Proposed amendments to the Development Contributions Policy
Under the Local Government Act 2002, local authorities may adopt a Development Contributions Policy to help fund the cost of providing additional community facilities due to growth. Selwyn District Council has had such a policy in place since the early 2000s. The Act requires local authorities to review their policies every three years and we do this in line with the Long-Term Plan cycle, however the Act also allows local authorities to amend their policy at any time, subject to consultation and the Council is proposing three specific changes to development contributions that will apply to resource and building consent applications.
Seeking community feedback on proposals for amendments to the Development Contributions Policy
Option 1: Our preferred option
We propose to make three changes in relation to the Development Contributions Policy.
Not making an inflationary increase in development contributions from 1 July 2020
The Development Contributions Policy allows for annual inflationary adjustments to the development contributions based on the Producer Price Index for Outputs for Construction. Currently, this index is 3.2% (December 2019) and therefore under the Development Contributions Policy all development contributions would be increased by 3.2% from 1 July 2020.
The aim of the inflationary increase is to be fair to developers over the three year review cycle for the Development Contributions Policy, so that over the three years all developers pay an equal amount in relative terms. However, since the development contributions were set two years ago interest rates have fallen reducing costs and this indicates no need for inflationary increases from 1 July 2020.
Introducing a new specific development contribution for a block of land adjacent to Broadlands Drive, Rolleston
In 2009/10 the Council constructed the portion of Broadlands Drive between Goulds Road and Lowes Road in Rolleston. The road services the land on either side of the road, including Clearview School.
To date, the benefit to the balance of the land adjoining the road has not been funded as the land has not been developed. It is appropriate to charge a development contribution on this land as the road means that network infrastructure capacity has been provided for the land so that it can be developed. The proposed development contribution will be $365,500 (plus GST) for the 2.8229 hectare block of land identified as Section 2 on Title Plan SO 494531.
Introducing a new development contribution for water in West Melton
Capital expenditure has been incurred to connect the Edendale water scheme to the West Melton water scheme. This will provide benefits to existing ratepayers and will also provide additional network infrastructure capacity for West Melton. This capacity will allow further development in West Melton and in line with the Council’s Revenue and Financing Policy, the growth component of capital expenditure should be funded from development contributions. Total expenditure is $1.01 million and the growth component to be recovered through the proposed Development Contribution is 12% of the total. The expenditure provides capacity for 20 lots. The proposed new development contribution will be applied to new development in West Melton. The development contribution is proposed to be $6,246 (plus GST).
What are the other options?
Option 2 – don’t make the proposed changes to the Development Contributions Policy
The benefit of not making any changes to the Development Contributions Policy is that it provides certainty for land developers for the time between the usual three year review periods.
The disadvantage in relation to increasing the development contributions for inflation is that developers may feel disadvantaged if development contributions are increased for a period and then at a later date they are reduced.
The disadvantage of not introducing the new development contributions for the block of land adjoining Broadlands Drive and for water in West Melton is that the costs will not be recovered and will fall on ratepayers.
Your say: Let us know your views on the proposal to make three changes in relation to the Development Contributions Policy. See the question on the online feedback form or submission form.