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Ongoing commitment to funding growth

Ongoing commitment to funding growth with development contributions

The North Shore City Council yesterday reconfirmed commitment to its development contributions policy.

Development contributions are contributions of money or land collected by the council when a development is undertaken or when the use of an existing property changes.

The council introduced development contributions as part of its 2004-2014 City Plan (long term council community plan) earlier this year.

North Shore City strategic management committee chairperson, Gary Holmes, says development contributions received overwhelming support from the community.

"We asked residents, ratepayers and developers what was their preferred way of funding growth and over 90 per cent who had their say chose development contributions," he says.

At their first strategic management committee meeting this week, councillors were updated on the findings from two independent external reviews of the council's development contributions policy. One review was undertaken by LECG, the other by Deloitte.

The reviews looked at the methodology for allocating costs, the financial model and the cost and cost allocations of 35 projects. The reports confirm that North Shore City's approach applies appropriate economic principles, is well designed and robust.

Councillor Holmes welcomes these findings.

"Development contributions are a more transparent and fairer way of funding growth-related services and infrastructure in our city," he says.

"For too long, our ratepaying community have been burdened with these costs. Now that cost is transferred to those who are developing and creating growth in our city."

Overall, the reports show strong support for the council's policy and confirm that the cost allocation methodology has been consistently applied. The Deloitte report highlighted some areas that needed further consideration.

As a result of the reports the council has reduced contributions for three projects: stormwater services in east Devonport, and community services - specifically the libraries in Birkenhead-Northcote and in Devonport.

Gary Holmes says further recommendations from the reports, some of which include increasing contributions for certain projects, would be considered as part of the council's 2006 City Plan.

Development contributions are charged when people subdivide a property, build a new property, extend an existing non-residential property, change the use of a property, connect to a service such as water or wastewater, or build a small residential unit or granny flat.

When people apply for resource consent, building consent or service connection, the council will assess what level of development contribution they will need to pay when granting consent.

The contributions will fund reserves, transport, water supply, wastewater collection and treatment, stormwater collection and management, and libraries and leisure centres needed as a result of growth.

Councillor Holmes says the council is investing more than one billion dollars on capital works over the next decade - $204m of this will be raised by development contributions.

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