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Local Government Act 2002

Planning, decision-making, and accountability - Financial management

101A: Financial strategy

You could also call this:

“Council's plan for managing money and services over many years”

As part of your local council’s long-term plan, they must create and adopt a financial strategy. This strategy covers all the years included in the long-term plan.

The financial strategy helps your council manage money wisely. It gives them a guide to look at when they’re thinking about how to spend and fund things. It also helps you understand how the council’s plans might affect services, rates, debt, and investments.

In this strategy, your council needs to talk about things that might have a big impact on them in the coming years. This includes changes in population, how land is used, and the costs of dealing with these changes. They also need to mention the money they’ll spend on things like pipes, roads, and flood protection to keep services running as they are now.

Your council must set limits on how much they can increase rates and how much they can borrow. They need to say if they can keep services going and meet new needs within these limits.

The strategy also needs to explain how the council will secure any money they borrow. Lastly, it should say what the council wants to achieve with its investments and how much return they expect to get from them.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM3414327.

Topics:
Government and voting > Local councils
Money and consumer rights > Taxes
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101: Financial management, or

“Rules for councils on how to handle money wisely for the community's benefit”

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101B: Infrastructure strategy, or

“A plan for taking care of important town services for a long time”

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

101AFinancial strategy

  1. A local authority must, as part of its long-term plan, prepare and adopt a financial strategy for all of the consecutive financial years covered by the long-term plan.

  2. The purpose of the financial strategy is to—

  3. facilitate prudent financial management by the local authority by providing a guide for the local authority to consider proposals for funding and expenditure against; and
    1. provide a context for consultation on the local authority's proposals for funding and expenditure by making transparent the overall effects of those proposals on the local authority's services, rates, debt, and investments.

      1. The financial strategy must—

      2. include a statement of the factors that are expected to have a significant impact on the local authority during the consecutive financial years covered by the strategy, including—
        1. the expected changes in population and the use of land in the district or region, and the capital and operating costs of providing for those changes; and
          1. the expected capital expenditure on network infrastructure, flood protection, and flood control works that is required to maintain existing levels of service currently provided by the local authority; and
            1. other significant factors affecting the local authority's ability to maintain existing levels of service and to meet additional demands for services; and
            2. include a statement of the local authority's—
              1. quantified limits on rate increases and borrowing; and
                1. assessment of its ability to provide and maintain existing levels of service and to meet additional demands for services within those limits; and
                2. specify the local authority's policy on the giving of securities for its borrowing; and
                  1. specify the local authority's objectives for holding and managing financial investments and equity securities and its quantified targets for returns on those investments and equity securities.

                    Notes
                    • Section 101A: inserted, on , by section 18 of the Local Government Act 2002 Amendment Act 2010 (2010 No 124).
                    • Section 101A(2): replaced, on , by section 35(1) of the Local Government Act 2002 Amendment Act 2014 (2014 No 55).
                    • Section 101A(3): amended, on , by section 35(2) of the Local Government Act 2002 Amendment Act 2014 (2014 No 55).
                    • Section 101A(3)(b)(i): amended, on , by section 21 of the Local Government Regulatory Systems Amendment Act 2019 (2019 No 6).