What is the Development Contributions Policy?
The Development Contributions Policy is a policy adopted by the Council under the Local Government Act 2002. It allows the Council to require cash contributions when new development occurs. The Council then uses the funds collected to carry out capital works caused by that development, for the following services:
- Transportation
- Community infrastructure, such as parks, libraries, public conveniences, harbours and solid waste facilities
- Water supply
- Wastewater
- Stormwater, environmental protection works, flood protection and mitigation works
- Reserves (for residential development only).
How do you know when a development contribution is payable?
In general you will pay a development contribution when you cause any additional demand on Council services when:
- Creating additional lots by subdivision, including the subdivision or cross lease of an existing lot;
- Building additional dwellings on a lot;
- Providing additional retirement units or units of commercial accommodation;
- Extending the area of business activity on a business lot;
- Adding additional farm buildings on a rural lot;
- Extending the area of any other activity such as kindergartens, churches or clubs;
- Obtaining a new or additional service connection.
A development contribution will be payable by each additional “unit of demand” created by development activity for the services provided in the area or “catchment” in which it falls.
What is a “unit of demand”?
The Development Contributions Policy considers any new dwelling or any new residential, business or rural lot created in a subdivision to be one additional “unit of demand” for services.
The Development Contributions Policy also contains formulas that use the “gross business area” of any additional commercial or industrial development or the “gross floor area” of any other activity such as kindergartens, churches, and clubs to calculate the units of demand generated by those businesses or other activities.
A new unit of commercial accommodation or a retirement unit of two or more bedrooms is treated as having one unit of demand like a normal dwelling. Smaller commercial accommodation and retirement units of one or fewer bedrooms are treated as having half a unit of demand.
In requiring a development contribution, the Council will give credits for any unit of demand in existence at the time the development or subdivision takes place because it deems this to have paid its contribution already.
How are development contributions calculated?
Development contribution amounts originate from the 10-year capital costs in the Council’s Ten Year Plan.
Council calculates that part of total capital expenditure in the 10-year programme that is being caused by new development and growth. It then divides this expenditure by the amount of development that is expected to take place.
Development contributions cannot be used to fund the costs of renewing or replacing infrastructure to ensure existing development enjoys the correct levels of service.
Contributions payable will depend on location
The contributions payable for any new development or subdivision will depend on where the activity is situated. The Development Contributions Policy uses a number of service areas or “catchments” to which expenditure is allocated. Only development taking place within a particular catchment will pay toward that expenditure. In general, a subdivision in a rural area will pay district-wide and community board contributions but will not pay toward water, wastewater or stormwater services which are usually confined to the urban settlements
Reserve Contributions
Contributions are also payable for neighbourhood reserves on residential development in urban settlements in the District.
What amounts of development contribution are payable?
The development contributions amounts payable for services in each part of the District are contained in Appendix B of the 2012 Draft Development Contributions Policy.
To view the Policy refer to the complete Statement of Proposal, this document can be found at all Council service centres, libraries and on our website.
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