How does council work?

Local government is the means by which communities make democratic decisions about the way in which their towns, cities and regions work and how they will develop. The LGA 2002 (s.13) provides councils a broad purpose, which is to:

  • enable democratic local decision-making and action by, and on behalf of, communities; and
  • to promote the social, economic, environmental, and cultural well-being of communities in the present and for the future.

The purpose has two parts. The first part emphasises the democratic nature of local government and enables councils to make decisions and undertake services that their communities want and are prepared to pay for. The second part of the purpose requires councils to consider the needs of future generations when making decisions with regard to local services, infrastructure and regulations as well as ensuring that these are provided in a cost effective way.

What councils do

Councils play a broad range of local roles, from services undertaken on behalf of the community itself, to most regulatory services undertaken on behalf of central government. Cities and districts have the widest range of responsibilities, which include:

  • infrastructure services, such as waste water, storm water and drinking water (councils own assets worth more than $120 billion);
  • local roads (councils own 87 per cent of all roads);
  • town planning and resource management;
  • local regulatory services, such as building consenting, dog control and liquor licensing (councils undertake more than 30 separate regulatory functions);
  • parks, recreation and cultural facilities;
  • libraries and museums;
  • cemeteries;
  • community amenities;
  • economic development (councils spend more than $250 million per annum on economic development);
  • tourist promotion; and
  • local and regional leadership and advocacy.

How council operates

The Council is ultimately responsible for the performance of the local authority. In districts or cities, the governing body will be led by a mayor who is directly elected by all eligible citizens within the area. Regional councils are led by a chairperson who is elected by the members of the regional council’s governing body.

Councils employ a chief executive who then employs all remaining staff, on behalf of the council. The role of the chief executive and their staff is to provide advice to the council and implement its decisions. Chief executives are employed on five year contracts that can be extended by a further two years. Each council is required to negotiate an annual performance agreement with their chief executive.

Most decisions are made in formally constituted meeting or under delegation by staff, committees, local boards or community boards. Delegating decisions is a way of managing the workload and ensuring that decisions are made as close as possible to the people affected by those decisions.

How councils are funded

Councils’ primary source of funding comes from rates. Rates make up around 60 per cent of all operational expenditure, although this will vary from council to council. Remaining revenue comes from user charges, investment income, regulatory fees and roading subsidies. Councils are required by law to balance their budgets, unless it is prudent not to do so, and borrowing is undertaken to fund capital expenditure.

Councils are required to think of the inter-generational benefits arising from their activities and borrowing to fund assets that have a long life is a prudent way of sharing the cost of long life assets over succeeding generations that will benefit from the investment. Most councils borrow from the Local Government Funding Agency, which raises bonds and is able to lend to councils at lower interest rates than those charged by the banking sector.

The critical planning document is the Long Term Plan (LTP). The LTP is reviewed every three years, includes a 10-year financial strategy and a 30-year infrastructure strategy.

Making decisions

As an elected member you will be responsible for making decisions involving very large amounts of public money, including debt. The local government sector, as a whole, spends more than $8 billion annually, so it is very important that decisions are based on accurate information and good advice. Elected members need to ask the right questions to ensure resources are used well and prudently. Poor investments and badly supervised projects can damage local economic development.

The way in which councils make decisions is subject to a number of rules and regulations set out in the LGA 2002 and other statutes.

Some critical ones are:

  • decision-makers must be informed by the views of those affected by the decision;
  • decision-makers must consider reasonable practicable options;
  • decisions must be made in public unless there are specific grounds for excluding the public; and
  • decision-making processes must acknowledge the diverse needs of the community.

Elected members have little authority by themselves. It is only when acting together with your colleagues that you can implement policies and make a difference. To be effective you need the support of the majority of your fellow elected members.

Being transparent

Local government works well because it is open and transparent. This is one of the fundamental values of good government and both the Local Government Official Information Act 1987 (LGOIMA) and the Ombudsmen Act 1975 apply to councils. This means that all business, except when matters of personal or commercial sensitivity are concerned, must be conducted in public. It also means that all information, including information held by elected members in their council role, is also public information.

The public is entitled to attend hui of councils, committees, local boards and community boards, except where the hui has gone into public excluded. Members can elect to hold workshops to debate and find out more about an issue and these are often held without the public being present. Please note: decisions cannot be made at workshops.