Complaints - Please scroll to the bottom of the page
« Historic Kopu Bridge | Main | Coromandel Harbour Update »

Development Contribution Policy

At last the Draft Statement of proposal for the 2015 Development Contribution Policy has come forward and a Special Consultative Procedure is being recommended to enable the policy to be implemented by 1 July 2015 - the paper goes to Council on Wednesday.

Leach has been vaguely threatening major changes in this area ever since he came into office, and his supporters will not be disappointed by the fundamental changes that he is now proposing through this Draft.

Putting all the pages and pages of weasel words aside, what this proposal means is that this Council, riding off the back of the National Governments demands that Councils lower the costs passed onto developers in order to ensure cheaper housing stocks, is intending to almost entirely remove the need for developers to pay for the infrastructure required in housing sub-divisions.

There is only one alternative source of funding to cover the cost of new infrastructure, and there are no prizes for guessing who that is – the existing ratepayers. Literally millions of dollars of cost will now revert to the ratepayer, whether through current rates or borrowing, and it is even proposed borrowing undertaken for existing or completed projects be removed from the DC equation.  

Previously, borrowing was undertaken to cover the cost of the unused capacity of new infrastructure in the clear understanding that this proportion of the principle and interest would be met in the future by Development Contributions. But if those DC’s are not coming in through the reluctance of developers to build, surely a demand driven situation, then interest costs build up over time, thus making the future DC’s intolerable – or that is the theory, and one that Leach has expounded often and at length. And there is no compromise – it is obviously now ‘all-in’ or ‘all-out’! By way of example - this interest component was suspended last year thus reverting onto rate-payers in an attempt to stop the balllooning effect, but such a long term solution is absent from this proposal.

What this amounts to is that we are now to be asked to shoulder the costs of all infrastructure demand by developers, apart from the relativly tiny amount required for solid waste. Never mind that Thames hardly figures in this scenario – it is all about expansion along the Eastern Seaboard, and Thames ratepayers will be paying for this along with all the ratepayers who reside in the towns that stand to benefit.

And moreover, the developments that we are to be required to fund are in the main well above the national average in terms of value – this is nothing to do with increasing housing stock for the poor as the Government is preaching; it is to provide more valuable sections to enable the relatively wealthy to move to the Coromandel Peninsula for their recreation, and retirement.  

But Leach will be enabled to meet his promise to his developer backers who saw him into office, and who have kept him there. This is the pay-off – the big ’discount’ that will encourage them to move more resources to the Peninsula and thus fulfil Leach’s dream of massive development at minimum cost to the developers, never mind the rate-payers.

If rate-payers are prepared to accept this change, and shoulder this burden (which could add hundreds of dollars to rates over time), then all I can say is that they are been hood-winked. And time is of the essence – staff are seeking “feedback” on the draft before it is adopted at  the November Council meeting for public release before 1 December 2014.

Staff are suggesting that although public consultation is not required, that the extent of the proposed changes are such that they had better have a ‘Special Consultative Procedure’ to be undertaken over the following months before final adoption prior to 1 July, and have recommended accordingly. Certain long-serving staff, past and present, who are not in debt to the present regime will be having conniptions at this turn of events.  

The key changes taken from the proposal are as follows:

  •  removal of the requirement for commercial activities to pay for community infrastructure services other than solid waste
  • change to the methodology for calculating development contributions
  • change to the methodology for calculating and purpose of collecting reserve contributions public conveniences and cemeteries to be funded locally, not District-wide
  • a new assessment of significant assumptions
  • specific exemption for Council development providing infrastructure or reserves
  • development contribution credits on previous activities if the value of these exceeds the credit available on the current activity, for a period of up to Long Terms
  • addition of development contribution requirements for minor units and campground activities
  • updated assumptions supporting the calculation of commercial activities for water and wastewater
  • a more relaxed criterion for reductions or waivers of contributions on the basis of significant public benefit

(all my bolds!)

And there are some additional amendments that are said to be further required as a result of the passing of amendment to the Local Government Act 2002 in August this year:

  • changes to the types of community infrastructure projects for which development contributions may be collected on new or early-stage projects
  •  a new schedule of assets
  • amended provisions relating to private developer agreements
  • ability for developers to request a reconsideration from Council or to object to the developmentcontributions assessed to an independent commissioner
  • a requirement that development contributions will be assessed in accordance with the policy provisions and amounts that were in place when the application was lodged
  • the ability to withhold a certificate of acceptance until applicable development contributions have been paid      

But it is the very first of the “key changes” that should concern everyone in this district. I repeat – it simply means that we will be paying forever for whatever developers require by way of wastewater, water and storm-water – the three ‘Ws’.  Everything else is of minor by comparison.

And I repeat from the first list:

“development contribution credits on previous activities if the value of these exceeds the credit available on the current activity, for a period of up to Long Terms”

This means that the debt remaining from the Eastern Seaboard waste-water projects amounting to some $30m will be wiped off the ledger when DC’s are calculated for any future development serviced by those plants, and the entire debt will slowly but surely come back onto all our rates. This is not simply a means to reduce the interest imposition of developers which may be a defensible position after a number of years, but a complete wiping of the slate.  

The remainder of the document may be innocuous, but requires much closer examination that I have been able to give it in 24 hours. I think the main message is clear, and is outlined in the previous paragraphs.

If our councillors do not have the wit to understand what is contemplated with these changes, then it is imperative that submissions are devised that draw attention to its totally unfair aspects – principally in the manner it is proposed to move liability for infrastructure costs from developers to ratepayers – no matter how it is wrapped up for consumption in these documents.




PrintView Printer Friendly Version

EmailEmail Article to Friend

Reader Comments (3)

Be interesting to see if the new cemetery in the Mercury Bay Board area remains a District funded excercise or indeed does revert to become a Board cost? Personally I doubt that will happen- with Leach, McLean and Fox batting hard for the Bay!

October 18, 2014 | Unregistered CommenterPipi

An excellent piece, that shoehorns this council and its policies into the neoliberal right wing orthodoxies that are (not) so insidiously creeping into the current Government's modus operandi. Let's get the poor old, low waged, and long suffering workers to pay for the costs associated with extravagant seaboard developments. If the richer amongst us want a lavish beach side cottage, then, surely, they deserve it - after all their toiling away at the coal face making their much vaunted profits, a bit of relaxation by the coast - which of course is every Kiwi's right - is nothing less than they deserve. Forgive me if I show a bit of left wing bias, but the DC issue is a classic - it is as much about rate-payer equity and fairness as anything, and clearly there will not be anything left for the ratepayers, except a few crumbs. But there is, equally, an argument that says if the rate-payers are that stupid and continue to allow their rights and 'say' to be eroded, then all they deserve is crumbs.

October 19, 2014 | Unregistered CommenterRussell

We are open for business-- develope where and how much you like--make your profit and run-- the ratepayers will pick up the tab..
Go on fill ya boots - we are all mates together --aren't we??

October 20, 2014 | Unregistered CommenterBring It On

PostPost a New Comment

Enter your information below to add a new comment.

My response is on my own website »
Author Email (optional):
Author URL (optional):
Some HTML allowed: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <code> <em> <i> <strike> <strong>