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Development Contributions Policy

Status: Approved by the Council on 29 July 2009

Introduction

Current projections for New Plymouth District Council area indicate that moderate population growth will be experienced over the next 20 years. The new development associated with a vibrant, growing community also results in increased demands on community facilities[1] such as network and community infrastructure and reserves. This can apply whether growth takes the form of greenfields development, renewal development, which changes the types of land use, or infill development, which can increase the intensity and scale of development. Affected infrastructure can include roading, water, wastewater and stormwater systems and facilities for community recreation and amenity such as reserves and libraries.

The premise behind this development contributions policy is that it is fairer for the costs of demand for increased service capacity resulting from development to be borne by developers, rather than be funded by existing ratepayers who have already paid for the assets they require. This means that all costs for network infrastructure on-site will be incurred by the developer and a contribution will be sought for off-site infrastructure and other community facilities that will require capital investment to cope with the increased service demand resulting from the development. A developer may also be required to meet any fair and reasonable off-site costs that immediately benefit the proposed development or that are needed to avoid, remedy or mitigate any adverse effects on the environment resulting from the development which have not been included in the Council's capital projects to be funded from development contributions.

Financial contributions or development contributions?

The Council's Financial Contributions Policy is a component of the New Plymouth District Plan (Volume 2, Appendix 5), and was also adopted in the 2004-2014 Long-Term Council Community Plan (2004-2014 LTCCP). Under the Local Government Act 2002, the council is required to summarise the District Plan provisions that relate to financial contributions.

The Financial Contributions Policy establishes general rules for dealing with the impacts on network infrastructure and community facilities resulting from subdivision, dwelling house development proposals and vehicle parking in the CBD. However, the policy does not address the impacts of non-residential commercial, business or industrial proposals on infrastructure.

The Financial Contributions Policy was formulated pursuant to the Resource Management Act 1991 (RMA 1991) and is focussed on avoiding, remedying and mitigating the adverse environmental effects resulting from particular developments. As the focus of the policy is on the direct marginal impact of each development, it is not possible to deal with the cumulative impact of multiple developments on infrastructure. The circumstances under which financial contributions may be required under the Financial Contributions Policy are where consent is granted for subdivision or for a dwelling house where there is no subdivision or for vehicle parking within the CBD. The purposes for which financial contributions may be used are infrastructure (water supply, wastewater collection and treatment, stormwater disposal, roading and vehicle parking) and community facilities.

While the RMA 1991 is designed to promote the sustainable management of natural and physical resources, it does not focus on the financial issues associated with growth. In contrast, the provisions of the Local Government Act 2002 (LGA 2002), which enable the adoption of a development contributions policy, are centred on recovering identified growth-driven costs using financial tools. Development contributions can be used to fund any new Council asset capacity which is required because of growth in demand resulting from development.

Development contributions and financial contributions can exist together and both can be charged against an individual development, but only for different purposes. That is, double dipping is not allowed. Contributions for the provision of off-site network and community infrastructure, and parks and reserves identified as capital projects in the Community Plan will therefore no longer be calculated or charged under the Financial Contributions Policy, but are replaced by a new system under this Development Contributions Policy.

However, it is not intended that changing to a system of development contributions under the Local Government Act 2002 will diminish the protection of the environment or undermine the social and environmental outcomes intended in the District Plan. It will still be necessary for developers to complete works on-site to avoid, remedy, or mitigate adverse effects as a condition of consent, or in accordance with rules in the District Plan. Where necessary, the provision of works or financial contributions can continue to be required for environmental reasons off-site, for example to pay for trees to be planted for screening purposes. Financial contributions may also be required for infrastructure offsite such as stormwater or roading that will solely benefit the proposed development or that is needed to avoid, remedy, or mitigate adverse environmental effects resulting from the development. The provisions in the Financial Contributions Policy relating to vehicle parking in the CBD remain unchanged.

Both types of contributions are restricted use revenue. This means that they can only be spent for the purposes for which they are collected. Development contributions may also be required to be returned if the council does not provide the reserve, infrastructure or other community facilities for which the funds were collected, or the development does not proceed.

Community Outcomes

Community Outcomes or priorities have been established as part of the process of developing and adopting the 2009-2019 Community Plan. These are as follows:

• Connected - A district that delivers accessible and integrated infrastructure, transport and communication systems which meet the needs of residents, businesses and visitors.
• Prosperous - A district that boasts a sustainable, resilient and innovative economy that prospers within the natural and social environment.
• Secure and Healthy - A district that provides a safe, healthy and friendly place to live, work or visit.
• Skilled - A district that values and supports learning so all people can play a full and active role in social, cultural and economic life.
• Sustainable - A district that appreciates its natural environment and its physical and human resources in planning, delivery and protection.
• Together - A district that is caring, inclusive and works together and where people have a strong, distinctive sense of identity.
• Vibrant - A district that provides high quality and diverse cultural and recreational experiences and where independence and creativity are encouraged.

The Development Contributions Policy, in providing funding to enable servicing of new developments for roads, water supply, wastewater and stormwater infrastructure, community infrastructure, and parks and reserves, will contribute significantly to the achievement of the Community Outcome areas: Connected, Prosperous, Sustainable and Vibrant, and to the other outcome areas to a lesser degree.

Who will contribute?

Any subdivision or development within the New Plymouth District which contributes to growth and generates a demand for reserves or infrastructure and the need for new or additional assets or assets of increased capacity to provide for that growth and demand will pay a development contribution.

Contributions for residential developments will be calculated differently to non-residential developments. Non-residential developments will be converted to Household Unit Equivalents (HUEs). They will not be charged for contributions to parks and reserves or community infrastructure such as libraries or community centres, as commercial activities generally do not create significant demand for these types of facilities. Return to top

Definitions

Community facilities

In this policy, community facilities has the same meaning as given to it in section 197 the Local Government Act 2002:

Reserves, network infrastructure, or community infrastructure for which development contributions may be required in accordance with section 199.

Community infrastructure

In this policy, community infrastructure has the same meaning as given to it in section 197 of the Local Government Act 2002:

1. Land, or development assets on land, owned or controlled by the territorial authority to provide public amenities; and
2. Includes land that the territorial authority will acquire for that purpose.

It includes assets such as community centres, events buildings and sports stadiums but does not include parks and reserves.

Contribution catchments

The entire district has been identified as a single catchment, where development contributions will be collected for all affected activities. This reflects the network nature of most of the assets attracting development contributions and the Council's long held strategic practice of treating the district as a single entity with all residents enjoying a single level of service wherever practicable. Where services are not available to developments, however, no contribution will be required for that service.

Development

In this policy development means any subdivision or other development that generates a demand for reserves, network infrastructure, or community infrastructure; but does not include the pipes or lines of a network utility operator.

Development contributions

In this policy, development contributions [2] means a contribution of money required in accordance with this policy for community and network infrastructure and parks and reserves, to provide for growth in demand for these services resulting from new development, as provided for in section 198 of the Local Government Act 2002.

Financial contributions

In this policy, financial contributions mean a contribution taken in accordance with the adopted Financial Contributions Policy in the New Plymouth District Plan and pursuant to the Resource Management Act 1991.

Household unit equivalent (HUE)

The Household Unit Equivalent (HUE) has been adopted as the basic unit of demand and is equivalent to the additional demand for services generated by one average additional dwelling.

Network infrastructure

In this policy network infrastructure means the provision of roads, water, wastewater, and stormwater collection and management.

Parks and reserves

Parks and reserves comprises land and improvements, controlled by the Council, for the purposes of:

• Access to public open space.
• Community, recreational, environmental, cultural purposes.
• Conservation of flora and fauna.
• The general enjoyment of the public, including land that is held as a reserve or part of a reserve under the Reserves Act 1977.

Units of demand

The unit of demand used is generally the household unit or its equivalent (HUE) for non-residential activity. Developments that only place low demand on infrastructure capacity will typically be assessed in percentages of HUEs, rather than whole HUEs.

Identified activities

Development contributions will be charged for the following activity groups:

• Network Infrastructure:
  - Roads.
  - Water Supply.
  - Wastewater.
  - Stormwater.
• Parks and Reserves.
• Community Infrastructure. Return to top

Application of Local Government Act s101(3)(A) to identified activities

This analysis deals only with council expenditures that result in qualitative or capacity improvements to the council's physical capital. Development contributions will only be applied to that part of the capital improvement that provides additional capacity to cope with growth in demand resulting from development.

When funding their activities councils are required to apply a set of considerations to each activity. These considerations deal with the distribution of benefits arising from the activity in order to inform the local authority and the community on a fair allocation of costs. The overall allocation of costs then needs to be considered against the effect of that allocation on the well-being of the community. The considerations set out in the legislation are:

The funding needs of the local authority must be met from those sources that the local authority determines to be appropriate, following consideration of the:

(i) Community outcomes to which the activity primarily contributes; and

(ii) Distribution of benefits between the community as a whole, any identifiable part of the community, and individuals; and

(iii) Period in or over which those benefits are expected to occur; and

(iv) Extent to which the actions or inaction of particular individuals or a group contribute to the need to undertake the activity; and

(v) Costs and benefits, including consequences for transparency and accountability, of funding the activity distinctly from other activities; and

The overall impact of any allocation of liability for revenue needs on the current and future social, economic, environmental, and cultural well-being of the community.

Analysis of development contribution affected activities on the basis of these considerations follows.

Activity	Primary Community Outcomes
Roads	Connected C1 Effective, efficient, safe and reliable infrastructure is provided and maintained. C2 High quality communication systems, information technologies and distribution networks. C3 The land transport system is safe and responsive. C4 The strategic value of the region's state highways is recognised and provided for and local roading networks are maintained and enhanced where appropriate. Sustainable SU Built environments and amenities are of a high standard and contribute significantly to the well-being of people and communities.
Water supply	Connected C1 Effective, efficient, safe and reliable infrastructure is provided and maintained.
Wastewater	Secure and Healthy S&H2 The environmental, physical and mental health of the people of New Plymouth District is maintained, enhanced, promoted and protected. Prosperous P5 Development and population growth in the district is encouraged but managed in a manner that does not compromise the natural or social environment. Sustainable SU2 Taranaki's land and soil, water, air and coast, its biodiversity and its natural features and landscapes are understood, valued, maintained and enhanced for future generations.
Stormwater	Connected C1 Effective, efficient, safe and reliable infrastructure is provided and maintained. Secure and Healthy S&H6 A sustainable management approach is taken to hazards and risks across the areas of reduction, readiness, response and recovery. Sustainable SU4 Built environments and amenities are of a high standard and contribute significantly to the well-being of people and communities.
Parks and reserves	Vibrant V1 People have access to and are encouraged to participate in a wide range of high quality recreational, sport, leisure, art and cultural activities. V2 The district has high quality public amenities and facilities. V4 All people have access to local services and facilities. V5 There is safe, convenient and affordable access to the natural environment and public access to the region's coastal marine area, lakes and rivers is maintained and where practical enhanced. Prosperous P1 New Plymouth District is an attractive place to work, do business and to visit. Secure and Healthy S&H2 The environmental, physical and mental health of the people of New Plymouth District is maintained, enhanced, promoted and protected. S&H3 A well-being model for health is promoted in the district, whereby people are encouraged to take responsibility for their own health in order to promote good health outcomes.

Distribution of benefits arising from the activity

Roads

The roading corridor is a network, available to all, so that people, goods and services can move from property to property freely. In this sense the provision of the roading corridor, and safe roads within it, benefits the community as a whole. The majority (56 per cent) of the costs of roading improvements will be met from the general rate, the uniform annual general charge and a roading uniform annual charge to reflect this. The network access benefit is reflected by the uniform annual charge that funds around 20 per cent of the total rate requirement for the roading activity.

The balance of the costs in providing sealed and gravel roads is designed for the benefit of a more limited set of beneficiaries, i.e. users of vehicles. These road users pay for the private benefits they receive by paying fuel taxes, per kilometre road user charges and registration fees, all collected by the government. These funds are received by the council as a subsidy for the roading activity costs. This funds 37.2 per cent of the costs of roading improvements, including new roads.

A small amount of roading improvement expenditure is attributed to new capacity arising from the actions of specific identifiable groups or individuals (6.8 per cent). In this case these groups and individuals are those creating a demand for new roads and improvements to existing roads, footpaths and associated infrastructure are additional road users for whom capacity must be provided. The most efficient and fair means available to levy these costs are development contributions on those developing the properties.

Water supply

No benefits from water supply are considered to apply to the community as a whole. This is because there are no obvious significant direct or indirect benefits of the supply network to those who are not connected to it.

Benefits are identifiable to individuals and to the "group" being those whose properties are connected to the water supply systems.

As the benefits of water supply capital improvement expenditures are produced over the life time of the asset, where these are not funded by development contributions and connection fees, they are generally funded through borrowing. The interest and principal repayment costs are funded from the same mechanisms used to fund the general operating expenses of the activity, i.e. through targeted rates and water by meter charges.

There are no expected costs in this activity that are to be met that are needed to remedy the actions or inaction of individuals. Actions, affecting the water supply system, that could cause unexpected costs to the council will be controlled through regulation and/or the seeking of cost recovery through regulation or general statutory provisions.

Water supply costs are funded from a range of separately identifiable mechanisms that are directly related to the actual costs of provision of supply and the physical assets required for this. Specifically these mechanisms are for operating costs, including depreciation and debt serving; targeted rates and water by meter charges, and for capital costs, borrowing, depreciation reserves, financial contributions and development contributions.

Wastewater

No benefits from wastewater reticulation, treatment and disposal are considered to apply to the community as a whole. This is because there are no obvious significant direct or indirect benefits of the supply network to those who are not connected to it.

While it is argued that the whole community benefits from the absence of wastewater pollution, this is seen as the prevention of a negative effect, rather than an activity causing positive benefits.

Benefits are identifiable to individuals and to the "group" being those whose properties are connected to the wastewater reticulation systems.

As the benefits resulting from wastewater system capital improvement expenditures occur over the life time of the asset, where these are not funded by development contributions and connection fees, they are generally funded through borrowing. The interest and principal repayment costs are funded from the same mechanisms used to fund the general operating expenses of the activity, i.e. through targeted rates and trade waste charges.

There are no expected costs in this activity that are to be met that are needed to remedy the actions or inaction of individuals. Actions, affecting the wastewater system that could cause unexpected costs to the council will be controlled through regulation and/or the seeking of cost recovery through regulation or general statutory provisions.

Wastewater system costs are funded from a range of separately identifiable mechanisms that are directly related to the actual costs of provision and the physical assets required for this. Specifically these mechanisms are for operating costs, including depreciation and debt serving; targeted rates and water by meter charges, and for capital costs, borrowing, depreciation reserves, financial contributions and development contributions.

Stormwater

The benefits of stormwater control systems tend to primarily go to those people and properties within hydrological catchment areas. Most catchments, however, contain infrastructure and other services that are used more widely across the community. The topography of North Taranaki means that the great majority of the district's people and properties reside in one catchment or another.

The stormwater activity arises from the need to protect improvements and land from inundation and slips. Subdivision and many capital improvements results in higher proportions of paved surfaces and greater runoff. Benefits accrue to people through the protection of property and improvements. Additional properties with capital improvements result in greater demand for services to protect the improvements from stormwater runoff. These benefits are still seen as public as it is not possible or practical to determine costs and benefits to individual properties within a catchment network. For this reason the bulk of the operating costs, including debt servicing and depreciation, are funded from a targeted rate on those properties serviced by stormwater systems, assessed on the capital value of properties.

The general public good factors result in some benefits that are spread across the whole community. All residents benefit from having access to business, community and social services without fear of inundation except in exceptional rainfall events. This general public benefit is reflected by funding from the general rate (on land value with differentials) for five per cent of the operating costs of the stormwater activity.

Properties with a large proportion of their area covered in impervious materials (e.g. buildings and concrete) do cause more stormwater run-off than those where the ground is uncovered or covered in natural foliage. For this reason an assessment is made on the area covered by impervious materials for the purposes of calculating development contributions.

As the benefits resulting from stormwater systems capital improvement expenditures occur over the life time of the asset, where these are not funded by development contributions, they are generally funded through borrowing. The interest and principal repayment costs are funded from the same mechanisms used to fund the general operating expenses of the activity, i.e. the Stormwater targeted rate.

The behaviour of individuals, where this might cause flooding or damage to property, is controlled through building and resource consent processes, as well as various statutes. Actions, affecting the stormwater system, people or property will be controlled through regulation and/or the seeking of cost recovery through regulation or general statutory provisions.

The groups and individuals benefiting directly from stormwater systems can be distinguished from the general rate payer. For this reason the majority of the operating costs of existing stormwater infrastructure are paid for from the stormwater targeted rate. The general public benefits gained from continued access to District services are paid from the general rate. Where a development is adding to the burden of existing or future stormwater infrastructure, these costs are recovered via development contributions.

Parks and reserves

The Council's parks and reserves portfolio is distributed across the whole district, although the major assets are situated close to the larger population areas. The portfolio includes open space, natural reserves, botanical gardens, access ways, walkways and sports parks. The direct beneficiaries of this diverse portfolio are difficult to identify because access to most of these assets is not limited or monitored. There are also indirect beneficiaries who, for example, benefit simply by living near parks, as is often reflected in their property values. This means that the beneficiaries of parks and reserves are indistinguishable from the wider community. For this reason the operating costs, including debt servicing and depreciation, are funded from the general rate, so that everyone makes some contribution.

Where the provision of any one part of the parks and reserves portfolio benefits any one group or set of individuals, though their exclusive use, and where it is practicable to do so, payment is usually sought. This occurs for such things as ground leases and sports parks rentals. These are used to cover the operating expenses of the parks and reserves portfolio.

As the benefits resulting from parks and reserves capital improvement expenditures occur over the life time of the asset, where these are not funded by development contributions, they are generally funded through borrowing. The interest and principal repayment costs are funded from the same mechanisms used to fund the general operating expenses of the activity, i.e. the general rate and uniform annual general charge.

The behaviour of individuals, where this might cause damage to property, is controlled through bylaw, as well as various statutes. Actions requiring significant remedy will be funded through the seeking of cost recovery through regulation or general statutory provisions, where practicable. The groups and individuals benefiting from parks and reserves are not sufficiently distinguishable from the general rate payer. For this reason the operating costs of existing parks and reserves are paid for from the general rate and uniform annual general charge.

Where a development is adding to the burden of existing or future parks and reserves capacity, these costs are recovered via development contributions.Return to top

Community infrastructure

Community infrastructure is provided to benefit the whole district.

While direct beneficiaries are often distinguishable, e.g. users of facilities, charging full cost of many of the facilities would render them unavailable. Because it is believed that there are benefits to the whole community in having such facilities, there is a level of general rate subsidy. The level of the subsidy depends on how much operating cost can realistically be recovered from direct users.

Where the provision of community infrastructure benefits any one group or set of individuals, though their exclusive use, and where it is practicable to do so, payment is usually sought. This occurs for such things as facility hire and entry fees. These are used to cover operating expenses.

As the benefits resulting from community infrastructure capital improvement expenditures occur over the life time of the asset, where these are not funded by development contributions, they are generally funded through borrowing. The interest and principal repayment costs are funded from the same mechanisms used to fund the general operating expenses of the activity, i.e. the user fees, the general rate and uniform annual general charge.

The behaviour of individuals, where this might cause damage to community infrastructure, is controlled through bylaw, as well as various statutes. Actions requiring significant remedy will be funded through the seeking of cost recovery through regulation or general statutory provisions, where practicable.

Identified contribution catchments

For consistency with Council policy to treat the district as a single entity, for administrative ease and to enable a developer to quickly estimate the level of development contribution required, the contribution catchment has been defined as the entire district for all activities. However, not all services are available throughout the district. In order to forecast the number of household unit equivalents (HUEs) that will contribute to demand for each service, it has been estimated that water and stormwater services will be provided to 90 per cent of new developments while wastewater services will be connected to 80 per cent of new houses, subdivided lots and businesses. Where a service is not provided the development contribution will not be charged.

Example calculations

The following examples illustrate the process used to calculate the development contribution for each new household or its equivalent for each asset type as listed in the table above.

For roads, which are available to be used by all new developments across the district, the total development contributions figure of $2,696,605 was divided by 614 household unit equivalent per year which includes houses, lots and new businesses to give $439 per household unit equivalent.

For services that are not provided across the whole district, such as water, where only 90 per cent of new developments will be able to connect, the total figure of $666,900 was divided by 307 for each household unit equivalent per year to give $217 per household unit equivalent.

Template of assessment

Expenditure and revenue over the 10 year life of the 2009-2019 Community Plan

Activity	Total capital projects	Development contributions	Other funding *	Rates	Estimated % of new developments using each asset type	Contribution per new household unit equivalent
Roads	$20,032,958	$2,696,605	$7,610,663	$9,725,690	100	$439
Water supply	$666,900	$666,900			90	$217
Wastewater	$2,221,290	$2,221,290			80	$794
Stormwater	$441,180	$441,180			90	$112
Parks and reserves	$6,902,825	$3,767,410		$3,135,415	100	$1,507
Community infrastructure	No projects meet development contributions policy criteria in this Community Plan				100
Total	$30,265,153	$9,793,386	$7,610,663	$12,861,105		$3,069

* Transfund road user funding.Return to top

Units of demand

The household unit equivalent (HUE) has been established as the basic unit of demand, and is the equivalent of one average dwelling. The average household size is taken as 2.5 people for New Plymouth District. Development contributions have been calculated according to the number of HUEs in a development. A one new dwelling residential, subdivision or building consent, is generally considered as one HUE, while non-residential applications are proportions or multiples of that.

The values represent typical levels of demand for a dwelling in the district for the asset types targeted by the policy.

Activity	Units	Demand per HUE	Comments
Roads	Vehicle trips per day	10
Water Supply	Litres per household per day	524	200 litres per person per day at 2.62 people per household
Wastewater	Litres per household per day	707	270 litres per person per day at 2.62 people per household
Stormwater	Impervious area (m2)	400	District average per dwelling

For industrial and commercial applications, development contributions for water supply, wastewater, stormwater and roads can be converted to HUEs based on a combination of accepted industry standards and assessment of information provided by the developer on the demand they expect to generate. Where insufficient information has been provided with an individual application, the council may request additional clarifying information or studies.

Developments that do not generate any demand for infrastructure will not be charged a development contribution. Developments that only place low demand on infrastructure capacity will typically be assessed in percentages of HUEs, rather than whole HUEs.

Council growth model

This policy is based on the capital expenditure required to cater for growth in capacity to meet demand generated by new development, as identified in the 2009-2019 Community Plan. The Plan is, in its turn, based on the Council's asset management, activity management, and financial plans, as well as incorporating community priorities and outcomes.

Decisions on future capital works required to meet the needs of the population of the district over time have been based on a moderate growth profile. This scenario will see an estimated increase in the population from 72,979 in 2009 to 76,158 in 2019.

Currently available information indicates that an average of 250 new houses and subdivided lots will be developed each year over the next 10 years. The potential for growth in the commercial or non-residential sector is incorporated in this figure. It is acknowledged that this is a best estimate for this sector until improved data becomes available and its contribution to growth can be identified more precisely.

Cost allocation methodology

The following methodology has been used to calculate the development contribution for each new development proposal. Only growth in demand, resulting in the need for new or increased service capacity and needs to be met through capital expenditure (CAPEX) can be funded from development contributions. Operations and maintenance costs (OPEX) and capital expenditure for qualitative improvements, such as renewals and catch-up have therefore been separated out before the other cost drivers have been considered.

All approved capital projects for the 10 year community planning term have been analysed and capital projects identified for the following activity areas have been included in the costing methodology:

• Water supply.
• Wastewater.
• Stormwater.
• Roads.
• Community infrastructure.
• Parks and reserves.

Example project: Upgrade of New Plymouth Water Treatment Plant (Manaaki Wai)

Growth in demand percentage	New development	New sections and houses, new commercial activities.	10%
	Increased consumption	Increased per capita consumption of water as more households install such things as swimming pools, spa pools and insinkerators.	40%
Increased level of service	Legislative requirements	Upgraded treatment facilities to meet new drinking water standards.	50%
	Discretional changes to service levels	No discretionary changes in this project.	0%
			100%

Each capital project has been divided into proportions depending on the degree to which the project is required to meet either growth in demand for the service, or improved quality, of service.

The portion of expenditure allocated to growth has then been further split into a percentage for new development and a percentage for increased per capita consumption or usage.

Subdivision and building consent data was analysed over the past five years to determine an average annual level of growth. This was determined to be around 300 new sections and dwellings to be serviced per annum, and is in keeping with a moderate level of population growth and the expected reductions in household size. The proportion of the total cost of new capital projects for each asset type attributable to increased demand for service from new development can therefore be divided by the average annual estimated growth in new building sections or dwellings, to give the development contribution requirement for each individual development.

Annual average expenditure on new capital capacity to accommodate growth in service demand
Forecast average annual growth in properties expected to use each service (in HUEs)
=
Total amount to be collected annually in development contributions for each service
Forecast HUEs using each service
=
Development contribution for each service

The total development contribution for each new residential section or house is then calculated by adding together the individual contributions for each service supplied to the new development. For urban developments this would normally include water supply, wastewater, stormwater, roads, community infrastructure and parks and reserves. For rural development, where water supply, wastewater, and stormwater services may not be available, only community infrastructure, parks and reserves and roads contributions may be collected.

The impact of business and industrial development proposals on demand for infrastructure will be analysed on a case by case basis, converted to household unit equivalents and the development contributions individually calculated.

Policy review

The Development Contributions Policy and schedule is to be reviewed at least every three years in line with the review cycle for the Community Plan.

Matters to be addressed in the review will include, but not be limited to:

• The level of charges as determined by the amount of capital expenditure that is attributable to growth and the number of household unit equivalent developments expected to occur over the plan period.
• Whether any unforeseen impacts on the rate of growth or its location have arisen as a result of the implementation of the policy.
• Any change to legislation, or its interpretation, due to legislative amendments, repeals or new case law.

The numbers, types and locations of new subdivision, land use, and building consents will be considered in the review.

Policy schedule

1. Events that will give rise to the requirement for a Development Contribution and Method of Payment

When deciding whether a development contribution will be required the council will first assess whether the proposed development is a subdivision or other development as defined in section 197 of the Local Government Act 2002 which generates a demand for reserves, network infrastructure, or community infrastructure and secondly, whether the proposed development is one that, on its own or cumulatively with other developments, will require the council to incur capital expenditure on new assets or assets of increased capacity (as required by section 197, 198 and 199 of the Local Government Act 2002) and thirdly, whether a contribution is required under this policy.

If following the above assessment it is decided that a contribution is required, the contribution will be assessed according to the demand generated for each type of service, as measured in whole, or percentages of, household unit equivalents (HUEs).

Contributions will be assessed under this policy when granting:

• A resource consent under the Resource Management Act 1991 for a development within the New Plymouth District.
• A building consent under the Building Act 2004 for building work situated in the New Plymouth District.

In respect of subdivision consents, payment is to be made prior to granting of a section 224(c) certificate. In respect of land use consent, payment is to be made prior to commencement of consent, or within 180 days of consent being granted, whichever occurs first. In respect of building consents payment is to be made within 180 days of granting consent, or prior to the code of compliance certificate being issued under section 43 of the Building Act, whichever occurs first.

As the sequence of development is not always consistent, development contributions will be required to be paid at the first available opportunity. At each and every subsequent opportunity the development will also be reviewed and additional contributions required if the units of demand assessed for the development exceed those previously paid. This would occur, for example, if the number of dwellings or HUEs had increased during the life of the proposal.

Homeowners carrying out renovations or extensions to their dwellings will not be subject to development contributions, unless those works create additional household units.

This policy does not apply where community facilities themselves require a resource or building consent. This decision is made on the basis that applying the policy to such developments would merely result in an internal transfer of budget from one account to another but would not generate any additional funding.

2. Method of Calculation of Contributions

Only capital expenditure (CAPEX) is considered in this methodology. All operational expenditure is excluded. Capital expenditure has been identified from asset management, activity management, and financial plans and approved via the long-term council community plan process.

The methodology for determining the development contribution for each individual development proposal has been outlined in the policy and calculated in accordance with Schedule 13 of the Local Government Act 2002. Some additional notes and worked examples are provided below.

- Parks

Contributions for parks and reserves will be used for development of existing and acquisition of new parkland and open space and for the capital development cost of new parks.

Section 203 of the Local Government Act 2002 establishes a maximum contribution for reserves as follows:

"Development contributions for reserves must not exceed the greater of:

1. 7.5 per cent of the value of the additional allotments created by a subdivision; and
2. The value equivalent of 20 square metres of land for each additional household unit created by the development".

The development contribution for parks and reserves of $1,507 currently represents around one to two per cent of the average value of an urban housing lot as determined by government valuation. This will be checked for each development proposal to ensure it falls below the statutory maximum.

- Community infrastructure

A community infrastructure contribution is required based on future projected demand for facilities such as community centres, event venues, aquatic centres, stadiums etc. An example of planned future investment to service new residents might include a new or enlarged swimming complex, or a new community or events centre. No capital projects for community infrastructure that fall within the criteria for levying development contributions have been included in this iteration of the Community Plan.

- Network infrastructure contribution

Under the existing Financial Contributions Policy, the provisions for water supply, wastewater collection and treatment, stormwater disposal and roading all require the applicant to meet the full cost of all land and works necessary to provide any subdivision or development with these services. This is achieved by requiring the applicant to meet all on-site costs associated with these services and to meet the fair and reasonable costs off-site necessary to service the development proposal in question.

No changes have been made to the requirements of the Financial Contributions Policy and District Plan, regarding the onsite provision of network infrastructure. These provisions can also be used to ensure that developers continue to pay for any fair and reasonable offsite costs associated with avoiding, remedying or mitigating adverse environmental effects resulting from the development and/or the servicing of their development, that are not accounted for by development contributions.

The Development Contributions Policy establishes a new regime for dealing with the cumulative off-site impacts of development proposals on network infrastructure. The policy does not use the RMA 1991 approach that requires a monetary contribution by a developer to remedy or mitigate the individual incremental off-site impacts of each proposal on network infrastructure. That is, it is not a reactive approach that only responds to development applications as they are received. Rather, contributions are calculated on the basis of the planned total capital investment required to service growth in the district, according to projections for new development arising from the growth model for the period identified. They are then charged on the proportional basis that each household or household unit equivalent has been estimated to contribute to demand for that particular type of network infrastructure.

The policy applies to all new development in the district, including commercial, business and industrial development applications.

- Car parking

The Financial Contributions Policy in the District Plan also establishes requirements in relation to the provision of vehicle parking (section 5.9 and Part B Appendix 22 of the District Plan). Within the Business A Environment Area in the New Plymouth CBD, the applicant is required to meet 15 per cent of the cost of constructing a parking space in a multi level parking building. This amount was set at $3,843 for the year 2004, where the number of parking spaces required, as set by Table 22.9 in Appendix 22, cannot be met on-site. This part of the Financial Contributions Policy continues to remain unchanged.

Table 22.9 in the District Plan also establishes the requirements for parking spaces to be provided on development sites outside the Business A Environment Area, but does not allow for a financial contribution in lieu of the provision of parking space.

3. Land or money

Under this policy the contribution shall in every case be money, unless at the sole discretion of the Council, a piece of land offered by a developer would adequately suit the purposes for which the contribution is sought. Return to top

4. Enforcement

As a means of ensuring development contributions are made, the Council may withhold RMA 1991 section 224(c) subdivision certificates, Building Act section 43 compliance certificates or land use consents. Finally, the Council may register an unpaid development contribution under the Statutory Land Charges Registration Act 1928 as a charge on the title of the land, as provided for by section 208(d) of the LGA 2002.

5. Credits and transitional arrangements

The LGA 2002 states that development contributions may be required for any application for a resource consent or building consent lodged after 19 December 2001 and granted on or after 1 July 2004.

Transitional arrangements were put in place so that the introduction of the policy was as fair as possible, particularly in terms of developments which were in progress when the policy came into force.

This approach gave those with developments in progress at the time that the policy came into force an additional six months to prepare and lodge all the applications for consent needed to complete their developments, without having to pay additional contributions under the policy.

6. Remissions, Reductions and Refunds

The Council may decide to allow remissions for particular community infrastructure works, such as that undertaken by schools, or charitable organisations or trusts.

Reductions might be considered where a developer is able to deal with an infrastructure requirement within the bounds of the development, for example water supply, wastewater or stormwater, such that no additional demand was placed on Council infrastructure. Any remaining off-site impact of the development would still necessitate a proportional charge for those activity groups.

A reduction would also be allowed where a financial or development contribution had been made for aspects of a particular development in the past. The development contribution would be calculated on the difference between the past amount paid and the current development contribution required. This is to ensure that the development contribution reflects the updated cost of providing infrastructure and services for the proposed development.

Refunds will be provided in accordance with the relevant provisions of the Local Government Act 2002 upon written request from the consent holder where:

• The consent lapses or is surrendered.
• The development or building for which the consent was granted does not proceed.
• The Council does not provide the reserve, network infrastructure or community infrastructure for which the contribution was required.

The Council will also take into consideration that while a current property owner might not wish to connect to council infrastructure, prudence may require that council take the development into consideration when determining infrastructure capacity because some future property owner might wish to connect. This may mean that a development contribution is payable, even though the current owner does not want to connect to Council infrastructure.

7. Significant financial and administrative assumptions

This development contributions policy is based on the following administrative and financial assumptions.

• Contributions for growth in water, wastewater and stormwater networks are only collected in those areas or catchments where that service is provided.
• The current level (quality) of service has been applied to new developments as the basis for calculating development contributions for this policy.
• Development contributions will be used towards the capital expenditure for increasing the capacity of network or community infrastructure or parks and reserves for which the contribution has been sought.
• Income generated from rates and other operating revenue will be sufficient to meet the increase in operating costs generated by the increasing level of capital expenditure into the future.
• For projects meeting Transfund criteria, Transfund subsidies will fund increased capacity alongside development contributions.

Next review 2012 as part of the LTP.Return to top