Development Contributions Policy may get more time

16 May 2006

The large number of submissions on the Development Contributions Policy, which is part of the Long Term Council Community Plan, has prompted Council staff to recommend that Council consider deferring full implementation of the policy.

A staff report regarding the issue is to be considered by Council at its meeting on Thursday, but the staff advice is that Council should not decide whether to accept the recommendation until it has heard submissions on the policy in early June.   

The policy, which will become effective on 1 July 2006, is being introduced to fund the cost of providing new infrastructure as a result of growth in the city. The new policy charges more of the cost of growth to developers and not primarily to ratepayers, as it does now.

Staff are recommending that Council delay the policy’s full implementation for up to a year to enable staff - working with those most impacted by the new policy - to resolve implementation issues raised by submitters.  The outcomes of this dialogue would then be subject to another public consultation process and, if approved by Council, would take effect from 1 July 2007.

The staff recommendation is that the policy be adopted in the form of the LTCCP but, in the interim, be applied at the similar contribution rates as the 2004 Development Contribution Policy. 

“We’re making this recommendation as a direct response to the LTCCP consultation process where submitters indicated through submissions and meetings that they wanted more transition time to work with us to possibly adjust and improve the policy.
“Given the major impact operationally on Council to deliver and monitor the policy, and the financial impact on these submitters, it’s a good idea to have more time before full implementation,” says the Council General Manager of Strategy and Planning, Michael Theelen.

 “While we are trying to shift to a fairer system – where ratepayers currently shouldering about 60% of the cost of providing infrastructure for new developments pay less - we don’t want the policy to discourage development. To strike the right balance, we need time and input from those concerned,” Mr Theelen says.

Projections indicated that the financial impact to Council of delaying the policy for up to a year, would not be major.  “Financial recoveries from those whose developments contribute to growth will be as close to the 2004 levels of contribution as possible,” Mr Theelen says.

If staff recommendations are accepted, a joint working party would be set up with representatives from the developers and the building industry to identify what, if any, improvements are needed to make the transition between the old and new policy smoother.  The working party could also examine possible incentives packages that Council earlier directed staff to investigate.

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