Changes to council Development Contributions means higher rates or reduced library and recreation services.

[Statement from David Thornton]

Local Councils face a likely loss of income from development contributions as a result of The Local Government Act 2002 Amendment Bill (No 3), which will have its First Reading in Parliament today.

Councils currently charge development contributions on residential developments to help meet the capital cost of providing new community facilities for growing populations

This includes using some contributions to meet interest costs on loans raised to build new facilities in anticipation of future contributions from new developments.

The new legislation will restrict the ability of councils to levy development contributions by specifying which facilities the council can demand development contributions.

Currently councils can spend development contributions on the full range of ‘community infrastructure’ including land and facilities for public amenities.

In future councils will only be able to charge contributions for community centres and halls (including land), public toilets, and play equipment on neighbourhood reserves. – and will not be able to levy for Libraries and for Regional facilities such as swimming pools.

This will present councils with some key decisions as to whether they increase rates to make up for the shortfall from anticipated development contributions, or reduce Library and regional recreational facilities.

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