Item 8. 7
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Power to recover actual and reasonable costs in respect of a development contributions objection 58A Section 199BPower to make decision on any request for reconsideration of a development contribution requirement
CE, ESM, E&PMg, RM, APM
58B Section 199H and Schedule 13A Cl 2
Power to select a development contribution commissioner
E&PMg, RM, APM, in consulatation with Chair EPC
58C Section 199I
Power to provide information upon request of development contribution commissioner and to appear at objection hearing on behalf of the Council
RM, APM, DE
58D Section 201A
Power to amend Schedule of Assets and determine form of disclosure
ESM, APM
58E Section 207A, 207B
Power to enter into, and respond to, a development agreement
E&PMg, ESM, RM, APM
59A Schedule 13 Cl 1(4)
Power to decide to receive late development contribution submission
E&PMg, RM, APM
4. agrees to delete from the current Schedule of Charges the Lodgement Fee for non- residential Development Contributions assessments and to fix the following fees and charges in respect of administering the Development Contributions Policy:
1 Deposit for Development Contributions Objection Hearing $1,200.00 2 Application for Reconsideration $210.00
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3 Purpose of the Report
3.1 This report seeks Council agreement to amend the Development Contributions Policy (DCP) and associated requirements following enactment of the Local Government Amendment Act 2014.
4 Background and Discussion
4.1 The Government has recently enacted the Local Government Amendment Act 2014. The changes cover a range of matters, including:
encouraging more collaboration and shared services between local authorities;
making consultation requirements more flexible and providing for a new significance and engagement policy;
enabling more efficient and focused consultation on long-term plans and annual plans;
removing unnecessary duplication between annual plans and long-term plans
introducing new requirements for infrastructure strategies and asset management planning;
requiring councils to disclose information about their rating bases in long-term plans, annual plans and annual reports;
requiring disclosure of risk management arrangements for physical assets in annual reports;
enabling elected members to use technology to participate in council meetings, rather than attending in person;
allowing the Local Government Commission to establish local boards (similar to those in Auckland) as part of new unitary authorities, and in existing unitary authorities and to create council-controlled organisations and joint committees as part of a reorganisation scheme.
4.2 The Act also makes a number of changes in relation to development contributions, the subject of this report. There are some subtle but important changes to the purpose and principles applying to the imposition of development contributions changes what development contributions can be used for in relation to “community infrastructure” and reserves for “non-residential” purposes. These changes do not affect Tasman District Council as we still use financial contributions under the Resource Management Act for reserves and community services. The new Act has also codified our current practice of escalating annually the development contributions quanta based on the annual movement in the Construction Price Index.
4.3 Reconsiderations:
199A Right to reconsideration of requirement for development contribution
“(1) If a person is required by a territorial authority to make a development contribution under section 198, the person may request the territorial authority to reconsider the requirement if the person has grounds to believe that—
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“(a) the development contribution was incorrectly calculated or assessed under the territorial authority’s development contributions policy; or“(b) the territorial authority incorrectly applied its development contributions policy;
or
“(c) the information used to assess the person’s development against the
development contributions policy, or the way the territorial authority has recorded or used it when requiring a development contribution, was incomplete or contained errors.
4.4 A request for reconsideration must be lodged and decided according to the procedure set out in Council’s development contributions policy (s202A(2)). This means Council must amend its development contributions policy to provide for reconsideration requests.
4.5 Reconsiderations are a less formal process, and are processed internally. Changes to the delegations register are proposed to enable decisions on reconsiderations. People may request reconsideration and then an objection.
4.6 Objections:
199D Scope of development contribution objections
An objection under section 199C may be made only on the ground that a territorial authority has—
“(a) failed to properly take into account features of the objector's development that, on their own or cumulatively with those of other developments, would substantially reduce the impact of the development on requirements for community facilities in the territorial authority's district or parts of that district;
or
“(b) required a development contribution for community facilities not required by, or related to, the objector’s development, whether on its own or
cumulatively with other developments; or
“(ba) required a development contribution in breach of section 200; or
“(c) incorrectly applied its development contributions policy to the objector’s development.
4.7 The process and timeframes for dealing with objections is prescribed in Schedule 13A of the Local Government Act, and is the more formal process for reviewing development
contribution invoices. It involves appointment of up to three independent commissioners chosen from a list appointed by the Minister of Local Government to hear and decide objections. Council is required to provide administrative support, including invoicing for costs.
4.8 Development Agreements: The Act has formalised a process for Councils and developers to enter into ‘development agreements’ (s.207A-F). These agreements are intended to cover arrangements for the payment, construction, ownership, timing, maintenance, vesting etc of infrastructure. Development agreements are optional but once entered into become legally enforceable contracts. Again, the Act is prescriptive on the process for entering development agreements, content of agreements, and effect of them. There are also restrictions around the use of development agreements.
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4.9 The Act also requires local authorities to make a number of amendments to any existing DCP and these changes can occur without having to use the Special Consultative Procedure. The changes relate to informing people of their rights to challenge a
development contribution assessment and some other technical changes including the list of assets for which development contributions will be used, and past projects. The required changes have been marked up using ”track changes” on the attached updated DCP (Appendix 1) except that Schedule II has been reinserted in the required format as new.
4.10 The Council is also required, no later than 1 December 2014, to make available for submission a new DCP and for this to be in place no later than 30 June 2015. The new DCP will be prepared and reported back to Council prior to that time.
5 Options
5.1 There are no relevant options around the decision required of the Council to amend the DCP. The law requires the Council to make the changes and this paper provides the means by which this can occur. As discussed below there are other decisions around fees and delegations over which the Council has choice.
6 Strategic Challenges / Risks
6.1 The new reconsideration and objection processes will now apply to residential and non- residential development. Under the current DCP it has only been non-residential
developments that have been able to be objected to and those have been considered by the Development Contributions Subcommittee. There has also been a process called “Special Assessment” which has been used infrequently but which now can be replaced by the reconsideration option. It is likely therefore that the number of challenges to development contribution assessments will increase.
6.2 If any objections are upheld by an independent commissioner this may negatively impact on the revenue quanta received for the growth component of Council’s capital works
programme. The law provides however that the full actual and reasonable cost of a hearing is able to be recovered from an objector. This may well be the focus of criticism because a hearing alone, based on RMA experience, is likely to be around $4,000-$5,000.
6.3 The timing of the legislative changes means that two development contribution policy
reviews are required. While the first review is largely administrative, the second review is the more substantive and effects how calculations are made, and for what. This second version is required “to be available to the public for consultation” before 1 December 2014. This is well ahead of Council’s LTP consultation process, when major decisions on assets are made for the next 10 years.
6.4 The risk is that the DC policy is finalised ahead of the LTP, thus pre-determining some decisions under the LTP. To avoid this, staff are intending to have the policy content, calculation methods and draft list of assets available on the 1 December 2014 for public consultation, but ensure there are obvious caveats around the final version of the list – i.e.
that it will be subject to decisions made on the LTP 2015-2015.
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7 Policy / Legal Requirements / Plan7.1 The changes to the DCP proposed in this report will ensure compliance with the Local Government Act.
7.2 It is proposed that the Council delegate to staff a number of decisions which will enable effective administration of the DCP. These are similar to what currently exists. The exception is that those matters that would have previously been considered by the Development Contributions Subcommittee will now be dealt with by independent commissioners. Councillors may wish to discuss whether there should be any residual elected representative check following receipt of requests for reconsideration. The current recommendation is to delegate the responsibility to nominated staff.
8 Consideration of Financial or Budgetary Implications
8.1 Any changes to the projects and quantum of development contributions have financial implications for the Council, however, the interim DCP does not propose any change.
Therefore the financial and budgetary implications of this first round of policy change is confined to administrative costs and staff labour costs.
8.2 There will be on-going administration costs to administer the DCP in light of the law changes. No extra budget is sought – any staff time will be absorbed but we will monitor this. Costs associated with hearings can be recovered and staff recommend that a deposit fee of $1,200 (equivalent to a non-notified RMA application hearing) should be set following a request for an objection hearing. The current lodgement fee for objections to non-
residential assessments of $210 should be deleted and be replaced by a similar fee for any request to reconsider a development contribution assessment.
9 Significance and Consultation
9.1 The decisions recommended in this report are essentially administrative and of low
significance although the changes brought about by the legislation will be important for those concerned.
9.2 The law requires the changes to be made within one month of enactment and for the
changes to be made without having to go through the normal special consultative procedure.
9.3 The more substantive review of the DCP will apply an active and targeted consultation process at the same time as the LTP consultation programme in 2015. Running this in conjunction with the LTP programme means that the public will be able to see the wider picture of how the contributions will be calculated and what development contributions are proposed to be used for; as well as ensuring that Council retains flexibility in its decision- making processes.
10 Conclusion
10.1 The changes to the Local Government Act (2002) that came into force on 1st July require Council to amend its Development Contributions policy. An interim Development
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Contributions policy has been prepared to cover the period between 7 August and when the new policy is adopted (post 1 December 2014).
10.2 The interim policy updates the existing policy by providing for reconsideration requests, objections and development agreements. It also renames the List of Assets to ‘Schedule of Assets for which development contributions will be used’.
10.3 The substantive review of the Policy is required to take place before 1 December 2014 and these will be prepared and reported back to Council prior to that time.
10.4 This report seeks approval for the interim Development Contributions policy (Attachment 1).
11 Next Steps / Timeline
11.1 Following a decision by the Council the DCP and associated information on the Council website will be updated. Following the passing of the legislation, Council staff will finalise the internal procedures and protocols for managing objections and reconsideration requests.
11.2 Staff will report back to the Council to comply with the 1 December 2014 time deadline for the more substantive review of the DCP
12 Attachments
1. Interim Development Contributiions Policy 75
2. List of Past Projects funded through Development Contributions 95
Att ac hm ent 1 Item 8. 7
Development Contributions Policy
1 Introduction
It is Tasman District Council’s intention that developers should bear the cost of the increased demand that development places on the District’s infrastructure. Population growth in the District will place a strain on network and community infrastructure. That infrastructure will need to expand and be further developed in order to cope with the demands of population growth.
Through this policy Tasman District Council is seeking to set development contributions in a transparent and consistent manner and at a level that requires a fair share of the capital expenditure for infrastructure to be met by those who are creating the new demand for infrastructure in the District.
This policy sets out the development contributions payable by developers, how and when they are to be calculated and paid, and a summary of the methodology and rationale used in calculating the level of contributions. It also includes a summary of the significant assumptions that the policy is based on. The policy also includes, for information purposes only, a summary of the provisions in the Tasman Resource Management Plan that relate to financial contributions.
1.1 Legislative Requirements and Powers
Council is required to have a policy on development contributions or financial contributions as a component
of its Funding and Financial Policies in its Long Term Plan under Section 102(2)(d) of the Local Government Act 2002 (the Act). This Policy satisfies that requirement.
Section 198 of the Act gives territorial authorities the power to require a development contribution when granting a resource consent for a development, a building consent or an authorisation for a service connection. It should be noted that Development Contributions can be charged at any or all of these points provided they have caused a requirement for growth funding. Development contributions provide Council with a method to obtain contributions to fund infrastructure required due to growth.
1.2 Purpose of Policy
The key purpose of the Development Contributions Policy is to ensure that growth, and the cost of infrastructure to meet that growth, is funded by those who cause the need for and benefit from the new or additional infra structure, or infrastructure of increased capacity. Development contributions are not a tool to fund the cost of maintaining
infrastructure or improving levels of service for existing users. This cost will be met from other funding sources.
1.3 Adoption of Policy
This Policy is adopted in conjunction with the Long Term Plan 2012–2022. The Policy was reviewed following a special consultation process initiated in December 2012 and came into force on 11 February 2013. It has also been amended to give effect to changes to the local Government Act 2002 that came into effect on xxxxxxx.
1.4 When a Development Contribution is Required
A development contribution can be required in relation to a development when:
• The effect of that development is to require new or additional assets or assets of increased capacity in terms of network infrastructure, reserves and community infrastructure; and
• The Council incurs, or is likely to incur, capital expenditure to provide appropriately for those assets, i.e. network infrastructure, reserves and community infrastructure.
Att ac hm ent 1 Item 8. 7
The effect of a development in terms of impact on assets includes the cumulative effect that a development may have in combination with another development.Where a development will benefit from existing or future Council water, wastewater or stormwater services within the 10 year period of the Plan, a development contribution for that particular infrastructure item will be required. The road network is of benefit to the whole District and development contributions for roading will be payable on development throughout the District.
Connection fees will continue to apply in addition to the requirements to pay development contributions except where a development contribution for water supply in the Coastal Tasman Area was paid prior to 1 July 2009, in which case the development contribution included a component for a connection fee.
1.5 Limitations to the Imposition of Development Contributions
Council may not require a development contribution for network infrastructure, reserves or community infrastructure in any of the following cases:
(a) Where it has, under Section 108(2)(a) of the Resource Management Act 1991 (RMA), imposed a condition on a resource consent requiring that a financial contribution be made in relation to the same development for the same purpose.
(b) Where subject to Council’s agreement, the developer will fund or otherwise provide for the same network infrastructure, reserve or community infrastructure.
(c) Where in relation to water, wastewater or stormwater services, it is not intended that the development will benefit from a new or expanded Council system, or that Council will manage any adverse effect on a stormwater system from development, over the life of the Long Term Plan (refer to the Services Contribution Area Maps – Schedule III).
(d) Where Council has received or will receive funding from a third party for these works.
(e) Where existing use rights under Section 10 of the Resource Management Act apply to any building re-development.
(f) Where, in relation to any dwelling, replacement development, repair or renovation work generates no additional demand for network infrastructure.
(g) Where, except in the case of a new dwelling, the value of any building work for which a building consent is required is less than $50,000 exclusive of GST, unless the building consent is for a change of use.
(h) Where a building consent is for a bridge, dam (confined to the dam structure and any tail race) or other public utility.
(i) Where, in the case of a residential development, a development contribution (or equivalent payment predating 1 July 2004) has already been paid for each applicable type of development contribution.
Council will require a reduced development contribution in respect of commercial building development where a previous development contribution has been paid when the title on which the development is located was created at time of subdivision.
1.6 Recovery of Financial Contributions
Financial contributions for reserves and community infrastructure will continue to be recovered under the financial contributions provisions of the Tasman Resource Management Plan independent of whether any development contribution is payable. Council intends only to require development contributions under this Development Contributions Policy for capital expenditure on network infrastructure comprising water, wastewater, roading and stormwater assets and has not, since 1 July 2004, required financial contributions for subdivision and land development under the Council’s Tasman Resource Management Plan for capital expenditure on these assets.
However, Council has and may still require works or services on new developments to avoid, re medy or mitigate the environmental effects of proposed developments through resource consent conditions, or in accordance with any relevant provision in the Tasman Resource Management Plan.
Att ac hm ent 1 Item 8. 7
Section 16.5 of the Tasman Resource Management Plan, which contains the Council’s planning provisions for recovering financial contributions, should also be consulted.
2 Council’s Objective for the Collection of Development Contributions
Council’s objective is to develop new or additional infrastructure, or infrastructure of increased capacity to meet the demands of new growth within Tasman District. A development contribution is the Council’s preferred method for ensuring that this outcome is achieved for network infrastructure comprising water, wastewater, roading and stormwater assets. Capital expenditure on reserves and community infrastructure will continue to be recovered as financial contributions under relevant planning instruments under the RMA. In addition, a requirement to provide works or services may continue to be imposed as a condition on any resource consent for new development.
3 Trigger for Taking a Development Contribution
Under Section 202 of the Act, Council can require a development contribution upon the granting of:
(a) A resource consent for a subdivision or building development;
(b) A building consent;
(c) An authorisation for a service connection.
Council will generally require development contributions on the grant of a resource consent for subdivision or building consent for new development. Council considers that these triggers are generally the most appropriate stage to require a development contribution for the following reasons:
(a) Practicality of implementation;
(b) Economies of scale in implementation costs;
(c) Fairness;
(d) Best available knowledge for projections and allocating budgets.
Council will require development contributions at resource consent stage or at the service connection stage where additional units of demand are created and development contributions for those additional units of demand may not otherwise be covered.
The requirement to pay a development contribution will be in addition to a requirement to pay service connection f ees on connection to any Council provided network infrastructure except where a development contribution for water supply has been required in the Coastal Tasman Area prior to 1 July 2009.
4 Activities Requiring a Development Contribution to Meet the Costs of Growth
Council will require a development contribution for capital expenditure to meet the increased demand for the following network infrastructure resulting from growth:
(a) Water supply;
(b) Wastewater reticulation;
(c) Transportation;
(d) Stormwater collection and management.
4.1 Capital Expenditure as a Result of Growth in the District
The Council has estimated the total capital expenditure which it expects to incur as a result of growth to meet increased demand for network infrastructure over the next 10 years. This arises out of the preparation of activity management plans (which are available for public inspection) identifying the new or additional or expanded network infrastructure that will be developed over the next 10 years, the anticipated growth in the District and the proportion of capital expenditure