Appendix 1: Our expectations

Decision-making and consultation

We expected that councils, in designing and choosing to adopt a rates postponement policy, would have adequately complied with the consultation and decision-making sections in the Local Government Act 2002.

We expected that councils would accurately and reasonably inform their communities about the potential implications of their rates postponement policy, including the potential effect on the council’s debt, and how the council intends to manage this.

We expected that councils would include the effect of rates postponement in their financial projections if the amount of postponed rates was significant for the council.

Risk identification and management

We expected that, in developing a rates postponement policy, councils would have:

• identified both short-term and long-term risks associated with the policy; and
• put in place strategies to manage these risks.

In particular, we expected councils to address four main risks:

• the risk of reduced cashflow;
• the risk that properties that rates are postponed against are not insured;
• the risk that the value of postponed rates may exceed the final sale value of the property that they are postponed against; and
• the risk of challenges to the validity of individual rates postponements based on claims of coercion by the council or failure to fully inform the ratepayer.

The application process

Informing ratepayers about the existence of the rates postponement policy

We expected that councils would be complying with legislative requirements regarding having information about their rates postponement policies on their rates assessments.

We expected that councils would have their rates postponement policy or policies, and clear supporting information, easily available in hard copy and on their website.

Where councils have more than one residential rates postponement policy, we expected that interested ratepayers would be informed of all the policies that they might qualify for rates postponement under.

Application documentation

We expected that application documentation would capture all the necessary information for councils to make a decision about whether to grant rates postponement to the applicant.

We expected that initial application forms and other information provided to applicants would accurately reflect the criteria used by the council to determine eligibility.

We expected that councils would have robust application and acceptance documentation that incorporates the detail of the rates postponement policy.

Informing applicants about the implications of rates postponement

We expected that, as part of the application process, councils would ensure that applicants are informed about the implications of rates postponement. In particular, we expected that councils would: ensure that ratepayers are informed about the potential effect of rates postponement on their equity; and advise ratepayers to seek independent advice before choosing to postpone their rates.

We expected that ratepayers who are postponing their rates would be informed of any changes to the council’s rates postponement policy that might affect them.

Ongoing administration Record-keeping We expected councils to ensure that documentation is properly completed and filed.

Fees and interest Section 88(2) of the Local Government (Rating) Act 2002 allows councils postponing rates to charge a fee not exceeding the financial and administrative costs to the council of the postponement. We expected that all councils would comply with this requirement.