Heritage Park
When the Heritage Park erects new buildings, these are vested to Council (they are gifted to Council and become Council assets). Council must therefore depreciate these buildings (account for the ware and tare on the building and reduce their value.
Council has the option to either fund this depreciation, that is to charge rates for the value of the depreciation and set these funds aside to be used when the building needs to be replaced.
Council may also choose not to fund the depreciation. This would mean there would be no monies set aside to replace the building. Council may choose to do this where it does not want to replace the building if it believe there is no longer a use for it.
In the case of the Heritage Park, the park will pay for new buildings to be built when the old ones need replacing. Therefore, Council does not need to build up a funds for the building replacements at the Heritage Park.
Option 1: Council no longer funds the depreciation on Heritage Park buildings and releases funds already held in reserve.
Council would continue to depreciate the Heritage Park buildings, but it would not fund the depreciation (set the cash aside). The overall average decrease in rates would be 0.53%.
Option 2: Council continues to fund depreciation on Heritage Park buildings, even though the Heritage Park would be responsible for their replacement.
This is how Council currently operates and there would be on reduction in rates if it continued with this process. There would be no overall change to rates.
Option 1 is the preferred option. Council does not need to set money aside for the replacement of buildings at the Heritage Park as the park will raise its own funding as and when needed.
