As our City grows, we need to make sure that our infrastructure and reserves grow with it. To help manage that growth we collect development contributions to make sure that our Smart Little City can continue running like we need it to.
The collection of development contributions is controlled by the Local Government Act, and we need to review our policy every three years. It is now time for us to do that review in time for our Long Term Plan 2021 - 2031.
More information is available - Development Contributions
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There are two parts to the development contributions. Infrastructure contributions and reserves contribution.
If a development will trigger the need for infrastructure to be improved (i.e. there will be a heavier load on the pipes, roads etc.), then this can require a development contribution.
Council calculates this by looking at the total number of households that will benefit from the asset (pipe, road etc.) and compare that to the existing number of households that will benefit from it over the life of the asset.
The development contribution is then calculated based on the cost of borrowing to fund that proportion of the new asset. Development contributions are collected to cover that cost.
It sounds complicated - but it is a fair way to spread the cost to manage growth in our city.
Reserves contributions are linked directly to the cost of providing new land to meet the level of service in the reserves asset management plan. The level of service is "what reserves should there be for 1000 people".
This currently states that 1.7Ha of land is required per 1000 people, which corresponds to 40 sqm of land per household on average.
The value of 40 sqm of any new lots is therefore paid as a reserves development contribution (subject to statutory limits).
Development contributions are applied over the whole of Nelson as a single catchment. This means all new households pay the same amount, no matter where your site is.
There are three aspects of the policy that have been identified by Council as needing to change. They are:
- Reserves development contributions
- Complexity of the policy
- Exemptions in the policy
Reserves development contributions
The method for calculating the neighbourhood reserves contribution is administratively complex and expensive. Valuations are required and at least three different methods are involved in the calculations.
Th current method of calculation doesn't take into account that we need to develop existing reserves in urban areas (rather than buy new ones).
Complexity of the policy
The current policy is complex in both its implementation and presentation and needs to be simplified. There are three main issues that need to be addressed through this review:
- Simplifying the reserves development contribution assessment
- Timing of payment (between resource consent and building consent)
- Readability of the policy
The current policy lists a number of organisations, authorities and development types that are exempt from paying some or all of the development contribution that would normally be levied.
Some of these exemptions are required by statute and some have been chosen by Council in the last policy review. These exemptions need to be reviewed to make sure they are still relevant.