Revenue and Financing Policy Funding of Capital Requirements Development and Financial Contributions 10. In general, the sources of funds for capital expenditure will be utilised in the • Contributions received from developments and subdivisions are applied following order: towards the cost of infrastructure to mitigate the effects of growth. (Where capital expenditure can be funded from these contributions, Council will generally use these sources of funding to meet the cost of • Development and financial contributions. growth of the District in preference to other services). • Capital grants and subsidies (where available). Forestry Income • User charges. • Currently used to fund the forestry and asset sales reserve which is General revenue sources [see below]. used to fund projects as determined by Council. • • Council financial reserves, including Depreciation Reserves. Changes to Existing Funding Policy • Loan raising [which will impact on rates in the form of loan servicing 12.1 Following an in-depth review of its Revenue and Financing Policy, Council charges]. initiated a number of funding changes that will take effect from 1 July 2018. • Targeted rates [directly charged]. The review included the following issues: General Revenue Sources Consideration of the background to the existing funding policies. • 11. There are some revenue sources which are not directly linked to an activity but are utilised by Council to assist in funding a number of Council activities either • A review of user charges. directly or indirectly. An examination of the provisions of the Local Government (Rating) Act • 2002. These include: • The appropriateness of the existing geographic areas for levying Dividends and Interest from Investments general-type rates and charges. • Funded to specified Reserves for particular purposes or events (eg: • The appropriateness of retaining Geographic Rating Areas paying a Emergency Events Reserve). defined percentage of total General Rates and Charges. • Used to subsidise general-type rates and charges by way of general revenue • The advantages and disadvantages of using either Land Value or allocation. Capital Value for levying general-type rates. (The current system is • Used to fund interest and funding costs on external borrowings. based on property land values). • Review of the “funding relationship weightings system” (see explanation Petroleum Tax of this in Terminology), to ensure that appropriate funding allocations are Used to subsidise general-type rates and charges by way of general made to take account of the Financial Management considerations • outlined in section 101 of the Local Government Act 2002. revenue allocation. 12.2 In this Plan Council has funded Depreciation and Debt Servicing Costs on the Asset Sale Proceeds following basis: • Proceeds from the sale of non- activity assets are used to fund the forestry and asset sales reserve. (i) Depreciation has been fully funded for all assets with the following exceptions: 2018-2028 Long Term Plan Page 317