescribed by the Council.
General Charges on Non-Contiguous
Rating Units Owned by the Same                             [5] Remission for Residential Land in                     As far as practicable, applications for rates
Owner                                                      Commercial or Industrial Areas
                                                                                                                     remission are to be made to the Council prior to
                                                                                                                     the commencement of the rating year. The Council
[4.1] Objective                                                                                                      reserves the right to consider any applications
                                                           [5.1] Objective                                           received during a rating year to be applicable
To provide for relief from uniform annual general
                                                           To ensure the owners of rating units situated in          from the commencement of the following rating
charges (UAGC) for land which is non-contiguous,
                                                           commercial or industrial areas are not unduly             year. In the normal course applications will not be
farmed as a single entity and owned by the same
                                                           penalised by the zoning decisions of this Council         backdated.
ratepayer.
                                                           and previous local authorities.

[4.2] Conditions and Criteria                                                                                        Applications for remission under this part of the
                                                           [5.2] Conditions and Criteria                             policy will be determined by Council officers acting
Rating units that meet the criteria under this policy
                                                           To qualify for remission under this part of the policy    under delegated authority from the Council as
may qualify for a remission of UAGCs on non-
                                                           the rating unit must:                                     specified in the delegations resolution.
contiguous rating units. The ratepayer will remain
                                                           • be situated within an area of land that has
liable for at least one UAGC.
                                                              been zoned for commercial or industrial use.           If an application is approved, the Council will direct
                                                              Ratepayers can determine where their property          its valuation service provider to inspect the rating
The rating units on which remission is given must
                                                              has been zoned by inspecting the Palmerston            unit and prepare a valuation that will treat the rating
be owned by the same ratepayer and must each
                                                              North City Council District Plan, copies of which      unit as if it were a comparable rating unit elsewhere
be classified in group code FL or FM for differential
                                                              are available for inspection at the Council‘s office   in the City. The ratepayer may be asked to contribute
purposes.
                                                           • be listed as a “residential” property for               to the cost of this valuation. Ratepayers should note
                                                              differential rating purposes. Ratepayers wishing       that the valuation service provider’s decision is
Only one of the rating units may have any
                                                              to ascertain whether their property is treated as      final as there are no statutory rights of objection or
residential dwelling situated on it.
                                                              a residential property may inspect the Council’s       appeal for values done in this way.
                                                              rating information database at the Council’s
Applications for remission must be made in the
                                                              office.
form prescribed by the Council.




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[6] Remission of Rates on Land                          In considering any application for remission of            Council acting under delegated authority from the
                                                        rates under this part of the policy the Council will       Council.
Protected for Natural or Cultural                       consider the following criteria:
Heritage Purposes                                       • the extent to which the preservation of natural          [7] Rates Remission – Wastewater
                                                           or cultural heritage will be promoted by granting
[6.1] Objective                                            remission of rates on the rating unit                   Charges for Educational
To contribute to sustainable management of the          • the nature and extent of the natural or cultural         Establishments
City’s built and natural environment through               heritage features present on the land
providing relief to property owners who have            • the extent to which preservation of features             [7.1] Objective
voluntarily protected land or buildings of natural or      of natural or cultural heritage might be                To provide relief and assistance to educational
cultural heritage value.                                   prejudicially affected if relief is not granted.        establishments as defined in the Rating Powers
                                                                                                                   (Special Provision for Certain Rates for Educational
[6.2] Conditions and Criteria                           The Council will decide what amount of rates will          Establishments Amendment Act) 2001 in paying
Ratepayers who own rating units which have              be remitted on a case by case basis subject to a           wastewater charges.
some feature of natural or cultural heritage which      maximum amount of 33 percent of rates assessed
is protected through such arrangements as a             for that rating unit per year. The Council may agree       [7.2] Conditions and Criteria
covenant or caveat may qualify for remission of         to an on-going remission in perpetuity provided            1. This policy will apply to the following
rates under this part of the policy.                    the terms and conditions of the voluntary legal                educational establishments:
                                                        mechanism applying to the feature are not altered.         •	 established	as	a	special	school	under	section	
Land that is non-rateable under section 8 of the                                                                       98(1) of the Education Act 1964; or defined as
Local Government (Rating) Act 2002 and is liable        In granting remissions under this part of the policy       •	 a	state	school	under	section	2(1)	of	the	
only for rates for water supply, wastewater disposal,   the Council may specify certain conditions before              Education Act 1989; or
waste collection or recycling will not qualify for      remission will be granted. Applicants will be required     •	 an	integrated	school	under	section	2(1)	of	the	
remission under this part of the policy.                to agree in writing to these conditions and to pay any         Private Schools Conditional Integration Act
                                                        remitted rates if the conditions are violated.                 1975; or
Applications must be in writing supported by                                                                       •	 a	special	institution	under	section	92(1)	of	the	
documentary evidence of the protected status of         Applications for the remission for protection of               Education Act 1989; or
the rating unit, eg a copy of the covenant.             heritage will be considered by officers of the             •	 an	early	childhood	centre	under	section	308(1)	




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     of the Education Act 1989, but excluding any             establishment is one toilet for every 20 students   [8.2] Conditions and Criteria
     early childhood centre operated for profit.              and staff or part thereof.                          The Council has introduced a system of charging for
                                                                                                                  wastewater which is a combination of a targeted
2. The policy does not apply to school houses              6. The number of students in an educational            fixed charge and a charge based on the number
   occupied by a caretaker, principal or staff.               establishment is the number of students on the      of pans (or pan equivalents) in non-residential
                                                              roll on 1 March in the year immediately before      properties. It is recognised that in some exceptional
3. The wastewater rates assessed in any year may              the year in which the charge relates.               circumstances the number of pans may not be
   not exceed the amount calculated as shown                                                                      a fair reflection of the use made of the Council’s
   below.                                                  7. The number of staff in an educational               wastewater system. This may be because of the
                                                              establishment is the number of teaching             infrequency of use or the nature of use.
4. The wastewater rate is the rate that:                      and administration staff employed by that           This policy enables Council officers, acting under
4.1 Would be assessed using the same rating                   establishment on I March in the year immediately    delegated authority, to determine circumstances
    mechanisms as are applied to other separate               before the year in which the charge relates.        in which it would be fair and equitable to remit a
    rating units within the City divided by the                                                                   portion of the wastewater charges.
    number of toilets as determined in accordance          8. Officers of the Council will be delegated
    with condition 5 below (the full charge); and             authority to approve remission of the               [9] Rates Remission – Property
4.2 Reduced in accordance with the following                  wastewater charges in excess of the charges
    graduated formula:                                        payable according to the policy.                    affected by Natural Disaster
•	 the	full	charge	for	the	first	4	toilets	or	part	
    thereof                                                                                                       [9.1] Objective
                                                           [8] Rates Remission – Wastewater                       To provide rate relief for any ratepayer where the
•	 75%	of	the	full	charge	for	each	of	the	next	6	
    toilets or part thereof                                Charges – Non-Residential Properties                   use that may be made of any rating unit has been
•	 50%	of	the	full	charge	for	each	toilet	after	the	                                                              detrimentally affected by erosion, subsidence,
    first 10 toilets.                                      [8.1] Objective                                        submersion, or other natural disaster.
                                                           To ensure that the wastewater charging regime is
5. For the purposes of condition 4.1 above the             applied in a fair and equitable manner.'               [9.2] Conditions and Criteria
    number of toilets for separately rateable units                                                               In the event of a significant natural disaster the
    occupied for the purpose of an educational                                                                    Council will determine whether or not remissions




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will be contemplated under this policy and if so the       for consideration for rates postponement for                be satisfied that the ratepayer is unlikely to have
criteria to be used. It is likely that the criteria will   extreme financial circumstances.                            sufficient funds left over, after the payment of
include the following elements:                                                                                        rates, for normal health care, proper provision for
• the severity of the damage to the rating unit,           Only the person entered as the ratepayer, or their          maintenance of his/her home and chattels at an
   as well as the individual circumstances of the          authorised agent, may make application for rates            adequate standard as well as making provision for
   ratepayer and the financial circumstances of the        postponement for extreme financial circumstances.           normal day to day living expenses.
   Council                                                 The ratepayer must be the current owner of, and
• the period during which the buildings are                have owned for not less than three years, the               Before approving an application the Council must
   uninhabitable and/or the rating unit is unable          rating unit which is the subject of the application         be satisfied that the ratepayer has taken all steps
   to be utilised to the extent it was prior to the        or another rating unit within Palmerston North              necessary to claim any central government benefits
   occurrence of the natural disaster.                     City. The person entered on the Council’s rating            or allowances the ratepayer is properly entitled to
                                                           information database as the “ratepayer” must not            receive to assist with the payment of rates.
Officers of the Council will be delegated authority to     own any other rating units or investment properties
approve remissions in accordance with the criteria.        (whether in the City or in another district).               Where the Council decides to postpone rates the
                                                                                                                       ratepayer must first make acceptable arrangements
                                                           The ratepayer (or authorised agent) must make an            for payment of future rates, for example, by setting
[10] Rates Postponement Policy                             application in the form prescribed by the Council.          up a system of regular payments.
                                                           The Council will consider, on a case by case basis, all
for Cases of Extreme Financial                             applications received that meet the criteria described      Any postponed rates will be postponed until:
Circumstances                                              in the first two paragraphs under this section.             • the death of the ratepayer(s); or
                                                                                                                       • the ratepayer(s) ceases to be the owner of the
[10.1] Objective                                           When considering whether extreme financial                    rating unit; or
To assist ratepayers experiencing extreme financial        circumstances exist, all of the ratepayer’s personal        • the ratepayer ceases to use the property as his/
circumstances which affect their ability to pay rates.     circumstances will be relevant including the                  her residence; or
                                                           following factors: age, physical or mental disability,      • a date specified by the Council.
[10.2] Conditions and Criteria                             injury, illness and family circumstances.
Only rating units used solely for residential                                                                          The Council will charge an annual fee on postponed
purposes (as defined by the Council) will be eligible      Before approving an application the Council must            rates for the period between the due date and the




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date they are paid. This fee is designed to cover          [11] Rates Remission and
the Council’s administrative and financial costs and
may vary from year to year. Even if the rates are
                                                           Postponement Policy for Maori
postponed, as a general rule the ratepayer will be         Freehold Land
required to pay the first $500 of the rate account.        Maori freehold land is defined in the Local
The policy will apply from the beginning of the            Government (Rating) Act 2002 as land whose
rating year in which the application is made               beneficial ownership has been determined by the
although the Council may consider backdating past          Maori Land Court by freehold order. Only land
the rating year in which the application is made           that is the subject of such an order may qualify
depending on the circumstances.                            for remission or postponement under this policy.
                                                           Section 91 of the Local Government (Rating) Act
The postponed rates or any part thereof may                2002 prescribes that in the normal course Maori
be paid at any time. The applicant may elect to            freehold land is liable for rates in the same manner
postpone the payment of a lesser sum than that             as if it were general land. Section 108 of the Local
which they would be entitled to have pursuant to           Government Act 2002 outlines that this policy is
this policy.                                               not required to provide for the remission of, or
                                                           postponement of, the requirement to pay rates on
Postponed rates will be registered as a statutory land     Maori freehold land. If the policy were to provide
charge on the rating unit title. This means that the       for remissions or postponements then it is required
Council will have first call on the proceeds of any        to outline the objectives sought to be achieved
revenue from the sale or lease of the rating unit.         by so doing and the conditions and criteria which
                                                           would need to be met in order to qualify.
The Council will delegate authority to approve
applications for rates postponements to particular         As far as the Council is aware there is no Maori
officers.                                                  freehold land within the City. As a consequence
                                                           the Council will not provide for any remissions or
                                                           postponements under this policy.




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                                                      funding And finAnciAl POlicies Policy on PaRtneRShiPS With the PRivate SectoR




Policy On        Introduction                                              For the purposes of this policy, private sector
                 The Council is required by Section 107 of the Local       partners are defined as being an individual,
                 Government Act 2002 (herein referred to as LGA            business, trust or registered company that



Partnerships
                 2002) to have a policy on partnerships with the           undertakes business for profit.
                 private sector. This policy covers the commitment
                 of Council resources to partnerships between the          The policy will apply where Council is considering
                 Council and the private sector, and sets out:             a partnership with the private sector which will



With The
                 • the circumstances in which the Council will             involve Council providing funding or other resources
                    provide funding or other resources                     whether by way of grant, loan, investment or by way
                 • the consultation the Council will undertake in          of acting as guarantor for any partnership.
                    respect of any proposed partnership


Private sector   • the conditions the Council will impose prior to a
                    partnership
                 • an outline of the risks associated with any
                    partnership before provision of funding or other
                                                                           [A] Circumstances where council
                                                                           may consider a private sector
                                                                           partnership
                    resources and                                          Section 107(1)(b)(i) of the LGA 2002 requires the
                 • the procedures for assessing, monitoring and            Council to include in its policy what circumstances
                    reporting on the provision of funding or other         the Council will provide funding or other resources
                    resources and the extent to which community            to any form of partnership with the private sector,
                    outcomes are furthered.                                whether by way of grant, loan or investment,
                                                                           or by way of acting as a guarantor for any such
                 Partnerships with private sector organisations exist      partnership.
                 where an agreement has been established which
                 involves the sharing of:                                  The Council may consider partnership
                 • resources                                               arrangements with the private sector for the
                 • risks and                                               provision of services where such a partnership is
                 • decision making.                                        likely to deliver greater efficiencies in time, cost and
                                                                           achievement of identified community outcomes.




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Policy Statement:                                           Where consultation is deemed appropriate Council           disclosures of agreed outcomes and processes,
Council may consider partnerships with the private          will include the following:                                acknowledging the need to protect commercial
sector where:                                               • an outline of the conditions of the partnership          confidentiality where appropriate
• they contribute toward achieving strategic                • an assessment of how the proposed partnership        •   outputs will be clearly specified including
   objectives set out in the 10 Year Plan and any              complies with the circumstances under                   measurable performance standards
   other strategic Council documents                           which the Council would consider entering a         •   all partners to the agreement will be
• a need has been identified and defined in                    partnership with the private sector                     accountable to each other for the delivery of the
   measurable output terms                                  • an outline of the risk management strategy               specified project and/or services
• benefits to the community, measured on cost               • an outline of the process by which the Council       •   risk allocation between the partners being clear
   efficiency, quality and timeliness exceed using             reaches a decision on entering into a partnership       and enforceable
   any other means of provision                                and the opportunities for public comment.           •   the partners requirements for the monitoring of
• sharing of risk is desirable.                                                                                        outcomes will be clearly articulated
                                                            [C] Conditions                                         •   any other matter or condition that he Council
[B] Consultation                                                                                                       considers appropriate on a case-by-case basis.
                                                            Section 107(1)(b)(iii) of the LGA 2002 requires the
Section 107(1)(b)(ii) of the LGA 2002 requires the          Council to include in its policy what conditions
Council to include in its policy what consultation          Council will impose before providing funding or        [D] Risk assessment and
it will undertake in respect of any proposal to             other resources to any form of a partnership with      management
provide funding or other resources to any form of           the private sector.                                    Section 107(1)(b)(iv) of the LGA 2002 requires the
partnerships with the private sector.                                                                              Council to include in its policy an outline of how
                                                            Policy Statement:                                      risks associated with any provision of funding or
Policy Statement:                                           Any partnership will be subject to the following       other resources with a private sector partner are
Any proposal for a partnership with the private             conditions before Council will agree to the            assessed and managed.
sector that involves the allocation of Council              provision of funding or other resources:
funds and/or resources will be tested against the           • the private partner is able to demonstrate           Policy Statement:
community consideration, using the consultation                that they are able to meet the terms of any         The risks to be assessed will include:
provisions of the LGA 2002.                                    agreement between Council and themselves            • risk to the reputation and ethical position of the
                                                            • agreements will be transparent with                    Council




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• financial risk to the Council                          performance report on the achievement of:
• risk to the capacity of the Council to carry out its   • outputs produced and the efficiency and
  core roles, functions and essential services             effectiveness of those in delivering greater
• risk to the protection of any intellectual property      efficiencies in time and cost
• any other matter Council deems appropriate.            • specially agreed community outcomes and
                                                         • impact on community in terms of the social,
The management of governing risk between                   economic, environmental and cultural
Council and the private sector will be through:            dimensions of wellbeing.
• a risk transfer regime to whoever is best able to
  manage it taking into account public interest
  considerations and an agreed risk management
  strategy.


[E] Monitoring and reporting
Section 107(1)(b)(v) & (vi) of the LGA 2002 requires
the Council to include in its policy procedures
for assessing, monitoring and reporting on the
provision of funding or other resources and the
extent to which the community outcomes are
furthered by any private sector partnerships.

Policy Statement:
Assessing, monitoring and reporting requirements
will be as appropriate to the significance of the
proposal and resources allocated. However
assessment, monitoring and reporting on a
partnership will include at a minimum an annual




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development                                                                                    [1] Introduction                                          The effect of a development in terms of impact on
                                                                                                                                                         these assets includes the cumulative effect that a
                                                                                               [1.1] Legislative Requirements and Powers                 development may have in combination with other



contributions
                                                                                               Council is required to have a Development                 development. A Development Contributions Policy
                                                                                               Contributions Policy as a component of its                also enables Council to require a development
                                                                                               Funding and Financial Policies in its Long-Term           contribution that is used to pay, in full or in part, for
                                                                                               Council Community Plan (LTCCP) under section              capital expenditure already incurred by the Council



Policy
                                                                                               102(4)(d) of the Local Government Act 2002                in anticipation of development.
                                                                                               (LGA02). Section 198 of the LGA02 gives territorial
                                                                                               authorities the power to require a contribution           [1.3] Limitations to the Application of
                                                                                               for developments. Development Contributions               Development Contributions
                                                                                               provide Council with the means to fund                    Council will not require a development
[1] Introduction....................................................................... 96
[2] Community Outcomes ............................................... 97                      infrastructure required due to growth.                    contribution for the purposes of network
[3] Overview of Development                                                                                                                              infrastructure, reserves or community infrastructure
     Contributions Policy ..................................................... 97             [1.2] When a Development Contribution is                  in the following cases:
[4] Significant Assumptions of the                                                             Required                                                  • Where it has, under Section 108(2)(a) of the
     Development Contributions Policy ................. 102                                    A Development Contribution is required in relation           Resource Management Act 1991 (RMA), imposed
[5] Administration of Development                                                                                                                           a condition on a resource consent in relation to
                                                                                               to a development when:
     Contributions ................................................................. 102                                                                    the same development for the same purpose; or
                                                                                               • the effect of that development is to require new
[6] Community Facilities: Network                                                                                                                        • Where the developer will fund or otherwise
     Infrastructure, Reserves and Community                                                       or additional assets or assets of increased capacity
                                                                                                  in terms of network infrastructure, reserves and          provide for infrastructure such as a reserve,
     Infrastructure ................................................................. 108
                                                                                                  community infrastructure; and                             network infrastructure, or community
[7] Development Contributions
     Assessment Flowcharts ........................................... 121                     • the Council incurs capital expenditure to                  infrastructure; or
[8] Schedule of Contributions                                                                     provide appropriately for those assets, i.e.           • Where the territorial authority has received or
     per Unit of Demand ................................................... 124                   network infrastructure, reserves and community            will receive sufficient funding from a third party
[9] How to work out Development                                                                   infrastructure.                                           to fund particular infrastructure.
     Contribution Payable ................................................ 129
[10] Examples........................................................................... 129
[11] Guidance Notes ............................................................ 137
[12] Glossary of Terms ........................................................ 138


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[1.4] Relationship to Resource Management              [2] Community Outcomes                                     [2.3] Businesses grow here and people have lots
Act 1991                                               Council outlines its strategic goals in Part 1 of the      of job opportunities
Development contributions under the LGA02              LTCCP. As a result of the community feedback               The development contributions policy helps to
are in addition to, and separate from, Financial       received as part of the ‘Creating Our Future’              ensure that the cost of growth in the City is fairly
Contributions under the RMA. While Council             project in 2005, Council adopted nine Community            and reasonably met by new development.
generally considers development contributions          Outcomes. Five of the nine community outcomes
under this Development Contributions Policy as         adopted are considered to be relevant to the               [2.4] People have lots of fun things to do
its main funding tool for infrastructure it may also   Development Contributions Policy.                          Development contributions policy ensures that
require Financial Contributions under the RMA.                                                                    city-wide and local reserves will be provided for
Council may require a Financial Contribution, as       The Development Contributions Policy contributes           and are appropriate to meet any future demands.
a condition of consent, in accordance with any         to the achievement of the following community
relevant rule in the District Plan under the RMA.      outcomes:                                                  [2.5] People can move easily around
Financial Contributions must not be applied as                                                                    Palmerston North
a condition on a consent where a Development           [2.1] Palmerston North is attractive, clean                The development contributions policy will enable
Contribution has been required for the same             and green                                                 the provision of adequate roading network to meet
purpose on the same development.                       The development contributions policy will ensure           future demand.
                                                       that a high and consistent level of infrastructure
Despite the above the Council still has the power      provision is maintained, which in turn will sustain a      [3] Overview of Development
to require services or works for subdivisions or       liveable urban environment.
developments to avoid, remedy and mitigate the                                                                    Contributions Policy
environmental effects through resource consent                                                                    Section 201 of the LGA02 outlines the required
                                                       [2.2] Palmerston North’s physical infrastructure
conditions.                                                                                                       contents of a Development Contributions Policy.
                                                       is reliable
                                                                                                                  The following section is consistent with this
                                                       Physical infrastructure such as roads, water
                                                                                                                  requirement of the Act.
                                                       supply, wastewater, stormwater, reserves and
                                                       other community infrastructure are critical to the
                                                       effective functioning of the city. The development
                                                       contributions policy will enable the provision of
                                                       this infrastructure to cater for future demand.




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[3.1] Purpose of a Development Contributions               granting of a resource consent, building consent or      apply contributions at the building consent stage
Policy                                                     authorisation for service connection is subject to       or at the service connection stage on all types of
The key purpose of the Development                         clause 1.2 and 1.3 of this Policy.                       development where additional units of demand are
Contributions Policy is to ensure that growth, and                                                                  created in the absence of subdivision.
the cost of infrastructure to meet that growth,            [3.2.1] Preferred Stage of Applying a                    The Councils experience is that occasionally units
is funded by those who cause the need for that             Development Contribution                                 of demand are created on land already subdivided.
infrastructure. Development Contributions                  It is Council’s preference to apply a development        In such cases, as a matter of equity, Council will
are not a tool to fund the cost of maintaining             contribution at the first stage of development,          assess and seek the appropriate development
infrastructure or improving levels of service. This        which is generally at the subdivision consent            contribution at the building consent stage. If
cost will be met from other sources.                       stage. It is not the intent of the Policy to delay the   additional units of demand are created in the
                                                           payment of contribution to subsequent consent/           absence of subdivision or outside of the building
[3.2] Trigger for Taking a Development                     development stages. Deferring payment of                 consent stage Council will require a development
Contribution                                               development contributions to subsequent stages           contribution at service connection stage.
Under Section 202 of the LGA02 Council may apply           is both administratively onerous and also results in
a development contribution for developments                the same request at all subsequent development           Refer also to clause 5.2 (Amount, Payment and
generating increased reserves, network or                  stages. Council considers that the subdivision           Collection of Development Contributions) and
community infrastructure demands upon the                  consent stage is generally the most appropriate          clause 5.3 (Transitional Provisions) of the Policy.
granting of:                                               stage to take a development contribution for the
• A resource consent                                       following reasons:                                       [3.2.3] Determining the Contribution Payable
• A building consent                                       • Practicality of implementation                         based on the Type of Development
• An authorisation for a service connection.               • Economies of scale in implementation costs             There are three types of development categories
                                                           • Fairness                                               in assessing a Development Contribution. These
A resource consent, building consent or                    • Best available knowledge for projections and           include:
authorisation for a service connection is only                 allocating budgets.                                  • Residential
a trigger for taking developing development                                                                         • Non-Residential
contributions in the sense of timing, not in               [3.2.2] Payment of Development Contributions             • Rural.
the definitional context. The application of               at Subsequent Development Stages
development contributions by Council upon the              While generally development contributions will
                                                           apply at subdivision consent stage, Council will



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Development is categorized by type to adequately         Funding Council’s capital expenditure for                   [3.4] Capital Expenditure Council Expects to
reflect the demand that type of development has          growth with development contributions must                  Incur as a Result of Growth
on our infrastructure networks. When Council             be considered alongside Council’s other funding             The total estimated capital expenditure Council
levies a development contribution, the expected          tools. Development Contributions will be required           expects to incur, as a result of growth, to meet
dominant nature of activities in the underlying zone     from development under this Policy to meet                  increased demand for network infrastructure,
will generally determine the type of development         the growth component of the future capital                  reserves, and community infrastructure over the
contribution payable. For example, the dominant          expenditure budgets, not met from other sources,            next 20 years, is summarised in Table 2. The total
activity in the industrial zone will be assumed to be    for Community Facilities: network infrastructure,           growth component, excluding funding from other
non-residential and will therefore be subject to a       community infrastructure and reserves. Table                sources, of the capital expenditure budgets will be
non-residential development contribution.                1 identifies activities Council will require a              funded by development contributions.
                                                         development contribution on.
However, there are exceptions where the
underlying zone will not appropriately reflect the       Table 1: Activities requiring a Development
dominant activity proposed for a development. For        Contribution
example, a residential development / dwelling in a
non-residential zone. In this circumstance it may        Activities                 Community Facilities
be appropriate to levy a ‘residential’ unit of demand
                                                         Water                      Network Infrastructure
to that development where there is certainty that it
will be the dominant activity on that particular site.   Wastewater                 Network Infrastructure

                                                         Roading                    Network Infrastructure
[3.3] Activities Requiring a Development
                                                         Stormwater                 Network Infrastructure
Contribution to Meet the Costs of Growth
Council may require a development contribution           Parks and Reserves         Community Infrastructure
from any development for the following:                  – Buildings and Works
1. Capital expenditure expected to be incurred as a      Parks and Reserves         Reserves
   result of growth                                      – Land
2. Capital expenditure already incurred in
   anticipation of development.




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Table 2: Summary of 20 Year Estimated Capital Expenditure and Funding for Growth                                                                                    In determining the total estimated growth
                                                                                                                                                                    component to be funded by Development
                                                                                                                                                        TOTAL       Contributions, careful consideration was given
                                                                                                                                  TOTAL            ESTIMATED
                                                                                                                                                                    to those matters listed under section 101(3) of
                                                                                                                            ESTIMATED                GROW TH
                                                                                                                               GROWTH            COMPONENT          the LGA 02 for each individual activity (network
                                 TOTAL                                                                                    COMPONENT             TO BE FUNDED        infrastructure or community facility). key
                              PLANNED                                                                    TOTAL            INCLUDED IN                  BY THIS
                                                                                                                                                                    considerations included:
                               CAPITAL               TOTAL LEVEL                                     ESTIMATED             THE 10 YEAR          DEVELOPMENT
                           ExPENDITURE                OF SERVICE           THIRD PARTY                 GROWTH                      PLAN        CONTRIBUTIONS        • The nature and operation of the activity;
    ACTIVITY                     WORk                COMPONENT                FUNDING               COMPONENT                (10 YEARS)               POLICY 1      • An analysis of who will benefit from the planned
                                                                                                                                                                       capital expenditure work; and
Water                         $39,345,000             $27,435,000                        $0          $12,000,000             $5,500,000                $7,400,000
                                                                                                                                                                    • An analysis of who will cause the need for the
Wastewater                    $42,380,000             $30,380,000                        $0          $12,000,000             $5,500,000                $7,400,000      planned capital expenditure work.
Roading                     $146,445,680            $110,330,170            $30,746,259              $36,115,510            $24,612,310              $19,176,938
                                                                                                                                                                    A detailed description of each activity, the funding
Stormwater                    $27,940,000             $17,500,000                        $0          $10,440,000             $4,720,000                       $0
                                                                                                                                                                    approach taken for each activity and justification
City Reserves                 $53,052,903             $33,389,420                        $0          $19,663,483             $4,843,920                $6,649,160   for the funding approach taken for each activity is
- Reserves and
                                                                                                                                                                    included in section 6 of this Policy.
Community
Infrastructure
                                                                                                                                                                    The reasons for the difference between the total
Local Reserves                $11,340,800               $2,954,000                       $0            $8,386,800            $4,052,800                 $801,6002   estimated growth component and the total
– Reserves and
                                                                                                                                                                    estimated growth component to be funded by this
Community
Infrastructure                                                                                                                                                      Development Contributions Policy are:
                                                                                                                                                                    • Many of the growth works planned over the
1    As estimated in January 2009.                                                                                                                                     next 20 years will provide capacity beyond the
2    This figure is the total estimated growth component for local reserves in kelvin Grove and Aokautere/Summerhill development contributions areas only.
                                                                                                                                                                       20 year planning horizon of this Development
                                                                                                                                                                       Contributions Policy
                                                                                                                                                                    • The local reserves and stormwater costs only
                                                                                                                                                                       represent future costs in kelvin Grove and
                                                                                                                                                                       Aokautere.



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[3.5] Capital Expenditure Council has Incurred          [3.6] Council use of Development Contributions               [3.8] Implementation and Review
in Anticipation of Development                          Council will use development contributions only on           It is anticipated that this policy will be updated on
Development contributions will also be required from    the activity for which they are collected. This will         a three yearly basis, or at shorter intervals if Council
development to meet the cost of capital expenditure     be undertaken on an aggregated project basis for             deems it necessary. Any review of the policy will
already incurred in anticipation of development,        each of the activities.                                      take account of:
where Council has assessed it appropriate and                                                                        • Any changes to significant assumptions
reasonable. The capital expenditure already incurred    Where Council anticipates funding from a third                   underlying the Development Contributions Policy
to meet increased growth demand for network             party for any part of the growth component                   • Any changes in the capital development works
infrastructure, reserves and community infrastructure   of the capital expenditure budget, then this                     programme for growth
over the next 20 years is summarised in Table 3 and     proportion is excluded from the total estimated              • Any changes in the pattern and distribution of
will be funded by development contributions.            growth component to be funded by development                     development in the District
                                                        contributions in Table 2. Similarly third party              • Any changes that reflect new or significant
Table 3: Summary of Capital Expenditure Council has     funding received for capital expenditure Council has             modelling of the networks
Incurred in Anticipation of Development                 incurred in anticipation of development has also             • The regular reviews of the Funding and Financial
 TOTAL CAPITAL EXPENDITURE INCURRED IN                  been excluded from figures represented in Table 3.               Policies, and the LTCCP
 ANTICIPATION OF DEVELOPMENT TO BE FUNDED BY                                                                         • Any issues associated with the implementation
 DEVELOPMENT CONTRIBUTIONS 3
                                                        [3.7] Level of Service                                           of the Policy
 Water                                 $1,509,797       The level of service component of Council’s identified       • Any other matters Council considers relevant.
                                                        infrastructure works, for the network activities, relates
 Wastewater                            $3,192,385
                                                        to increasing the level of infrastructure provision          The three year review period of the Policy is
 Roading                               $7,530,545       due to higher public expectation, environmental or           preferred and takes into account the following:
 Stormwater                            $3,364,951       statutory obligation e.g. environmental standards            • The need for certainty of the fee structure over a
                                                        for water quality or technological improvements.                reasonable duration
 City Reserves – Reserves and
                                       $3,346,217       The level of service proportion of the identified            • Alignment with the required statutory update of
 Community Infrastructures
                                                        infrastructure works will not be funded by                      the Council’s Long Term Community Plan.
 Local Reserves – Reserves and                          development contributions. Approved Council
                                       $1,519,902
 Community Infrastructure                               Asset Management Plans for each activity define the
                                                        relevant level of service for that activity.
3 As calculated in January 2009.




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The Policy would only be reviewed at a shorter                                       indicative only and zones may change during the          Statistics for Palmerston North City. The rate of
interval than the preferred three year period where                                  life of this Policy. Where a zone does change, for       accumulating population growth is projected to be
there was a significant change in the projected                                      example from rural to residential, then the principles   0.7% over a 20-year period. The rate of accumulating
growth rates and assumptions, or issues associated                                   of Section 3.2.3 shall apply. Where a rural zone is      household growth is projected to be 1% over a 20-
with the implementation of the Policy arise, or a                                    changed to a residential or non-residential zone         year period. This represents approximately 6480 new
large growth capital work is required that was not                                   those fees attributable to Development Contribution      households in the City.
anticipated.                                                                         Area B shall apply and be based on the dominant
                                                                                     type of development within the new zone.                 Council has used past trends in non-residential
[4] Significant Assumptions of the                                                                                                            land uptake to estimate the area of non-residential
                                                                                     [4.3] Planning Horizons                                  development Council expects each year. This
Development Contributions Policy                                                     A 20-year timeframe is being used as a basis for         represents approximately 4.8ha of non-residential
                                                                                     forecasting growth and applying a development            development in the City.
[4.1] Approach to Methodology                                                        contribution. This is consistent with Council’s asset
In developing a methodology for the Development                                      management planning horizons. Benefits will be           [4.5] Best Available Knowledge
Contributions Policy, Council has taken an                                           distributed over that timeframe with averaging           Development contributions are based on
approach to ensure that the cumulative effect of                                     to avoid the effects of lumpy4 infrastructure            capital expenditure budgets from Council Asset
development is considered from a system-wide                                         works within any given year on development               Management Plans, which in turn feed into the
perspective. This policy considers the specific                                      contributions.                                           Long Term Council Community Plan budgets.
infrastructure demands created by individual                                                                                                  The capital expenditure budgets and projected
developments in the context of Council’s wider                                       [4.4] Projecting Growth                                  estimates of future asset works are based on
community responsibilities as an infrastructure                                      To estimate the number of residential and rural          the best available knowledge at the time of
service provider.                                                                    developments Council expects over a 20-year period,      preparation. The policy will be updated, as
                                                                                     this policy has used, and has maintained consistency     practical, to reflect better information as it becomes
[4.2] Development Contribution Areas                                                 with, Council’s urban growth planning and asset          available, as per Section 3.8 of this policy.
For the purposes of development contributions the                                    management planning data. Projected growth
City is broken into 12 development contribution                                      for residential and rural development is based on
areas based on activity service catchments (Refer                                    a medium growth projection for population and
Map 1 in Appendix A to this policy). This map is                                     households by the New Zealand Department of

4 Lumpy infrastructure is where any given year there are large sums assigned given the discrete nature of the development work.




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[4.6] Growth in the District                                                           activities. A specific explanation of units of demand                     same service
Continued greenfield residential development                                           allocated for each activity is provided in Section 6                   3. Development contributions applicable to a
will take place in kelvin Grove and the Aokautere/                                     of this policy. Clauses 6.6.4 – 6.6.7 provide specific                    particular development are deemed by Council to
Summerhill area units respectively in the short to                                     guidance for measuring units of demand for certain                        be manifestly excessive for any other reason. (This
medium term. Further residential development                                           types of activities and different development                             catchall is inserted because Council recognises that
within existing developed residential areas                                            scenarios e.g. Multi-unit residential development                         there maybe situations not envisaged at the time
within the district is also assumed. Further rural                                     and development in the absence of subdivision.                            this policy was established that justifies remission.
development, in particular rural-residential                                                                                                                     However, where units of demand are created it
development, in the district is assumed to continue                                    [5] Administration of Development                                         would only be in exceptional circumstances that
at current trends. Non-residential development is                                                                                                                Council would accept that a remission is justified).
expected to continue within all relevant zones, in                                     Contributions
particular the North East Industrial Zone. Where                                                                                                              Remissions must be applied for before a
any new Greenfield areas are rezoned prior to an                                       [5.1] Additional Considerations: Remissions,                           development contribution payment is made
update of the Policy Section 4.2 shall apply.                                          Postponements, Refunds and Special                                     to Council. Council will not allow remissions
                                                                                       Circumstances of Development Contributions                             retrospectively.
[4.7] unit of Demand                                                                   [5.1.1] Remissions and Postponements
Different types of measurements are used to                                            At the request of the applicant, the development                       [5.1.3] Postponements
allocate units of demand for each community                                            contribution required on a development may                             Postponement of the land-based5 portion of
facility to residential, rural and non-residential                                     be considered for remission or postponement at                         a development contribution applicable to the
developments (refer to clause 6.6.2 and table                                          Council’s discretion on a case-by-case basis.                          balance lot6 of a development may be allowed in
4 – Units of Demand for Community Facilities for                                                                                                              the following circumstances:
further guidance). Council will demonstrate that                                       [5.1.2] Remissions                                                     • The development contribution is deemed by
it has attributed units of demand to particular                                        Remission (in whole or in part) of development                            Council to be manifestly excessive given that
developments or types of developments on a                                             contributions may be allowed in the following                             no immediate capital works or expenditure are
consistent and equitable basis. For all activities                                     circumstances:                                                            planned or required by Council.
a differentiation is made between residential,                                         1. The development creates no additional unit of
rural and non-residential development due to                                              demand
the demand and use they place on the network                                           2. A contribution has already been paid for the

5 The land-based portion of a development contribution includes those charges that are calculated on the area of land included within a development
6 A balance lot is a remaining allotment not yet intended for development that will be developed at a later date.



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[5.1.4] Postponements Criterion                            [5.1.5] Process for Consideration for Remission            works programme
Postponements must be applied for before a                 or Postponement of Development Contribution            •   Existing uses on the allotment area of the
development contribution payment is made to                Any request for remission or postponement of               proposed development
Council. Council will not allow postponements              a development contribution shall be made by            •   Development contributions paid and/or works
retrospectively.                                           notice in writing, from the applicant to Council,          undertaken and/or land set aside as a result of:
                                                           before development contributions required on the           (i) Development Contributions
The postponed land-based portion of a                      development are paid. Any request for remission or         (ii) Agreements with Council
development contribution will be reassessed at the         postponement shall set out reasons for the request.        (iii) Financial Contributions under the RMA.
next and any subsequent development phase.                 In undertaking the review:                             •   Any other matters Council considers relevant
                                                           • Council shall consider the request as soon as        •   The timing, likelihood and type of capital works
In certain circumstances the Council may choose               reasonably practicable                                  or expenditure planned or required within or
to only postpone part of the land-based portion            • Council may, at its discretion, uphold, reduce,          surrounding the postponed balance lot.
of a development contribution applicable to the               postpone or cancel the original amount of
balance lot.                                                  development contribution required on the            In any case, Council retains the right to uphold the
                                                              development and shall communicate its decision      original amount of development contributions
The postponed land-based portion of the                       in writing to the applicant within 15 working       levied on any particular development.
development contribution that is applied at a                 days of receiving the request
subsequent development phase will be assessed on           • Council will make the decision, by way of            The applicant may request a further review of an
the development contribution charges applicable               delegation to officers to an appropriate level,     officer’s determination on a request for remission or
at that time.                                                 and on the papers.                                  postponement. That review will be undertaken by
                                                                                                                  the Hearings Committee. No further review will be
Postponement of the land-based portion                     Where Council decides to consider such a request       available unless:
of a development contribution required on                  the following matters will be taken into account:      (a) The further request is received by Council
a development does not indicate that the                   • The Development Contributions Policy                      together with the prescribed fee within
development does not create additional units of            • Council’s Funding and Financial Policy                    20 working days of receipt of the officer’s
demand.                                                    • The extent to which the value and nature of               decision; and
                                                              works proposed by the applicant reduces the         (b) The Hearings Committee gives leave for a
                                                              need for works proposed by Council in its capital        further review.




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The Hearings Committee will determine an                      be subject to a development contributions charge          or authorisation that triggered the assessment lapses
application for leave on the papers. The Hearings             under this Policy (the 2009 Policy).                      or expires. If the consent or authorisation lapses
committee may give leave for a further review                                                                           or expires, a new consent will be required in which
only if it is clearly arguable that the development           The development contribution payable during               case the development contribution payable will be
contributions are manifestly excessive.                       the life of this Policy shall not be less than the        re-assessed. If the development contribution is not
                                                              amounts shown in the attached schedule of fees            paid within 12 months of the date the assessment
A Council decision must not have the practical                and shall increase annually on 1 July of each year, in    was made, then the development contribution
effect of altering the methodology of this policy             accordance with the following formula:                    shall increase annually on 1 July each year by the
including the underlying averaging approach                                                                             amount of increase in the Producer’s Price Index –
inherent to the calculation of units of demand.               DC = BC x (PPIC / PPIB)                                   Construction for that year.

[5.1.6] Refunds                                               DC = the development contribution charge for the          Development contributions payable on resource
The refund of money and return of land if                     relevant service or infrastructure payable under the      consents, building consents or service connections will
development does not proceed and refund of                    Policy.                                                   not be re-assessed following an update to the Policy.
money or return of land if not applied to specified
reserves purposes will be applied in accordance               BC = the base development contribution charge             If payment of development contribution is not
with Sections 209 and 210 of the LGA02 as set out             payable under the Policy as set out in the schedule       received Council will exercise its powers outlined
in Appendix B.                                                of fees.                                                  in Section 208 LGA02. Those provisions state
                                                                                                                        that until a development contribution required in
Any refunds will be issued to the consent holder of           PPIC = the Producers Price Index – Construction           relation to a development has been paid or made
the development to which they apply and will not              (Outputs) for the current year.                           under section 198, a territorial authority may:
be subject to any interest or inflationary adjustment.                                                                  (a) in the case of a development contribution
                                                              PPIB = the Producers Price Index – Construction                required under section 198(1)(a), -
[5.2] Amount, Payment and Collection of                       (Outputs)7 for the base year8.                                 i) Withhold a certificate under section 224(c)
Development Contributions                                                                                                        of the Resource Management Act 1991:
Any resource consent, building consent or service             Subject to the Council’s powers under section 208              ii) Prevent the commencement of a resource
connection applications received on or after the date         LGA 02 the development contribution assessed under                 consent under the Resource Management
the 2009/19 LTCCP came into effect (1 July 2009) will         this Policy may be paid at any time until the consent              Act 1991:
7 December 1997 Quarter (=1000),
8 The year the Development Contributions Policy was updated




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(b) in the case of a development contributions             effect (1 July 2006) but before any subsequent          [5.5] Special Circumstances
    required under section 198(1)(b), withhold a           Policy came into effect will be subject to a            Council reserves the discretion to enter into specific
    code of compliance certificate under section 95        development contributions charge under the 2006         arrangements with a developer for the provision
    of the Building Act 2004:                              Policy and will not be reassessed based on the          of particular infrastructure to meet the special
(c) in the case of development contribution                measure of a unit of demand and fees applicable         needs of a development, for example where a
    required under section 198(1)(c), withhold a           under the 2007 Policy or any other Development          development requires a special level of service or
    service connection to the development:                 Contributions Policy adopted by Council.                is of a type or scale which is not readily assessed in
(d) in each case, register the development                 Any resource consent, building consent or service       terms of units of demand. Where a development
    contribution under the Statutory Land Charges          connection applications received prior to the date      is considered to be a special circumstance, an
    Registration Act 1928, as a charge on the title of     the 2007/2008 Annual Plan came into effect (1 July      individual assessment will be undertaken by
    the land in respect of which the development           2007) will not be subject to Producer’s Price Index –   Council to determine the effect of the development
    contribution was required.                             Construction adjustment.                                on the network infrastructure, reserves and
                                                                                                                   community facilities and the development
[5.3] Transitional Provisions                              [5.4] valuing of Land                                   contributions amount payable.
Any resource consent, building consent or service          Council will no longer accept land as a development
connection applications received on or after the           contribution. All land requirements for reserves        For the purposes of clarity, special circumstances
date the interim 2004/2005 – 2013/2014 LTCCP               purposes will be obtained through sale and              include, but are not limited to, the following
came into effect (1 July 2004) but before any              purchase agreements outside of this development         activities:
subsequent Policy came into effect will be subject         contributions policy. Future land requirements for      • Wet industries
to a development contributions charge under the            reserves purposes are budgeted for in Council’s         • Service stations
2004 Policy and will not be reassessed based on            Recreation and Community Facilities Asset               • Fast food outlets
the fees applicable under the 2006 Policy or any           Management Plan. Council will use structure plans       • Wind-farms
other Development Contributions Policy adopted             and where appropriate, designation processes under      • Activities that require specific roading upgrades
by Council.                                                the RMA to identify future reserve requirements.        • Massey University – Turitea Campus.

Any resource consent, building consent or service                                                                  The activities listed above have been identified
connection applications received on or after the                                                                   as special circumstances for one of the following
date the 2006/2007 – 2015/2016 LTCCP came into                                                                     reasons:




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• The potential effect the activity may have on the                                  [5.6] Individual Assessments                                                      [5.7] Non-Residential Brownfield
  capacity of the network infrastructure, reserves                                   Where an individual assessment is undertaken by                                   Redevelopment
  and community infrastructure is likely to be greater                               Council for the purposes of a special circumstance,                               Non-residential brownfield redevelopment9 generally
  than that taken into account when developing a                                     the following matters will be taken into account                                  places negligible increased demand on the capacity
  methodology for the Development Contributions                                      when determining the final development                                            of the network infrastructure. This is because it occurs
  Policy and calculating the development                                             contributions amount payable:                                                     in established areas and the new or altered activities
  contributions charges per unit of demand                                           (i) The schedules of contributions per unit of                                    and buildings established on the site generally place
• The activity is likely to require the provision of                                       demand (fees) applicable at the time the                                    a similar demand on the network infrastructure as
  particular infrastructure to meet the special                                            application is received.                                                    the previous activity or building. For this reason non-
  needs of a development, for example where a                                        (ii) The relative measures of a unit of demand.                                   residential brownfield redevelopment does not create
  development requires a special level of service                                    (iii) The factors used to portion out the 20 year                                 additional units of demand.
  or is of a type or scale which is not readily                                            residential and non-residential growth costs
  assessed in terms of units of demand.                                                    (water, wastewater and roading only)                                        Non-residential brownfield redevelopment will
                                                                                     (iv) Previous contributions paid.                                                 generally occur on allotments that have not paid
Significant adverse effects on infrastructure of                                     (v) The current or previous level of demand placed                                development contributions in the past based
particular developments may be considered as part                                          on the network infrastructure, reserves and                                 on allotment area (2007 Policy or later) or per
of the evaluation of application for resource consent                                      community facilities.                                                       additional allotment (2004 and 2006 Policies).
and may influence consideration of the application                                   (vi) The level of demand the proposed development
in the absence of agreed mitigation with the Council.                                      will place on the network infrastructure,                                   The alteration of an existing non-residential
The applicant shall provide sufficient information                                         reserves and community facilities.                                          building or construction of a new non-residential
to enable the Council to determine whether or not                                    (vii) Any other matters Council considers relevant.                               building may still create additional units of demand
a development is a special circumstance and to                                                                                                                         and be subject to development contributions (refer
enable an individual assessment to be made (see                                                                                                                        to sections 6 and 7 for further guidance) e.g. the
clause 5.6).                                                                                                                                                           extension of a non-residential building established
                                                                                                                                                                       after 1 July 2004 located on an allotment that has
                                                                                                                                                                       not paid any development contributions in the past
9 Brownfield redevelopment means further development of sites that are developed at or over 40% site coverage, or were at sometime in the past at or over 40% site     10 Massey University Turitea Campus means land that is occupied by Massey
  coverage, provided the buildings located on the site were established prior to 1 July 2004, and specifically includes:                                                  University whether leasehold or freehold that is zoned Institutional within
  - further subdivision of the site;                                                                                                                                      the Palmerston North City District Plan. Massey University Turitea Campus
  - alterations and additions to existing buildings; and                                                                                                                  does not include the Hokowhitu campus located on Centennial Drive,
  - the demolition of existing buildings and construction of new buildings.                                                                                               Palmerston North.




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based at the subdivision stage.                            [6] Community Facilities: Network                       Water Network’. The anticipated future works on
                                                                                                                   the ‘Integrated Water Network’ in each area are
The applicant shall provide sufficient information
                                                           Infrastructure, Reserves and                            identified in the Palmerston North City Council’s
to enable the Council to determine whether or              Community Infrastructure                                Water Asset Management Plan and the values are
not a development is a non-residential brownfield                                                                  summarised in Table 2 in Section 3.4 of this Policy.
redevelopment.                                             [6.1] Water
                                                           The water reticulation network is made up of two        [6.1.2] Who Gets Charged?
[5.8] Massey university – Turitea Campus                   service catchments, Palmerston North urban area         Under the above outlined method, all new
The Massey University Turitea Campus10 is                  and Ashhurst urban area. Each of the defined            developments in the service catchments will be
made up of a number of different sites. For the            service catchments of the water reticulation system     subject to a development contribution within
purposes of clause 5.7 (Non-Residential Brownfield         is characterised by interdependent components.          identified development contribution areas. The
Redevelopment), the various sites that make up             For the purposes of development contributions, the      only exclusions are:
the Massey University Turitea Campus shall be              water reticulation network is optimised to include      • developments in the rural area that are
considered as one site.                                    only those components necessary to the effective           not connected to the City water systems
                                                           operation of the network-wide system.                      (Development Contributions Area A).
[5.9] Tax – GST                                            Interdependence within the network creates a need       • developments in Ashhurst that have a separate
Development contributions required will incur a            for integrated management of the operation of these        water network on which no future growth works
12.5% Goods and Services Tax upon assessment of            necessary components. As such, the management              are planned (Development Contributions Area C).
contribution payable.                                      of this network is undertaken with network-wide
                                                           supply and demand issues in mind. This network is       [6.1.3] Justification for Approach
[5.10] Cross Area Development                              referred to as the ‘Integrated Water Network’ and its   All growth works on the ‘Integrated Water Network’
In the situation where a proposed development              components in the service catchments are defined        are considered to service any allotment within the
lies partially in each of two or more development          visually on Map 2 in Appendix C.                        specified boundary, up to a uniform service level,
contribution areas, the development contribution                                                                   at any time. All components of the integrated
for the entire development will be calculated based        [6.1.1] Development Contributions Approach              networks also have excess capacity that will
on the contribution applicable to the development          A development contribution for the identified           cater for anticipated future capacity uptake. Any
contribution area that contains the majority of the        water service catchments will be based on the           identified capital development growth-related
development allotment area.                                value of future identified growth works on each         works undertaken on the identified integrated
                                                           of the service catchments in the ‘Integrated            network add to the capacity of the existing



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integrated network directly.                        The measure for a non-residential unit of demand is:       Interdependence within the network creates
                                                    • per 100m2 of allotment area at subdivision; or           a need for integrated management of the
[6.1.4] unit of Demand                              • per 100m2 of Gross Floor Area (GFA) at building          operation of these necessary components. As
The development contribution is subject to a form     consent or service connection.                           such, the management of the identified network
of measurement to allocate units of demand to                                                                  is undertaken with network-wide supply and
development. This allows for differences between    The measures for units of demand is summarised at          demand issues in mind. This network is referred
residential, rural and non-residential demand.      the end of this section in Table 4.                        to as the ‘Integrated Wastewater Network’ and
                                                                                                               its components are defined visually on Map 3 in
The following factors have been used to portion     Refer also to clause 5.5 (Special Circumstances)           Appendix D.
out the 20 year residential and non-residential     and clause 5.7 (Non-Residential Brownfield
growth costs for water:                             Redevelopment).                                            [6.2.1] Development Contributions Approach
• an average residential – non-residential water                                                               The development contribution is based on the
   demand ratio                                     Further guidance on measuring units of demand is           value of future identified growth works on each
• the average number of equivalent household        provided in sections 6.6 and 7.                            of the service catchments in the ‘Integrated
   units per hectare                                                                                           Wastewater Network’. The anticipated future
• the residential and non-residential growth        [6.2] Wastewater                                           works on the ‘Integrated Wastewater Network’ are
   projections.                                     The wastewater reticulation network is made up             identified in the Palmerston North City Council’s
                                                    of two discrete service catchments, Palmerston             Wastewater Asset Management Plan and the value
All residential and non-residential development     North urban area and Ashhurst urban area. Each of          is summarised in Table 2 in Section 3.4 of this Policy.
is assumed to create a unit of demand. All rural    the defined service catchments of the wastewater
development is assumed to create zero units of      system is characterised by a combination of                [6.2.2] Justification for Approach
demand.                                             interdependent components. For the purpose                 All growth works on the ‘Integrated Wastewater
                                                    of development contributions, the wastewater               Network’ are considered to service any
The measure for a residential unit of demand is:    network is rationalised to include only those              allotment within the specified boundary, up to a
• per additional allotment at subdivision; or       components necessary to the effective operation of         uniform service level, at any time. All necessary
• per connected equivalent household unit at        the network-wide system.                                   components of the integrated networks also have
  building consent or service connection.                                                                      excess capacity that will cater for anticipated
                                                                                                               future capacity uptake. Any identified capital
                                                                                                               development growth-related works undertaken



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on the identified integrated network add to the            • an average residential – non-residential             Further guidance on measuring units of demand is
capacity of the existing integrated network directly.        wastewater demand ratio                              provided in sections 6.6 and 7.
                                                           • the average number of equivalent household
[6.2.3] Who Gets Charged?                                    units per hectare                                    [6.3] Roading
Under the above outlined method, all new                   • the residential and non-residential growth           The roading network service is contained within
developments in the service catchments will be               projections.                                         the Palmerston North City Council territorial
subject to a development contribution within                                                                      boundary. The roading network is characterised
identified development contribution areas. The             All residential and non-residential development        by a combination of interdependent components.
only exclusions (at present) are:                          is assumed to create a unit of demand. All rural       Interdependence within the network creates a need
• developments in the rural area that are not              development is assumed to create zero units of         for integrated management of operation of these
   connected to the City wastewater systems                demand.                                                components. As such, the management of the
   (Development Contributions Area A)                                                                             network is undertaken with network-wide supply
• developments in Ashhurst that have a separate            The measure for a residential unit of demand is:       and demand issues in mind.
   wastewater network on which no future growth            • per additional allotment at subdivision; or
   works are planned (at present). (Development            • per connected equivalent household unit at           For the purposes of development contributions, the
   Contributions Area C.)                                    building consent or service connection.              roading network is considered to be an unrestricted
                                                                                                                  system. This means that the roading network can
[6.2.4] unit of Demand                                     The measure for a non-residential unit of demand is:   be accessed by anyone at anytime in the City. The
The development contribution is subject to a form          • per 100m2 of allotment area at subdivision; or       roading network is defined visually on Map 4 in
of measurement to allocate units of demand to              • per 100m2 of GFA at building consent or service      Appendix E.
development. This allows for differences between             connection.
residential, rural and non-residential demand.                                                                    [6.3.1] Development Contributions Approach
                                                           The measures for units of demand is summarised at      Development contributions are applied citywide
Production of wastewater correlates closely                the end of this section in Table 4.                    and are based on the value of future identified
with the consumption of water. Therefore the                                                                      growth capital development works on the roading
following factors have been used to portion out            Refer also to clause 5.5 (Special Circumstances),      network. The anticipated future growth capital
the 20 year residential and non-residential growth         clause 5.7 (Non-Residential Brownfield                 development works are identified in the Palmerston
costs for wastewater:                                      Redevelopment).                                        North City Council’s Roading Asset Management




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Plan and the values are summarised in Table 2          capital development works undertaken on the               • per 100m2 of GFA at building consent or service
in Section 3.4 of this Policy. The development         network enhance the capacity of the existing                connection.
contribution for the roading network is based          integrated network directly.
on the proportion of these works that have been                                                                  The measure for a rural (other) unit of demand is:
assessed as the result of increased demand             [6.3.4] unit of Demand                                    • per 100m2 GFA at building consent or service
generated by new residential, rural and non-           The development contribution is subject to a form           connection.
residential development.                               of measurement to allocate units of demand to
                                                       development. This allows for differences between          The measures for units of demand is summarised at
The proportion of future growth works resulting        residential, rural and non-residential demand.            the end of this section in Table 4.
from increased demand attributable to new                                                                        Refer also to clause 5.5 (Special Circumstances)
residential and non-residential development is         The following factors have been used to portion           and clause 5.7 (Non-Residential Brownfield
determined by Council from data collected for          out the 20 year residential and non-residential           Redevelopment).
Palmerston North City Council’s Transportation         growth costs for roading:
Management Plan.                                       • average vehicle trip generation data for                Further guidance on measuring units of demand is
                                                          residential and non-residential activities             provided in sections 6.6 and 7.
[6.3.2] Who Gets Charged?                              • the residential and non-residential growth
Under the above outlined method, all new                  projections.                                           [6.4] Stormwater
developments in all development contribution                                                                     The stormwater network is defined using a
areas will be subject to a development contribution    All residential, non-residential and rural                catchment based approach because it is dependent
for the roading network.                               development is assumed to create a unit of demand.        on natural geographical features and events. The
                                                                                                                 stormwater network is characterised by a number
[6.3.3] Justification for Approach                     The measure for a residential and rural (dwellings)       of relatively autonomous service catchments
All components included in the development             unit of demand is:                                        and within each of these is an integrated system
contribution for the roading network are               • per additional allotment at subdivision; or             of interdependent network components. For
considered to service any allotment within the         • per connected equivalent household unit at              the purposes of this policy there are nine
specified boundary, up to a uniform service level,       building consent or service connection.                 defined service catchments that make up nine
at any time. The current network also has excess                                                                 development contribution areas.
capacity that has been planned to and will cater for   The measure for a non-residential unit of demand is:
anticipated future capacity uptake. Any identified     • per 100m2 of allotment area at subdivision; or



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Stormwater infrastructure development within               [6.4.2] Who Gets Charged?                              will apply development contributions to partially
service catchments is based on a defined level             Under the above outlined method, all new               developed service catchments only. Identified
of service, as outlined in Council’s Stormwater            developments in the development contribution           partially developed catchments are illustrated on
Asset Management Plan, under a fully developed             areas F, G, H, I, J, k and L will be subject to a      Map 5 & 6 in Appendices F & G.
catchment scenario. For the purpose of                     development contribution. New developments in
development contributions specific demand                  other catchments will not be required to pay any       [6.4.4] unit of Demand
analysis has been undertaken on existing service           development contributions for stormwater.              The development contribution is subject to a form
catchments and infrastructure requirements have                                                                   of measurement to allocate units of demand to
been identified as a result.                               [6.4.3] Justification for Approach                     development. This allows for differences between
                                                           Demand investigations, undertaken by Council,          residential, rural and non-residential demand.
[6.4.1] Development Contributions Approach                 tested stormwater catchments under a fully             The allotment area of development and hence
A stormwater development contribution for                  developed scenario. Investigations suggested that      information related to site coverage and
each of the nine service catchments is based on            additional development within existing developed       impermeable surface area has been used to
the value of components to be located within               stormwater catchments would have little effect on      calculate a unit of demand.
each in order to meet the defined level of service         the demand for additional stormwater infrastructure.
under the fully developed catchment scenario.              In contrast, additional development in partially       All residential development is assumed to create
Anticipated future components are identified in            developed catchments had a significant effect on       one unit of demand. All rural development is
Council’s Stormwater Asset Management Plan                 the demand for additional stormwater infrastructure.   assumed to create zero units of demand. All non-
capital development budgets.                                                                                      residential development is assumed to create two
                                                           Only Aokautere and kelvin Grove stormwater             units of demand.
Current and planned future stormwater                      service catchments will be subject to development
infrastructure provided in the nine service                contributions for stormwater as other identified       The measure of a unit of demand is per 700m2 of
catchments is anticipated to cater for the entire          stormwater catchments have level of service            allotment area.
catchment when it is fully developed. Thus,                deficiencies that require remedy before it is
in partially developed service catchments,                 appropriate to further develop infrastructure          The measures for units of demand is summarised at
infrastructure provision identified will specifically      for growth, and thus apply a development               the end of this section in Table 4.
cater for growth in that service catchment.                contribution in these catchments. As a result of the
                                                           findings of these demand investigations Council        Refer also to clause 5.5 (Special Circumstances)




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and clause 5.7 (Non-Residential Brownfield            recreational facilities to the city community.            [6.5.4] Who Gets Charged?
Redevelopment).                                       Citywide reserves are destination reserves that           All residential and rural developments (dwellings
                                                      are accessed for recreational purposes from all           and additional allotments only) in all development
Further guidance on measuring units of demand is      areas of the City and people within the Palmerston        contribution areas will pay a citywide development
provided in sections 6.6 and 7.                       North City boundary. The citywide reserves and            contribution for ‘citywide’ reserves and community
                                                      community infrastructure service catchment is             infrastructure.
[6.5] Reserves and Community Infrastructure           illustrated on Map 7 in Appendix H.
The Palmerston North City reserves and                                                                          All residential and non-residential developments
community infrastructure asset comprises two          [6.5.2] Local Reserves and Community                      within the kelvin Grove and Aokautere/Summerhill
distinct parts. They are: land zoned as reserve and   Infrastructure                                            development contributions areas will pay a
identified for recreational purposes (“reserves”),    Identified local reserves and community                   development contribution for ‘local’ reserves and
and infrastructure associated with that zoned         infrastructure primarily serve a local area. The          community infrastructure.
land (“community infrastructure”). Community          primary purpose of these assets is to provide
infrastructure includes capital developments and      amenity for local areas by breaking up the urban          [6.5.5] Justification for Approach
facilities associated with the identified reserves,   environment and also to provide for passive               The assumed demand for citywide reserves and
such as playgrounds, car parks, and fences.           recreation. Local reserves are not considered             community infrastructure is created and driven
                                                      destination type reserves. Local reserves and             as a result of additional people, or residential
The reserves and community infrastructure assets      community infrastructure service catchments are           households, being located within the Palmerston
are also distinguished at two levels, these being     illustrated on Map 8 & 9 in Appendices I & J.             North territorial boundary. As citywide reserves and
“citywide” and “local”.                                                                                         community infrastructure are destination reserves,
                                                      [6.5.3] Development Contributions Approach                increased demand can come from anywhere
RESERvES AND COMMuNITY INFRASTRuCTuRE                 A city development contribution is based on the           within the defined city boundary from both
        “Citywide”      “Local”                       value of identified future provision of citywide          residential and rural development. Non-residential
                                                      reserves and community infrastructure.                    development is generally assumed to have no
[6.5.1] Citywide Reserves and Community                                                                         impact on the demand for citywide reserves and
Infrastructure                                        A local development contribution is based on the          community infrastructure networks.
The primary purpose of citywide reserves and          value of identified future provision of local reserves
community infrastructure is to provide active         and community infrastructure.




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As one of the key purposes of ‘local’ reserves and         A development contribution for community             For citywide reserves and community
community infrastructure is to provide amenity by          infrastructure must not exceed the amount            infrastructure, all residential and rural development
breaking up the urban environment, it is assumed           calculated by multiplying the cost of the            (dwellings and allotments only) is assumed to
for the purposes of development contributions              relevant unit of demand calculated under             create one unit of demand. The measure of a unit
that the key driver and demand for the provision of        clause 1 of schedule 13 by the number of units       of demand for citywide reserves and community
such ‘local’ assets is the take up of land in a defined    of demand assessed for a development or type         infrastructure is per additional allotment at
local area. While local population increase within         of development, as provided for in clause 2 of       subdivision or per equivalent household unit at
a defined local area does have a bearing on the            Schedule 13 of the LGA02.                            building consent or service connection.
provision of local reserves, ultimately there is only
a finite land area in which to provide local reserves.     [6.5.7] unit of Demand                               For local reserves and community infrastructure,
Residential and non-residential development are            The development contribution is subject to a form    all residential development is assumed to create
both considered to have an impact on the provision         of measurement to allocate units of demand to        one unit of demand and all non-residential
of local reserves because of the development of            development. This allows for differences between     development is assumed to create two units of
land area and the need for local reserves to provide       residential, rural and non-residential demand.       demand (Aokautere / Summerhill and kelvin Grove
amenity by breaking up the urban environment               For citywide reserves, information regarding the     areas only). All rural development is assumed to
and provide for passive recreation needs.                  average resident populations and households          create zero units of demand. The measure of a
                                                           has been used to calculate a unit of demand for      unit of demand for local reserves and community
[6.5.6] Legislative Considerations                         citywide reserves and community infrastructure.      infrastructure is per 700m2 of allotment area.
A development contribution for reserves may
not exceed the greater of 7.5% of the value of             For local reserves, information regarding the        The measures for units of demand is summarised at
additional allotments created by a subdivision and         average allotment area of development and            the end of this section in Table 4.
the value equivalent of 20 square metres of land           hence information related to public access reserve
for each additional household unit created by the          areas available has been used to calculate a unit    Refer also to clause 5.5 (Special Circumstances)
development.                                               of demand for local reserves and community           and clause 5.7 (Non-Residential Brownfield
                                                           infrastructure.                                      Redevelopment).

                                                                                                                Further guidance on measuring units of demand is
                                                                                                                provided in sections 6.6 and 7.




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[6.6] units of Demand for All Community               [6.6.2] Measuring units of Demand                            Roading
Facilities Requiring a Development Contribution       Different types of measurements are used to                  Residential: The measure of a residential unit of
                                                      allocate units of demand for each community                  demand for roading is per additional allotment at
[6.6.1] Key Criterion in Assessing Contributions      facility to residential, rural and non-residential           subdivision or per connected equivalent household
under the Policy                                      developments.                                                unit at building consent or service connection.
The key criterion that Council uses to assess
whether a development contribution is payable on      The measures for units of demand is summarised at            Rural: The measure of a rural (dwellings) unit of
a proposed development is ‘units of demand’ and       the end of this section in Table 4.                          demand for roading is per additional allotment at
the characteristics of that unit of demand.                                                                        subdivision or per equivalent household unit at
                                                      Further guidance on measuring units of demand is             building consent or service connection.
Units of demand can be assessed at subdivision,       provided in clauses 6.6.4 - 6.6.7 and section 7.             The measure for a rural (other) unit of demand for
building consent and service connection stage.                                                                     roading is per 100m2 GFA.
                                                      Water and Wastewater
Units of demand can also be created outside of        Residential: The measure of a residential unit of            Non-Residential: The measure of a non-residential
the subdivision process i.e. an additional dwelling   demand for water and wastewater is per additional            unit of demand for roading is per 100m2 of
on an existing lot. Therefore the Policy enables      allotment at subdivision or per connected                    allotment area at subdivision or per 100m2 of GFA
Council to assess units of demand created at the      equivalent household unit at building consent or             at building consent or service connection.
building and service connection stage also.           service connection.
                                                      Rural: Not applicable                                        Citywide Reserves and Community Infrastructure
It is Council’s preference to assess and apply a                                                                   Residential: The measure of a residential unit of
development contribution at the first stage of        Non-Residential: The measure of a non-residential unit       demand for Citywide Reserves and Community
development, namely the subdivision consent           of demand for water and wastewater is per 100m2 of           Infrastructure is per additional allotment at
stage. The reasons for this are set out in Section    allotment area at subdivision or per 100m2of GFA at          subdivision or per equivalent household unit at
3.2.1 of this Policy and Council will apply this      building consent or service connection.                      building consent or service connection.
preference consistently.
                                                      Note: Whether a lot or site has existing services on site    Rural: The measure of a rural unit of demand for
                                                      or at the boundary does not necessarily determine an         Citywide Reserves and Community Infrastructure
                                                      existing unit of demand i.e. the placement of a new          is per additional allotment at subdivision or per
                                                      dwelling on a site with existing services.



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equivalent household unit at building consent or                                   [6.6.3] Applying units of Demand
service connection.                                                                Individual developments may create multiple
                                                                                   units of demand for any of the given community
Non-Residential: Not applicable.                                                   facilities. To determine the number of units of
                                                                                   demand created by development on a particular
Stormwater and Local Reserves and                                                  community facility the unit of demand factor is
Community Infrastructure                                                           multiplied by the number of measures associated
Residential and Non-Residential: Access to                                         with the development as defined in 6.6.2 and
stormwater, local reserves and community                                           shown in Table 4. Examples of applying the units of
infrastructure is limited to the land area within specific                         demand to development can be found in Section
service catchment areas. Therefore the measure for                                 10 of this policy.
a residential and non-residential unit of demand
for stormwater, local reserves and community                                       Table 4 gives a summary of the assessed units of
infrastructure is per square meter of allotment                                    demand for residential, rural and non-residential
area developed. Each equivalent household unit is                                  development for each of the community facilities
assumed to occupy 700m2 of allotment area11.                                       and should be read in conjunction with the
                                                                                   Residential, Rural and Non-Residential Schedule of
Rural: Not applicable.                                                             Contributions per Unit of Demand contained within
                                                                                   section 8 of the Policy.

                                                                                   The table also illustrates the measure associated
                                                                                   with a unit of demand for each of the community
                                                                                   facilities.




11 The number of units of demand created is the total allotment area divided by
   the measure of 700m2 where the allotment area is greater or lower than 700m2.




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Table 4 – Units of Demand for Community Facilities


                                         UNIT OF DEMAND
                                                                                                                                           MEASURE:
 COMMUNITY                                                       NON-                                                            BUILDING CONSENT AND SERVICE
 FACILITIES                RESIDENTIAL          RURAL         RESIDENTIAL                MEASURE: SUBDIVISION                             CONNECTION

 Water                     1                0                 1                Residential: Per Additional Allotment        Residential: Per Connected EHU
                                                                               Rural: Not Applicable                        Rural: Not Applicable
                                                                               Non-Residential: Per 100m2 of Allotment Area Non-Residential: Per 100m2 GFA*

 Wastewater                1                0                 1                Residential: Per Additional Allotment        Residential: Per Connected EHU
                                                                               Rural: Not Applicable                        Rural: Not Applicable
                                                                               Non-Residential: Per 100m2 of Allotment Area Non-Residential: Per 100m2 GFA*

 Stormwater                1                0                 2                Residential: 700m2 of Allotment Area         Residential: 700m2 of Allotment Area
                                                                               Rural: Not Applicable                        Rural: Not Applicable
                                                                               Non-Residential: 700m2 of Allotment Area     Non-Residential: 700m2 of Allotment Area
 Roading                   1                1                 1                Residential: Per Additional Allotment        Residential: One EHU Rural (Dwellings): One
                                                                               Rural: Per Additional Allotment              EHU
                                                                               Non-Residential: Per 100m2 of Allotment Area Rural (Other): Per 100m2 GFA*
                                                                                                                            Non-Residential: Per 100m2 GFA*
 Citywide Reserves         1                1                 0                Residential: Per Additional Allotment        Residential: One EHU Rural (Dwellings): One
 and Community                                                                 Rural: Per Additional Allotment              EHU
 Infrastructure                                                                Non-Residential: Not Applicable              Rural (Other): Not Applicable
                                                                                                                            Non-Residential: Not Applicable
 Local Reserves            1                0                 1                Residential: 700m2 of Allotment Area         Residential: 700m2 of Allotment Area
 and Community                                                                 Rural: Not Applicable                        Rural: Not Applicable
 Infrastructure                                                                Non-Residential: 700m2 of Allotment Area     Non-Residential: 700m2 of Allotment Area


* For fees applied at the building consent stage for non-residential development a
  minimum of 100m2 GFA, or a minimum increase of 100m2 GFA, applies.



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[6.6.4] Measuring units of Demand – Specific               measure of an equivalent household unit, the            Small Dwellings: Where a new dwelling is
Guidance, Principles and Notes (Residential)               multi-unit or communal residential development          constructed that is below 100m2 Gross Floor Area
                                                           measure of equivalent household units and the           and the development contributions for the dwelling
Multi-unit or Communal Residential Development:            accommodation motel measure of equivalent               are levied by Council at the building consent or
For the purposes of establishing the number of             household units may be used to recognise the            service connection stage, the following calculation
equivalent household units that apply for multi-           specific composition of a particular development.       shall apply for the purposes of establishing the
unit or communal residential developments, the             For example, a retirement village that includes         equivalent household unit of the dwelling:
maximum possible number of occupants on any                a combination of independent dwellings                  GFA of the dwelling / 100 = equivalent household unit.
given night is to be divided by 2.6, which is the          and communal living arrangements or an
average number of occupants per dwelling in                accommodation motel that includes a combination         Refer to the residential development contributions
Palmerston North (2006 Census).                            of fully serviced units, hostel accommodation and a     assessment flowchart for further guidance.
                                                           managers unit.
Accommodation Motel: For the purposes of                                                                           [6.6.5] Measuring units of Demand – Specific
establishing the number of equivalent household            Retirement Villages: For the purposes of                Guidance, Principles and Notes (Rural)
units that apply for accommodation motels, the             establishing the number of equivalent household         It is assumed that each additional rural allotment
number of individual units that meet the definition        units that apply for retirement villages, the total     may accommodate an additional dwelling. Each
of an equivalent household unit is to be multiplied        number of units within a development that meet the      additional rural allotment therefore creates one
by 0.48 (48%), which is the average occupancy              definition of a dwelling shall be multiplied by 0.44.   unit of demand for roading and citywide reserves
rate for Palmerston North (Statistics New Zealand          Any part of a retirement village that does not meet     and community infrastructure.
Accommodation Survey). For units that do not               the definition of a dwelling shall be assessed as a
meet the definition of an equivalent household             multi-unit or communal residential development.         While most new rural development is likely to be
unit, the multi-unit or communal residential                                                                       dwellings, occasionally a more general rural activity
development measure can be used in combination                                                                     may establish in the rural area e.g. a rural industry or
with the average occupancy rate multiplier (0.48).                                                                 milking shed. These types of activities are identified
                                                                                                                   in table 4 above as Rural (Other) and attract one unit
In determining the final number of equivalent                                                                      of demand per 100m2 GFA at the building consent or
                                                                                                                   service connection stage for roading only.
household units that apply to a particular
development, a combination of the general




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For the purpose of assessing units of demand for                                         Where the underlying allotment has not paid any                                    • Buildings established or approved between
rural developments, Rural (Other) does not include                                       development contributions in the past based                                          1 July 2004 and 30 June 2007 (2004 and 2006
accessory buildings.                                                                     on allotment area (2007 Policy or later) or per                                      Policies) are not assumed to have paid in full
                                                                                         additional allotment (2004 and 2006 Policies) and                                    should further development occur. Further
Refer to the residential development contributions                                       a building has never been located on the site, the                                   development of these buildings may create
assessment flowchart for further guidance.                                               entire site is subject to additional units of demand.                                additional units of demand.
                                                                                         Where development contributions are applied at
[6.6.6] Measuring units of Demand – Specific                                             the subdivision stage they will be assessed and                                    • Buildings established or approved after 1 July 2007
Guidance, Principles and Notes (Non-Residential)                                         measured based on allotment area (per 100m2).                                        (2007 Policy or later) that have paid development
General: All new non-residential subdivisions are                                                                                                                             contributions at the building consent or service
assessed and measured based on allotment area                                            Non-residential boundary adjustments and                                             connection stage based on the GFA measure are
(per 100m2). Subsequent non-residential building                                         amalgamations will be assessed on a case by case                                     not assumed to have paid in full should further
development on sites that have paid development                                          basis. Refer to clause 11.1 Boundary Adjustments /                                   development occur. Further development of these
contributions based on allotment area (2007 Policy                                       Amalgamations for further guidance.                                                  buildings may create additional units of demand.
or later) or per additional allotment (2004 and                                                                                                                             • A new or additional building on an allotment
2006 Policies) are assumed to have paid in full and                                      Refer to the non-residential development                                             with remaining development potential is
therefore do not create additional units of demand.                                      contributions assessment flowchart on page 121                                       assumed to create additional units of demand.
                                                                                         for further guidance.                                                              • As provided by clause 5.7 of this Policy, non-
Refer to the non-residential development contributions                                                                                                                        residential brownfield redevelopment does not
assessment flowchart on page 121 for                                                     Building Consent or Service Connection: Where the                                    create additional units of demand.
further guidance.                                                                        underlying allotment of a particular development
                                                                                         has not paid any development contributions in the                                  Where the underlying allotment has not paid any
Subdivision: Where the underlying allotment                                              past based on allotment area (2007 Policy or later) or                             development contributions in the past based
has not paid any development contributions in                                            per additional allotment (the 2004 and 2006 Policies)                              on allotment area (2007 Policy or later) or per
the past based on allotment area (2007 Policy or                                         and there is or was a building located on the site,                                additional allotment (2004 and 2006 Policies) and a
later) or per additional allotment (2004 and 2006                                        the following principles shall apply when measuring                                building has never been located on the allotment, it
Policies) and there is (or was) a building located                                       units of demand:                                                                   is assumed that development on the site will create
on the site, the remaining lot12 is to be excluded                                                                                                                          additional units of demand.
from the final allotment area calculation.
12 A remaining lot is an allotment created as part of a new subdivision that remains with or provides for an existing building located on the original allotment.



PART TWO                                                                                                                                                                                                                        119
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Where development contributions are applied at the         [6.6.7] Measuring units of Demand – Specific
building consent or service connection stage they          Guidance, Principles and Notes (General)
will be assessed and measured based on GFA (per            Stormwater and Local Reserves:
100m2) or the overall increase in GFA (per 100m2).         Building development in the absence of
For fees applied at the building consent stage             Subdivision Where building development occurs
for non-residential development a minimum of               in the absence of subdivision in a development
100m2 GFA, or a minimum increase of 100m2 GFA,             contributions area that is subject to local
applies to ensure small insignificant buildings and        reserves and stormwater charges, the total area
alterations and additions to existing buildings are        of the underlying allotment will determine the
not levied development contributions. This will            stormwater and local reserves fees applicable.
also ensure the application of the Policy does not
become administratively onerous.

Refer to the non-residential development
contributions assessment flowchart on page 121
for further guidance.

Non-Residential Brownfield Redevelopment and
Special Circumstances: Refer to clauses 5.5 to 5.7
for further guidance on non-residential brownfield
redevelopment and special circumstances.

Refer to the non-residential development
contributions assessment flowchart for further
guidance.




120                                                                                                          10 YeAR PlAn 2009/19
           [7] Development Contributions Assessment Flowcharts
           The following flowcharts have been included in the Policy to assist with determining whether




PART TWO
           or not development contributions fees apply. The flowcharts are for guidance purposes only.

           [7.1] Residential Development Contributions Assessment Flowchart




                                                                                                                                                        The development is not
                                         Is the                                                 Is the dominant                                       a residential development.
                                  development in the                      NO                  nature of the activity               NO             Refer to the rural or non-residential
                                   residential zone?                                               residential?                                       development contributions
                                                                                                                                                        assessment flowcharts.



                                                           YES                          YES




                    DevelopmeNT                                          Is the                              Establish the existing number
                                                                 development a special                        of units of demand (EHU’s or
              CoNTRibuTioN fees apply.            YES                                             NO
                                                                    circumstance?                            allotments) before proceeding
                individual assessment                                                                             with the assessment.




                                                        Has
                                                 the underlying
                                                allotment or any                                                       Is there an
                                            building located on the                       YES                 increase in the final number           NO
                                                                                                                                                                        No DevelopmeNT
                                           allotment paid any other                                               of units of demand?                               CoNTRibuTioN fees apply.
                                             form of contributions
                                                   in the past?



                                                     YES


                                                                                                                      DevelopmeNT
                                        Take past contributions into                                            CoNTRibuTioN fees apply.
                                      account when determining the                                          levy development contribution fees
              NO                     final development contributions                                        in accordance with the specific eHu
                                                fee payable.                                                          measurement.
                                                                                                                       (clause 6.6.4)


                                                                                                                           YES



                                                     Is the                                                             Is the
                                                                                      BUILDING                     development an
                                             development at the                      CONSENT OR
                                         subdivision, building consent                                         accommodation motel or
                                                                                       SERVICE
                                            or service connection                                                multi-unit residential
                                                                                     CONNECTION
                                                    stage?                                                          development?




                                                 SUBDIVISION


                                                  DevelopmeNT
                                           CoNTRibuTioN fees apply.
                               levy development contribution fees per additional
                              allotment (subdivision) or per eHu (building consent
                                  or service connection) for water, wastewater,                        NO
                                roading and citywide reserves and per 700m2 for
                                 stormwater and local reserves where applicable
                                          (Kelvin Grove and aokautere).
121
                       [7.2] Rural Development Contributions Assessment Flowchart




122
                                                                  The development is not
                                      Is the                        a rural development.
                              development in the        NO      Refer to the non-residential
                              rural zone (Area A)?              or residential development
                                                                 contributions assessment
                                                                         flowcharts.



                                      YES




                                     Is the                   Establish the existing number
                             development a special      NO         of units of demand
                                circumstance?                     (EHU’s or allotments)




                                      YES



                        DevelopmeNT CoNTRibuTioN fees
                                                                   Is there an increase                     No Development
                                     apply.                                                    NO
                                                                 in the final number of                  Contribution fees apply
                             individual assessment                  units of demand?




                                                                           YES



                                                                            Has
                                                                     the underlying
                                                                    allotment or any                    Take past contributions into
                                                                building located on the        YES    account when determining the
                                                               allotment paid any other              final development contributions
                                                                 form of contributions                          fee payable.
                                                                       in the past?



                                                                            NO




                                                                                                                DevelopmeNT
                                                                        Is the                           CoNTRibuTioN fees apply.
                                                                    development a              YES   levy development contribution fees
                                                                     subdivision?                    per additional allotment for roading
                                                                                                            and citywide reserves.



                                                                            NO




                                                                                                                DevelopmeNT
                                                                        Is the                           CoNTRibuTioN fees apply.
                                                                    development a              YES   levy development contribution fees
                                                                    new dwelling?                     per additional eHu for roading and
                                                                                                              citywide reserves.



                                                                            NO


                                                                                                               DevelopmeNT
                                                                The development is some
                                                             other type of rural development             CoNTRibuTioN fees apply.
                                                                   eg Rural industry or              levy development contribution fees
                                                                      milking shed.                      per 100m2 Gfa for roading.
10 YeAR PlAn 2009/19
           [7.3] Non-Residential Development Contributions Assessment Flowchart




PART TWO
                                                                                                                                               The development is not
                         Is the                                                                                                            a non-residential development.
                   development a                                            Is the dominant nature of
                                                          NO                                                             NO                Refer to the residential or rural
                 non-residential zone?                                     the activity non-residential?
                                                                                                                                             development contributions
                                                                                                                                               assessment flowcharts.



                           YES                            YES



                                                                                      Has
                                                                                the underlying                                               No aDDiTioNal DevelopmeNT
                                                                         allotment paid development                                            CoNTRibuTioN fees apply.
                        Is the
                                                                       contributions in the past at the                                   fees were already levied for the same
                development a special                   NO                                                                     YES
                                                                   subdivision stage based on an additional                                 purpose at the subdivision stage.
                   circumstance?
                                                                       allotment (2004 & 2006 Policies)
                                                                               or allotment size
                                                                                 (2007 Policy)?


                           YES                                                          NO


                      DevelopmeNT
                CoNTRibuTioN fees apply.                                                  Has
                  individual assessment                                            the underlying
                                                                                  allotment or any                                  Take past contributions into
                                                                              building located on the              YES            account when determining the
                                                                                 site paid any other                             final development contribtuions
                                                                               form of contributions                                        fee payable.
                                                                                     in the past?
                     DevelopmeNT CoNTRibuTioN
                              fees apply.
              levy development contribution fees based on
               allotment area for the entire site for water,
            wastewater and roading and stormwater and local
                       reserves where applicable                                        NO
                     (Kelvin Grove and aokautere).


                                  NO


                                                                                       Is the
                                                                                                                    BUILDING
                          Is or was there                                      development at the                  CONSENT OR                  Is or was there
                      an existing building on            SUBDIVISION       subdivision, building consent             SERVICE               an existing building on                  NO
                              the site?                                       or service connection                CONNECTION                      the site?
                                                                                      stage?


                                 YES                                                                                                                   YES




                              Was the                                                             DevelopmeNT                                                                                 DevelopmeNT
                       building established                                                CoNTRibuTioN fees apply.                            Was the building                        CoNTRibuTioN fees apply.
                      or approved by Council                                            apply fees based on total Gfa or the         NO    established or approved                  levy fees based on total Gfa or the
                           prior to 1 July                                                    overall increase in Gfa.                          prior to 1 July                           overall increase in Gfa.
                               2004?                                                                                                                2004?


                                 YES                                                                                                                   YES


                                                                                                                                                                                       The development must
                             Is the                                                                                                                Is the                                be a new, altered or
                           proposed                                                                                                              proposed                             additional building on an
           NO                                            YES              No DevelopmeNT
                    development a brownfield                                                                                              development a brownfield             NO     allotment that is yet to be
                                                                       CoNTRibuTioN fees apply
                        redevelopment?                                                                                                        redevelopment?                          developed at or over 40%
                                                                                                                                                                                            site coverage.


                                  NO                                                                                                                   YES


                     DevelopmeNT CoNTRibuTioN                                                                                                 No DevelopmeNT
                               fees apply.                                                                                                 CoNTRibuTioN fees apply
                   exclude the remaining lot with the
                     existing building from the final
                       allotment area calculation.
123
funding And finAnciAl POlicies develoPMent contRibutionS Policy




[8] Schedule of Contributions Per                          The development contribution payable during
                                                           the life of this Policy shall not be less than the
Unit of Demand                                             amounts shown in the schedule of fees below and
The residential, rural and non-residential                 shall increase annually on 1 July of each year, in
schedule of development contributions refer to             accordance with the following formula:
Development Contributions Areas A to L. Area A
is the rural area and is therefore excluded from the       DC = BC x (PPIC / PPIB)
residential and non-residential schedule and is the
only area listed in the Rural Area schedule. These         DC = the development contribution charge for the
areas relate to geographically defined development         relevant service or infrastructure payable under the
contribution areas in Appendix A, Map 1.                   Policy.

Each column of development contribution for                BC = the base development contribution charge
the community facilities is per unit of demand as          payable under the Policy as set out in the schedule
measured by Table 4. Section 10 shows examples             of fees below.
of how to work out your development contribution
for particular developments.                               PPIC = the Producers Price Index – Construction
                                                           (Outputs) for the current year.
All fees in the schedule are GST exclusive, however
final assessment of development contribution               PPIB = the Producers Price Index – Construction
payable will incur a 12.5% GST.                            (Outputs) for the base year.

Schedule of Development Contributions:
Residential
This schedule should be read in conjunction with
Table 4 – Units of Demand for Community Facilities.




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                                                                                   COMMUNITY FACILITIES

                    ROADING                          WATER                     WASTEWATER                     STORMWATER             CITYWIDE RESERVES                LOCAL RESERVES

                            Building                      Building                       Building                     Building                     Building                     Building
                            Consent                       Consent                        Consent                      Consent                      Consent                      Consent
            Subdivision                  Subdivision                   Subdivision                   Subdivision                   Subdivision                 Subdivision
                           Or Service                    Or Service                     Or Service                   Or Service                   Or Service                   Or Service
                          Connection                    Connection                     Connection                   Connection                   Connection                   Connection
           Per                          Per             Per           Per             Per            Per 700m2    Per 700m2    Per                             Per 700m2    Per 700m2
Measure    Additional     Per EHU       Additional      Connected     Additional      Connected      of Allotment of Allotment Additional        Per EHU       of Allotment of Allotment
           Allotment                    Allotment       EHU           Allotment       EHU            Area         Area         Allotment                       Area         Area
B          $2,796         $2,796        $1,219          $1,219        $1,320          $1,320         $0            $0             $1,543         $1,543        $0            $0

C          $2,796         $2,796        $0              $0            $0              $0             $0            $0             $1,543         $1,543        $0            $0

D          $2,796         $2,796        $1,219          $1,219        $1,320          $1,320         $0            $0             $1,543         $1,543        $200          $200

E          $2,796         $2,796        $1,219          $1,219        $1,320          $1,320         $0            $0             $1,543         $1,543        $503          $503

F          $2,796         $2,796        $1,219          $1,219        $1,320          $1,320         $32           $32            $1,543         $1,543        $200          $200

G          $2,796         $2,796        $1,219          $1,219        $1,320          $1,320         $360          $360           $1,543         $1,543        $200          $200

H          $2,796         $2,796        $1,219          $1,219        $1,320          $1,320         $1,440        $1,440         $1,543         $1,543        $200          $200

I          $2,796         $2,796        $1,219          $1,219        $1,320          $1,320         $270          $270           $1,543         $1,543        $200          $200

J          $2,796         $2,796        $1,219          $1,219        $1,320          $1,320         $2,310        $2,310         $1,543         $1,543        $200          $200

k          $2,796         $2,796        $1,219          $1,219        $1,320          $1,320         $520          $520           $1,543         $1,543        $503          $503

L          $2,796         $2,796        $1,219          $1,219        $1,320          $1,320         $1,410        $1,410         $1,543         $1,543        $503          $503




PART TWO                                                                                                                                                                               125
funding And finAnciAl POlicies develoPMent contRibutionS Policy




Schedule Of Development Contributions: Rural                       DC = the development contribution charge for the
This schedule should be read in conjunction with                   relevant service or infrastructure payable under the
Table 4 – Units of Demand for Community Facilities.                Policy.

The development contribution payable during                        BC = the base development contribution charge
the life of this Policy shall not be less than the                 payable under the Policy as set out in the schedule
amounts shown in the schedule of fees below and                    of fees below.
shall increase annually on 1 July of each year, in
accordance with the following formula:                             PPIC = the Producers Price Index – Construction
                                                                   (Outputs) for the current year.
DC = BC x (PPIC / PPIB)
                                                                   PPIB = the Producers Price Index – Construction
                                                                   (Outputs) for the base year.



                                                                                     COMMUNITY FACILITIES

                          ROADING                             WATER                     WASTEWATER                  STORMWATER               CITYWIDE RESERVES              LOCAL RESERVES
                           Building      Building
                                                                       Building                    Building                    Building                    Building                    Building
                           Consent       Consent
                                                                       Consent                     Consent                     Consent                     Consent                     Consent
           Subdivision    Or Service    Or Service   Subdivision                   Subdivision                 Subdivision                 Subdivision                 Subdivision
                                                                      Or Service                  Or Service                  Or Service                  Or Service                  Or Service
                         Connection    Connection
                                                                     Connection                  Connection                  Connection                  Connection                  Connection
                         (Dwellings)     (Other)
                                                                                                                                           Per
        Per
                                       Per 100m2     Not            Not            Not           Not           Not           Not           Additional    Not           Not           Not
Measure Additional       Per EHU
                                       GFA           Applicable     Applicable     Applicable    Applicable    Applicable    Applicable    Allotment     Applicable    Applicable    Applicable
        Allotment
                                                                                                                                           or Per EHU
A         $2,796         $2,796        $2,796        $0             $0             $0            $0            $0            $0            $1,543        $0            $0            $0




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Schedule Of Development Contributions:
Non-Residential
This schedule should be read in conjunction with
Table 4 – Units of Demand for Community Facilities.

The development contribution payable during
the life of this Policy shall not be less than the
amounts shown in the schedule of fees below and
shall increase annually on 1 July of each year, in
accordance with the following formula:

DC = BC x (PPIC / PPIB)

DC = the development contribution charge for the
relevant service or infrastructure payable under the
Policy.

BC = the base development contribution charge
payable under the Policy as set out in the schedule
of fees below.

PPIC = the Producers Price Index – Construction
(Outputs) for the current year.

PPIB = the Producers Price Index – Construction
(Outputs) for the base year.




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                                                                             COMMUNITY FACILITIES

                    ROADING                      WATER                     WASTEWATER                    STORMWATER               CITYWIDE RESERVES              LOCAL RESERVES

                            Building                    Building                    Building                     Building                     Building                      Building
                            Consent                     Consent                     Consent                      Consent                      Consent                       Consent
            Subdivision                 Subdivision                 Subdivision                 Subdivision                  Subdivision                  Subdivision
                           Or Service                  Or Service                  Or Service                   Or Service                   Or Service                    Or Service
                          Connection                  Connection                  Connection                   Connection                   Connection                    Connection
           Per 100m2                    Per 100m2                   Per 100m2                   Per 700m2    Per 700m2                                    Per 700m2    Per 700m2
                        Per 100m2                    Per 100m2                   Per 100m2                                Not              Not
Measure    of Allotment                 of Allotment                of Allotment                of Allotment of Allotment                                 of Allotment of Allotment
                        GFA                          GFA                         GFA                                      Applicable       Applicable
           Area                         Area                        Area                        Area         Area                                         Area         Area
B          $895           $2,796        $217          $679          $333          $1,042        $0            $0             $0            $0             $0             $0

C          $895           $2,796        $0            $0            $0            $0            $0            $0             $0            $0             $0             $0

D          $895           $2,796        $217          $679          $333          $1,042        $0            $0             $0            $0             $200           $200

E          $895           $2,796        $217          $679          $333          $1,042        $0            $0             $0            $0             $503           $503

F          $895           $2,796        $217          $679          $333          $1,042        $32           $32            $0            $0             $200           $200

G          $895           $2,796        $217          $679          $333          $1,042        $360          $360           $0            $0             $200           $200

H          $895           $2,796        $217          $679          $333          $1,042        $1,440        $1,440         $0            $0             $200           $200

I          $895           $2,796        $217          $679          $333          $1,042        $270          $270           $0            $0             $200           $200

J          $895           $2,796        $217          $679          $333          $1,042        $2,310        $2,310         $0            $0             $200           $200

k          $895           $2,796        $217          $679          $333          $1,042        $520          $520           $0            $0             $503           $503

L          $895           $2,796        $217          $679          $333          $1,042        $1,410        $1,410         $0            $0             $503           $503




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[9] How to Work Out Development                        [STEP 4]                                                  [10] Examples
                                                       Go to the relevant Development Contributions
Contribution Payable                                   Schedule of Fees in Section 7 and identify the fees
                                                                                                                 The following examples are intended as a simple
                                                                                                                 illustration of the calculation process associated with
                                                       payable per unit of demand for your development           the development contributions policy.
[STEP 1]                                               contribution area.
Go to Appendix A, Map 1 and check what
development contribution area your development                                                                   The figures used exclude GST.
                                                       [STEP 5]
lies within.                                           Apply the Units of Demand to your development             [10.1] Development Contributions Calculation –
                                                       i.e. multiply the charges by the number of units of       Example 1 (Residential):
[STEP 2]                                               demand applicable.
Establish what type of development it is i.e.                                                                    Consider the example of a proposed residential
residential, rural or non-residential.                                                                           subdivision as shown in diagram 1 and 2. The
                                                       Calculate your total development contribution by          proposed subdivision is for an original lot size of
                                                       summing the individual community facilities charges       4000m2. The proposed subdivision will result in
Determine the stage of development i.e. subdivision,   established in steps 1-4 and add GST of 12.5%.
building consent or service connection.                                                                          the creation of 3 new additional allotments each
                                                                                                                 consisting of an area of 1000m2. The Development
                                                       [EXAMPLES]                                                Contributions applied will be worked out in relation
[STEP 3]                                               In Section 10.1-10.8 working examples of steps 1
Check clause 6.6.4 Measuring Units of Demand –                                                                   to the new units of demand being created (3
                                                       through to 5 are provided to help you work out your       additional allotments) that will contain a total area
Specific Guidance and Notes.                           development contribution payable.                         of 3000m2. An example to work out the appropriate
Check the relevant Development Contribution                                                                      contribution is set out below.
Flowchart Contained in section 7 to ensure
Development Contributions Fees are applicable.                                                                   Step1: What Development Contribution Area is
                                                                                                                 the development in?
Using the Unit of Demand (Table 4) in Section                                                                    Area H (Residential Activity)
6.6.3 establish how many units of demand your
development will create for each of the community                                                                Step 2: What is the demand for each Community
facilities.                                                                                                      Facility being created for the proposed
                                                                                                                 development?




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                                           Formula: Row 1 – Row 2 = Row 3                                                   Notes: The remaining lot of 1000m2 as shown in
                                                                                                                   CITY
                                                                                                                            diagram 2 may also create a unit of demand and
                                                                            WATER     WASTEWATER ROADING
                                                                                                                 RESERVES   could be subject to a development contribution. If
 How many final units of demand will there be?               ROW 1            4           4             4             4     the remaining lot has a dwelling on it connected
                                                                                                                            to all City services then it will not be subject to
 How many existing units of demand are there?                ROW 2            1           1             1             1
                                                                                                                            a further development contribution levy as it is
 Total demand created for each community facility            ROW 3            3           3             3             3     assumed it has an existing unit of demand. If the
                                                                                                                            remaining lot does not have a dwelling on it and
(Note: An existing unit of demand is determined by either an existing equivalent residential unit on the site such as a     has not paid a past contribution, or it has a dwelling
dwelling or a past contribution has been paid in respect to that development. Refer to Section 11.2 for guidance)
                                                                                                                            that is not fully connected to infrastructure services
                                                                                                                            then Council officers will assess this at the time of
Step 3: Calculate the Area Based Charges                                                                                    processing the consent for development and will
                                                                                                                            advise applicants if additional contributions are
Stormwater:           3000m2/700m2                =          4.2                                                            required as a result of additional units of demand
Local Reserves:       3000m2/700m2                =          4.2                                                            being assessed.

These contributions are based on the total land area being developed (less area in road/s) i.e. the measure of
a unit of demand is per 700m2.

Step 4: Calculate Final Development Contributions Payable

Water:           3 (additional allotments)               x         $1,219         =   $3,657
Wastewater:      3 (additional allotments)               x         $1,320         =   $3,960
Stormwater:      4.2 (3000m2/700m2)                      x         $1,440         =   $6,048
Roading:         3 (additional allotments)               x         $2,796         =   $8,388
City Reserves:   3 (additional allotments)               x         $1,543         =   $4,629
Local Reserves:  4.2 (3000m2/700m2)                      x         $200           =   $840
Total Development Contributions Payable                                           =   $27,522




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Diagram 1 – Original Lot Size                     [10.2] Development Contributions Calculation –
                                                  Example 2 (Rural):
                                                  Consider the example of a proposed rural
                                                  subdivision as shown in diagram 3 and 4. The
                                                  proposed subdivision is for an original lot size
                                                  of 16ha. The proposed subdivision will result in
                                                  the creation of 3 new additional allotments each
                                                  consisting of an area of 4ha. The Development
                    4000m2                        Contributions applied will be worked out in relation
                                                  to the new units of demand being created (3
                                                  additional allotments) that will contain a total area
                                                  of 12ha. An example to work out the appropriate
                                                  contribution is set out below.

                                                  Step1: What Development Contribution Area is
Diagram 2 – Proposed new allotments               the development in?
for original lot                                  Area A (Rural Activity)

                                                  Step 2: What is the demand for each Community
                                                  Facility being created for the proposed
   1000m2      1000m2      1000m2        1000m2   development?



 Remaining                3 Proposed
    Lot                 New Allotments




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                                           Formula: Row 1 – Row 2 = Row 3                                                   Diagram 3 – Original Lot Size
                                                                                                                   CITY
                                                                         WATER       WASTEWATER ROADING
                                                                                                                 RESERVES

 How many final units of demand will there be?              ROW 1          N/A          N/A             4             4

 How many existing units of demand are there?               ROW 2          N/A          N/A             1             1

 Total demand created for each community facility           ROW 3          N/A          N/A             3             3

(Note: An existing unit of demand is determined by either an existing equivalent residential unit on the site such as a                            16ha
dwelling or a past contribution has been paid in respect to that development. Refer to Section 11.2 for guidance)



Step 3: Calculate the Area Based Charges
Not applicable

Step 4: Calculate Final Development Contributions Payable
                                                                                                                            Diagram 4 – Proposed new allotments
                                                                                                                            for original lot
Roading:          3 (additional allotments)                x      $2,796         =    $8,388
City Reserves:    3 (additional allotments)                x      $1,543         =    $4,629
Total Development Contributions Payable                                          =    $13,017
                                                                                                                                4ha          4ha            4ha         4ha




                                                                                                                             Remaining                3 Proposed
                                                                                                                                Lot                 New Allotments




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[10.3] Development Contributions Calculation –                                                   Formula: Row 1 – Row 2 = Row 3
Example 3 (Non-Residential):
                                                                                                                                                                        CITY
Consider the example of a proposed non-residential                                                                          WATER       WASTEWATER ROADING
                                                                                                                                                                      RESERVES
subdivision. The proposed subdivision is for an           How many final units of demand will there be?         ROW 1      10,000m2      10,000m2      10,000m2         N/A
original lot size of 10,000m2 that has not paid
any development contributions in the past at the          How many existing units of demand are there?          ROW 2      4,000m   2
                                                                                                                                         4,000m  2
                                                                                                                                                       4,000m   2
                                                                                                                                                                        N/A
subdivision stage. The original lot has an existing       Total demand created for each community facility      ROW 3      6,000m2       6,000m2       6,000m2          N/A
non-residential building located on it that was
established prior to 1 July 2004. The proposed
development does not meet the definition of a            Step 3: Calculate the Area Based Charges
non-residential brownfield redevelopment. The            Not applicable
proposed subdivision will result in the creation of
3 additional allotments each consisting of an area       Step 4: Calculate Final Development Contributions Payable
of 2000m2, leaving a 4000m2 remaining lot that will
provide for the existing building. The Development       Water:         (6000/100) = 60 Units of Demand (100m2 of Allotment Area)            x       $217   =       $13,020
Contributions applied will be worked out in relation     Wastewater:    (6000/100) = 60 Units of Demand (100m2 of Allotment Area)            x       $333   =       $19,980
to the 3 new allotments that will contain a total area   Roading:       (6000/100) = 60 Units of Demand (100m2 Allotment Area)               x       $895   =       $53,700
of 6000m2. The remaining lot of 4000m2 with the          Total Development Contributions Payable                                                            =       $86,700
existing building established prior to 1 July 2004 is
excluded from the allotment area calculation.

Step1: What Development Contribution Area is
the development in?
Area B (Non-Residential Activity)

Step 2: What is the demand for each Community
Facility being created for the proposed
development?




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[10.4] Development Contributions Calculation –                                                     Formula: Row 1 – Row 2 = Row 3
Example 4 (Non-Residential):
                                                                                                                                                                  CITY
Consider the example of a proposed non-residential                                                                        WATER      WASTEWATER ROADING
                                                                                                                                                                RESERVES
subdivision. The proposed subdivision is for an             How many final units of demand will there be?       ROW 1    8,000m2      8,000m2       8,000m2        N/A
original lot size of 8,000m2 that has not paid any
development contributions in the past at the                How many existing units of demand are there?        ROW 2    3500m   2
                                                                                                                                       3500m  2
                                                                                                                                                     3500m 2
                                                                                                                                                                   N/A
subdivision stage. The original lot has an existing         Total demand created for each community facility    ROW 3    4,500m2      4,500m2       4,500m2        N/A
non-residential building located on it that was
established after 1 July 2004. The proposed
development does not meet the definition of a non-         Step 3: Calculate the Area Based Charges
residential brownfield redevelopment. The proposed         Not applicable
subdivision will result in the creation of 3 additional
allotments each consisting of an area of 1500m2,           Step 4: Calculate Final Development Contributions Payable
leaving a 3500m2 remaining lot that will provide for
the existing building. The Development Contribution        Water:        (4500/100) = 45 Units of Demand (100m2 of Allotment Area)        x       $217 =     $9,765
applied will be worked out in relation to the 3            Wastewater:   (4500/100) = 45 Units of Demand (100m2 of Allotment Area)        x       $333 =     $14,985
additional allotments that will contain a total area       Roading:      (4500/100) = 45 Units of Demand (100m2 of Allotment Area)        x       $895 =     $40,275
of 4500m2. The remaining lot of 3500m2 with the            Total Development Contributions Payable                                                     =     $65,025
existing building established after 1 July 2004 is not
included in the allotment area calculation.

Step1: What Development Contribution Area is
the development in?
Area B (Non-Residential Activity)

Step 2: What is the demand for each Community
Facility being created for the proposed
development?




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[10.5] Development Contributions Calculation –                                                 Formula: Row 1 – Row 2 = Row 3
Example 5 (Non-Residential):
                                                                                                                                                                     CITY
Consider the example of a proposed extension to                                                                           WATER       WASTEWATER ROADING
                                                                                                                                                                   RESERVES
an existing non-residential building. The existing      How many final units of demand will there be?         ROW 1      7,000m2        7,000m2        7,000m2       N/A
5000m2 building is located on an allotment which
has not paid any development contributions in the       How many existing units of demand are there?          ROW 2      5,000m   2
                                                                                                                                        5,000m 2
                                                                                                                                                       5,000m2
                                                                                                                                                                     N/A
past at the subdivision stage. The existing building    Total demand created for each community facility      ROW 3      2,000m2        2,000m2        2,000m2       N/A
was established after 1 July 2004. The proposed
development does not meet the definition of a non-
residential brownfield redevelopment. The proposed     Step 3: Calculate the Area Based Charges
extension will add 2000m2 to the building. The         Not applicable
Development Contributions applied will be worked
out in relation to the 2000m2 extension only.          Step 4: Calculate Final Development Contributions Payable

Step1: What Development Contribution Area is           Water:        (2000/100) = 20 Units of Demand (100m2 GFA)              x       $679         =     $13,580
the development in?                                    Wastewater:   (2000/100) = 20 Units of Demand (100m2 GFA)              x       $1,042       =     $20,840
Area B (Non-Residential Activity)                      Roading:      (2000/100) = 20 Units of Demand (100m2 GFA)              x       $2,796       =     $55,920
                                                       Total Development Contributions Payable                                                     =     $90,340
Step 2: What is the demand for each Community
Facility being created for the proposed
development?                                           Notes:
                                                       It is assumed for this example the activity is not a special circumstance.
                                                       If the underlying allotment in the above example had paid development contributions in the past then the
                                                       GFA fees would not be applied.




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[10.6] Development Contributions Calculation –                                                     Formula: Row 1 – Row 2 = Row 3
Example 6 (Non-Residential):
                                                                                                                                                             CITY
Consider the example of a proposed new non-                                                                               WATER     WASTEWATER ROADING
                                                                                                                                                           RESERVES
residential building. The new building is to be             How many final units of demand will there be?       ROW 1    9,000m2     9,000m2    9,000m2       N/A
located on a vacant allotment which has not paid
any development contributions in the past. The              How many existing units of demand are there?        ROW 2      0m   2
                                                                                                                                       0m  2
                                                                                                                                                  0m2
                                                                                                                                                              N/A
proposed development does not meet the definition           Total demand created for each community facility    ROW 3    9,000m2     9,000m2    9,000m2       N/A
of a non-residential brownfield redevelopment.
The new building will have a GFA of 9,000m2. The
Development Contributions applied will be worked           Step 3: Calculate the Area Based Charges
out in relation to the GFA of 9,000m2.                     Not applicable

Step1: What Development Contribution Area is               Step 4: Calculate Final Development Contributions Payable
the development in?
Area B (Non-Residential Activity)                          Water:         (9000/100) = 90 Units of Demand (100m2 GFA) x $679           =       $61,110
                                                           Wastewater:    (9000/100) = 90 Units of Demand (100m2 GFA) x $1,042         =       $93,780
Step 2: What is the demand for each Community              Roading:       (9000/100) = 90 Units of Demand (100m2 GFA) x $2,796         =       $251,640
Facility being created for the proposed                    Total Development Contributions Payable                                     =       $406,530
development?

                                                           Notes:
                                                            It is assumed for this example the activity is not a special circumstance.
                                                           If the underlying allotment in the above example had paid development contributions in the past then the
                                                           GFA fees would not be applied.




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[10.7] Development Contributions Calculation –           [11] Guidance Notes                                       • Previous contributions paid;
Example 7 (Non-Residential):                                                                                       • Whether or not the existing allotment(s) meet
Consider the example of a proposed redevelopment         [11.1] Boundary Adjustments/Amalgamations                   the definition of non-residential brownfield
involving the demolition of four existing non-           The Policy does not exempt boundary adjustments or          redevelopment;
residential buildings established prior to 1 July 2004   amalgamations from being assessed for development         • Whether or not the proposed allotment(s) meet
and the construction of one new non-residential          contributions. Boundary adjustments and                     the definition of non-residential brownfield
building. The proposed redevelopment is located          amalgamations create new lots, but not necessarily          redevelopment;
in an established area and meets the definition of       additional lots or additional allotment area, through     • The current or previous level of demand placed
non-residential brownfield redevelopment. Non-           subdivision. Where the new lot and the characteristics      on the network infrastructure, reserves and
residential brownfield redevelopment generally           of that new lot are determined to create additional         community facilities;
places negligible increased demand on the capacity       units of demand then a development contribution           • The level of demand the proposed boundary
of the network infrastructure and therefore does not     will be payable. Each circumstance will be assessed         adjustment or amalgamation may place on the
create additional units of demand.                       on a case-by-case basis.                                    network infrastructure, reserves and community
                                                                                                                     facilities;
Total Development Contributions Payable: $0.             One example is where a boundary adjustment or             • Whether or not it is more appropriate to levy
                                                         an amalgamation includes land where all or part             development contributions at the building
[10.8] Development Contributions Calculation –           of that land has not had contributions previously           consent stage; and
Example 8 (Non-Residential):                             paid on it. Council will, in this instance, assess        • Any other matters Council considers relevant.
Consider the example of a proposed new 500m2             the contributions payable related to the specific
non-residential building. The new building is to be      development application.                                  [11.2] Past Contributions and Determining an
located a recently subdivided 1500m2 allotment                                                                     Existing unit of Demand
that paid development contributions based on             The measure of a non-residential unit of demand           Past contributions will be taken into account in
allotment area at the time of subdivision under          for water, wastewater and roading is per 100m2 of         assessing new units of demand. It is incumbent on
the 2007 Development Contributions Policy. The           allotment area at subdivision or per 100m2 GFA at         the applicant to provide the necessary information,
proposed new 500m2 building does not create any          building consent. In determining whether a non-           where possible, to show contributions have been
additional units of demand.                              residential boundary adjustment or amalgamation           paid on a particular development. Where past
                                                         creates additional units of demand, the following         contributions can be validated, what these cover
Total Development Contributions Payable: $0.             matters will be taken into account:                       in terms of units of demand under the new Policy,




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and how they apply to new developments, will               [11.3] Granting consents does not assume that             [12] Glossary of Terms
depend on the original intent of the contribution          final contributions payment has been made
or agreement at that time. As the new Policy is            A development contribution can be levied either           Accommodation Motel has the same meaning as
different in methodology and application to the            at the subdivision, building or service connection        Accommodation Motel in the Palmerston North
previous policy there will need to be an assessment        consent stage. Having a development contribution          City District Plan
made by Council officers on a case-by-case basis.          levied upon the granting of consent does not              “means land and/or buildings used for transient
                                                           assume final payment. Under the Policy, payment           residential accommodation and includes the
Where it is proven a past contribution has not             of contributions is required prior to the issue of        provision of playgrounds, spa pools and swimming
been paid on a proposed development, and that              either: the 224 certificate (for subdivision), the code   pools. It does not include restaurants, bars or
development creates a unit of demand as defined            compliance certificate (for building consent), or         conference facilities”.
in the Policy, then a development contribution will        service connection. As such, full and final payment
be assessed accordingly.                                   of development contribution charges on a specific         Accessory Building has the same meaning as
                                                           development will not be assumed until one of              accessory building in the Palmerston North City
One example is where no past contribution has              these criteria has been met                               District Plan:
been paid on a vacant lot and where an applicant                                                                     “means a building not being part of the principal
now proposes to build a house or further subdivide         [11.4] Development contributions on                       building, the use of which is incidental to that
the lot. An existing vacant lot does not necessarily       overlapping consents and future subdivision               of any other building or buildings on the site. In
mean that there is an existing unit of demand. A           applications                                              the case of a site on which no building has been
determination, by staff on the application, will           In the case where two or more overlapping consent         erected, it is a building incidental to the use of
assess if past contributions where paid and what           applications are being processed simultaneously           the principal building permitted on the site. This
they covered, and if they were not paid what units         in the same development area, full contributions          includes a garage, carport, tool shed, playroom,
of demand the particular proposed development              (under whatever contribution regime existed at            recreation room, glasshouse, swimming pool, spa
now creates, if any.                                       that time) will be levied on both applications until      pool and sleepout”
                                                           full payment has been received for one or the
                                                           other as explained above. Once payment has been           Activity means a good or service provided by, or on
                                                           received for one of the two consents concerned,           behalf or, a local authority or a council-controlled
                                                           all contributions applicable to future subdivision        organisation; and includes –
                                                           applications will be revised to include those             (a) the provision of facilities and amenities; and
                                                           contributions already paid.



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(b) the making of grants; and                        Balance Lot means a remaining allotment not yet         Community Infrastructure means:
(c) the performance of regulatory and other          intended for development that will be developed at      (a) land, or development assets on land, owned or
    governmental functions.                          a later date.                                               controlled by the territorial authority to provide
                                                                                                                 public amenities; and
Allotment has the meaning given to it in section     Brownfield Redevelopment means further                  (b) includes land that the territorial authority will
218(2) of the Resource Management Act 1991, and      development of sites that are developed at or over          acquire for that purpose.
for the purposes of the development contributions    40% site coverage, or were at sometime in the past,
policy only, excludes allotments to be vested with   provided the buildings located on the site were         Community Outcomes, in relation to a district or
Council as roads.                                    established prior to 1 July 2004, and specifically      region, –
                                                     includes:                                               (a) means the outcomes for that district or region
Allotment Area is the total land area of             • further subdivision of the site;                          that are identified as priorities for the time
an allotment, and for the purposes of the            • alterations and additions to existing buildings;          being through a process under section 91; and
development contributions policy only, excludes         and                                                  (b) includes any additional outcomes subsequently
‘undevelopable land’ as defined in the Palmerston    • the demolition of existing buildings and                  identified through community consultation by
North City District Plan when applying units of         construction of new buildings.                           the local authority as important to the current
demand to stormwater and local reserves only. It                                                                 or future social, economic, environmental, or
does include ‘undevelopable land’ where resource     Catchment means the area served by a particular             cultural well-being of the community.
consent or building consent is obtained to develop   infrastructure.
‘undevelopable land’.                                                                                        Connected Equivalent Household Unit means an
                                                     Capital Expenditure means the cost council expect       equivalent household unit with an existing unit of
Applicant is the person/persons that apply for       to incur to provide infrastructure assets for the       demand with direct access to a service connection.
resource consent, building consent or service        running of network infrastructure, reserves and
connection.                                          community infrastructure.                               Consent Holder is the person/persons that are the
                                                                                                             applicants to which resource consent, building
Asset Management Plan means Council documents        Community Facilities means reserves, network            consent or service connection was granted.
that outline how the Council will manage and         infrastructure, or community infrastructure for
provide infrastructure assets.                       which development contributions may be required
                                                     in accordance with section 199 of the Local
                                                     Government Act 2002.



PART TWO                                                                                                                                                         139
funding And finAnciAl POlicies develoPMent contRibutionS Policy




Development means                                          Development Contribution Policy means the policy          Greenfield Areas are defined as those areas where
(a) any subdivision or other development that              on development contributions included in the              building capacity exists on the perimeter of the
    generates a demand for reserves, network               long-term council community plan of the territorial       city. Where a land is zoned residential, has capacity
    infrastructure, or community infrastructure; but       authority under section 102(4)(d).                        to provide for future development it is considered
(b) does not include the pipes or lines of a network                                                                 a Greenfield site. Two defined Greenfield areas for
    utility operator.                                      District means the district of a territorial authority.   the purposes of Development Contributions policy
                                                                                                                     are the kelvin Grove and Aokautere areas.
Development Contribution means a contribution -            Equivalent Household Unit has the same meaning
(a) provided for in a development contribution             as Dwelling and Dwelling Unit in the Palmerston           Gross Floor Area (GFA) has the same meaning
    policy included in the long-term council               North City Council District Plan.                         as Gross Floor Area in the Palmerston North City
    community plan of a territorial authority; and         “means self contained home and includes buildings         District Plan
(b) calculated in accordance with the                      where board and lodging is provided for up to and
    methodology; and                                       including five people”.                                   “Is the sum of the gross area of all floors of all
(c) comprising-                                                                                                      buildings on a site, measured from the exterior
    (i) money; or                                          Fast Food Outlets has the same meaning as Fast Food       faces of the exterior walls, or from the centre lines
    (ii) land, including a reserve or esplanade            Outlets in the Palmerston North City District Plan        of walls separating two buildings.
          reserve other than in relation to a              “means any building, or part of a building, whose
          subdivision consent), but excluding Maori        principal business is the preparation and sale of         In particular, gross floor area includes:
          land within the meaning of Te Ture Whenua        food for immediate consumption on or off the              (a) Elevator shafts, stairwells, and lobbies at each
          Maori Act 1993,unless that Act provides          premises. This definition includes takeaway bars.”            floor;
          otherwise; or                                                                                              (b) Floor space in interior balconies and
    (iii) both.                                            Financial Contribution has the same meaning                   mezzanines;
                                                           as financial contributions in s108(9)(a)-(c) of the       (c) All other floor space not specifically excluded.
Development Contribution Areas relate to                   Resource Management Act 1991.
defined indicative geographical areas to which a                                                                     The gross floor area of a building shall not include:
development contribution is applicable in relation         Goods and Services Tax (GST.) means goods and             (1) Uncovered stairways;
to the service catchments within those areas for           services tax under the Goods and Services Tax Act         (2) Floor space in terraces (open or roofed),
network infrastructure, community infrastructure           1985 or any legislation substituted for the same.             external balconies, breezeways, porches;
and reserves.



140                                                                                                                                                      10 YeAR PlAn 2009/19
                                                                                                         funding And finAnciAl POlicies develoPMent contRibutionS Policy




(3) Roof vehicle parking, lift towers and machinery   Multi-unit or Communal Residential Development             RMA 1991 means the Resource Management Act
    rooms on the roof, having a floor area of not     means any form of residential development that             1991.
    more than 200m2;                                  does not meet the definition of an equivalent
(4) Public thoroughfare areas in malls (this does     household unit.                                            Rural Development means any activity in a rural
    not include foodcourt areas);                                                                                zoned area or where the predominant activity is not
(5) Areas used exclusively for fire egress;           Network Infrastructure means the provision of              non-residential or residential.
(6) Switchboard areas / Plant rooms;                  roads and other transport, water, wastewater, and
(7) Public Toilets”.                                  stormwater collection and management.                      Schedule of Development Contributions means
                                                                                                                 the schedule to the council’s development
LGA 2002 means the Local Government Act 2002 or       Non-Residential Development means any activity             contributions policy required by section 201 of the
any legislation substituted for the same.             in a non-residentially zoned area, excluding the           LGA02 and setting out the information required by
                                                      rural zone, or where the predominant activity is not       section 202, namely;
Local Authority means a regional council or           residential or rural.                                      • the contributions payable in each district in
territorial authority.                                                                                              respect of reserves, network infrastructure and
                                                      Remaining Lot means an allotment created as part of           community infrastructure
Massey University – Turitea Campus means land         a new subdivision that remains with or provides for an     • the events giving rise to the requirement for
that is occupied by Massey University whether         existing building located on the original allotment.          development contribution
leasehold or freehold that is zoned Institutional                                                                • specified by district and by activity.
within the Palmerston North City District Plan.       Residential Development means any activity in a
Massey University – Turitea Campus does not           residentially zoned area or where the predominant          Service Catchment means a catchment defined by
include the Hokowhitu campus located on               activity is not non-residential or rural.                  reference to the characteristics of the service and
Centennial Drive, Palmerston North.                   Retirement Village has the same meaning as                 the common characteristics of the geographical
                                                      Retirement Village in the Palmerston North City            area (for example stormwater catchments).
Methodology has the same meaning as                   District Plan.
methodology in s197 of the Local Government Act       “means a comprehensive development which may               Service Connection means a physical connection to
2002.                                                 include housing, recreational, welfare, and medical        a service provided by, or on behalf of, a territorial
                                                      facilities which is intended principally or solely for     authority.
                                                      retired persons or people with disabilities”.




PART TWO                                                                                                                                                             141
funding And finAnciAl POlicies develoPMent contRibutionS Policy




Service Station has the same meaning as Service            Third Party Funds means funding or subsidy, either
Station in the Palmerston North City District Plan.        in full or in part, from a third party.
“means a business primarily engaged in the fuelling
of motor vehicles. This may also include mechanical        Undevelopable Land has the same meaning as
repairs and servicing of motor vehicles. Retail sales      Undevelopable Land in the Palmerston North City
for the convenience of the traveling public may also       District Plan
be included, provided such sales remain incidental         “means any land in Aokautere which is not
and ancillary to the principal use of fuelling motor       identified as developable land on Map 10.1 of the
vehicles”                                                  District Plan”.

Site Coverage has the same meaning as Site                 Unit of Demand means measure of demand for
Coverage in the Palmerston North City District Plan.       community facilities.
“means that portion of the net site area, expressed
as a percentage, which may be covered by all               Wet Industry means any activity located on an
buildings and storage space, including eaves,              allotment greater than 5000m2 which seeks to use
balconies and verandas in excess of 0.6 of a metre         water or discharge wastewater at a rate exceeding
in width, but excluding uncovered swimming pools,          200m3 /ha/day (or per area equivalent).
decks of 0.5 of a metre in height or less, and ramps
of 0.5 of a metre in height or less with handrails         Wind Farm has the same meaning as Wind Farm in
of an additional 0.9 of a metre in height or less.         the Palmerston North City District Plan.
Where no garage is shown at the construction of a          “means land, buildings or structures used to
dwelling, an allowance for a garage of 18 m2 will be       generate electricity from the wind”
added to the total building coverage”

Subdivision has the same meaning as Section 218
of the Resource Management Act 1991.




142                                                                                                             10 YeAR PlAn 2009/19
funding And finAnciAl POlicies develoPMent contRibutionS Policy




Appendix B: Refund of development                          [2] A territorial authority may retain any portion of
                                                               a development contribution or land referred
contributions                                                  to in subsection (1) of a value equivalent to
                                                               the costs incurred by the territorial authority in
209 Refund of money and return of land if                      relation to the development or building and its
development does not proceed                                   discontinuance.
[1] A territorial authority must refund or return to
    the consent holder or to his or her personal           210 Refund of money or return of land if not
    representative a development contribution              applied to specified reserve purposes
    paid or land set aside under this subpart if—          [1] If a development contribution has been
    (a) the resource consent—                                   required for a specified reserve purpose, a
         (i) lapses under section 125 of the                    territorial authority must—
              Resource Management Act 1991; or                  (a) refund money received for that purpose, if
         (ii) is surrendered under section 138 of                    the money is not applied to that purpose
              that Act; or                                           within 10 years after the authority receives
    (b) the building consent lapses under section                    the money or other period specified in the
         52 of the Building Act 2004; or                             development contribution policy; or
    (c) the development or building in respect                  (b) return land acquired for the specified
         of which the resource consent or building                   reserve purpose, if the authority does not
         consent was granted does not proceed; or                    use the land for that purpose within 10
    (d) the territorial authority does not provide                   years after the authority acquires the land
         the reserve, network infrastructure, or                     or other period agreed by the territorial
         community infrastructure for which the                      authority and the person who paid the
         development contribution was required.                      development contribution.
                                                           [2] A territorial authority may retain part of the
                                                                money or land referred to in subsection (1) of a
                                                                value equivalent to the costs of the authority in
                                                                refunding the money or returning the land.




144                                                                                                                 10 YeAR PlAn 2009/19
                                                                                                                                                                                   RAILWAY RD
                                                         Appendix C : Map 2 Integrated Water Network



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                                                                                                                                                                                                Map Production March 2009
        City Boundry                                              0                390        780                1,560                     2,340              3,120
                                                                                                                                                                                                GIS: City Corporate                    Palmerston North City Council accepts no responsibility for
                                                                                                                                                                                                Palmerston North City Council          incomplete or inaccurate information contained in this map.
                                                                                                                                                                  Meters
                                                             Appendix D : Map 3 Integrated Waste Water Network




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                                                                                                                                                                       The information is indicative ans for internal use only.        DR          Map Production March 2009
          City Boundry                     0         500   1,000            2,000               3,000          4,000                                                   Palmerston North City Council accepts no responsibility for                 GIS: City Corporate
                                                                                                                   Meters                                              incomplete or inaccurate information contained in this map.                 Palmerston North City Council
                                                                                                                                                                          Appendix E : Map 4
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                                                                                                                                                                     Roading Infrastructure Network




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                                                                                                                                              Map Production March 2009             The information is indicative ans for internal use only.
0   1   2   3      4          5                                                                                                               GIS: City Corporate                   Palmerston North City Council accepts no responsibility for
                                  Km                                                                                                          Palmerston North City Council         incomplete or inaccurate information contained in this map.
                                                                                  MaoRi PaRticiPation in council deciSion Making




Maori           The Council is working with                               In its relationships with Rangitaane the Council
                                                                          works with:
                Rangitaane and the wider Maori                            • Te Rangimarie Marae



Participation
                                                                          • Tanenuiarangi Manawatu Incorporated and Te
                community to identify further ways
                                                                              Mauri o Rangitaane
                for Maori to be more effectively                          • Ngati Hineaute Hapu Authority.

                involved in Council’s decision making.

in council
                                                                          Specific steps that the Council undertakes to provide
                                                                          opportunities for and to encourage Rangitaane to
                The following sections outline some of the ongoing        participate in its decision making include:
                commitments to iwi and wider Maori participation          • developing guidelines on how staff should



decision
                in the Council’s decision making.                           consult with Rangitaane O Manawatu. These
                                                                            guidelines are also relevant for consultation with
                Rangitaane Participation                                    the wider Maori community
                                                                          • employment of a Principal Maori Adviser. The


Making
                The Council acknowledges Rangitaane as tangata
                whenua.                                                     purpose of this position is to advise the Council
                                                                            on all key matters to do with its responsibilities
                The Council continues to be committed to                    and relationships in relation to Rangitaane, and
                identifying and progressing formal relationships            also to contribute to wider Maori development
                with Rangitaane. The Council will work in good            • provision of funding for Te Rangimarie Marae,
                faith with Rangitaane and the Crown to assist               Taneuiarangi Manawatu Incorporated, and Ngati
                in implementing Treaty claim settlements in                 Hineaute Hapu Authority, to assist with their
                the region, including recognition of Rangitaane             involvement in decision making, especially in
                relationships with their historical and cultural sites.     resource management issues
                                                                          • continue to maintain and develop the
                The Council will also meet its obligations for              archaeological assessment programme to ensure
                wider Maori involvement in decision-making in               that major City Council projects do not damage
                conjunction with Rangitaane.                                or destroy cultural sites or resources, and to




PART TWO                                                                                                                     153
MaoRi PaRticiPation in council deciSion Making




  work with Rangitaane to identify collaborative         • in December 2005, the Council decided not
  projects that may be of value to the protection,         to establish Maori wards. This will be formally
  enhancement and development of historical and            reviewed in 2011.
  cultural sites
• Rangitaane participation is sought for working
  parties on major projects, for example the City
  Heart Project and the New Bridge.


Wider Maori Community
Participation
The Council is also working at maintaining and
improving the participation of the wider Maori
community in its decision-making. Initiatives include:
• staff training to ensure all staff are aware of
  the Treaty of Waitangi and other key issues for
  Maori, and are able to be responsive to Maori
  perspectives and aspirations
• the Council has also developed relationships
  with a number of organisations whose
  contributions to the well-being and participation
  of the Maori community are significant.
  Organisations and individuals are also involved
  on a project-by-project basis where they have
  experience or knowledge of Maori community
  perspectives and aspirations.
• support for and participation in the MAIA (Maori
  Inter-Agency Network)




154                                                                                                          10 YeAR PlAn 2009/19
Part tWO SectiOn 3
additional
information
                                                                    AddiTiOnAl infORmATiOn Palmerston north Community outComes




Palmerston          These community outcomes belong
                    to the community. They are for
                                                                           Where did they come from?
                                                                           You decided our community outcomes!




north
                    everybody – organisations, groups                      In 1995 we developed a City Vision. This was based
                                                                           on extensive community consultation to find out
                    and individuals – to work towards.                     what sort of community people wanted to live
                                                                           in. We used this information as a starting point to



Community           What are community outcomes?                           identify the community outcomes. We wrote a draft
                    Community outcomes are the things that are             ‘word picture’ based on the vision and then went
                    important to people. In Palmerston North this          and asked people what they thought of it.



Outcomes
                    means:
                    • people have lots of fun things to do                 To make sure we heard the views of the ‘person
                    • people feel safe                                     on the street’ we visited places such as shopping
                    • businesses grow here and people have lots of job     centres, suburban buses, festivals, schools, Massey
                                                                           University, UCOL, the Highbury Whanau Centre and

What you said was
                      opportunities
                    • people can move easily around Palmerston North       Age Concern.
                    • Palmerston North’s physical infrastructure is

important to you      reliable                                             We also sent a questionnaire to all households. Reply-
                    • Palmerston North is attractive, clean and green      paid postcards were put in major businesses, cafes,
                    • the community is supportive and people and           the Council’s Customer Service Centre, and libraries.
                      organisations work together
                    • people are well-housed and healthy                   We also met with government agencies and key
                    • people have lots of learning opportunities.          organisations to ask their views. People had two
                                                                           months to have their say and over 1,000 people
                                                                           shared their thoughts. We looked carefully at all
                                                                           of these ideas and summarised them into the
                                                                           community outcomes.




PART TWO                                                                                                                       155
AddiTiOnAl infORmATiOn Palmerston north Community outComes




Achieving the Community Outcomes                       Monitoring the community
The community outcomes will only be achieved if        outcomes
all organisations and individuals in the City work     Achieving the outcomes is a long-term job. We
towards them. We are committed to playing our          will need to keep track of our progress. We have
part. The 10 Year Plan shows how we will do this.      worked with other organisations to identify key
See the following pages which outline what we and      performance indicators – the signals that will tell us
other organisations are doing.                         how we are doing. These are outlined in the tables
                                                       on the next pages.
All the organisations – including the Council – work
towards the outcomes in three ways:
• by doing their ‘day-to-day work’, eg, MidCentral
   Health provides health services, schools provide
   education and sports clubs offer recreation
   opportunities
• by working together on particular projects, eg,
   the Council and Ministry of Social Development
   jointly fund a youth worker in Kelvin Grove,
   the Ethnic Council leads a settlement support
   network, involving the City Council and
   government agencies, to help new migrants and
   refugees settle in Palmerston North
• by working together through networks
   and ‘umbrella groups’, such as the Regional
   InterAgency Network (central and local
   government agencies), Ethnic Council, and
   Environment Network Manawatu.




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Community Outcome:        What Council Does
                          Council provides a range of leisure facilities – such
                                                                                     Manawatu District, Massey University, the NZ Army
                                                                                     and schools have a range of recreation facilities,
                                                                                     sportsfields and playgrounds.

People have lots of fun
                          as the library, playgrounds, walkways, sportsfields,
                          swimming pools, skatepark, Arena Manawatu, and
                          Te Manawa.                                                 Destination Manawatu promotes what is on in the

things to do              We fund a wide range of events for local people
                                                                                     City.

                                                                                     Sports clubs and arts and cultural groups provide
                          and visitors.
                                                                                     opportunities for a huge range of leisure activities.
                          We help promote what is on in Palmerston North.            Private businesses also provide many leisure
                          We also provide grants to organisations like Sport         opportunities, eg, shopping, the movies, etc.
                          Manawatu, the Regent Theatre, Centrepoint,
                          Creative Sounds, Rugby Museum, Manawatu                    Incorporated societies and trusts help fund many
                          Community Athletics Track and the Globe Theatre.           groups and facilities.

                                                                                     Residents are encouraged to be active, be involved
                          How we will measure progress                               in things be aware of what is on.
                          • Satisfaction with range of leisure opportunities
                          • Number of clubs


                          What other organisations do
                          Sport Manawatu co-ordinates the sports sector, and
                          the Regional Sport and Active Recreation Strategy.
                          The Community Arts Council co-ordinates the arts
                          and cultural sector.




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Community Outcome:                                     What Council Does
                                                       The Council is responsible for providing safe
                                                                                                             We support safety groups like the Safety Advisory
                                                                                                             Board, Neighbourhood Support and SafeCity Hosts.
                                                                                                             We ensure that our community buildings,

People feel safe
                                                       transport networks – for motorists, cyclists and
                                                       pedestrians.                                          sportsfields, playgrounds, etc, are safe.


                                                       We provide street lighting, footpath maintenance      We maintain a register of contaminated land.
                                                       and ensure trees are cut back from footpaths so
                                                       people can move safely.                               How we will measure progress
                                                                                                             •   Crime figures
                                                       We are responsible for stormwater and flood           •   Road accidents
                                                       protection (other than the Manawatu River             •   Fire Starts
                                                       and the Mangaone Stream, which are the                •   Injury Accidents
                                                       responsibility of Horizons).                          •   Perceptions of safety

                                                       We provide safe drinking water.
                                                                                                             What other organisations do
                                                                                                             The Safety Advisory Board ensures organisations
                                                       We include Crime Prevention Through Environmental
                                                                                                             take a co-ordinated approach to safety.
                                                       Design (CPTED) in projects like City Heart.

                                                                                                             The Police focus on crime and crash reduction.
                                                       The Council’s regulatory services – animal control,
                                                       health inspections, hazardous substances, building
                                                                                                             The Fire Service responds to fires and other
                                                       consents, bylaws, etc – are for safe communities.
                                                                                                             emergencies. It also promotes fire safety.
                                                       Through civil defence, the Council encourages
                                                       people to prepare themselves for emergencies like
                                                                                                             St John provides emergency response services and
                                                       earthquakes and floods. We will work with other
                                                                                                             first aid training.
                                                       emergency services during an emergency.




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Horizons leads the regional Civil Defence and               MidCentral Health encourages healthy, safe
Emergency Management Group (and the CDEMG                   lifestyles and treats the sick and injured through its
Plan) and is responsible for flood protection on the        MidCentral District Strategic Plan.
Manawatu River and the Mangaone Stream.
                                                            The SafeCity Trust helps create a safe and pleasant
ACC works to prevent injuries at home, at work, at          social centre for the City.
play, on the move, etc. It has overall responsibility for
the NZ Injury Prevention Strategy. The ACC and the          Community groups eg, Neighbourhood Support,
Council have a Memorandum of Understanding to               DrugArm, Women’s Refuge all help keep people
address common issues of safety in Palmerston North.        safe and reduce violence.

The Ministry of Social Development works to                 Housing New Zealand Corporation helps provide
strengthen communities and families and to reduce           safe urban neighbourhoods.
family violence.
                                                            Residents are encouraged to look after each other
Child, Youth and Family Services works to prevent           and be prepared for emergencies.
child abuse and neglect and provides services for
strong families.

Occupational Safety and Health looks after safety in
the workforce.

New Zealand Transport Authority contributes to
safe transport systems.




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Community Outcome:                                     What Council Does
                                                       The Council is responsible for waste management,
                                                                                                               What other organisations do
                                                                                                               Horizons is responsible for the sustainable

Palmerston north is
                                                       involving reduction, re-use, recycling, recovery,       management of air, land, native biodiversity
                                                       treatment, and disposal of waste.                       and water resources through its LTCCP. It also
                                                                                                               undertakes environmental education.

attractive, clean and                                  We provide ‘green space’ through parks, walkways,
                                                       reserves, etc, and street trees and gardens.            The Environment Network co-ordinates the


green
                                                                                                               environmental sector.
                                                       We develop and implement the District Plan, including
                                                       urban design criteria and heritage protection.          Urban Care is active in projects like Clean-Up NZ.
                                                                                                               Other environmental groups carry out
                                                       We plan for sustainable growth.                         environmental projects and advocacy.

                                                       The Council supports groups like Urban Care,            The Department of Conservation looks after
                                                       Manawatu Tree Trust, Zero Waste Academy and the         conservation issues in the City and is involved in
                                                       Environment Network.                                    reserve management.

                                                       We carry out projects to keep the City looking          The NZ Historic Places Trust is responsible for the
                                                       attractive such as repositioning overhead cables        protection of heritage buildings.
                                                       underground and removing graffiti from public places.
                                                                                                               Housing New Zealand Corporation helps provide
                                                       We include public art in projects like City Heart.
                                                                                                               attractive and well designed urban areas.

                                                       How we will measure progress                            Residents help by keeping their properties
                                                       •     Satisfaction with look and feel of the City       attractive and the City clean and tidy.
                                                       •     Reserves per 1,000 people
                                                       •     Water Quality
                                                       •     Air Quality



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Community Outcome:        What Council Does
                          The Council funds and promotes initiatives that
                                                                                        How we will measure progress
                                                                                        •   Number of jobs

Businesses grow here
                          increase the numbers of businesses and jobs in                •   Number of businesses
                          the City. We do most of this by helping fund Vision           •   Average household income
                          Manawatu.                                                     •   Employment

and people have lots of   The Council funds Destination Manawatu and
                                                                                        •   Deprivation Index



job opportunities
                          Vision Manawatu to market and promote the City                What other organisations do
                          as a vibrant place to live, to work, to visit and do
                                                                                        Vision Manawatu provides economic development
                          business.
                                                                                        services.

                          We provide the infrastructure such as roading,
                                                                                        Destination Manawatu markets the City as a place
                          water and waste removal that businesses need.
                                                                                        to do business.
                          We plan and provide for industrial land.
                                                                                        Business groups like City Centre Marketing and
                          We provide part of the regulatory framework within
                                                                                        Manawatu Chamber of Commerce undertake co-
                          which businesses operate.
                                                                                        ordination and advocacy.

                          We invest in the airport.
                                                                                        The BioCommerce Centre helps develop new
                                                                                        businesses.
                          We provide events to attract visitors.
                                                                                        Work and Income assists people into employment
                          We provide a vibrant CBD and parking
                                                                                        and economic independence through its Central
                          developments.
                                                                                        Regional Plan.




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Trade and Enterprise gives advice and funding to
business (through Vision Manawatu).

Community Groups (eg, Mature Employment,
Ethnic Council) undertake community employment
initiatives.

Careers Service Rapuara provides individuals with
careers advice.

The private sector provides a large number of
business and jobs.

Residents can take up job and training
opportunities and to support local businesses.




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Community Outcome:       What Council Does
                         The Council works with Massey, UCOL, the
                                                                                    Community education groups (Te Whare Akonga
                                                                                    Open Learning Centre, EOSL, etc) provide education
                                                                                    and training opportunities.

People have lots of
                         International Pacific College, etc, to market the City
                         as a learning centre.
                                                                                    Private Training Providers also provide education

learning opportunities   We make the City attractive to students through
                         events, and other initiatives.
                                                                                    and training opportunities.

                                                                                    Tertiary Education Commission funds and co-
                         We provide learning opportunities through the              ordinates the tertiary sector.
                         library and Te Manawa.
                                                                                    The Guardian Group (a cluster of education groups)
                         We provide funding and support for community               also provides co-ordination for the education
                         education groups.                                          sector.

                                                                                    The Student City Group markets the City as a
                         How we will measure progress                               student centre and carries out initiatives for
                         • Participation in early childhood education               students.
                         • Number of school leavers with at least NCEA
                           level 1                                                  The Ministry of Education Special Education
                         • Highest Qualifications                                   Services improves learning opportunities for
                                                                                    disadvantaged young people.
                         What other organisations do
                         Schools and tertiary education institutions                Residents can take up learning opportunities
                         provide a wide range of education and training             available to them.
                         opportunities.




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Community Outcome:                                     What Council Does
                                                       The Council is responsible for providing safe
                                                                                                             New Zealand Transport Authority is the land
                                                                                                             transport funding agency (full funding for state
                                                                                                             highways, part funding with the City Council for local

People can easily move
                                                       transport networks – for motorists, cyclists and
                                                       pedestrians.                                          roads). It also promotes safety and sustainability.
                                                                                                             The Police undertake traffic enforcement, road

around the City                                        We ensure that transport is part of land planning
                                                       for new growth areas.
                                                                                                             safety, and crash investigations.

                                                                                                             ACC helps ensure road safety and injury prevention
                                                       We liaise with Horizons on public transport.          from road crashes.

                                                                                                             Individuals are encouraged to drive, cycle and walk
                                                       How we will measure progress                          safely and courteously. They are also encouraged
                                                       • Satisfaction with moving around the City            to use public transport.
                                                       • Delays at key intersections
                                                       • Number of road accidents


                                                       What other organisations do
                                                       Horizons is responsible for co-ordinating transport
                                                       activities in the region through its Regional Land
                                                       Transport Strategy and Plan. It also funds public
                                                       transport services (including special services for
                                                       people with disabilities) and has a road safety
                                                       programme (Road Safe Central).




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Community Outcome:        What Council Does
                          The Council provides the main infrastructural
                                                                                   Waste management companies provide waste
                                                                                   services.


Palmerston north’s
                          services for the City – roading, water, wastewater,
                          stormwater and waste disposal. We have asset             Horizons has responsibility for infrastructural
                          management plans to make sure this infrastructure        consents and monitoring, and for the stopbanks

physical infrastructure   is well maintained and can meet the City’s needs at
                          least cost.
                                                                                   along the Manawatu River and the Mangaone
                                                                                   Stream.


is reliable               We provide new infrastructure for growth.
                          We also provide much of the City’s cultural and
                          recreational infrastructure.


                          How we will measure progress
                          • Satisfaction with roads, footpaths, water,
                            stormwater, wastewater, waste
                          • Asset Management Plans
                          • Number of households connected to services


                          What other organisations do
                          Communication and energy companies provide
                          communication and energy infrastructure.

                          New Zealand Transport Authority has part
                          responsibility for land transport funding.




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Community Outcome:                                     What Council Does
                                                       The Council carries out community development,
                                                                                                            Umbrella Groups (eg, the Arts Council, Ethnic
                                                                                                            Council, Environment Network Manawatu,
                                                                                                            Community Services Council etc) provide co-

The community is
                                                       making grants to organisations, building capacity
                                                       and carrying out research.                           ordination and leadership, as well as carrying out
                                                                                                            specific projects.

supportive and people                                  We work with organisations and groups such
                                                       as Ministry of Social Development, Community         Rangitaane are Tangata whenua and mana whenua.
                                                                                                            Housing New Zealand Corporation provides

and organisations work
                                                       Services Council, Safety Advisory Board, Tools for
                                                       Schools, etc.                                        community agency housing.



together                                               Our strategic planning and democratic services are   Department of Internal Affairs gives advice,
                                                       about getting people working together on agreed      information and funding for strong communities
                                                       actions.                                             and encourages a strong volunteer sector.


                                                       We provide community halls and community             The Ministry of Social Development improves
                                                       infrastructure.                                      peoples’ well-being and ability to participate in
                                                                                                            the community. Key areas include youth, families
                                                                                                            and prisoners.
                                                       How we will measure progress
                                                       • Satisfaction with community spirit                 The Regional InterAgency Network provides co-
                                                       • Amount of volunteering                             ordination for government agencies working
                                                                                                            together.
                                                       What other organisations do
                                                       Community, church and voluntary groups               Te Puni Kokiri provides policy for Maori development.
                                                       carry out a wide range of projects that help
                                                       communities and individuals.                         Individuals are encouraged to be involved in
                                                                                                            voluntary groups and support people in need.




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Community Outcome:       What Council Does
                         Much of the Council’s infrastructure is concerned
                                                                                What other organisations do
                                                                                MidCentral Health provides hospital and health

People are well-housed
                         with public health. For example, providing clean       services for people. This includes provision of
                         water and disposing of waste and wastewater.           hospital services secondary and some tertiary
                         The Council provides many opportunities for healthy    facilities) and the funding of other health services

and healthy              exercise – walkways, playing fields, parks, etc.       in the City, including public health, primary care
                                                                                and other community health services.
                         The Council supports community groups involved in
                         health and housing.                                    The Manawatu Primary Health Organisation provides
                                                                                primary health services to people. This includes
                         We provide community and public rental housing         General Practice services and a range of other
                         for low income people, especially the low income       community based primary health care services.
                         elderly.
                                                                                Private health providers provide a wide range of
                         We carry out building inspections and are              health and wellness services.
                         responsible for the regulatory framework for
                         housing.                                               Maori Health providers, eg, Whakapai Hauora, Te Waka
                                                                                Huia, etc, provide health and wellness services.
                         We plan for growth.
                                                                                Community groups are also involved in health and
                         How we will measure progress                           wellness services.
                         • Housing overcrowding
                                                                                ACC is responsible for injury prevention and
                         • Number of people with severe/significant
                                                                                rehabilitation.
                           housing needs
                         • Morbidity and mortality
                                                                                Individuals lead healthy lifestyles and make healthy
                         • Life expectancy
                                                                                choices.




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Housing New Zealand Corporation provides rental
housing (1550 units), advice and assistance into
home ownership.

Tenancy Services resolves disputes between
tenants and landlords.

MidCentral gives support for people to stay in their
own houses and fund healthy homes or home
modifications for people with disabilities.

The Ministry of Health funds housing for people
with special needs.

Work and Income provides the accommodation
supplement and gives grants or loans for modifying
housing for people with special needs. It also funds
the Healthy Homes programme.

The Energy Efficiency and Conservation Authority
encourages energy efficient and healthy homes.
MASH and other community groups help provide
sheltered housing.

Community housing groups are involved in advice
and advocacy.

Individuals are responsible for the bulk of housing
in Palmerston North.




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links between the                     Palmerston North is a city where people want
                                      to live because of its easy lifestyle and its many
                                      social, economic and leisure opportunities.
                                                                                           Palmerston North is a city which attracts,
                                                                                           fosters and retains businesses because of the
                                                                                           creativity and innovation of its education,
                                                                                                                                           Palmerston North is a leading city in
                                                                                                                                           the quest to become environmentally
                                                                                                                                           sustainable.

Community Outcomes                     People have lots of fun things to do
                                                                                           research and knowledge database.




and Council's major                   People are attracted to a city with lots
                                      of leisure opportunities for them and
                                                                                           Businesses find it easier to attract new
                                                                                           staff to a city that has a wide range of
                                                                                                                                           Outdoor recreation opportunities
                                                                                                                                           ū like walkways, parks and reserves
                                      their families. The more people living in            leisure opportunities.                          ū provide green open spaces that

City Goals                            a city the wider the range of groups that
                                      can help meet peoples’ different leisure
                                      interests.
                                                                                                                                             enhance the environment.




By working towards its major goals,    People feel safe
                                      Cities that have a reputation for being              Businesses find it easier to attract new        Principles of crime prevention
the Council is also contributing to   unsafe find it difficult to attract new              staff to a city that is a safe place to live.   through environmental design
                                      residents, whether they are thinking of                                                              can be used to enhance safety and
the Community Outcomes. This          coming here for work or study.                                                                       environmental sustainability.

table shows the links between the      Palmerston North is attractive, clean and green

goals and the outcomes.               People are becoming more                             Businesses understand the need        Attractive, clean and “green” cities
                                      environmentally aware and are                        to conduct their businesses in an     are environmentally sustainable
                                      attracted to cities that look after their            environmentally sustainable way. Jobs cities.
                                      environments.                                        can be created by finding innovative
                                                                                           ways to protect the environment.




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                                                       Palmerston North is a city where people want         Palmerston North is a city which attracts,      Palmerston North is a leading city in
                                                       to live because of its easy lifestyle and its many   fosters and retains businesses because of the   the quest to become environmentally
                                                       social, economic and leisure opportunities.          creativity and innovation of its education,     sustainable.
                                                                                                            research and knowledge database.

                                                        Businesses grow here and people have lots of job opportunities
                                                       One of the key reasons people move to                Economic development is about                   Businesses understand the need
                                                       a new city is to get a new job. If people            keeping and growing existing                    to conduct their businesses in an
                                                       are attracted to a city it will experience           businesses and jobs, and attracting             environmentally sustainable way.
                                                       population growth – which then creates               new businesses and jobs. The                    Jobs can be created by finding
                                                       more jobs.                                           education, research and development             innovative ways to protect the
                                                                                                            sector is a major strength of                   environment.
                                                                                                            Palmerston North’s economy.

                                                        People have lots of learning opportunities
                                                       People are attracted to a city with        Business growth and economic                              Learning – formally or informally –
                                                       lots of formal and informal education      development depend upon the                               more about the environment is an
                                                       opportunities for them and their families. creativity and innovation of the                          important topic for many people.
                                                                                                  education, research and development
                                                                                                  sectors.

                                                        It is easy to move around Palmerston North
                                                       Cities with poor transport networks                  An efficient and reliable roading               The Council manages its roading
                                                       where they are lots of travel delays are             network is vital for businesses – for the       network in a way that maximises its
                                                       not attractive places to live.                       movement of customers, goods and                protection and enhancement of the
                                                                                                            staff.                                          environment, and minimises any
                                                                                                                                                            negative environmental impacts.




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           Palmerston North is a city where people want         Palmerston North is a city which attracts,      Palmerston North is a leading city in
           to live because of its easy lifestyle and its many   fosters and retains businesses because of the   the quest to become environmentally
           social, economic and leisure opportunities.          creativity and innovation of its education,     sustainable.
                                                                research and knowledge database.

            The City’s infrastructure is reliable
           Cities with poor infrastructure do not               Efficient and reliable infrastructure           The Council manages its physical
           attract people as good places to live.               – roads, rubbish and recycling,                 infrastructure in a way that
                                                                stormwater, wastewater, and water –             maximises its protection and
                                                                are all vital for businesses.                   enhancement of the environment,
                                                                                                                and minimises any negative
                                                                                                                environmental impacts.

            The community is supportive and people and organisations work together
           People like living in cities that have good          Businesses have a key leadership in a           Many community groups and
           community spirit and that support those              city. Many businesses play key roles            networks focus on improving the
           in need. The more people that live in a              in supporting schools, community                environment and working towards
           city the bigger the volunteer base for               groups, leisure groups, etc.                    environmental sustainability.
           community groups.

            People are well-housed and healthy
           People are attracted to a city with a good           The health sector is a major employer           A healthy environment is one of the
           range of housing (especially affordable              in Palmerston North. Businesses find            most important factors in peoples’
           housing) and good health services.                   it easier to attract new staff to a city        individual health.
           Having lots of people in a city also means           that has a good range of housing
           a greater range of health services can be            opportunities and health services.
           provided.




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Role and       Role of the Council                                      • management of local infrastructure including
               The purpose of the Palmerston North City Council           network infrastructure (e.g. roads, sewage
               is to enable democratic local decision making to           disposal, water, stormwater, flood and river



Structure of
               promote the social, economic, environmental and            control works) and community infrastructure
               cultural well being of Palmerston North City in the        (libraries, parks and recreational activities)
               present and for the future.                              • environmental management
                                                                        • planning of the future needs of the local district.



Palmerston
               In meeting its purpose the Palmerston North City
               Council has a variety of roles:
               • facilitating and monitoring of community
                  outcomes


north City     • formulating the Council’s strategic direction in
                  conjunction with the community through the
                  Long Term Council Community Plan (LTCCP)



Council
               • determining the services and activities to be
                  undertaken
               • managing principal risks
               • administering various regulations and upholding
                  the law
               • monitoring the delivery of the LTCCP and Annual
                  Plan
               • advocacy on behalf of the local community with
                  central government, other local authorities and
                  other agencies
               • facilitating solutions to local needs
               • development of local resources




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Council Representation
The Council is composed of 16 elected members
– a Mayor and 15 Councillors. A Chief Executive is
appointed by the Council to be in charge of Council
operations, and certain powers of management
are delegated to that position in accordance with
Section 42 and clauses 33 and 34 of Schedule
7 of the Local Government Act 2002. The Chief
Executive implements and manages Council’s
policies and objectives within the budgetary
constraints established by Council.


Elections
Council elections are held every three years, with
the most recent election held in October 2007. The
representation arrangements for that election, as
decided by the Local Government Commission,
were that the Council comprise 15 councillors
elected by five wards, plus the Mayor, with no
community boards to be established.




                                                          Back row from left: Pat Kelly            Middle row from left: Jan Barnett   Front row from left: Lew Findlay   Absent: Councillor Chris Teo-
                                                          (Awapuni Ward), David Ireland            (Papaioea Ward), Ross Linklater     (Papaioea Ward), Mayor Jono        Sherrell (Hokowhitu Ward)
                                                          (Takaro Ward), Bruce Wilson (Ashhurst-   (Papaioea Ward), Gordon Cruden      Naylor, Anne Podd (Ashhurst-       and Councillor Michael Feyen
                                                          Fitzherbert Ward), John Hornblow         (Hokowhitu Ward), Peter Wheeler     Fitzherbert Ward), Jim Jefferies   (Takaro Ward).
                                                          (Papaioea Ward, Deputy Mayor),           (Awapuni Ward), Annette Nixon       (Hokowhitu Ward).
                                                          Vaughan Dennison (Takaro Ward).          (Awapuni Ward).




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Committee Structure

Council and committee meetings                                                                     PUBLIC
The Council reviews its committee structure after each
triennial election. At the last review, three primary                                      Informal community meetings
standing committees were established, being the
Community Well-Being, Finance & Performance and
                                                             ASHHURST -       AWAPUNI                HOKOWHITU                     PAPAIOEA   TAKARO
Planning & Policy Committees. These committees           FITZHERBERT WARD      WARD                    WARD                          WARD      WARD
meet monthly, with the full Council meeting on the
last Wednesday of each month. Other committees
meet on an as-required basis.
                                                                                              COUNCIL
The purpose of the meetings is to ensure that                                          MAYOR & 15 COUNCILLORS
the affairs of the Council are being conducted in
accordance with legislative mandate and Council
objectives. The Council also has a monitoring role in                       Community                Finance &             Planning
relation to the performance of Council Controlled                            Wellbeing             Performance             & Policy
                                                                            Committee               Committee             Committee
Organisations.
                                                                            Audit & Risk             Committee             Hearings
                                                                            Committee                of Council           Committee
In addition to formal monthly meetings, the
Council convenes informal community meetings
                                                                                   Joint Strategic
                                                                                                             CCNZ/Arts & Culture
at least four times per year, throughout the wards                              Planning Committee
                                                                                                              Fund Committee
                                                                                    PNCC/ MDC
of the City. The purpose of these meetings is to
provide an opportunity for discussion between
ward residents and the Council on matters affecting
ward residents.




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Local Governance Statement                                Council Direction                                     Legislative Compliance
The Council has adopted a Local Governance                The Council’s focus is on making:                     Being a regulatory body, the Council administers
Statement, as required by the Local Government Act                                                              various regulations and laws. It is imperative that
2002, setting the governance role of the Council.         • Palmerston North a city where people want to        Council also complies with all relevant legislation.
The statement ensures that the community has                live because of its easy lifestyle and its many     External law firms with local government expertise
information on the processes the Council follows            social, economic and leisure opportunities.         are contracted to assist the Council to comply with
when making decisions and taking action and how           • Palmerston North a leading city in the quest to     applicable legislation.
the community can influence these processes.                become environmentally sustainable.
                                                          • Palmerston North a city which attracts, fosters
Other governance documents include the Code of              and retains businesses because of the creativity
Conduct, Policy on the Appointment of Directors             and innovation of its education, research and
to Council Organisations, and the Council’s                 knowledge base.
Standing Orders.
                                                          In doing this the Council will ensure that:
The Council believes that it is essential, in the
interests of good management and effective                • Palmerston North City Council is financially
administration, to encourage the delegation of              responsible and residents are satisfied that they
decision-making. The full list of delegations can be        get value for money from their rates.
viewed in the Council’s Delegations Manual, which         • Palmerston North City Council understands
is available on the Council’s website, www.pncc.            the many views of the City’s people and those
govt.nz. However, the overall responsibility for            people understand what the Council is doing
maintaining effective systems of internal control           and why.
ultimately rests with the Council. Internal controls
include the policies, systems and procedures              For more details, see page 17 of Part One.
established to provide measurable assurance that
specific objectives will be achieved.




176                                                                                                                                               10 YeAR PlAn 2009/19
                                                                                      AddiTiOnAl infORmATiOn role and struCture of Palmerston north City CounCil




Palmerston North City Council                                                                        COUNCIL
Organisational Chart
                                                                                      Chief Executive – Paddy Clifford
The Council organisation is divided into
seven units, the managers of which                                   v                         Management Team                                        v
report to the Chief Executive.
                                                  City Contact                   City Corporate                          City Future                       City Networks
                                                 Peter Eathorne                    Grant Elliott                        Sheryl Bryant                        Ray Swadel
                                                 General ManaGer               Chief finanCial OffiCer                  General ManaGer                     General ManaGer

                                              Public health, customer           Chief Executive’s office,           Community outcomes,                 Asset Management for
                                               services, planning and       governance and civic support,       community planning (LTCCP),            water supply, wastewater,
                                              building, animal control,       information management,          social, economic, environmental           stormwater, roading,
                                            parking control, bylaws and    finance and treasury, legal, risk      and leisure strategies and                  recreation.
                                           liquor licensing enforcement.     management, internal audit,          policies, Iwi relationships,
                                                                                    Print Synergy.              bylaws development, resource
                                                                                                                  management and district
                                                                                                                           planning


                                                     Executive Support                              City Enterprises                      Library & Community Services
                                                         Jane Julian                                  Ray McIndoe                                 Anthony Lewis
                                                        General ManaGer                               General ManaGer                                General ManaGer

                                                                                                                                           Library services, community facilities,
                                                    Economic development,                 Horticultural, parks and sports grounds
                                                                                                                                          community and social housing, Council
                                               City events, human resources and            maintenance, civil works, emergency
                                                                                                                                          controlled organisations, grant funding,
                                            organisational development, corporate             services, water and wastewater
                                                                                                                                           community development, community
                                            communications, web development and           treatment plants, project consultancy,
                                                                                                                                           events, community safety, managing
                                             management, City promotion, external          cemetery administration, laboratory,
                                                                                                                                            relationships with social and cultural
                                                         relationships.                          Venues Palmerston North.
                                                                                                                                                       organisations.


                                                 Human Resources Manager
                                                                                                    Advisors to                                   Public Affairs Manager
                                                     – Wayne Wilson
                                                                                                 < Management >                                    – Malcolm Hopwood
                                                                                                      Team



PART TWO                                                                                                                                                                             177
AddiTiOnAl infORmATiOn CounCil ContaCt details




Council                                          Postal Address                                           T:      06 356 8199
                                                 Private Bag 11034                                        F:      06 351 4471
                                                 Manawatu Mail Centre                                     E:      info@pncc.govt.nz



Contact details
                                                 Palmerston North 4442                                    W:      www.pncc.govt.nz


                                                 In Person                                                Customer Services Centre
                                                 Customer Services Centre                                 Open Hours:
                                                 32 The Square                                            Monday, Tuesday, Thursday and Friday, 8am-5pm
                                                 Palmerston North                                         Wednesday, 9am-5pm


                                                 Contact Centre                                           The Customer Services Centre has been developed
                                                 The Palmerston North City Council operates a 24          to be the first point of contact within the Council
                                                 hour, seven day a week, 365 days a year Contact          for all of our business and is user friendly for the
                                                 Centre which acts as a gateway and hub for the           disabled.
                                                 Council.
                                                                                                          Our friendly customer-focused team will assist
                                                 The Contact Centre staff are always there to talk to     you in person at the Customer Services Centre on
                                                 you about any issues you may be having within the        The Square side of the road linking the Council’s
                                                 City. It also provides a translation service for those   Customer Services to the heart of the City.
                                                 who have English as a second language.
                                                                                                          Service Centres
                                                 For all enquiries, service requests, or to contact       Ashhurst Services Delivery Centre
                                                 anyone who works for the Palmerston North                C/o Ashhurst Four Square Discounter
                                                 City Council, please use the following contact           122 Cambridge Avenue, Ashhurst
                                                 information:




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                                                                                                                   AddiTiOnAl infORmATiOn CounCil ContaCt details




Statistics                                             Open Hours:                                         Council Meetings
Area: 32,594 hectares                                  Monday, Tuesday & Thursday         10am - 6pm       The Council encourages public participation in
Population: 79,300 (estimated by NZ Statistics 2008)   Wednesday & Friday                 10am - 8pm       its activities. Meetings of the Council and its
Rateable Properties: 30,033                            Saturday                           10am - 4pm       Committees are open to the public and are held in
                                                       Sunday                             1pm - 4pm        the Council Chamber. For information on meeting
Palmerston North has a young population. The City      Closed on public holidays.                          agendas and dates, contact the Customer Service
has a high proportion of 15-29 year olds as a result                                                       Centre (06 356 8199) or look in the public notices
of the City’s education strengths. For most other      Ashhurst Community Library                          section of the Manawatu Standard, The Tribune or
factors, the City’s population closely matches that    Cnr Cambridge Street & Bamfield Streets, Ashhurst   The Guardian newspapers; or look at our website –
of the rest of New Zealand.                            Phone/Fax: 06 326 8646                              www.pncc.govt.nz

                                                       Awapuni Branch Library                              This 10 Year Plan has been prepared under the
City Libraries                                         Cnr College Street & Pitama Road                    Local Government Act 2002. Thank you to all who
                                                       Phone/Fax: 06 356 7634                              contributed to the collation and production of this
Central Library
                                                                                                           publication.
4 The Square                                           Te Patikitiki (Highbury) Branch Library
PO Box 1948                                            157 Highbury Avenue
Palmerston North                                       Phone: 06 357 2108
P: 06 351 4100
F: 06 351 4102                                         Roslyn Branch Library
E: webmanager@library.pncc.govt.nz                     8 Kipling Street
                                                       Phone/Fax: 06 357 9287
Renewals: Phone 06 351 4101
                                                       Mobile Library
                                                       Has regular stops throughout the City.




PART TWO                                                                                                                                                      179
AddiTiOnAl infORmATiOn Glossary




Glossary
                                      Activity                                                  Capital New
                                      The goods or services that the Council provides           That expenditure which will increase the value of
                                      to the community. The Council has 19 Activities,          or create new Council assets (land, infrastructure,
                                      e.g. Economic Development, Water, and Parks               plant and equipment). A household analogy would
                                      and Recreation. The Activities are the Council’s          be expenditure to put a new roof on a house or
                                      contribution to the community outcomes,                   build a new bedroom.
This section explains the key terms
                                      however all Activities contribute to more than one
in the 10 Year Plan.                  community outcome.                                        Capital Renewal
                                                                                                Asset renewals or replacements e.g. renewing a
                                      Annual Plan                                               footpath to increase the life of the footpath, or
                                      This is a budget document that shows how the              replacing library books.
                                      Council will fund a particular year of the 10 Year Plan
                                      (LTCCP). This is to give more consistency of direction    Community Outcomes
                                      to what the Council does for the community. It is         What local communities think are important
                                      produced in years two and three of the 10 Year Plan.      for their current and future social, economic,
                                                                                                environmental and cultural wellbeing.
                                      Asset Management Plans (AMPs)
                                      These ensure that the Council’s major infrastructural     Council Controlled Organisations (CCO)
                                      assets are maintained to ensure high environmental        An organisation which the Council owns or controls
                                      standards and can meet the future needs of the            at least 50% of the voting rights or has the right to
                                      City, at the lowest possible cost over the long term.     appoint at least 50% of the directors or trustees.
                                      The Council has AMPs for roading and parking,             CCOs are mostly set up to independently manage
                                      stormwater, waste management, wastewater, water,          Council facilities or deliver specific services on
                                      and property and recreation facilities.                   behalf of residents.

                                                                                                Council Controlled Trading Organisation (CCTO)
                                                                                                As above for CCO but trading with the main
                                                                                                purpose/intention being to make a profit.




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Depreciation                                            Level of service                                      Operating Expenditure
Spreading the costs of assets over their useful life.   A measurable description of what the Council does     Expenditure that is necessary for the normal
                                                        (or is planning to do) for residents.                 activities of Council. Using a household analogy,
Development Contributions                                                                                     this would be paying for the electricity or food.
Development Contributions provide Council               Liability Management and Investment Policy            Performance Measures
with a method to obtain contributions to fund           This policy sets out:                                 Performance measures show how people can
infrastructure requirements due to growth. A            • when and how Council will invest, and for what      judge the success of the Council. The measures in
Development Contributions Policy is required as            purposes                                           the current 10 Year Plan are part of the Council’s
a component of the Funding & Financial Policies         • when and how Council will borrow, and for what      performance framework. The Council has
in the LTCCP under section 102(4)(d) of the Local          purposes                                           other more technical performance measures in
Government Act (LGA) 2002.                                                                                    documents like Asset Management Plans.
                                                        LTCCP (Long Term Council Community Plan)
Financial Year                                          A 10 Year Plan, with particular emphasis on the       Programmes
The Council’s financial year runs from 1 July to 30     first three years, developed by the Council and       Programmes are the detailed financial actions
June. The 2009/10 financial year therefore covers       describing what the Council will do to contribute     which include capital and non-capital works within
the period 1 July 2009 to 30 June 2010.                 to the community outcomes. It shows what the          a particular financial year to achieve particular
                                                        Council will do, why it does these things, how much   outcomes of the Council.
Group of Activities                                     they will cost and how success will be judged. An
Groups of Activities show how the Council will work     LTCCP is prepared every three years.                  Uniform Annual General Charge (UAGC)
towards the community outcomes. The Council                                                                   A component of the general rate that is levied as a
has six Groups of Activities. Activities that provide   Maintenance Costs                                     uniform amount on every property.
similar services have been grouped together.            Expenditure in relation to repairs and maintenance
                                                        of Council’s assets.
Inflation
A rise in the general level of prices of goods and      NZIFRS
services to the Council over a period of time.          New Zealand International Financial Reporting
                                                        Standards




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