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New developer contributions policy to share burden

5 October 2004

New developer contributions policy to share burden of paying for new community assets

The Manukau City Council has adopted a Development Contributions Policy to help spread the costs of building new infrastructure and community facilities more fairly.

Developers will in future be required to pay a levy to help meet the costs of new services provided by the Council to newly-developed areas, such as arterial roads, libraries and swimming pools, and improving town centres.

Manukau is the third-largest and fastest growing city in New Zealand, with GDP growth last year reaching 7.3%. The population grew by 10,000, thousands of new homes have been built and hundreds of new commercial building projects completed. Over 500 businesses moved to or expanded in Manukau in 2003.

This growth puts great pressure on current facilities. But it also requires new infrastructure such as new roads, community facilities including libraries, leisure centres and swimming pools; sewage and stormwater piping and treatment facilities.

Providing these new facilities is a major part of the Council's expenditure each year. Some of these costs are already met by levies on developers to cover reserve contributions (parks) and water-related services. But this does not meet the full costs of growth, in particular new arterial roads, improving town centres and community facilities.

Such contributions are now required under the Resource Management Act and the Local Government Act 2002. City Manager Colin Dale says, "This new policy is fair because newcomers should be expected to contribute to the services that they benefit from in the city.

"We are building extremely high quality community services such as the new swimming complex in Manurewa and the Botany library. These are wonderful facilities but they don't come cheap."

Over this current financial year the Council will be spending $153 million on expenditure related to transport infrastructure, town centre development and community infrastructure.

The contributions will aim to recover the full costs associated with a particular development and are expected to raise around $15 million per year, depending on the level of new developments. In addition, Public Open Space (parks and reserves) contributions can also be in the form of either land or money, and financial contributions will be used as appropriate for land acquisition.

Colin Dale says this new policy is an example of the Council finding new ways of raising funds for community assets without raising rates. "We will need a lot more infrastructure such as roads and new community assets in future years and there is now a widespread expectation that we must look beyond the traditional financial base. Ratepayers are not prepared to tolerate rate rises above the rate of inflation.

"There is also wide agreement both among councillors and within the community that we need to re-examine our rating system from scratch. In addition to modernising it, we must also examine things such as ability to pay, and the social impacts of the rating system."


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