Long Term Community Plan 2012-2022 - Hurunui District Council

Development Contributions Policy
Introduction
Any growth in the District will impact on the existing reserves,
sewerage, water, stormwater, roading, township infrastructure
and recreation facilities. To ensure that the expected population
growth does not adversely affect residents the Council has
identified a number of infrastructural developments needed to
cope with this growth.
The Local Government Act 2002 (LGA) allows councils to
collect ‘Development Contributions’, which are contributions
of land or money made by developers towards the cost of
providing new infrastructure, or increased capacity in existing
infrastructure as a result of growth.
Councils can also collect Financial Contributions under the
Resource Management Act 1991 via rules in the District Plan. A
Council cannot however take both Development Contributions
and Financial Contributions for the same purpose. The type
of contribution must be stipulated in the Development
Contributions Policy.
The Hurunui District Council has decided that growth in the
District will be funded from 3 main sources:
• Financial Contributions (levied under the Resource
Management Act), which are designed to offset adverse
effects of a particular development, and are identified in
the Hurunui District Plan.
• Development Contributions (charged under the Local
Government Act 2002) which are for growth related
projects that are identified in the Hurunui Long Term
Community Plan.
• Existing ratepayers and residents through rates and
loans.
Review of Development Contributions
Policy
Council’s Development Contributions Policy as outlined in the
2009-2019 LTCCP was based on a number of assumptions, of
which growth projections formed a key component. Council
directed that the Policy should provide for a significant increase
in development in the Amberley Township, and adjustments to
the Policy were made accordingly. However, in the intervening
period, the amount of growth has been significantly lower
than anticipated and as a result, the level of Development
Contributions received has been lower than budgeted.
Hurunui Community Long Term Plan 2012 - 2022
review concluded that the methodology was sound, and based
on experience sourced from other Councils, suggestions were
made to simplify the methodology.
One of the key suggestions was to consider rationalising the
number of collection areas for contributions. For metropolitan
Councils, this is relatively easy to achieve as each new
development will generally receive the same benefit from the
growth projects identified as the next development. Due to the
geography of the Hurunui District and the specific requirements
for individual areas, Council felt that this could not be easily
achieved.
A further suggestion was for the Council to reinstate an
interest component to the calculation of the contribution. This
suggestion was made in the light that a number of the growth
related projects will occur ahead of receiving a sufficient level of
development contributions and as a result, there will normally be
a holding cost attached to the project. When this was reviewed
as part of the 2009-2019 LTCCP, the Council favoured the use
of an inflation component rather than an interest component,
which meant that the individual development contribution will
increase on an annual basis to match the increase in inflation, so
as a result, the developer who pays a contribution in four years’
time will pay a higher level of contribution than the developer
who pays now. The Council considered that the inclusion of an
interest component would result in further increases to the
individual contributions and decided against it.
Updated growth projections based on Statistics New Zealand
data have been provided which are at a more conservative rate
of development than was provided for in the 2009-2019 LTCCP
due to the Council not making specific adjustments to particular
areas. It is important to note that due to the earthquake in
Christchurch in February 2011 that the census scheduled for 8
March 2011 was not undertaken and as a result, the population
projections have not been updated. The census has now been
scheduled for 5 March 2013 and the population projections can
be re-assessed at that stage.
Key Changes made to Methodology
As a result of the review, the Council has made some changes
to the methodology.
In general, the Council has retained the projects that are subject
to the methodology, so those projects that were identified in
the 2009-2019 methodology have been continued, however, due
to the lower level of growth that has resulted in the last three
years, some projects have been deferred for a longer period.
As preparation for the 2012-2022 LTP, the Council contracted
Pricewaterhouse Coopers, in conjunction with the Council’s
legal advisers, Buddle Findlay, to undertake a comprehensive
review of out Development Contributions Methodology. The
The Council has, in some cases, reduced the portion of the
project that relates to growth, reflecting that some of the
projects (particularly in relation to Community Infrastructure
and Reserves) will benefit the wider community rather than
201