Rates income is recognised on an accrual basis and is measured at the fair value of consideration received or receivable.
The following particular policies apply:
• General rates, targeted rates (excluding water-by-meter), and uniform annual general charges are recognised at the start of the financial year to which the rates resolution relates. They are recognised at the amounts due.
Council considers that the effect of payment of rates by instalments is not sufficient to require discounting of rates receivables and subsequent recognition of interest revenue.
• Rates arising from late payment penalties are recognised as revenue when rates become overdue.
• Rates remissions are recognised as a reduction of rates revenue when Council has received an application that satisfies its rates remission policy.
• Water billing revenue is recognised on an accrual basis with unread meters at year end accrued on an average usage basis.
2018/2019
$000 RATES 2019/2020
$000
38,535 Total general rates 40,300
TARGETED RATES ATTRIBUTABLE TO ACTIVITIES
184 Environmental Management 167
– Transportation, Roads and Footpaths –
90 Coastal Structures 84
2,381 Water Supply – excluding metered 2,743
7,623 Water Supply – metered 7,450
10,072 Wastewater 10,396
4,785 Stormwater 4,746
2,029 Solid Waste 2,379
2,661 Flood Protection and River Control Works 2,968
4,764 Community Development 4,487
310 Governance 319
34,899 Total targeted rates attributable to activities 35,739
73,434 Total rates net of remissions 76,039
322 Rates remissions 265
73,756 Total rates gross of remissions 76,304
NOTES TO FINANCIAL STATEMENTS
NOTES TO FINANCIAL STATEMENTS
NOTE 2: RATES (CONT.)
The annual rates revenue of Council for the year ended 30 June 2020 and 30 June 2019 for the purposes of the LGFA Guarantee and Indemnity Deed disclosure is shown on the previous page.
Rates revenue is shown net of rates remissions. The rates remission policy allows Council to remit rates when certain conditions and criteria are met. Some examples of situations where rates may be remitted include when land has been detrimentally affected by natural disaster, on properties with a rating valuation up to $7,000 and on land used for sporting, recreation or community services purposes.
In accordance with the Local Government (Rating) Act 2002, certain properties cannot be rated for general rates.
This includes schools, places of religious worship, public gardens and reserves. These non-rateable properties, where applicable, may be subject to targeted rates in respect of wastewater, water, refuse and sanitation. Non rateable land does not constitute a remission under Councils rates remission policy.
A rating revaluation occurs every three years. They are prepared on behalf of the Tasman District Council by Quotable Value (QV). The entire process is independently audited by the Office of the Valuer General. The effective date for the current revaluation is 1 September 2017. These valuations, along with other factors will be used by Council as the basis for distributing individual rates obligations for the three financial years, starting from 1 July 2018.
NOTE 3: OTHER REVENUE
Revenue is recognised on an accrual basis and is measured at the fair value of consideration received or receivable.
The following particular policies apply:
• Development contributions and reserve financial contributions are recognised as revenue when Council has rights to the contribution and has provided, or is able to provide, the service that gave rise to the charging of the contribution. Otherwise development contributions and financial contributions are recognised as liabilities until such time as Council provides, or is able to provide, the service.
• Interest is recognised using the effective interest method.
• Dividends are recognised when the right to receive payment has been established.
• Where a physical asset is acquired for nil or nominal consideration the fair value of the asset received is recognised as revenue. Assets vested in Council are recognised as revenue when control over the asset is obtained (for roading and water assets, this is when S224 is approved). The fair value of vested or donated assets is usually determined by reference to the cost of constructing the asset. For assets received from property developments, the fair value is based on construction price information provided from the most recent revaluation.
• Infringements are recognised when the fine is issued.
2018/2019
$000 OTHER REVENUE 2019/2020
$000
8,186 Forestry harvesting revenue 13,638
96 Dividend revenue 86
470 Infringements and fines 345
409 Petrol tax 364
271 Rental revenue from investment properties 245
15,861 Vested assets 11,634
7,921 Other 5,486
NOTES TO FINANCIAL STATEMENTS
NOTE 3: OTHER REVENUE (CONT.)
2018/2019
$000 FAIR VALUE MOVEMENT ON REVALUATION 2019/2020
$000
(6,436) Unrealised gain/(loss) on interest rate derivatives (4,261)
2,895 Gain on changes in fair value of forestry assets 2,957
46 Investment property revaluation movement (248)
(3,495) Total fair value movement on revaluation (1,552)
2018/2019
$000 OTHER GAINS 2019/2020
$000
76 Gain on disposal of property, plant and equipment 16
76 Total other gains 16
NOTE 4: SUBSIDIES AND GRANTS
Revenue is recognised on an accrual basis and is measured at the fair value of consideration received or receivable. The following policies apply:
• Council receives government grants from the New Zealand Transport Agency, which subsidises part of Council’s costs in maintaining the local roading infrastructure. New Zealand Transport Agency revenue is recognised on entitlement when conditions pertaining to eligible expenditure are fulfilled.
• Other grants are recognised as revenue when they become receivable unless there is an obligation in substance to return the funds if conditions of the grant are not met. If there is such an obligation, the grants are initially recorded as grants received in advance and recognised as revenue when conditions of the grant are satisfied.
2018/2019
$000 OPERATING SUBSIDIES AND GRANTS 2019/2020
$000
6,071 NZ Transport Agency roading subsidies 4,662
1,713 Other subsidies, grants and donations 1,046
7,784 Total operating subsidies and grants 5,708
2018/2019
$000 CAPITAL SUBSIDIES AND GRANTS 2019/2020
$000
3,258 NZ Transport Agency roading subsidies 5,180
2,251 Other subsidies and grants 963
5,509 Total capital subsidies and grants 6,143
There are no unfulfilled conditions and other contingencies attached to government grants and subsidies recognised as revenue. Amounts received with unfulfilled conditions as at 30 June, are recognised as a liability in note 22.
NOTES TO FINANCIAL STATEMENTS
NOTE 5: FEES AND CHARGES
Revenue is recognised on an accrual basis and is measured at the fair value of consideration received or receivable.
The following particular policies apply:
• Fees and charges for building and resource consent services are recognised on a percentage completion basis with reference to the recoverable costs incurred at balance.
2018/2019
$000 FEES AND CHARGES 2019/2020
$000 5,229 Building, resource consent, public health and liquor licensing charges 5,585
4,200 Landfill/resource recovery centre charges 3,785
3,218 Sales 3,368
502 Sundry fees and recoveries 430
2,050 Other fees and charges 2,028
15,199 Total fees and charges 15,196
NOTE 6: EMPLOYEE BENEFIT EXPENSES
2018/2019
$000 EMPLOYEE BENEFIT EXPENSES 2019/2020
$000
22,015 Salary and wages 24,323
887 Kiwisaver/superannuation schemes employer contributions 970
181 Increase/(decrease) in employee benefit liabilities 334
23,083 Total employee benefit expenses 25,627