Revenue and Financing Policy 2020-21

Council has an asset replacement reserve to meet the cost of buying fixed assets such as motor vehicles, plant and equipment, and computers.

Depreciation on Council fixed assets is funded, and this income is placed in the asset replacement reserve, along with proceeds from the sale of assets. The reserve also attracts interest income. 

Most infrastructure assets (such as floodbanks, pumping stations and drains) are assigned to special rating districts, and their depreciation is funded by the ratepayers in those districts. Each special rating district has a “funded depreciation reserve” set up, which represents the balance of the amount of depreciation revenue rates for, and any interest earned on reserve balances. These reserves fund capital expenditure and infrastructure renewals.

It If the reserves don’t have sufficient funds, we borrow the money (either internally or externally). 

Tools to fund major capital projects will be considered on a case-by-case basis. Council may borrow either internally or externally to fund a major project. Other funding tools available to Council are rating, dividend income, reserves, fees and charges and cash balances held by Council. In determining the appropriate funding tools, the Council will consider the benefits arising from the project, the project costs, and the impacts and consequences of the project.