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Development Contribution Interest

There was no stomach for an open discussion about the DC interest dilemma - clearly the matter had been fully explored within a 'closed door' workshop.

Instead, Steve Baker produced a 'compromise' proposal to partially fund the development contribution interest in the 2014/15 year. This was based on choosing not to fund the DC interest for community infrastructure - presumably everything other than water/wastewater (the majority of the DC are for these activities) - Mercury Bay Sports-complex would remain a Mercury bay only responsibility.

The rationale for this approach is based purely on reducing the immediate impact on rate-payers. The net result was a rapid motion to adopt this suggestion that will add 1.79% to the rates across the District for next year.  (Mercury Bay would have been 8.38% and Thames 3.44% on an Area of Benefit basis) Clearly this is a far more acceptable solution to councillors who would have been extremely concerned as to the likely ratepayer reaction to the increase otherwise, but is simply postpones the inevitable impact.

Recommendation 3 requires Staff to bring back information and options for 'reducing expenditure' in the 2014/15 year. That is where I expect a number of important projects modified, or given the chop. Otherwise, the increase will have to be added to whatever has already been decided as an accepotable increase - probably between 3-4%.The February Annnual Plan meeting should be interesting the AP has to be in place by the end of the month. 




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