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Local Government Act 2002

Planning, decision-making, and accountability - Financial management

104: Liability management policy

You could also call this:

“A plan for how your local council borrows and manages money”

When your local authority makes a policy under section 102(1), it needs to explain how it will handle its borrowing and other money matters. This policy must cover four main areas:

First, it needs to talk about interest rate exposure. This means how the authority will deal with changes in interest rates that could affect its loans.

Second, the policy must address liquidity. This is about making sure the authority has enough money available when it needs to pay for things.

Third, it should cover credit exposure. This relates to how the authority manages the risk of lending money or extending credit to others.

Lastly, the policy must explain how the authority plans to repay its debts. This is important to show that the authority has a plan to pay back the money it borrows.

These rules help make sure your local authority manages its money responsibly and takes care of important financial matters.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM172362.

Topics:
Government and voting > Local councils
Money and consumer rights > Banking and loans
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103: Revenue and financing policy, or

“How your local council plans to get and spend money”

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105: Investment policy, or

“Rules for how local councils handle money and investments”

Part 6 Planning, decision-making, and accountability
Financial management

104Liability management policy

  1. A policy adopted under section 102(1) must state the local authority's policies in respect of the management of both borrowing and other liabilities, including—

  2. interest rate exposure; and
    1. liquidity; and
      1. credit exposure; and
        1. debt repayment.

              Compare
              Notes
              • Section 104: amended, on , by section 21(1) of the Local Government Act 2002 Amendment Act 2010 (2010 No 124).
              • Section 104(d): amended, on , by section 21(2) of the Local Government Act 2002 Amendment Act 2010 (2010 No 124).
              • Section 104(e): repealed, on , by section 21(3) of the Local Government Act 2002 Amendment Act 2010 (2010 No 124).
              • Section 104(f): repealed, on , by section 21(3) of the Local Government Act 2002 Amendment Act 2010 (2010 No 124).