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Notice is hereby given that an Ordinary Meeting of Southland District Council will be held on:

 

Date:                      

Time:

Meeting Room:

Venue:

 

Wednesday, 18 March 2015

9am

Council Chambers
15 Forth Street
Invercargill

 

Council Agenda

 

OPEN

 

 

 

MEMBERSHIP

 

Mayor

Mayor Gary Tong

 

Deputy Mayor

Paul Duffy

 

Councillors

Lyall Bailey

 

 

Stuart Baird

 

 

Brian Dillon

 

 

Rodney Dobson

 

 

John Douglas

 

 

Bruce Ford

 

 

George Harpur

 

 

Julie Keast

 

 

Ebel  Kremer

 

 

Gavin Macpherson

 

 

Neil Paterson

 

 

IN ATTENDANCE

 

Chief Executive

Steve Ruru

 

Committee Advisor

Maree Fyffe

 

 

 

 

Contact Telephone: 0800 732 732

Postal Address: PO Box 903, Invercargill 9840

Email: emailsdc@southlanddc.govt.nz

Website: www.southlanddc.govt.nz

 

Full agendas are available on Council’s Website

www.southlanddc.govt.nz

 

 

 


Delegations of Council/Committee/Community Board/CDA insert text here.


Council

18 March 2015

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TABLE OF CONTENTS

ITEM                                                                                                                                   PAGE

Procedural

1          Apologies                                                                                                                        5

1.1       Statutory Declaration - Cr E Kremer                                                                           5

2          Leave of absence                                                                                                           5

3          Conflict of Interest                                                                                                         5

4          Public Forum                                                                                                                  5

5          Extraordinary/Urgent Items                                                                                          5

6          Confirmation of Council Minutes                                                                                5

Reports - Policy and Strategy

7.1       Proposal: Remission and Postponement of Rates on Māori Freehold Land Policy         7

7.2       Proposal: Development and Financial Contributions Policy                                 19

7.3       Statement of Proposal:  Draft Revenue and Financing Policy                               63

7.4       Proposal - Schedule of Fees and Charges                                                               89

7.5       Consultation: Draft Early Payment of Rates Policy                                              121

7.6       Proposal:  Draft Remission and Postponement of Rates Policy                         131

7.7       Long Term Plan 2015-2025 - Adoption of Supporting Information                     151

7.8       Long Term Plan 2015-2025 - Adoption of Consultation Document                     165

7.9       Te Anau Wastewater Discharge Project Committee                                             171

7.10     Dog Control                                                                                                                187

Reports - Operational Matters

8.1       Management Report                                                                                                  391

8.2       Mediation of Appeals on the Proposed Te Anau Wastewater Resource Consent Application - Delegated Authority                                                                           403

8.3       Proposed Southland District Plan 2012 - Make and Release the Council's Decision on Designation 80                                                                                                           407

8.4       Mediation of the Appeals on the Proposed Southland District Plan 2012 - Delegated Authority                                                                                                                     653

8.5       Southland District Council 2015 Scholarship Recipients                                     657

8.6       Resource Consents and Other Resource Management Act Items - December 2014        659

8.7       Resource Consents and Other Resource Management Act Items - January 2015 663

8.8       Building Consents and Values for January 2015                                                   667

8.9       Building Consents and Values for February 2015                                                 679

8.10     Council Action Sheet                                                                                                689

Reports - Governance

9.1       Completion of a historical roading action - Glenburn Road                                691

9.2       Southland District Council Speed Limits Bylaw 2015                                           697

9.3       Edendale Community Pool Society                                                                         789

9.4       Minutes for Confirmation by Council                                                                      793

9.5       Minutes for Confirmation by Council                                                                      885   

Public Excluded

Procedural motion to exclude the public                                                                            959

C10.1  Public Excluded minutes for Confirmation by Council                                        959

C10.2  Proposed Road Stopping - Upper Scotts Gap Road                                            959  

 


Council

18 March 2015

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1          Apologies

 

At the close of the agenda no apologies had been received.

 

2          Leave of absence

 

At the close of the agenda no requests for leave of absence had been received.

 

3          Conflict of Interest

Councillors are reminded of the need to be vigilant to stand aside from decision-making when a conflict arises between their role as a councillor and any private or other external interest they might have. It is also considered best practice for those members in the Executive Team attending the meeting to also signal any conflicts that they may have with an item before Council.

 

4          Public Forum

Notification to speak is required by 5pm at least two days before the meeting. Further information is available on www.southlanddc.govt.nz or phoning 0800 732 732.

 

5          Extraordinary/Urgent Items

To consider, and if thought fit, to pass a resolution to permit the Council to consider any further items which do not appear on the Agenda of this meeting and/or the meeting to be held with the public excluded.

Such resolution is required to be made pursuant to Section 46A(7) of the Local Government Official Information and Meetings Act 1987, and the Chairperson must advise:

(i)    The reason why the item was not on the Agenda, and

(ii)        The reason why the discussion of this item cannot be delayed until a subsequent meeting.

Section 46A(7A) of the Local Government Official Information and Meetings Act 1987 (as amended) states:

“Where an item is not on the agenda for a meeting,-

(a)   That item may be discussed at that meeting if-

(i)         That item is a minor matter relating to the general business of the local authority; and

(ii)        the presiding member explains at the beginning of the meeting, at a time when it is open to the public, that the item will be discussed at the meeting; but

(b)          no resolution, decision or recommendation may be made in respect of that item except to refer that item to a subsequent meeting of the local authority for further discussion.”

 

6          Confirmation of Council Minutes

6.1         Meeting minutes of Council, 28 January 2015


Council

18 March 2015

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Proposal: Remission and Postponement of Rates on Māori Freehold Land Policy

Record No:        R/15/2/3307

Author:                 Tamara Dytor, Policy Analyst

Approved by:       Rex Capil, Group Manager, Policy and Community

 

  Decision                             Recommendation                        Information

 

  

 

Purpose

1        This report presents the draft Remission and Postponement of Rates on Māori Freehold Land Policy and the corresponding Proposal for Council’s consideration. If approved, these documents will be used for public consultation and hearings will be held concurrently with hearings for the Long Term Plan 2015-25, from 19-20 May 2015.

Executive Summary

 

2           This report outlines the draft Remission and Postponement of Rates on Māori Freehold Land Policy and seeks Council approval to release the draft policy and associated Proposal for public consultation (attached).

 

Recommendation

That the Council:

a)         Receives the report titled “Proposal: Remission and Postponement of Rates on Māori Freehold Land Policy” dated 9 March 2015.

b)         Determines that this matter or decision be recognised as not significant in terms of Section 76 of the Local Government Act 2002.

c)         Determines that it has complied with the decision making provisions of the Local Government Act 2002 to the extent necessary in relation to this decision; and in accordance with Section 79 of the Act determines that it does not require further information, further assessment of options or further analysis of costs and benefits or advantages and disadvantages prior to making a decision on this matter.

d)         That Council approves the draft Remission and Postponement of Rates on Māori Freehold Land Policy for release for public consultation.

e)         That Council endorses the Proposal for use in public consultation on this policy.

f)          Consults through a process which will run parallel to the consultation process for the Long Term Plan 2012-25; with hearings from 19-20 May 2015.

 


 

Content

Background

3        The Proposal allows the draft Remission and Postponement of Rates on Māori Freehold Land Policy to be released for public consultation in compliance with s82(A) of the Local Government Act (2002). Consultation will occur via a process which will run parallel with consultation for the Long Term Plan 2015-25 (LTP).  The policy will have the same consultation period as the LTP, so that anyone wishing to speak to their submission can do so at the LTP hearings (19-20 May 2015).

4        The Proposal will be available at Area Offices, and on the Southland District Council website. Submissions will be able to be made by post or on the website.

Issues

5        Southland District Council proposes that the policy applies to all land that is deemed to be Māori Freehold Land by the Māori Land Court. Reference to ‘multiple ownership’ has been removed in the draft policy and the draft policy applies to land not currently held in a Trust. Land that has a dwelling on it or that is used for economic benefit will not be eligible for rates remission or postponement.

6        This policy takes into account the relationship of Māori and their culture and traditions with their ancestral land.

Factors to Consider

Legal and Statutory Requirements

7                    The Remission and Postponement of Rates on Māori Freehold Land Policy is a statutory requirement under s108 of the Local Government Act (2002), and has to be reviewed every 6 years. It acknowledges that some Māori Freehold Land may have particular conditions, ownership structures or other circumstances which make it appropriate to remit or postpone rates. The Policy sets out the criteria and conditions attached to the remission or postponement of rates on Māori Freehold Land.

8                    This policy has been reviewed to meet a requirement of the Local Government Act (2002) (s109 (2A)) which states that the policy must be reviewed at least once every 6 years using a consultation process.

9                    There is no legislative requirement for this policy to be included in the Long Term Plan. The Proposal allows the Remission and Postponement of Rates on Māori Freehold Land Policy to be released for public consultation in compliance with s82(A) of the Local Government Act (2002).

Community Views

10                  The consultation process proposed will allow Council to consider community views regarding this policy.

Costs and Funding

11                  There are no costs associated with implementing the draft policy. The financial value of remitted and postponed rates on Māori freehold land is low and the number of ratepayers granted remissions and postponements is small. This is unlikely to change if the draft policy is adopted.

Policy Implications

12                  This policy does not need to be included in the Long Term Plan 2015-25 and will not be included in the consultation document for the Long Term Plan. Consultation will occur through a separate parallel process along with other council policies which are currently being reviewed.

Analysis

Options Considered

Council could choose to:

·    Use proposed policy and remove the requirement from the current policy that land has to be held in ‘multiple’ ownership in order to remit and/or postpone rates (Option 1); or

·    Use proposed policy and retains the requirement from the current policy that land has to be held in ‘multiple’ ownership (4+ persons) in order to remit and/or postpone rates (Option 2); or

·    Maintain the status quo of the current policy that retains requirement that land has to be held in ‘multiple’ ownership (4+ persons) in order to remit and/or postpone rates (Option 3).

Analysis of Options

Option 1

Advantages

Disadvantages

·        Less problems regarding locating owners of land, where multiple owners exist

·        Requires people to apply for rates remission so not automatically removing landowners from system

·        Reliant on how Māori Land Court defines Māori Freehold Land (i.e. legal test)

·        Could result in a greater number of landowners being granted rates remission, if landowners apply

·        Does not detail definition of ownership (although this is clarified in s129 of Te Ture Whenua Māori Act 1993 as determined by the Māori Land Court)

Option 2

Advantages

Disadvantages

·        Defines multiple ownership clearly

·        Less rates remissions granted under this policy

·        Gain total annual rates of ~$55,000 from including the extra properties (from 2+ to 4+)

·        Most of these properties have the Māori Land Court as their address, making it difficult to find the landowners

·        Cost of finding landowners and collecting rates is not economical for Council

Option 3

Advantages

Disadvantages

·        No change necessary

·        Includes statements specific to specific land areas

·        Complex for Council to administer

Assessment of Significance

13      The review of the Remission and Postponement of Rates on Māori Freehold Land Policy has not been assessed as significant. The financial impacts of any of the options listed above will be relatively minor and proposed changes are unlikely to have a substantial impact on communities or large numbers of ratepayers.

Recommended Option

14      It is recommended that Council approve the draft policy and Proposal for release for public consultation (Option 1).

Next Steps

15      If Council approves the draft policy and Proposal for release for public consultation, the public will be able to submit on the draft policy and hearings for submitters wishing to speak will be held from 19-20 May 2015.

16      Council would then adopt the Remission and Postponement of Rates on Māori Freehold Land Policy with any appropriate amendments its meeting on 24 June 2015.

 

Attachments

a         Proposal - Remission and Postponement of Rates on Maori Freehold Land Policy View

b         DRAFT Remission and Postponement of Rates on Maori Freehold Land Policy View     


Council

18 March 2015

 

PROPOSAL - REMISSION AND POSTPONEMENT OF RATES ON MĀORI FREEHOLD LAND POLICY

 

Summary

The Remission and Postponement of Rates on Māori Freehold Land Policy (the Policy) acknowledges that some Māori Freehold Land may have particular conditions, ownership structures or other circumstances which make it appropriate to remit or postpone rates.
The Policy sets out the criteria and conditions attached to the remission or postponement of rates on Māori Freehold Land.

 

Southland District Council proposes that the policy applies to all land that is deemed to be Māori Freehold Land by the Māori Land Court.  Land that has a dwelling on it or that is used for economic benefit will not be eligible for rates remission or postponement.  Owners of Māori Freehold Land may apply to Council for a remission or postponement of rates.

 

This policy takes into account the relationship of Māori and their culture and traditions with their ancestral land.

 

Statutory Context

 

This Proposal is made for the purposes of meeting Section 82, Section 102 and Section 108 of the Local Government Act (2002).

 

The Remission and Postponement of Rates on Māori Freehold Land Policy (the Policy) is a statutory requirement under s108 of the Local Government Act (2002), and has to be reviewed every 6 years.

 

Analysis of Options

 

Option 1:  Use proposed policy and remove the requirement from the current policy that land has to be held in ‘multiple’ ownership in order to remit and/or postpone rates

 

Advantages

Disadvantages

·        Fewer problems regarding locating owners of land, where multiple owners exist

·        Requires people to apply for rates remission so not automatically removing landowners from system

·        Reliant on how Māori Land Court defines Māori Freehold Land (i.e. legal test)

·        Could result in a greater number of landowners being granted rates remission, if landowners apply

·        Does not detail definition of ownership (although this is clarified in s129 of Te Ture Whenua Māori Act 1993 as determined by the Māori Land Court)

 

Option 2: Use proposed policy and retains the requirement from the current policy that land has to be held in ‘multiple’ ownership (4+ persons) in order to remit and/or postpone rates

 

Advantages

Disadvantages

·        Defines multiple ownership clearly

·        Less rates remissions granted under this policy

·        Gain total annual rates of ~$55,000 from including the extra properties (from 2+ to 4+)

·        Most of these properties have the Māori Land Court as their address, making it difficult to find the landowners

·        Cost of finding landowners and collecting rates is not economical for Council

 


 

Option 3:    Status quo of the current policy that retains requirement that land has to be held in ‘multiple’ ownership (4+ persons) in order to remit and/or postpone rates

 

Advantages

Disadvantages

·        No change necessary

·        Includes statements specific to specific land areas

·        Complex for Council to administer

 

Proposed changes

 

The Remission and Postponement of Rates on Maori Freehold Land Policy has been reviewed by Council and the following changes have been proposed:

 

·              That the policy applies to all land within the Southland District that has been deemed Māori Freehold Land by the Māori Land Court

·              That the policy also includes rates remissions for land not currently held in a Trust but is still deemed Māori Freehold Land by the Māori Land Court

·              That the policy has removed reference to ‘multiple ownership’, and will therefore apply to all Māori Freehold Land within the Southland District

·              That the policy requires landowners of Māori Freehold Land to apply to the
Southland District Council for rates remission or postponement

·              That the policy does not apply to Māori Freehold Land which contains a dwelling or is used for economic benefit.

 

Making a Submission

 

Submissions are invited on the draft Remission and Postponement of Rates on Māori Freehold Land Policy and must be received by 5.00 pm on Monday, 20 April 2015. Submissions can be made online, via post or by providing a written submission to staff at your local Southland District Council office.  All submissions received by Southland District Council will be made available to the public.

 

Online submissions can be made using the submission form available at www.abettersouthland.co.nz.

 

Written submissions must:

1.       Be clearly labeled SUBMISSION - REMISSION AND POSTPONEMENT OF RATES ON MAORI FREEHOLD LAND POLICY.

2.       Contain the name, address and contact details of the submitter.

3.       Indicate whether the submitter wishes to be heard by the Southland District Council in support of his/her submission. Submitters wishing to speak will be allocated a time by Southland District Council from 19-20 May 2015. 

 

Submissions can be posted to:        Southland District Council

Submissions

PO Box 903

Invercargill  9840

 

 

 

 


Council

18 March 2015

 

 

SOUTHLAND DISTRICT COUNCIL

REMISSION AND POSTPONEMENT OF RATES ON MĀORI FREEHOLD LAND

 

 

This policy applies to:  Council and owners of Māori freehold land

 

 

DOCUMENT CONTROL

 

Policy owner:

Corporate and Financial Services

TRIM reference number:

R/14/9/13224

Effective date:

«type date»

Approved by:

«type date»

Date approved:

«type date»

Next review date:

«type date»

 

 

 

CONTENTS

 

1.           PURPOSE.. 2

2.           DEFINITIONS AND ABBREVIATIONS.. 2

3.           POLICY DETAILS.. 2

3.1         Background. 2

3.2         Objectives. 3

3.3         Conditions and Criteria for the Postponement and Remission of Rates on Maori Freehold Land  3

3.4         Postponement of Rates. 3

3.5         Remission of Penalties. 3

3.6         Remission of Rates. 4

3.7         Existing decisions on Maori Freehold land. 4

3.8         Length of decision. 4

4.           ROLES AND RESPONSIBILITIES.. 4

5.           ASSOCIATED DOCUMENTS.. 5

6.           REVISION RECORD.. 5

 


REMISSION AND POSTPONEMENT OF RATES ON MĀORI FREEHOLD LAND

 

 

1.   PURPOSE

 

            Southland District Council has developed the Remission and Postponement of Rates on Māori Freehold Land Policy (the Policy) to ensure fair and equitable collection of rates from all sectors.  The Policy recognises that certain Māori-owned lands have particular features, ownership structures or other circumstances that make it appropriate to provide rates relief.

 

            The Policy provides the framework for granting remissions and postponements for the payment of rates and penalties on Māori freehold land, as is adopted under Section 102(2)(e) and Section 108 of the Local Government Act (2002).

 

 

2.   DEFINITIONS AND ABBREVIATIONS

 

Term

Meaning

LGA

Local Government Act (2002)

LGRA

Local Government (Rating) Act (2002)

Maori freehold land

Land whose beneficial ownership has been determined by the Māori Land Court by freehold order.

Service Rates

As referenced in the Funding Impact Statement

 

 

3.   POLICY DETAILS

 

3.1     Background

 

The Southland District Council carries out its rating function in accordance with the requirements of the Local Government (Rating) Act 2002 (LGRA) and the LGA.

 

All Māori freehold land in the Southland District is liable for rates in the same manner as if it were general land (as per section 91 LGRA).

 

Māori freehold land is defined in the LGRA as land whose beneficial ownership has been determined by a freehold order issued by the Māori Land Court.  Only land that is the subject of such an order may qualify for remission or postponement under this policy.

 

Whether rates are remitted in any individual case will depend on the individual circumstances of each application.  Schedule 11 of the LGA identifies the matters which must be taken into account by Council when considering rates relief on Māori freehold land.

 

When considering the objectives listed below Council must take into account:

•           the desirability and importance of the objectives (3.2) to the District.

•           whether remitting the rates would assist attainment of those objectives.

 

3.2       Objectives

 

The objectives of rates remission and postponement on Māori freehold land by Council are:

(a)        supporting the use of the land by the owners for traditional purposes;

(b)        recognising and supporting the relationship of Māori and their culture and    traditions with their ancestral lands;

(c)        avoiding further alienation of Māori freehold land;

(d)        facilitating any wish of the owners to develop the land for economic use;

(e)        recognising and taking account of the presence of waahi tapu that may affect the use of the land for other purposes;

(f)        recognising and taking account the importance of the land in providing economic and infrastructure support for marae and associated papakainga housing (whether on the land or elsewhere);

(g)        recognising and taking account of the importance of the land for community goals relating to:

i.          the preservation of the natural character of the coastal environment,

ii.          the protection of outstanding natural features,

iii.         the protection of significant indigenous vegetation and significant habitats of indigenous fauna;

(h)        recognising the level of community services provided to the land and its  occupiers;

(i)         recognising matters related to the physical accessibility of the land.

 

3.3       Conditions and Criteria for the Postponement and Remission of Rates on Maori Freehold Land

 

Conditions for the rates to receive rates remission include for defined Maori freehold land to be:

·                not occupied by a dwelling, out-building or commercial building; and

·                not used for economic benefit.

 

Applications for remission of rates on Māori freehold land must be made in writing, and should include:

•           a description of the size, position and current use of the land,

•           an indication of the ownership and documentation that shows the land which is subject to the application for rates remission is Māori freehold land,

•           outline future plans for the land (if any),

•           sources and level of income generated by the land (if any),

•           financial accounts if requested,

•           outline the reason for the request,

•           describe how the application meets any one or more of the objectives listed in 3.2.

 

Council may grant a remission of up to 100% of all rates except Service Rates.

 

3.4       Postponement of Rates

 

Council does not postpone rates for Māori freehold land; however, it will remit 100% of rates (excluding Service Rates) on application, if the application meets the criteria set out in 3.2 and 3.3.

 

3.5       Remission of Penalties

 

Remission on rates penalties on Māori freehold land will be subject to application meeting the criteria set out in 3.2 and 3.3.  Each application will be considered on its merits and remission will be granted where it is considered just and equitable to do so.


 

Where significant arrears exist, penalties may be remitted whilst regular payments are made to reduce the arrears balance. 

 

Decisions on remission of penalties will be made on the same basis as remission of rates, with the delegated authority to remit penalties being given to the Chief Executive, with recommendations from the Revenue Manager.

 

3.6       Remission of Rates

 

An application for remission of rates must be considered by the Chief Executive.

 

All rates on Māori freehold land whose owners name or names (or the name of the lessee) appears on the valuation roll (under Section 92 of the LGRA) will be collected in the usual manner of rate collection and follow up.

 

All rates, rates arrears and penalties on Māori freehold land vested in trustees will be collected from income derived from that land and held by the trustees for the beneficial owners, but limited to the extent of the money derived from the land and held by the trustees on behalf of the beneficial owner or owners (as per Section 93 LGRA).

 

For Māori freehold land, any person who actually uses the land whether for residing, farming, storage or any other use, whether they have a lease or not, is liable to pay the rates (as per Section 96 LGRA).  The rates invoice will be delivered to that person and the rates will be collected in the usual manner.  Section 97 LGRA provides for the person to be treated as having used the whole of the land for the whole financial year, unless they can establish otherwise.

 

Rates arrears on Māori freehold land shall be reviewed annually and amounts determined by Council as uncollectible shall be written off (for accounting purposes) on such land.

 

3.7       Existing decisions on Māori Freehold land

 

Any decisions made by Council regarding rates remissions on Māori freehold land before
1 July 2015 remain recognised by Council.

 

3.8       Length of decision

 

Decisions regarding rates remission on Māori freehold land remain in perpetuity, unless the land becomes occupied or used for economic benefit. In this case, it is expected that the landowners would advise Council of the change in land use. If there is evidence of the use of the land for occupation or economic benefit, Council may request financial statements regarding the property in order to review a decision. Reviews of decisions regarding rates remission for Māori freehold land will be made by the Chief Executive.

 

 

4.   ROLES AND RESPONSIBILITIES

 

Party/Parties

Roles and Responsibilities

Revenue Manager

Receive applications and make recommendations to Chief Executive for remission of rates on Māori freehold land.

 

May request financial statements regarding the property if there is evidence that the land is occupied or being used for economic benefit.

 

May write off rates if the application is accepted

Chief Executive

Accept or decline applications for remission of rates on Māori freehold land.

 

Review applications, if applicable, for remission of rates on Māori freehold land.

 

 

5.   ASSOCIATED DOCUMENTS

 

·        Local Government Act (2002),

·        Local Government (Rating) Act (2002),

·        Relief, Remission and Postponement of Rates Policy (R/13/8/11128).

 

 

6.   REVISION RECORD

 

Date

Version

Revision Description

2012

 

Remission and Postponement of Rates on Māori  Freehold Land

R/13/8/11136 - Long Term Plan 2012-2022

2007

 

Rates Remission Policy for Māori  Freehold Land

2007/05/4523

26 June 2003

 

Remission and Postponement of Rates on Māori  Freehold Land

 

30 January 1997

Remission and Postponement of Rates on Māori  Freehold Land

 

 

 


Council

18 March 2015

Description: sdclogo

 

Proposal: Development and Financial Contributions Policy

Record No:        R/15/2/3308

Author:                 Henrietta McNeill, Policy Analyst

Approved by:       Rex Capil, Group Manager, Policy and Community

 

  Decision                             Recommendation                        Information

 

  

 

Purpose

1        This report presents the draft Development and Financial Contributions Policy and the corresponding Proposal for Council’s consideration.  If approved, these documents will be used for public consultation and hearings will be held concurrently with hearings for the Long Term Plan 2015/2025 (LTP or 10 Year Plan), from 19-20 May 2015.

Executive Summary

2        This report outlines the draft Development and Financial Contributions Policy and seeks Council approval to release the draft policy and the associated Proposal for public consultation (attached).  The draft policy puts the collection of development contributions into remission until there is sufficient evidence of population growth.

 

Recommendation

That the Council:

a)         Receives the report titled “Proposal: Development and Financial Contributions Policy” dated 9 March 2015.

b)         Determines that this matter or decision be recognised as not significant in terms of Section 76 of the Local Government Act 2002.

c)         Determines that it has complied with the decision making provisions of the Local Government Act 2002 to the extent necessary in relation to this decision; and in accordance with Section 79 of the Act determines that it does not require further information, further assessment of options or further analysis of costs and benefits or advantages and disadvantages prior to making a decision on this matter.

d)         Approves the draft Development and Financial Contributions Policy for release for public consultation.

e)         Endorses the Proposal for use in public consultation on this policy.

f)          Undertakes consultation through a process which will run parallel to the consultation process for the Long Term Plan 2012-25; with hearings from
19-20 May 2015.

 


 

Content

Background

3       The Development and Financial Contributions Policy has been reviewed to propose a new direction around the use of development contributions and to comply with the changes required by the Local Government Act 2002 Amendment Act (No. 3) 2014.

4       The Proposal allows the Development and Financial Contributions Policy to be released for public consultation in compliance with Section 83 of the Local Government Act (2002). Consultation will occur via a process which will run parallel with consultation for the Long Term Plan 2015/25 (LTP).  The policy will have the same consultation period as the LTP, so that anyone wishing to speak to their submission can do so at the LTP hearings
(19-20 May 2015).

5       The Proposal will be available at Area Offices, and on the Southland District Council website.  Submissions will be able to be made by post, email or on the website.

6       Financial Contributions are established under the Resource Management Act (1991) to mitigate the environmental effects of development. Although Financial Contributions are covered by this policy, they are set through the Southland District Plan and are proposed to remain enforced. Development Contributions are established under the Local Government Act (2002) and allow councils to apportion the costs associated with additional demand to those creating the demand. In the proposed policy, these are put into remission due to low population growth in the Southland District.

Issues

7        It has been highlighted in the Proposal that this may frustrate some developers who have already paid development contributions.  However, it  has been determined that the proposed policy is equitable as it has been noted that encouraging development in the Southland District will result in benefits for the broader community.

Factors to Consider

Legal and Statutory Requirements

8        The Local Government Act 2002 Amendment Bill (No. 3) contained a number of amendments to the Development Contributions provisions in the principal Act. 
From 8 September 2014 a requirement was introduced for councils to have:

 

§  A schedule which lists the assets for which Development Contributions are intended to be used or already have been used, the estimated capital of each asset and the proportion of the capital cost the territory authority proposes to recover from Development Contributions and from other sources; and

 

§  A reconsideration process which sets out how the request can be lodged with the territorial authority and the steps that it will apply when reconsidering the requirement to make a development contribution.

 

Council’s proposed policy meets both of these requirements.

9                    Because the Development and Financial Contributions Policy has not been determined to be significant, Council is proposing to consult under s82 of the Local Government Act (2002).

10                  There is no legislative requirement for this policy to be included in the Long Term Plan.  The Proposal allows the Development and Financial Contributions Policy to be released for public consultation in compliance with
Section 82 of the Local Government Act (2002).

Community Views

11                  The consultation process proposed will allow Council to consider community views regarding this policy.

Costs and Funding

12                  The draft Development and Financial Contributions Policy places development contributions into remission until it is assessed that the level of population growth requires these to be levied again.  This means that if the draft policy is adopted, developers will not be required to pay a development contribution at this stage.

13                  Placing development contributions into remission will shift costs from developers to existing ratepayers.  However, Council has taken an approach which encourages development in the Southland District, recognising that this will benefit the community as a whole.

Policy Implications

14                  This policy does not need to be included in the Long Term Plan 2015/2025 and will not be included in the consultation document for the Long Term Plan.  Consultation will occur through a separate parallel process along with other council policies which are currently being reviewed.

Analysis

Options Considered

15                  Council could choose to approve the draft Development and Financial Contributions Policy and corresponding Proposal for release for public consultation (Option 1); OR Council could amend the draft Development and Financial Contributions Policy and corresponding Proposal (Option 2).

16                  In making any amendments to the draft Development and Financial Contributions Policy and corresponding Proposal, Council must ensure that the requirements of the Local Government Act 2002 Amendment Bill (No. 3) are met.

17                 

Analysis of Options

 

Option 1

 

Advantages

Disadvantages

·        The draft Development and Financial Contributions Policy complies with the requirements of the Local Government Act 2002 Amendment Bill (No. 3) and has been prepared by an external consultant who is a subject matter expert.

·        The draft Development and Financial Contributions Policy puts development contributions into remission at this stage. This may frustrate some developers who have already paid development contributions. However, it  has been determined that the proposed policy is equitable as it has been noted that encouraging development in the Southland District will result in benefits for the broader community.

Option 2

Advantages

Disadvantages

·        Council could choose to amend the draft Development and Financial Contributions Policy to address any issues likely to be raised in submissions.

·        The draft Development and Financial Contributions Policy has been developed by an external consultant who is a subject matter expert on development contributions.  The draft policy adheres to good practice application of development and financial contributions. Amending the policy may impact on compliance or create other issues which would require further consideration.

Assessment of Significance

18      The Development and Financial Contributions Policy has broad effects because of its potential impacts on development activity as well as economic and population growth.  It also raises issues of equity and affordability in funding assets and infrastructure.  It is therefore determined that the Development and Financial Contributions Policy is not a significant policy.

Recommended Option

19      It is recommended that Council approve the draft policy and Proposal for release for public consultation (Option 1).

Next Steps

20      If Council approves the draft policy and Proposal for release for public consultation, the public will be able to submit on the draft policy and hearings for submitters wishing to speak will be held from 19-20 May 2015.

21      Council would then adopt a Development and Financial Contributions Policy with any appropriate amendments its meeting on 24 June 2015.

 

Attachments

a         Proposal - Development and Financial Contributions Policy View

b         DRAFT Policy on Development and Financial Contributions 2015 - 2025 View     


Council

18 March 2015

 

PROPOSAL - SOUTHLAND DISTRICT COUNCIL POLICY ON DEVELOPMENT AND FINANCIAL CONTRIBUTIONS 2015 - 2025

 

Summary

 

The Southland District Council Policy on Development and Financial Contributions
(2015-2025) (the Policy) determines how Council will recover development and financial contributions to cover the cost of capital expenditure which is necessary to service growth and associated demand for development in the Southland District.  Financial contributions are required under the Southland District Plan through the Resource Management Act (1991) for reserves and roading; whereas development contributions contribute to the capital expenditure costs of water, wastewater (sewerage) and community infrastructure and are covered under the Local Government Act (2002). Under this Proposal, financial contributions will still be required through the Southland District Plan and will not be put into remission.

 

The Policy relating to development contributions had previously been applicable only to the Te Anau area due to the level of growth in the township; however, the population of Southland District only grew by 3.1% between 2001 and 2013, indicating limited development within the District.  Therefore, Council is proposing that the development contributions section of the Policy be in remission, so as to not discourage new development in the District.  Council would be able to review this remission clause at any time, and the change will require consultation with the community(s) affected.

 

Council recognises that there will be developers who have previously paid development contributions who may be frustrated by the decision to place this policy in remission but it has decided that it is in the wider community interest to do so.

 

Infrastructure and/or projects that are applicable to the Policy on Development and Financial Contributions Policy are available in Schedule 1 of the Policy, mainly referring to those already underway: particularly the Te Anau Wastewater Scheme.

 

Statutory Context

 

This Proposal is made for the purposes of meeting Section 83, Section 102 and Section 106 of the Local Government Act (2002).

 

The Policy on Development and Financial Contributions is a statutory requirement under Section 102(2) of the Local Government Act (2002), and has to be reviewed every three years.

 

Analysis of Options

Option 1: Use proposed policy and remit Development Contributions until such time as growth is occurring within the District

 

Advantages

Disadvantages

·        Encourages economic growth within the District

·        Reduces housing costs for new homes in the District

·        Applies to the whole District rather than just Te Anau

·        The cost of development will be spread across all ratepayers instead of the developer paying

·        Less revenue for Council

·        Has to be put in place again once growth occurs

 


 

Option 2: Use proposed policy and do not remit Development Contributions

 

Advantages

Disadvantages

·        The cost of development will be spread across developer instead of the ratepayers paying for the costs of growth

·        Applies to the whole District rather than just Te Anau

·        Revenue stream for Council for capital  projects based on growth

·        There are no capital expenditure projects planned, other than the Te Anau wastewater scheme, due to the lack of growth within the District

·        Could discourage new development and growth within the District

 

Option 3: Status quo of the current policy that does not remit Development Contributions

 

Advantages

Disadvantages

·        Revenue stream for Council for capital expenditure projects based on growth

·        There are no capital expenditure projects planned, other than the Te Anau wastewater scheme, due to the lack of growth within the District

·        Could discourage new development and growth within the District

·        Only applies to the Te Anau area rather than the whole District

 

Changes following review

 

The Policy on Development and Financial Contributions, while remitted, is proposed to have a simpler calculation mechanism and to apply to the entire District. It would still apply to water supply, wastewater (sewerage) and community infrastructure.

The proposed policy uses the ward structure as catchments for community infrastructure, otherwise local scheme-by-scheme catchments for water supply and wastewater activities. Only new connections would be obliged to pay development contributions if the policy was not in remission.

Council has proposed that the methodology for development contributions be firstly determined by calculating the demand on infrastructure caused by development, and subtracting demand generated prior to development; therefore, only using development contributions to cover additional demand caused by a development. This is then multiplied by the cost per unit of demand. Each household is one unit of demand; however, commercial facilities, such as accommodation developments could be more than one unit of demand.

 

Making a Submission

 

Submissions are invited on the draft Development and Financial Contributions Policy and must be received by 5.00 pm on Monday, 20 April 2015. Submissions can be made online, via post or by providing a written submission to staff at your local Southland District Council office. All submissions received by Southland District Council will be made available to the public.

 

Online submissions can be made using the submission form available at www.abettersouthland.co.nz.

 

Written submissions must:

1.       Be clearly labeled SUBMISSION - DEVELOPMENT AND FINANCIAL CONTRIBUTIONS POLICY.

2.       Contain the name, address and contact details of the submitter.

3.       Indicate whether the submitter wishes to be heard by the Southland District Council in support of his/her submission. Submitters wishing to speak will be allocated a time by Southland District Council from 19-20 May 2015. 

 

Submissions can be posted to:        Southland District Council

Submissions

PO Box 903

Invercargill   9840

 

 

 


Council

18 March 2015

 

SOUTHLAND DISTRICT COUNCIL

POLICY ON DEVELOPMENT AND FINANCIAL CONTRIBUTIONS 2015-2025

 

This policy applies to: 

 

DOCUMENT CONTROL

 

Policy owner:

Finance

TRIM reference number:

R/14/11/17513

Effective date:

«type date»

Approved by:

«type date»

Date approved:

«type date»

Next review date:

«type date»

 

  Operational policy

  Council policy

 

 

CONTENTS

 

1.     INTRODUCTION. 1

2.     POLICY DETAILS. 3

4.     METHODOLOGY. 17

6.     ROLES AND RESPONSIBILITIES. 25

7.     REVISION RECORD.. 25

APPENDIX 1 - DEFINITIONS AND ABBREVIATIONS. 26

APPENDIX 2 - DEVELOPMENT CONTRIBUTION CATCHMENTS. 29

APPENDIX 3 - ASSESSMENT OF SIGNIFICANT ASSUMPTIONS. 30

APPENDIX 4 - SUMMARY OF FINANCIAL CONTRIBUTION PROVISIONS. 31

APPENDIX 5 - CALCULATING UNITS OF DEMAND FOR COMMERCIAL DEVELOPMENT. 32

 

 


Council

18 March 2015

 

 

POLICY ON DEVELOPMENT AND FINANCIAL CONTRIBUTIONS - 2015-2025

 

1.       INTRODUCTION

 

1.1       Purpose

 

            To provide predictability and certainty about the sources and levels of funding by enabling Council to recover development contributions from those persons undertaking development, a fair, equitable, and proportionate share of the total cost of capital expenditure necessary to service growth over the long term and to recover financial contributions to deal with the adverse effects of new development in the Southland District.

 

1.2       Statutory context

 

1.2.1    Council is required by Section 102(2)(d) of the Local Government Act 2002 (the Act), to have a policy on development contributions or financial contributions.

 

1.2.2    Council has chosen to use both development contributions and financial contributions to recover the total cost of capital expenditure necessary to service new development and to deal with its effects.

 

1.2.3    Financial contribution provisions for recovering the growth related costs of roading and reserves are detailed in Section 2.14 of the Proposed District Plan.

 

1.2.4    This policy deals with development contributions for water supply, sewerage and community infrastructure.

 

1.2.5    Council, in addition to determining matters of content in this policy, has determined:

 

            (a)        that the decision to adopt the Southland District Policy on Development and Financial Contributions 2015 - 2025 is a significant decision;

 

            (b)        that it believes it has met the decision-making and consultation requirements of the Act to the extent required.

 

1.3       Approach to growth and development

 

1.3.1    The population of Southland District grew by only 900 persons (3.1%) in the 12 years between 2001 and 2013.  In spite of this, the total number of dwellings increased by just over 1,000 (9.4%) and the number of rating units increased in the same period, indicating that there is limited development taking place over the long term.  Development is known to be occurring in particular parts of the District and not generally across the District. 

 

1.3.2    In making this policy, Council has considered the matters under Section 101(3) of the Act.  Section 101(3)(b) of the Act states that the funding needs to meet expenditure requirements must be met from sources that the local authority determines to be appropriate, following a consideration of the overall impact of any allocation of liability for revenue needs on the community.


Council

18 March 2015

 

1.3.3    Although it does not wish to burden current households and businesses by making them fund additional capacity in capital assets that will mainly benefit new development, it is aware that development contributions may discourage new development.

 

1.3.4    In the wider community interest, Council may from time to time resolve to suspend the requirement for the payment of development contributions under this policy by putting the policy into remission.  In doing so it shall specify an appropriate alternative source of funding for the share of the total cost of capital expenditure necessary to service any limited growth known to be occurring.

 

1.4         Remission of policy and background

1.4.1      This Southland District Policy on Development and Financial Contributions 2015 – 2025 policy is currently in remission and development contributions will not be required under it. The financial contributions provisions in the Southland District Plan are not in remission and continue to apply to development in the Southland District. 

1.4.2      In view of the limited growth of the Southland District between 2001 and 2013 and limited projections for growth in the Long Term Plan period, the Council proposes to fund the total cost of capital expenditure for water supply and sewerage necessary to service development from sources other than development contributions. Development contributions will not be required under this policy until resolved otherwise by Council in which case the provisions of the policy will apply in full. Council has full discretion as to the timing of a review.

1.4.3      Council will continue to require financial contributions for roading and reserves under Section 2.14 of the Proposed Southland District Plan. Council is concerned that in the event of any substantial development, the resulting costs for roads and reserves to serve the development could affect the level of rates unless funded by financial contributions.  The ability to require financial contributions will not limit the ability of Council to impose resource consent conditions requiring an applicant to carry out roading and reserves works to offset the adverse effects of a development.

1.4.4      Council may review its position on remissions at any time but shall do so no more than three years from the date on which it adopts its Long Term Plan.

1.4.5      Prior to 2012, the development contributions policy applied to development across Southland District and application of the policy resulted in persons undertaking new developments in the Southland District being subject to a development contributions regime.

1.4.6      Council has been conscious of the fact that development contributions may have previously been an impediment or barrier to new economic development. This is contrary to the Council’s aspirations for encouraging growth.  The Council also recognises that when new developments occur, these often contribute significantly to ongoing community wellbeing and also contribute financially on an ongoing basis through rates. 


 

1.4.7      In recognition of this, the Council removed development contributions from most parts of the District in 2012, with the exception of Te Anau. The 2012-22 development contribution policy was limited to water and sewerage projects at Te Anau and only in cases where developments proposed to connect to reticulated services.  

1.4.8      Findings of the 2013 New Zealand Census have confirmed the limited growth taking place in Southland District since 2001.

 

 

2.       POLICY DETAILS

 

            Council has considered all matters it is required to consider under the Act when making a policy on development contributions or financial contributions.  The Council has also considered requirements in Section 106, Section 201 and Section 201A of the Act relating to the content of such a policy.  Policy resulting from these considerations is set out in this section.  The way in which the policy will be applied in practice is set out in Section 3.

 

2.1       Appropriate sources of funding

 

2.1.1    Council incurs capital works expenditure in order to:

 

            (a)        provide additional capacity in assets to cater for new development;

 

            (b)        improve the level of service to existing households and businesses;

 

            (c)        meet environmental and other legislative requirements; and

 

            (d)        renew assets to extend their service life.

 

2.1.2    Section 101(3)(a) of the Act states that the funding needs to meet these expenditure requirements must be met from sources that Council determines to be appropriate, following a consideration, in relation to each activity, of a number of matters.  Council’s consideration of these matters as it relates to the funding of capital expenditure is outlined in the Revenue and Financing Policy.  The analysis contained in the Revenue and Financing Policy is also applicable to this policy.

 

2.1.3    Council has had regard to and made the following determinations under each activity in relation to the matters set out under section 101(3)(a)(i) to (v) of the Act:

 

            (a)        that development contributions are an appropriate source of funding for providing additional capacity in water supply, sewerage and community infrastructure assets because when development occurs it takes up capacity in these assets and requires Council to provide additional capacity in existing assets or new assets or to serve the development;

 

            (b)        that financial contributions are an appropriate source of funding for roading and reserves assets because the Council only seeks contributions towards these assets to mitigate adverse effects in the vicinity of developments and not to fund these assets in the wider network;


 

 

            (c)        community infrastructure contributions will only be required on residential developments although the Council may still require financial contributions for reserves on non-residential developments as a condition of resource consent under the Resource Management Act 1991. 

 

2.1.4    In keeping with the principles in Sections 197AB(e) and (f) of the Act, Council is required to make information available and provide certain schedules.

 

2.1.5    Section 106 of the Act requires Council to:

 

            (a)        summarise and explain the total cost of capital expenditure that Council expects to incur to meet the increased demand for community facilities resulting from growth; and

 

            (b)      state the proportion of that total cost of capital expenditure that will be funded by—

 

                        (i)
    development contributions;

                        (ii)          financial contributions; and

                        (iii)
    other sources of funding.

 

2.1.6    These requirements are met in Schedule 1 of this policy.

 

2.1.7    Section 201A of the Act requires inclusion in a development contribution policy to include a schedule of assets, and specifies the contents of that schedule. 
This requirement is met by Schedule 2 of this policy. 

 

2.1.8    Section 201 of the Act requires inclusion in a development contribution policy of a schedule of development contributions.  This requirement is met by Schedule 2 of this policy. 

 

2.2       Financial contributions

 

2.2.1    The Resource Management Act 1991 authorises local authorities to impose financial contributions to address effects associated with subdivision, land use or development. Council may require a financial contribution, as a condition of consent, in accordance with any relevant rule in the Southland District Plan. 

 

2.2.2    Provisions regarding financial contributions towards roading and reserves infrastructure are detailed in Section 2.14 of the Proposed District Plan and should be referred to when reading this policy.  The financial contribution rules in Section 2.14 the Proposed Southland District Plan are operative[1].

 

2.2.3    Section 106(2)(f) of the Act states that if financial contributions will be required this policy must summarise the provisions that relate to financial contributions. 
This summary is set out in Appendix 4.  


 

2.3       Limitations on contributions

 

2.3.1    While Council is able to seek both development contributions for infrastructure
under the Local Government Act 2002 and financial contributions under the Resource Management Act 1991, Section 200 of the Local Government Act 2002 prevents Council from requiring a development contribution where it has imposed a contribution requirement on the same development under the Resource Management Act 1991 or where developers or other parties fund the same infrastructure for the same purpose.

 

2.3.2    Although under the Southland District Plan, Council may impose a financial contribution as a condition of resource consent, it shall ensure that no condition of resource consent is imposed that would require work to be done or funded that is identified in the Long Term Plan and funded in whole or in part by development contributions. 

 

2.3.3    Nothing in this policy, including the amounts of development contribution payable in Schedule 3, will diminish from any other legal requirement to make a payment for community facilities other than a development contribution, including connection fees or any other fee required to be paid pursuant to any other policy or bylaw or by agreement with Council.

 

2.4       Limitations on costs eligible for inclusion in development contributions

 

2.4.1    In calculating development contributions under this policy, the contributions shall not include the value of any project or work or part of any project or work required for:

 

            (a)        rehabilitating or renewing an existing asset; or

 

            (b)        operating and maintaining an existing asset.

 

2.4.2    In accordance with Section 200(1) of the Act, no development contribution calculated under this policy shall include the value of any funding obtained from third parties, external agencies or other funding sources in the form of grants, subsidies or works.  This limitation shall not include the value of works provided by a developer on behalf of Council and used as a credit against contributions normally payable, which Council may seek to recover from other developers in contributions.

 

2.4.3    Council may require development contributions where it has incurred capital expenditure via a third party and has provided a credit against development contributions payable by any person where that person has incurred capital expenditure on behalf of Council, which provides additional capacity to serve further development.

 

2.4.4    The value of any subsidy or grant toward the value of any project or work shall be deducted prior to the allocation for funding of the balance portion of project cost between development contributions and other sources of Council funding. 

 

2.5       Vested assets and local works

 

2.5.1    The value of assets vested or expenditure made by a developer, pursuant to a requirement under the Resource Management Act 1991, shall not be used to off-set development contributions payable on a development unless all or a portion of such assets or expenditure can be shown to avoid or reduce the need for Council to incur costs providing an asset that is included in its capital works programme, for which development contributions are sought. 

 

2.5.2    The value of assets vested or expenditure made voluntarily by a developer to enhance a development shall not be used to offset development contributions payable on development.

 

2.6       Past surplus capacity provided

 

2.6.1    In accordance with Section 199(2) of the Act, development contributions may be required to fund capital expenditure already incurred by Council in anticipation of development, prior to the adoption of this policy.

 

2.6.2    Where Council has in recent years incurred expenditure to undertake works or acquire land in anticipation of development, it may seek to recover this expenditure from development contributions yet to be made.  Council may include the value of past surplus capacity in its calculation of development contributions.

 

2.7       Cumulative and network effects

 

2.7.1    In accordance with Section 199(3) of the Act, development contributions may be required under this policy, where a development, in combination with other developments, has a cumulative effect including the cumulative effect of developments on network infrastructure.

 

2.8       Geographic grouping (Catchments)

 

2.8.1    In keeping with the principle in Section 197AB(g) of the Act, Council considers that development contributions should be required from new development on a geographic basis using separate catchments those being determined:

 

            (a)        in a manner that balances practical and administrative efficiency with considerations of fairness and equity; and

 

            (b)        avoids, wherever practical, grouping across the entire District.

 

2.8.2    A catchment is an area of the Southland District within which growth and development is occurring, which is likely, either solely or cumulatively, to give rise to the need for, or benefit from, particular Council activities.

 

2.8.3    This policy avoids the use of district-wide catchments for the recovery of development contributions.

 

2.8.4    This policy uses four separate ward based catchments for community infrastructure assets because it is considered impractical to divide the areas of benefit of these types of asset into smaller geographic areas.

 

2.8.5    The policy uses separate local scheme-by-scheme catchments for water supply and sewerage activities.  Development contributions will be payable only where the service is available and in the case of water supply and sewerage, only to those new households, businesses or other developments connecting to the networks concerned.  It is considered reasonably practical to administer the policy using local scheme-by-scheme catchments. 

 

2.8.6    The catchments used in this policy are summarised in Appendix 2.


 

2.9       Principles of Cost Allocation

 

2.9.1    In keeping with the principle in Section 197AB(a) of the Act an asset should not be considered for cost allocation for recovery through a development contribution unless it is a new or additional asset or an asset of increased capacity required to be provided by the Council to deal with the effects of developments.

 

2.9.2    In keeping with the principle in Section 197AB(c) of the Act, the cost of any project identified in the Long Term Plan will, after deductions for subsidies and other sources of funding, be allocated between:

 

            (a)        the costs if any for improving levels of service to existing households and businesses by bringing assets up to the service standard and/or by providing additional service life, to be expressed as the ILOS cost; and

 

            (b)        the costs if any for providing additional capacity to service the development of new households and businesses, to be expressed as the AC Cost.

 

2.9.3    Council will allocate project cost between ILOS costs and AC costs, in the manner described in Section 4.0 - Methodology.

 

2.9.4    The methodology used to allocate costs is a need/benefits matrix approach.

 

2.10     Capacity life of assets

 

2.10.1  In keeping with the principle in Section 197AB(b) of the Act, Council has considered the period over which the benefits of capital expenditure for new development are expected to occur.  It considers that capital expenditure on infrastructure during the Long Term Plan period should be recovered over the full take-up period of each asset, from all development that created the need for that expenditure or will benefit from capacity it provides, including development occurring after the Long Term Plan period.

 

2.10.2  Council has determined that:

 

            (a)        new development occurring in the Long Term Plan period will contribute only to that proportion of additional asset capacity that it is expected to consume;

 

            (b)        future development occurring after the Long Term Plan period will contribute toward the remaining surplus capacity in assets at the end of that period.

 

2.10.3  In calculating the development contributions payable by new development for each activity type, Council will:

 

            (a)        include the value of any past surplus capacity in assets provided after 1 July 2005 that is expected to be consumed by new development, where this can be identified and where it can be shown to have been provided in anticipation of growth;

 

            (b)        include the value of capacity in assets to be provided in the Long Term Plan period, that is expected to be consumed by new development; and

 

            (c)        exclude the value of remaining surplus capacity in assets at the end of the Long Term Plan period, which is likely to be consumed by future development.

 

2.10.4  Recovery of the whole of a project’s cost from only those households and businesses establishing in the Long Term Plan period may place an unfair burden on them.  Households and businesses developing after the period will arrive to a fully paid up asset with spare capacity for their developments.

 

2.10.5  This policy uses a development contributions calculation period extending from 1 July 2005 (to include past surplus capacity) to 30 June 2045 - 30 years after the adoption of the Policy to ensure more equitable attribution under Schedule 13 of the Act. 
The 30 year future outlook is to take account of major infrastructure projects that may retain spare capacity for up to 30 years, particularly as a result of prolonged periods of slow growth as have been experienced in Southland District.

 

2.11     Significant assumptions

 

2.11.1  Section 201(1)(b) of the Act requires this policy to set out the significant assumptions underlying the calculation of the schedule of development contributions, including an estimate of the potential effects, if there is a significant level of uncertainty as to the scope and nature of the effects.

 

2.11.2 The significant assumptions underlying the calculation of the schedule of development contributions are that:

 

            (a)        the rate, level and location of growth will occur as forecast in the rating growth projections accompanying the Long Term Plan;

 

            (b)        capital expenditure will be in accordance with the capital works programme in the Long Term Plan and future capital expenditure is based on the best available knowledge at the time of preparation.  These are to take into account known or likely construction costs and assumed inflation rates;

 

            (c)        no significant changes to service standards are expected to occur in the Long Term Plan period other than those planned for in the Asset Management Plans;

 

            (d)        the level of any third party funding for projects will continue at predicted levels for the period of the Long Term Plan;

 

            (e)        there will be no significant variations to predicted rates of interest and inflation to those set out in the Long Term Plan;

 

            (f)        it is assumed each residential dwelling comprises the average number of residents from the 2013 Census.  The demand on Council assets placed by a standard dwelling (Unit of Demand) is assumed to be 2.5 persons per dwelling and this is applied district-wide.

 

2.11.3  An assessment of effects, if there is a significant level of uncertainty as to the scope and nature of the effects, is set out in Appendix 3 of this policy.

 

2.12     Financial policy

 

2.12.1  All project costs used in the development contributions section of the policy should be based on current estimates of infrastructure construction prices at the time of planning in the dollars of the year of planning, with inflation of all capital costs over the period using local government cost adjusters supplied by a commercial research and analysis agency, such as BERL.


 

2.12.2  All capital expenditure and development contributions contained in this policy are exclusive of GST (except where shown to be inclusive).

 

2.12.3  No cost of capital, including interest is included in growth cost calculations for the purposes of this policy.

 

2.13     Policy on existing lots or development

 

2.13.1  When granting a consent or authorising a connection for development, and calculating the units of demand from that development, Council will deduct the units of demand generated by existing lots or development already legally established at the date of granting consent, other than as required in sections 2.13.2, 2.13.3 and 2.13.5 below.

 

2.13.2  Section 2.13.1 shall apply to any lot or development that:

 

            (a)        was already legally established at the date on which this policy became operative, on 1 July 2015; or

 

            (b)        has been legally established since the date on which this policy became operative and for which a development contribution has been paid; or

 

            (c)        is not yet legally established but for which a development contribution has been paid (and not refunded).

 

2.13.3  Legally established development includes buildings and structures which can be shown to have been in existence on but have been demolished up to three years prior to this policy becoming operative on 1 July 2015.

 

2.13.4  Section 2.13.1 shall not apply to any lot or development for which a contribution has been required and has not yet been paid.

 

2.13.5  Council may require a development contribution to be paid for any existing legally established lot or development, in a water supply or sewerage area, with no connection to the service, which is to be connected for the first time or seeks connection to either a water supply network or a sewerage network, as the case may be, where no development contribution or other such payment for these services can be shown to have been previously paid.

 

2.13.6  Council may require a development contribution to be paid for any existing legally established lot that has previously been prevented from being developed by any open space covenant or by any other restriction registered against the title of the lot and that covenant or restriction has been removed.

 

2.13.7  In considering legally established developments already on a development site, the Council will use the current or most recent use of the site and not it’s zoning to determine the existing units of demand that will be deducted when calculating the development contribution. 

 

2.14     Use of development contributions

 

2.14.1  In keeping with the principle in Section 197AB(d) of the Act, development contributions will be used:

 

            (a)        for or towards the purpose of the activity or the group of activities for which the contributions were required; and

 

            (b)      for the benefit of the Southland District or the part of the district that is identified in the Southland District Policy on Development and Financial Contributions 2015 – 2025 in which the development contributions were required.

 

2.14.2  Development contributions will be used for the capital expenditure for which they were required in accordance with section 204(1) of the Act and will not be used for the maintenance of reserves, network infrastructure or community infrastructure.

 

2.15     Network infrastructure

 

2.15.1  Under Section 197 of the Act, the term development excludes the pipes and lines of any network utility operator.  Council will not seek development contributions for the installation or expansion of network infrastructure, including the pipes, lines, roads, water supply, wastewater and stormwater networks by network utility operators.

 

2.15.2  Section 2.15.1 does not apply to development by network utility operators carried out in order to run their normal business such as offices, industrial buildings, warehouses and storage areas, which may be liable for the payment of development contributions. 

 

2.16     Policy on remissions or postponements of development contributions

 

2.16.1  In accordance with Section 201(1)(c) of the Act, Section 3.5 of this policy includes provisions that will enable Council to consider remissions and postponements of development contributions.

 

2.17     Policy on refunds

 

2.17.1  Council will refund development contributions in accordance with the requirements of Sections 209 and 210 of the Act.

 

2.18     Development agreements

 

2.18.1  The Council may enter into development agreements with developers for the provision, supply, or exchange of infrastructure, land, or money to provide network infrastructure, community infrastructure, or reserves the District or a part of the District.  The provisions of Sections 207A to 207F shall apply to such agreements.

 

 

3.         PRACTICAL APPLICATION

 

3.1       Requirement for Development Contributions

 

3.1.1    Upon granting:

 

            (a)        a resource consent under the Resource Management Act 1991;

 

            (b)        a building consent under the Building Act 1991;

 

            (c)        an authorisation for a service connection;

 

            Council will determine whether the activity to which the consent or authorisation relates is a “development” under the Act, which:

 

            (a)        has the effect of requiring new or additional assets or assets of increased capacity (including assets which may already have been provided by Council in anticipation of development); and

 

            (b)        as a consequence requires (or has required) Council to incur capital expenditure to provide appropriately for those assets; and

 

            (c)        that capital expenditure is not otherwise funded or provided for.

 

3.1.2    Upon determining that the activity is a “development”, Council may require a development contribution to be made towards the activity associated with that development, according to the geographic catchment in which the development is located, for:

 

            (a)        water supply;

 

            (b)        sewerage; and

 

            (c)        community infrastructure.

 

3.1.3    Council shall calculate the development contribution payable at the time of granting the consent or authorisation and issue an assessment of development contributions payable.

 

3.1.4    A development contribution may be paid at any time from the date of assessment up to the date when the contribution is required to be paid as a result of Council issuing an invoice.

 

3.1.5    In accordance with Section 198(2A) of the Act, a development contribution must be consistent with the content of the policy that was in force at the time that the application for a resource consent, building consent, or service connection was submitted.

 

3.1.6    Council will invoice a development contribution at the following times:

 

            (a)        in the case of a resource consent for subdivision, at the time of application for a certificate under section 224(c) of the Resource Management Act 1991, with payment required prior to the issue of the certificate;

 

            (b)        in the case of a resource consent for land use, at the time of notification of commencement or commencement of the consent, whichever is the earlier, with payment required prior to commencement of the consented activity;

 

            (c)        in the case of a building consent, at the time of granting the building consent with payment no later than 90 days from the date of granting consent or prior to the issue of a code compliance certificate, whichever is the earlier;

 

            (d)        in the case of a service connection, at the time of approval of the service connection with payment prior to connection.

 

3.1.7    In accordance with Section 208 of the Local Government Act 2002, if contributions are not paid at the times required in section 3.1.6, the Council may:

 

            (a)        withhold a certificate under section 224(c) of the Resource Management Act 1991 in the case of a subdivision;

 

            (b)        prevent the activity commencing in the case of a land use consent;

 

            (c)        withhold a code compliance certificate or certificate of acceptance in the case of a building consent;

 

            (d)        withhold a service connection to the development.

 

            If, after exercising its powers under Section 208 of the Act, any development contribution remains unpaid, the Council may under Section 252 of the Act regard the amount payable as a debt and take debt recovery action to recover that development contribution.

 

3.1.7    In the case of a resource consent for land use only, where a building consent is required to give effect to the resource consent, the applicant may apply for a postponement of payment under Section 3.5 of this policy.  If this is granted the Council will only require payment at the time it issues a building consent.

 

3.1.8    If a grantee of consent is in possession of two development contribution invoices for different consents relating to the same lot, both invoices will continue to have effect until payment is made of one of those invoices.  When the first invoice is paid, the second invoice will be withdrawn and a reassessment of development contributions payable for the subdivision or development, as the case may be, relating to the second invoice will be made under Section 3.2.1.  If any development contribution is payable on re-assessment, a new invoice will be issued.

 

3.1.9    No consented activity or building work shall commence prior to the payment of the development contribution and where such activity or work has commenced prior to such payment, Council shall require this to cease until payment has been made.

 

3.2       Amount of Total Development Contribution

 

3.2.1    The total amount of development contribution payable when issuing any consent or authorisation for subdivision or development, shall be the sum of the development contribution payable for each activity, calculated as:

 

            [(a) X [Σ(n) – Σ(x)]] + GST

 

            Where:

 

            (a) = the applicable development contribution per unit of demand determined from Schedule 3 and the activity-funding area for each type of community facility in which the subdivision or development lies.

 

            Σ = the sum of the terms inside the brackets.

 

            (n) = for each lot at the completion of the consent or authorisation application, the total lot units of demand OR the total activity units of demand, determined by
Table 1, whichever is the greater.

 

            (x) = for each lot in existence (or for which a section 224 certificate under the Resource Management Act 1991 has been issued) prior to the date of the consent or authorisation application, the total lot units of demand OR the total activity units of demand for the existing development, determined by Table 1, whichever is the greater.

 

3.2.2    The development contribution per unit of demand in Schedule 3, may be increased for any Producer Price Index adjustment in accordance with Section 106(2B) of the Act.

 

3.3       Determination of Units of Demand

 

3.3.1    In accordance with Schedule 13 of the Act, the additional capacity (AC cost) component of capital expenditure associated with new development in any catchment will be allocated equally between the numbers of new units of demand expected to occur in that catchment during the development contributions calculation period.

 

3.3.2    Council has determined that units of demand generated by different land use types shall be those reflected in Table 1.  Calculations supporting the calculation on units of demand on non-residential development are in Appendix 5.

 

3.3.3    Demand for services may be necessitated by the creation of new lots (lot units of demand) that are required to be serviced in advance of their occupation.  Demand for services may also be generated by the use and development of lots (activity units of demand), including the intensification or expansion of activity on those lots.

 

Table 1

Units of Demand Generated by Subdivision and Development

 

Lot Unit of Demand

Units of demand

One residential or rural lot

1.0

One mixed-use residential/commercial lot

1.0

One commercial, industrial or other non-residential lot with an area of less than 1,000 m2

Lot area divided by 1,000 per square metre

One commercial, industrial or other non-residential lot with an area of 1,000 m2 or more

1.0

For the purposes of calculating community infrastructure development contributions only, one commercial, industrial or other non-residential lot 

0

For the purposes of calculating water supply and sewerage development contributions ONLY, any existing legally established lot not connected to either the water supply network or the sewerage network as the case may be

0

For the purposes of calculating water supply and sewerage development contributions ONLY, any proposed lot not to be connected to either the water supply network or the sewerage network as the case may be

0

One serviced camping site

Special application

One lot:

§  wholly covenanted in perpetuity as provided for by section 22 of the Queen Elizabeth the Second National Trust Act 1977

§  the title of which prevents any form of development on the lot.

0

Activity Unit of Demand

Units of demand

One dwelling unit or accommodation unit (excluding a serviced camping site) of two or more bedrooms per unit

1.0

One commercial unit including the commercial part of any activity but excluding any part that comprises accommodation units

The net lettable area on the lot multiplied by the applicable unit of demand factors in this table.

One industrial unit or any other non-residential development

Special application

For the purposes of calculating community infrastructure development contributions only, one commercial, industrial or other non-residential development

0

Any dwelling unit, or accommodation unit (excluding a  serviced camping site) of one or fewer bedrooms per unit

0.5

Any room in an accommodation unit or any room in a retirement village or school, normally accommodating more than 3 persons

The number of persons able to be accommodated in the room divided by 6

Any retirement unit for purposes of calculating the water supply and sewerage contributions only

0.5 otherwise 0

Any aged care room for purposes of calculating the water supply and sewerage contributions only

0.2 otherwise 0

Other activity (Activity not specified elsewhere in this table).

Special application

For the purposes of calculating water supply and sewerage development contributions ONLY, any existing legally established development not connected to either the water supply network or the sewerage network as the case may be.

0

For the purposes of calculating water supply and sewerage development contributions ONLY, any proposed development not to be connected to either the water supply network or the sewerage network as the case may be.

0

Network infrastructure, including pipes, lines and installations, roads, water supply, wastewater and stormwater collection and management systems

0

Farm buildings associated with normal farming operations including sheds, barns, garages and buildings for indoor poultry livestock and crop production.

0

Crown developments

0

Unit of demand factors commercial development

Calculated in Appendix 5

Water Supply  – Commercial development

1 per 769 m2 net lettable area

Sewerage - Commercial development

1 per 322 m2 net lettable area

 

3.3.4    The different units of demand generated by a unit of commercial activity, as compared with a unit of residential activity, arise mainly from the different scale and nature of activity when compared to demand from a standard dwelling unit. 
To ensure fair and equitable assessment this policy:

 

            (a)        uses lot size in the case of subdivision for commercial purposes;

 

            (b)        uses net lettable area in the case of commercial development as a proxy for assessing the different units of demand on services, likely to be generated respectively by residential and commercial activity and incorporates multipliers (unit of demand factors) to quantify those differences;

 

            (c)        requires a special application to assess development contributions on industrial activity.

 

3.3.5    The assumptions used in this policy to derive the unit of demand factors for commercial development in Table 1 are described in Appendix 5 of this policy.

 

3.4       Information Requirements

 

3.4.1    The applicant for any consent or authorisation shall provide all information necessary for Council to calculate the amount of a development contribution, including the gross business area and the impervious area of the development if required for purposes of an assessment under Table 1.  

 

3.4.2    The applicant shall be responsible for providing proof of the legal establishment of existing units of demand for purposes of an assessment under Table 1.

 

3.4.3    Existing units of demand may include legally established buildings and structures that have been demolished up to three years prior to this policy becoming operative on 1 July 2015.

 

3.5       Remissions and Postponements of Development Contributions

 

3.5.1    In addition to rights to reconsideration provided for by Section 199A and 199B of the Local Government Act 2002, the Council will consider applications for remission or postponement of development contributions.

 

3.5.2    The Council will consider applications for and may grant a remission of any development contribution where the applicant has provided and/or funded the same infrastructure that a development contribution has been required for but that remission shall be limited to the value of infrastructure provided or funded.  In cases where the value of infrastructure provided or funded exceeds the development contribution payable, the Council shall meet the excess costs by separate agreement with the applicant.

 

3.5.3    Council will consider applications for and may grant a postponement of the payment of a development contribution in the case of resource consent for land use only, where a building consent is required to give effect to that resource consent. 
At the discretion of the Council, the payment of a development contribution on the resource consent may be postponed until a building consent is granted.

 

3.5.4    Council will consider applications for a postponement of the payment of a development contribution in the case of asubdivision consent.  If it grants a postponement it may do so on whatever terms the Council thinks fit, including that it may:

 

            (a)        issue a certificate under Section 224(c) of the Resource Management Act 1991, prior to the payment of a development contribution; and

 

            (b)        register the development contribution under the Statutory Land Charges Registration Act 1928, as a charge on the title of the land in respect of which the development contribution was required.

 

3.5.5    An applicant may formally request Council to review the development contribution required and remit or postpone the development contribution payment.

 

3.5.6    Any such request shall be made in writing no later than 15 working days after the date on which Council issues an invoice under Section 3.1.5, setting out the reasons for the request.

 

3.5.7    Prior to accepting any such request for review, Council shall require the applicant to provide specific details of the manner in which its proposals qualify for a remission or postponement.

 

3.5.8    In undertaking the review, Council or a Committee of Council or an officer so delegated:

 

            (a)        shall, as soon as reasonably practicable, consider the request;

 

            (b)        may determine whether to hold a hearing for the purposes of the review and if it does, give at least five working days’ notice to the applicant of the date, time and place of the hearing;

 

            (c)        may at its discretion uphold, remit in whole or in part or postpone (as the case may be) the original development contribution required and shall advise the applicant in writing of its decision within ten working days of making that decision;

 

            (d)        may charge such fee as determined in its annual schedule of fees, to consider the request.

 

3.6       Reconsideration process

 

3.6.1    As required by Section 202A of the Act, this policy must set out the process for requesting reconsideration of a requirement for a development contribution under section 199A of the Act. The process for reconsideration must set out:

 

            (a)        how the request can be lodged with the Council; and

 

            (b)        the steps in the process that the Council will apply when reconsidering the requirement to make a development contribution.

 

3.6.2    An applicant who is required to make a development contribution may request a reconsideration of that requirement if they believe that:

 

            (a)        the development contribution was incorrectly calculated or assessed under this policy; or

 

            (b)        the Council incorrectly applied this policy; or

 

            (c)        the information used to assess the applicant’s development against this policy, or the way the Council has recorded or used it when requiring the development contribution, was incomplete or contained errors.

 

3.6.3    Any request for reconsideration shall be made in writing, no later than 15 working days after the date on which Council issues an invoice under Section 3.1.6 of this policy.

 

3.6.4    Prior to accepting any request for review, the Council shall require the applicant to state the reasons under Section 3.6.2 for reconsideration and provide sufficient information to enable the Council to reconsider the development contribution.

 

3.6.5    The Council (or a Committee of Council or an officer so delegated) will limit its considerations to matters set out in Section 199A of the Act (Section 3.6.2 of this policy).

 

3.6.6    In accordance with Section 199B(1) of the Act, the Council must, within 15 working days after the date on which it receives all required relevant information relating to a request, give written notice of the outcome of its reconsideration to the applicant who made the request.

 

3.6.7    In accordance with Section 199B(2) of the Act, an applicant who requested reconsideration may object to the outcome of the reconsideration.

 

3.7       Special applications

 

3.7.1    Where developments are marked for special application or not adequately represented in Table 1 or there are specific circumstances related to the applications, these may be considered on a case-by-case basis. Units of demand calculated are based on potential demand not actual demand at any one time.  Accordingly specific circumstances do not include those where the users do not utilise the full potential demand (e.g., a hotel with a 50% occupancy rate will still be assessed at a 100% of the unit of demand relating to hotels; a house with one occupant will be assessed at the unit of demand for a household).

 

3.8       Crown developments

 

3.8.1    The Crown is exempt from the provisions of this policy by virtue of Section 8 of the Local Government Act 2002. If an applicant considers that it is the Crown for the purposes of avoiding liability to pay a development contribution, the Council may require the applicant to provide written advice to the Council outlining the basis on which the applicant considers that it is the Crown.

 

3.9       Statement on GST

 

3.9.1    Any development contribution referred to in this policy or in the accompanying development contributions model and any development contribution required in the form of money, pursuant to this policy, is exclusive of Goods and Services Tax.

 

 

4.       METHODOLOGY

 

            The calculation of the separate portions of the cost of any combined project (AC/ILOS project) between that for improving levels of service to existing households and businesses (ILOS costs), and that for providing additional capacity to accommodate new development of households and businesses (AC costs) under this policy, is carried out using the following procedure.

 

4.1       Step 1: Listing projects

 

4.1.1    Every project in the capital works programme of the Long Term Plan for the activities for which the Council intends to require development contributions is listed in the Project Allocation Schedule of the Development Contributions Model.

 

4.1.2    Every surplus capacity project is listed in the Surplus Capacity Schedule. 

 

4.1.3    Where possible, distinct stages of a project or distinct parts of a project are listed in the schedules as separate components and separate calculations carried out for each.

 

4.1.4    For each project in the schedules, the following base information is provided:

 

            (a)        the total project cost;

 

            (b)        the catchment which the project will serve;

 

            (c)        the level of any subsidy or third party funding if any which is deducted from the total project cost to give the net project cost;

 

(d)        the year in which the project or component is to be carried out in the
Long Term Plan, or in the case of each surplus capacity project (SC project), the year it was completed.

 

            (e)        the year in which the project capacity is expected to be fully consumed.

 

4.2       Step 2:  Initial screening

 

4.2.1    Each project in the Project Allocation Schedule is categorised “Yes” or “No” in answer to the question – “Is this capital expenditure required at least partly to provide appropriately for new or additional assets or assets of increased capacity in order to address the effects of development?”  By answering:

 

            (a)        “No” - the project is treated as a pure renewal or level of service project and the cost of the project is removed from the development contribution calculation;

 

            (b)        “Yes” - the project is treated as either a combined project (AC/ILOS project) or an additional capacity for growth project (AC project) and is subject to further analysis.  

 

4.2.1    Each project in the Surplus Capacity Schedule is categorised “Yes” or “No” in answer to the question – “Was capital expenditure on this project incurred, at least partly, in anticipation of development?"  By answering:

 

            (a)        “No” - the project is treated as a pure renewal or level of service project and the cost of the project is removed from the development contribution calculation;

 

            (b)        “Yes” - the project is treated as either a combined project (AC/ILOS project) or an additional capacity for growth project (AC project) and is subject to further analysis.

 

4.3       Step 3:  Cost allocation of combined projects or additional capacity for growth projects

 

4.3.1    Using the information provided on combined projects (AC/ILOS projects) and additional capacity for growth projects (AC projects) in the project schedules, a needs/benefits matrix analysis is carried out by which it is required to state for each project:

 

            (a)        the degree, on a scale of 0 to 10 to which growth created the need for the project to be undertaken. (0=Not at all, 10=Totally);

 

            (b)        the degree on a scale of 0 to 10 to which the growth community will benefit from the project being undertaken. (0=Not at all, 10=Totally);

 

 

4.3.2    The value is chosen in each case from the need/benefits matrix in the model which produces an estimated percentage of cost attributable to growth.

 

4.3.3    The matrix generates 121 different need/benefit combinations.  The percentage derived is applied to the net project cost to determine the AC cost. The remainder of the net project cost is the ILOS cost.

 

4.3.4    A unit price is calculated for each project by dividing the project cost by the total units of demand that will consume its capacity comprising:

 

            (a)        existing units of demand at 2015; plus

 

            (b)        additional units of demand expected to consume capacity in the asset by the end of its asset life.

 

4.4       Step 4:  Capacity life - Cost allocation between new and future units of demand

 

4.4.1    Using information provided on the year in which capacity take up of a project is expected to start and the year in which the project capacity is expected to be fully consumed, the AC cost of the project is divided between new units of demand (N) arriving in the activity-funding area in the Long Term Plan period and future units of demand (F) arriving after the end of the Long Term Plan period, as follows:

 

            (a)        the AC cost to F is the AC cost determined in section 5.3 above multiplied by the years of capacity take up after the Long Term Plan period divided by total years of capacity take-up;

 

            (b)        the AC cost to N  is the AC cost less the AC cost to F.

 

4.4.2    Only the AC Cost to N is used in the calculation of development contributions.

 

4.4.3    In addition to predicting the capacity take up an asset, by comparing the start and end years of capacity life against rating unit projections, the development contributions model is able to accept a finite capacity figure from the asset manager which, regardless of years of take-up, can be used to share the cost of an asset equitably among the known number of units of demand that will eventually consume its capacity. 

4.5       Step 5:  Growth assumptions – Sharing 10 year costs among projected growth

 

4.5.1    In order to calculate the amount of new development to which the growth
related portion of capital expenditure (AC costs) for infrastructure will be attributed, area-by-area projections of new and future units of demand for services in the period 2012 to 2042 are required.

 

4.5.2    Council maintains a detailed rating database that provides the numbers of rating units for all parts of the District. 

 

4.5.3    The numbers of rating units provide a close correlation with numbers of lots in the Southland District and a measure of separate units of activity on any lot where this is the case. They are considered to provide a reasonably sound measure of the units of demand for infrastructure and services.

 

4.5.4    The growth projection worksheet of the development contributions model, Projections Schedule, contains as the base year, the number of rating units (units of demand) for each activity type existing at the time of the 2014/2015 rates year.  Rating data is available for the whole Southland District, and each of the water supply, wastewater and community infrastructure catchments.

 

4.5.5    Long Term Plan assumptions have been used to determine the expected annual increase in the numbers of rating units and hence units of demand to 2025, in each of these areas.

 

4.5.6    Projections Schedule also provides long-term estimates for future Rating Units (units of demand) after the Long Term Plan period to 2045, in order to ensure that any portion of remaining surplus capacity at the end of the period may be attributed to future development.

 

4.5.7    Geographic catchments will apply to each activity type. Projections Schedule provides rating units at 2015 and projected rating units for each activity-funding area to 2045.

 

4.6       Step 6: Allocation of costs to units of demand - Schedule of development contributions

 

4.6.1    The development contribution for each activity and each catchment to be charged per Unit of Demand is derived by dividing the costs of growth in the Long Term Plan period (AC Cost to N), derived in Step 3 and Step 4 by the number of additional rating units expected in the period, derived in Step 5.

 

4.6.2    A full schedule of development contributions (Schedule 3) must be prepared as part of the policy to enable the development contributions to be calculated by infrastructure type and catchment on each development application.

 

4.7       Interest and inflation

 

4.7.1    The development contributions model does not include interest on growth related capital expenditure in the calculation of the development contribution amounts.

 

4.7.2    Council does not intend to recover past interest that has been funded from rates from development contributions and has not included it in the development contribution calculation.


 

4.7.5     The development contributions model uses the inflated capital costs in the Long Term Plan to calculate development contributions.


Council

18 March 2015

 

 

 

5.      SCHEDULES 

 

SCHEDULE 1 – SCHEDULE OF ASSETS

Activity

DCP Catchment

Project name

Type

Project Cost

Proportion recovered through Development Contributions

Proportion recovered through Other Sources

Sewerage

Sewerage:Te Anau CB

Te Anau/Manapouri Treatment & Disposal

LTP Project

12,133,896.14

38.55%

61.45%

Roading

Roading:Stewart Island/Rakiura CB

Stewart Island Foothpaths

LTP Project

96,222.60

0.00%

100.00%

Community Infrastructure

ComInf:Stewart Island/Rakiura CB

Moturau Gardens shelter

LTP Project

12,233.02

0.00%

100.00%

Reserves

Reserves:Stewart Island/Rakiura CB

Traill Park path

LTP Project

6,000.00

0.00%

100.00%

Reserves

Reserves:Stewart Island/Rakiura CB

Waterfront Playground

LTP Project

23,593.10

0.00%

100.00%

Reserves

Reserves:Te Anau CB

Cycletrack through Ivon Wilson Park

LTP Project

0.00

0.00%

100.00%

Reserves

Reserves:Te Anau CB

Cycletrack through Waterpark

LTP Project

30,000.00

0.00%

100.00%

Reserves

Reserves:Winton CB

Ivy Russell public convenience

LTP Project

67,371.00

0.00%

100.00%

Reserves

Reserves:Winton CB

Information Kiosk Winton cemetery

LTP Project

16,037.10

0.00%

100.00%

Reserves

Reserves:Winton CB

Winton Skatepark

LTP Project

50,000.00

0.00%

100.00%

12,435,352.96

 

 


 

SCHEDULE 2 - CAPITAL EXPENDITURE IDENTIFIED TO MEET INCREASED DEMAND RESULTING FROM GROWTH AND SOURCES OF FUNDING BY ACTIVITY

 

ACTIVITY

2015-25 LTCCP

SURPLUS CAPACITY

Total Capital Project Costs

Development Contributions (New)

Development Contributions (Future)

Rates

Subsidies/Grants

Total Value of Surplus Capacity Projects

Development Contributions (New)

Development Contributions (Future)

Development Contributions (Already Used)

Rates

Subsidies/Grants

Sewerage

 $             12,133,896

 $               1,215,146

 $               3,119,870

 $               7,456,279

 $                  342,601

 $                             -

 $                             -

 $                             -

 $                             -

 $                             -

 $                             -

Water supply

 $                             -

 $                             -

 $                             -

 $                             -

 $                             -

 $                             -

 $                             -

 $                             -

 $                             -

 $                             -

 $                             -

Community Infrastructure

 $                    12,233

 $                             -

 $                             -

 $                             -

 $                    12,233

 $                             -

 $                             -

 $                             -

 $                             -

 $                             -

 $                             -

Reserves

 $                  193,001

 $                             -

 $                             -

 $                             -

 $                  193,001

 $                             -

 $                             -

 $                             -

 $                             -

 $                             -

 $                             -

Roading

 $                    96,223

 $                             -

 $                             -

 $                             -

 $                    96,223

 $                             -

 $                             -

 $                             -

 $                             -

 $                             -

 $                             -

Total

 $             12,435,353

 $               1,215,146

 $               3,119,870

 $               7,456,279

 $                  644,058

 $                             -

 $                             -

 $                             -

 

 $                             -

 $                             -

 

 


 

SCHEDULE 3 – SCHEDULE OF DEVELOPMENT CONTRIBUTIONS

 

AREA

Wastewater treatment

Water supply

Community Infrastructure

Reserves

Roading

TOTAL

AREA

Wastewater treatment

Water supply

Community Infrastructure

Reserves

Roading

Te Anau CB

 $                   -  

 $          2,707.36

 $                   -  

 $                   -  

 $                   -  

 $          2,707.36

Te Anau CB

Water:Te Anau CB

Sewerage:Te Anau CB

Roading:Te Anau CB

Note 1:These contribution amounts do not include GST

 

 

 

 


Council

18 March 2015

 

6.       ROLES AND RESPONSIBILITIES

 

Party/Parties

Roles and Responsibilities

Council

Decision on whether to review and reinstate the Policy when in remission

 

 

7.       REVISION RECORD

 

This policy may be reviewed at any time but no longer that three years from the date of its adoption.

 

Section 106(6) of the Local Government Act 2002 requires that a policy on development or financial contributions must be reviewed at least once every three years using a consultation process that gives effect to Section 82 of the Act.

 

Date

Version

Revision Description

r/14/11/17513

Development and Financial Contributions Policy

Long Term Plan 2015-25

r/14/6/8794

Development and Financial Contributions Policy

Annual Plan 2014-15

r/13/2/1981

Development and Financial Contributions Policy

June 2013

r/09/9/13493

Development Contributions and Reserve Contributions under Local Government Act 2002 Policy

LTCCP 2009-2019

 


Council

18 March 2015

 

APPENDIX 1 - DEFINITIONS AND ABBREVIATIONS

 

Definitions

Term

Meaning

Accommodation unit

Has the definition given to it in Section 197 2 of the Local Government Act 2002 which “means units, apartments, rooms in 1 or more buildings, or cabins or sites in camping grounds and holiday parks, for the purpose of providing overnight, temporary, or rental accommodation.”  

“AC cost”

means the cost for providing additional capacity to service the development of new households and businesses.

Activity

means a good or service provided by the Council under
Section 5 of the Local Government Act 2002), and for which development contributions are normally collected.

“Activity unit of demand”

means the demand for a community facility generated by development activity other than subdivision

“Additional capacity project” or “AC project”

means a capital project in the Long Term Plan intended only to provide additional capacity to service new and future households and businesses.

“Aged care room”

means any residential unit in a “rest home” or “hospital care institution” as defined in Section 58(4) of the Health and Disability Service (Safety) Act 2001.

“Allotment” or “lot”

has the meaning given to the term “allotment” in Section 218(2) of the Resource Management Act 1991. 

“Allotment” is defined under section 218(2) of the Resource Management Act 1991 as follows:

“(a)    any parcel of land under the Land Transfer Act 1952 that is a continuous area and whose boundaries are shown separately on a survey plan, whether or not:

          (i)  the subdivision shown on the survey plan has been allowed, or subdivision approval has been granted, under another Act; or

          (ii) a subdivision consent for the subdivision shown on the survey plan has been granted under this Act; or

(b)     any parcel of land or building or part of a building that is shown or identified separately—

          (i)  on a survey plan; or

          (ii) on a licence within the meaning of Part 7A of the Land Transfer Act 1952; or

(c)     any unit on a unit plan; or

(d)     any parcel of land not subject to the Land Transfer Act 1952.

“Bedroom”

means a room used for sleeping, normally accommodating no more than three persons.

Catchment

is an area of the District identified in this policy within which growth and development is occurring, which is likely, either solely or cumulatively, to give rise to the need for, or benefit from, particular Council activities.

“Combined project” or “AC/ILOS project”

means a project in the Long Term Plan intended to deal with shortfalls in levels of service to existing households and businesses by bringing assets up to the service standard and/or by providing additional service life, and to provide capacity for further growth.

“Commercial”

means non-residential development using land or buildings for the provision of goods and services in the course of a trade or business and includes retail development.

“Community facilities”

means parks and reserves, network infrastructure, or community infrastructure for which development contributions may be required.

“Community infrastructure”

has the definition given to it in Section 197(2) of the Local Government Act 2002.

“Development”

has the definition given to it in Section 197(1) of the Local Government Act 2002.

“Development contributions calculation period”

means the period between 1 July 2015 and a date 30 years after the date of adoption of this policy.

District Plan

The Operative Southland District Plan including any proposed plan or variation.

“Dwelling unit”

means any building or group of buildings or any part of those buildings, used or intended to be used solely or principally for residential purposes and occupied or intended to be occupied by not more than one household – and includes a minor household unit, a utility building or any unit of commercial accommodation.

“Household unit”

A building or part of a building capable of being used as an independent residence and includes dwelling apartments, semi-detached or detached houses, units, town houses, granny flats (or similar), and caravans (where used as a place of residence or occupied for a period of time exceeding six months in a calendar year).

“ILOS cost’

means the cost of improving levels of service to existing households and businesses by bringing assets up to the service standard and/or by providing additional service life.

“Improved level of service project” or “ILOS project”

means a capital project in the Long Term Plan intended only to deal with shortfalls in levels of service to existing households and businesses by bringing assets up to the service standard and/or by providing additional service life.

“Industrial”

A non-residential development using land or buildings where people use material and physical effort in the course of a trade or business to:

·                Extract or convert natural resources,

·                Produce goods or energy from natural or converted resources,

·                Repair goods; but

does not include mineral extraction or farm buildings associated with normal farming operations including sheds, barns, garages and buildings for indoor poultry livestock and crops production.

“Legally established”

means, in relation to any lot or development, any lot for which a title has been issued, or any dwelling, commercial or industrial unit for which a code compliance certificate has been issued. Legally established development includes buildings and structures that can be shown to have been in existence when this policy became operative on 1 July 2012, but have since been demolished.

“Lot unit of demand”

means the demand for a community facility generated by the creation of lots through subdivision.

“Net lettable area”

means the area for which a tenant could be charged for occupancy under a lease.  Generally, it is the floor space contained within a tenancy at each floor level measured from the internal finished surfaces of permanent external walls and permanent internal walls but excluding features such as balconies and verandahs, common use areas, areas less than 1.5 m in height, service areas, and public spaces and thoroughfares.

“Non-residential lot or development”

Any lot or development that is not for residential purposes.  This includes:

·                All buildings that are considered a fundamental place of work such as dairy milking sheds, shearing sheds, and indoor farming facilities such as chickens or pigs

·                All buildings for the provision of sport, recreation or entertainment,

All buildings for the provision of social and cultural pursuits.

“Past surplus capacity”

means capacity in assets provided as a result of capital expenditure made in anticipation of development since 1 July 2001.

“Remaining surplus capacity”

means the estimated remaining capacity in capital assets at the end of the Long Term Plan period, available to service future development occurring after the Long Term Plan period.

“Residential development”

Any use of land and/or buildings by people for the purpose of living accommodation. It includes accessory buildings and leisure activities associated with needs generated principally from living on the site.

“Retirement unit”

means any residential unit other than an aged care room, in a “retirement village” as defined in section 6 of the Retirement Villages Act 2003.

“Serviced Site”

means any site dedicated for the location of a vehicle or tent for the accommodation of persons, which is provided with utility services such as water supply, wastewater disposal, solid waste disposal, electricity or gas, either directly to the site or in the immediate vicinity.

“Surplus capacity project” or “SC project”

means a past capital expenditure project carried out since 1 July 2001 in anticipation of new development and providing surplus capacity for further development.

Utility Building”

is a structure containing facilities (such as toilet, shower, laundry, hot water cylinder, laundry tub) that make the site habitable prior to or during the erection of a dwelling.

“Unit of demand”

is a unit of measurement by which the relative demand for an activity, generated by different types of development (existing or proposed), can be assessed. A unit of demand may be expressed as a lot unit of demand or an activity unit of demand.

 


 

APPENDIX 2 - DEVELOPMENT CONTRIBUTION CATCHMENTS

 

Community Facility

Catchment

Development to which Development Contribution Applies

Water supply

10 drinking water supply scheme areas and 2 mixed potable / rural water supply areas

Development in any separate water supply scheme

Sewerage

18 sewerage scheme areas

Development in any separate sewerage scheme

Community infrastructure

Waihopai Toetoes Ward, Winton Wallacetown Ward, Mararoa Waimea Ward, Waiau Aparima Ward

Development in each separate ward

 


 

APPENDIX 3 - ASSESSMENT OF SIGNIFICANT ASSUMPTIONS

 

Assumption

Level of Uncertainty

Potential Effects

The rate, level and location of growth will occur as forecast in the rating growth projections accompanying the Long Term Plan

High

Lower than forecast growth will result in a significant under-recovery of development contributions revenue

Capital expenditure will be in accordance with the capital works programme in the Long Term Plan and future capital expenditure is based on the best available knowledge at the time of preparation.  These are to take into account known or likely construction costs and assumed inflation rates

Moderate

In current circumstances significant changes to the capital programme are unlikely

No significant changes to service standards are expected to occur other than those planned for in the Asset Management Plans

Low

No significant effects anticipated

The level of third party funding (such as NZ Transport Agency subsidies) will continue at predicted levels for period of the Long Term Plan

Low

No significant effects anticipated

There will be no significant variations to predicted rates of interest and inflation to those set out in the Long Term Plan

Low/Moderate

No significant effects anticipated

Each residential dwelling comprises the average number of residents from the 2013 Census. The demand on Council assets placed by a standard dwelling (Unit of Demand) is assumed to be 2.5 persons per dwelling and this is applied District-wide

Moderate

The average dwelling occupancy will remain steady over time but there may be local areas where residential occupancy goes above the District average and places increased demands on infrastructure form that anticipated

 


 

APPENDIX 4 - SUMMARY OF FINANCIAL CONTRIBUTION PROVISIONS 

 

Section 106(2)(f), if the Council is to require financial contributions then this policy must summarise the provisions that relate to financial contributions in the District plan. 
Section 2.14 of the Proposed Southland District Plan 2012 requires the following contributions:

 

Roading - A contribution may be required for the development, maintenance and upgrading of roading infrastructure that’s serves the subdivision.  The amount of contribution is 100% of the cost of the required work reduced with regard to:

 

(a)        the current status and standard of roading leading to and fronting the site;

 

(b)        the benefit of works to existing users and the wider public;

 

(c)        the standard and classification of the road and expenditure required to meet this standard;

 

(d)        the use or likely future use of the road by other parties; contributions made by central government and other agencies towards the development of the road; and

 

(e)        previous financial contributions from developers who will benefit from the work.

 

Reserves - A contribution may be required in the following situations:

 

(a)        a contribution of 2% of the value of additional allotments created by subdivision, up to a maximum value of 2% of the value of 1,000 m2 per lot, where existing reserves in the locality cannot deal with additional demand; or

 

(b)        a contribution of  1% of the value (given as money or land) of additional allotments created by subdivision for minor improvements to existing reserves in the locality up to a maximum value of 1% of the value of 100 m2 per lot;

 

(c)        a contribution of the value of 20 m2 for each additional residential unit created in a development; or

 

(d)        a contribution of the value of 4 m2 of land for each additional 100 m2 of net
non-residential building floor area created in a development in the Urban Zone, Commercial Precinct or Industrial Zone. 

 


 

APPENDIX 5 - CALCULATING UNITS OF DEMAND FOR COMMERCIAL DEVELOPMENT

 

Industrial and other non-residential development (other than commercial development) will be subject to special application under section 3.7 of this policy. In calculating the units of demand generated by commercial development for water supply and sewerage, as compared to that of an average dwelling unit, Council accepts that demand may vary between different types of commercial activity. However changes to the type of business over time may not constitute “development” under the Act or even trigger a resource consent, building consent or new connection requiring a development contribution. This policy therefore treats all types of commercial activity as generating the same average unit of demand for a given net lettable area.

 

Water - comparison of residential and commercial demand

 

The residential daily demand for water comprises that for domestic purposes and
non-domestic uses (eg gardening, car washing, fire fighting, leakages etc). 

 

The following figures are used in the assessment:

 

(a)        The average daily residential demand for domestic purposes is 230 litres/person/day.

 

(b)        The average daily residential demand for non-domestic purposes is
1,200 litres/dwelling.

 

In determining the  units of demand for one dwelling unit, it is noted that not all potential demand will occur at the same time and therefore an average peak of four persons per household is used to assess peak usage per dwelling at 2,120 litres/day (4 x 230 litres/day + 1200 litres).

 

Water consumption sampling[2] of various commercial premises, offers data for premises which may be typical of many Southland main street businesses in the range 0 - 5,000 m2 net lettable area (NLA). These would also generally be premises naturally rather than mechanically cooled with air conditioning systems using higher quantities of water.

 

Sampling found consumption in the range 875 - 1,200 m3 (average 1,037 m3) per annum per 1,000 m3 NLA.  This converts as follows:

 

Commercial premises consuming an average 2,840 litres per day per 1,000 m2 NLA; thus

If 2,120 litres per day is 1 unit of demand for residential; then

2,840 litres per day (1,000 m2 NLA) is 1.3 units of demand; then

769 m2 NLA is 1 unit of demand.

 

Sewerage - comparison of residential and commercial demand

 

Average daily residential wastewater flows are assumed to equate to the domestic purposes water use of 230 litres/person/day, with water for non-domestic purposes not finding its way to the sewer.  Average peak usage per property at 4 persons per dwelling is therefore 920 litres/day (4 x 230 litres/day).

 


 

It is assumed that all water consumption on commercial premises (2,840 litres per day per 1,000 m2 NLA in main street situations will find its way to the sewer. To calculate the units of demand for sewerage:

 

Commercial premises generate an average 2,840 litres sewerage per day per 1,000 m2 NLA; thus

If 920 litres per day is 1 unit of demand for residential; then

2,840 litres per day (1,000 m2 NLA) is 3.1 units of demand; then

322 m2 NLA is 1 unit of demand.

 

 

APPENDIX 6 - CALCULATION OF DEVELOPMENT CONTRIBUTION AMOUNT ON A DEVELOPMENT

 

The formula in Section 3.2.1 of this policy calculates the demand on infrastructure from any development site after the proposed development has taken place (n) and subtracts the existing demand already generated by the site before the development occurs (x). In this way, it identifies only additional demand placed on infrastructure as a result of the development. This additional demand is multiplied by the development contribution amount for each type of infrastructure to calculate the total development contribution payable.

Using Table 1 of this policy, the units of demand before and after development are calculated, as the greater of the number of lot units of demand making up the development site OR activity units of demand (building development) on the development site at the time. 

 

The calculation is [(a) X [Σ(n) – Σ(x)]] + GST where:

 

(a) is the development contribution for the catchment eg sewerage $1,316 per unit;

 

(x) is, for each lot existing before development, the lot units of demand OR activity units of demand whichever is the greater;

 

(n) is, for each lot after the development, the lot units of demand OR activity units of demand whichever is the greater.

 

Residential development example using Table 1:

 

Before development                                After development

Additional units of demand Σ(n) - Σ(x) = 4(n) - 2(x) = 2 Units

Development contribution for sewerage is 2 units X $1,316 = $2,632 + GST.

 

Commercial development example using Table 1:

Before development                                After development

Additional units of demand Σ(n) - Σ(x) = 4.1(n) - 2 (x) = 2.1 Units

Development contribution for sewerage is 2.1 units X $1,316 = $2,764 + GST.


Council

18 March 2015

Description: sdclogo

 

Statement of Proposal:  Draft Revenue and Financing Policy

Record No:        R/15/2/3309

Author:                 Tamara Dytor, Policy Analyst

Approved by:       Rex Capil, Group Manager, Policy and Community

 

  Decision                             Recommendation                        Information

 

  

 

Purpose

1        This report presents the draft Revenue and Financing Policy and the corresponding Statement of Proposal for Council’s consideration.  If approved, these documents will be used for public consultation and hearings will be held concurrently with hearings for the
Long Term Plan 2015-2025 (LTP or 10 Year Plan), from 19-20 May 2015.

Executive Summary

2        This report outlines the draft Revenue and Financing Policy and seeks Council approval to release the draft policy and associated Statement of Proposal (attached) for public consultation.

 

 

Recommendation

That the Council:

a)         Receives the report titled “Statement of Proposal:  Draft Revenue and Financing Policy” dated 9 March 2015.

b)         Determines that this matter or decision be recognised as significant in terms of Section 76 of the Local Government Act 2002.

c)         Determines that it has complied with the decision making provisions of the Local Government Act 2002 to the extent necessary in relation to this decision; and in accordance with Section 79 of the Act determines that it does not require further information, further assessment of options or further analysis of costs and benefits or advantages and disadvantages prior to making a decision on this matter.

d)         Approves the draft Revenue and Financing Policy for release for public consultation.

e)         Endorses the Statement of Proposal for use in public consultation on this policy.

f)          Consults through a process which will run parallel to the consultation process for the Long Term Plan 2012-2025; with hearings from
19-20
May 2015.

 


 

Content

Background

3        The draft policy was discussed at the Policy Review Committee meeting on 10 December 2014.  Some amendments have been made since this date.  These amendments are minor in nature and increase transparency and legislative compliance of the policy.

4        The Statement of Proposal allows the draft Revenue and Financing Policy to be released for public consultation in compliance with Section 83 of the Local Government Act (2002). Consultation will occur via a process which will run parallel with consultation for the LTP.  The policy will have the same consultation period as the LTP, so that anyone wishing to speak to their submission can do so at the LTP hearings (19-20 May 2015).

5        The Statement of Proposal will be available at Area Offices, and on the Southland District Council website. Submissions will be able to be made by post, email or on the website.

Issues

6        The draft Revenue and Financing Policy contains changes which reflect Council’s proposed funding for future operating expenses and capital expenditure. In addition to changes relating to specific activities, there are two key changes proposed to Council’s overall funding.
These are the funding of depreciation and the consolidation of District activities to be funded by general rates.

7        In the past Council has adopted a policy of not funding depreciation.  Moving towards funding depreciation would reflect good practice across the local government sector and would meet the statutory requirement to operate a balanced budget unless it is financially prudent to do otherwise.

8        In the draft Revenue and Financing Policy, Council is also proposing to fund district activities by way of uniform annual general charge and general rates.  This simplifies the way rates are charged and increases efficiency.  This will make rates easier to understand while maintaining equity regarding who pays for services.

9        The draft Revenue and Financing Policy is formed on the basis of proposed amendments to the Development and Financial Contributions Policy.  This assumes that development contributions will be put into remission at this stage.

10      Council will ensure that the way rates are collected and activities are funded is transparent by showing a breakdown of rates on its website www.abettersouthland.co.nz. 
Other important financial details will also be available on this website.

Factors to Consider

Legal and Statutory Requirements

11                  The draft Revenue and Financing Policy allows Council to comply with legislation by operating a balanced budget.

12                  The Revenue and Financing Policy has been reviewed to meet a requirement of the Local Government Act (2002) (Section 109 (2A)) which states that the policy must be reviewed at least once every six years using a consultation process.

13                  The Local Government Act 2002 (Clause 10, Schedule 10) requires that this policy to be included in the LTP. 

14                  Because the Revenue and Financing Policy has been determined to be significant, Council will comply with its Significance and Engagement Policy and the special consultative procedure requirements of s83 of the Local Government Act (2002).

15                  This Statement of Proposal allows the Remission and Postponement of Rates Policy to be released for public consultation in compliance with s83 of the Local Government Act (2002).

Community Views

16                  The proposed consultation process will allow Council to consider community views regarding the policy.

17                  Funding decisions regarding local services, assets and activities have been made following consultation with Community Boards and Community Development Area Subcommittees at Ward Estimates meetings.

Costs and Funding

18                  Although the policy relates to funding decisions and the way that Council will collect revenue, there are no costs associated with adopting a revised Revenue and Financing Policy apart from minor costs associated with consultation (eg advertising). Review of the policy is a legislative requirement.

Policy Implications

19                  This policy does not need to be included in the Long Term Plan 2015/2025 and will not be included in the consultation document for the Long Term Plan.  Consultation will occur through a separate parallel process along with other council policies which are currently being reviewed.

Analysis

Options Considered

20      Council could choose to adopt the draft Revenue and Financing Policy and corresponding Statement of Proposal in its current form (Option 1); OR Council could choose to consult on an amended draft Revenue and Financing Policy and corresponding Statement of Proposal. To remain compliant with legislation, Council cannot choose not to review or consult on this policy.

 

Analysis of Options

 

Option 1

 

Advantages

Disadvantages

·        Changes in the draft Revenue and Financing Policy increase efficiency and equity and are financially prudent.  They are also legislatively compliant and align with good practice in the local government sector.

·        Changes to funding of depreciation and general rates are substantial.
The community may not be familiar with the rationale behind these amendments and it will be important to communicate key messages clearly.


 

Option 2

 

Advantages

Disadvantages

·        Council could choose to amend the draft policy in any way it sees appropriate prior to release for public consultation.  However, no key issues have been identified which require amendment.

·        Key amendments to the draft Revenue and Financing Policy (including the funding of depreciation and the consolidation of rates) have been carefully considered by staff and elected members. Changes to the draft policy at this stage would not be able to be as rigorously considered and debated due to time constraints associated the Long Term Plan 2015/2025.

Assessment of Significance

21      The Revenue and Financing Policy is a fundamental policy of Council.  It determines how we will collect revenue and fund activities, services and assets.  The policy affects all ratepayers and raises issues of equity and affordability. It is therefore determined that the Revenue and Financing Policy is a significant policy.

Recommended Option

22      It is recommended that Council approve the draft Revenue and Financing Policy and Statement of Proposal for release for public consultation (Option 1).

Next Steps

23      If Council approves the draft policy and Statement of Proposal for release for public consultation, the public will be able to submit on the draft policy and hearings for submitters wishing to speak will be held from 19-20 May 2015.

24      Council would then adopt a Revenue and Financing Policy with any appropriate amendments its meeting on 24 June 2015.

 

Attachments

a         Statement of Proposal - Revenue and Financing Policy View

b         DRAFT Revenue and Financing Policy  View     


Council

18 March 2015

 

STATEMENT OF PROPOSAL - REVENUE AND FINANCING POLICY

 

Summary

 

The Revenue and Financing Policy states Council’s policies on funding operating expenses and capital expenditure.  The possible sources for funding are set out in Section 103(2) of the Local Government Act 2002.  They include:

 

·                      general rates, including: choice of valuation system; differential rating; and uniform annual general charges;

·                      targeted rates;

·                      lump sum contributions;

·                      fees and charges;

·                      interest and dividends from investments;

·                      borrowing;

·                      proceeds from asset sales;

·                      development contributions;

·                      financial contributions under the Resource Management Act 1991;

·                      grants and subsidies; or

·                      any other source.

Examples of “other sources” used by Council include, but are not limited to, renewals funding from depreciation, reserves, lump sum or equity payments.  The funding needs of Council must be met from sources that Council determines to be appropriate and Council must consider the overall impact of funding decisions on the community.  Council must also consider the following factors for each activity: 

 

·                      the community outcomes to which the activity primarily contributes;

·                      the distribution of benefits between the community as a whole, any identifiable part of the community, and individuals;

·                      the period in or over which those benefits are expected to occur;

·                      the extent to which the actions or inaction of particular individuals or a group contribute to the need to undertake the activity;

·                      the costs and benefits, including consequences for transparency and accountability of funding the activity distinctly from other activities.

The draft Revenue and Financing Policy summarises Council’s intended funding sources and explains operating expenses and capital expenditure for each activity.

 

Statutory Context

 

This Statement of Proposal is made for the purposes of meeting Section 83, Section 102 and Section 103 of the Local Government Act (2002).  The Revenue and Financing Policy (the Policy) explains “who pays and why”.  It explains how Council activities are funded. Revenue sources include rates, fees, charges and investments.

 

Section 102(2)(a) of the Local Government Act 2002 requires the adoption of a
Revenue and Financing Policy.

 

This Statement of Proposal forms part of Council’s consultation, using the
Special Consultative Procedure (SCP).  Councils must use the SCP set out in the Local Government Act 2002 when making certain decisions.

These are set out in s83 of the Act but generally have high significance to the community, and may have major implications (such as financial).  The SCP assists the community to be aware of the issue and how they can make submissions on it.

 

The Local Government Act 2002 (Clause, 10 Schedule 10) requires this policy to be included in the Long Term Plan.

 

Analysis of Options

 

Option 1:  Adopt the proposed Revenue and Financing Policy

 

Advantages

Disadvantages

·        The proposed policy outlines the intended funding sources for operating expenses and capital expenditure.

·        It is compliant with the requirements of the Local Government Act (2002) and consistent with good practice in the local government sector.

·        The proposed policy clearly establishes “who pays for what”.

·        There are no significant disadvantages to adopting the proposed policy however; the public may wish to comment on aspects of funding for specific activities or more broadly on Council’s overall approach.

 

Option 2:  Do not adopt the proposed Revenue and Financing Policy in its current form

 

Advantages

Disadvantages

·        Council could choose to amend aspects of the Policy if consultation highlights specific issues which are of concern to the community.

·        The Local Government Act (2002) requires Council to adopt a Revenue and Financing Policy which explains how operating expenses and capital expenditure will be funded. If Council did not adopt a Revenue and Financing Policy it would not be legally compliant. 

 

Proposed Changes

 

Council reviewed its current Revenue and Financing Policy to meet the requirements of Section 109 (2A) of the Local Government Act (2002).  Section 109 (2a) states that the policy must be reviewed at least once every six years and that public consultation must occur, through the SCP.

 

The proposed Revenue and Financing Policy contains changes which reflect Council’s proposed funding for future operating expenses and capital expenditure.  In addition to changes relating to specific activities, there are two key changes proposed to Council’s overall funding.  These are the funding of depreciation and the consolidation of district activities to be funded by general rates.

 

In the past Council has adopted a policy of not funding depreciation and has only funded operating expenditure (excluding depreciation) plus current year asset renewal capital expenditure.  Moving towards funding depreciation would reflect good practice across the local government sector and would meet the statutory requirement to operate a balanced budget unless it is financially prudent to do otherwise.  By fully funding depreciation, a reserve is set up that can be used to fund renewal expenditure when it falls due. 
This means that those who use the asset contribute to its upkeep or replacement ensuring that there is intergenerational equity.

 

By consolidating District activities to be funded by way of Uniform Annual General Charge, Council is simplifying the way rates are charged and increasing its efficiency.  This will make rates easier to understand while maintaining equity regarding who pays for services.

The draft Revenue and Financing Policy is formed on the basis of proposed amendments to the Development and Financial Contributions Policy.  This assumes that development contributions will be put into remission at this stage to encourage economic development and because of low population growth.

 

Council will ensure that the way rates are collected and activities are funded is transparent by showing a breakdown of rates on its website www.abettersouthland.co.nz. 

 

Making a Submission

 

Submissions are invited on the draft Revenue and Financing Policy and must be received by 5pm  on Monday, 20 April 2015.  Submissions can be made online, via post or by providing a written submission to staff at your local Southland District Council office.
All submissions received by Southland District Council will be made available to the public.

 

Online submissions can be made using the submission form available at www.abettersouthland.co.nz.

 

Written submissions must:

 

1.       Be clearly labeled SUBMISSION - REVENUE AND FINANCING POLICY.

2.       Contain the name, address and contact details of the submitter.

3.       Indicate whether the submitter wishes to be heard by the Southland District Council in support of his/her submission.  Submitters wishing to speak will be allocated a time by Southland District Council from 19-20 May 2015. 

 

Submissions can be posted to:        Southland District Council

Submissions

PO Box 903

Invercargill  9840

 

 

 

 


Council

18 March 2015

 

 

SOUTHLAND DISTRICT COUNCIL

REVENUE AND FINANCING POLICY

 

 

This policy applies to: Council

DOCUMENT CONTROL

 

Policy owner:

Finance

TRIM reference number:

r/14/11/17719

Effective date:

1 July 2015

Approved by:

«type date»

Date approved:

«type date»

Next review date:

«type date»

 

CONTENTS

 

1.           PURPOSE.. 2

2.           POLICY DETAILS.. 2

2.1        Our Funding Approach. 2

2.2        Description of Funding Mechanisms. 3

2.2.1    Types of Expenditure. 3

2.2.2    Funding Mechanisms. 3

2.3        Application of Funding Mechanism to Expenditure. 5

2.4        Funding of Activities. 6

3.           ROLES AND RESPONSIBILITIES.. 17

4.           ASSOCIATED DOCUMENTS.. 17

5.           REVISION RECORD.. 17

 

 


Council

18 March 2015

 

REVENUE AND FINANCING POLICY

 

 

1.         PURPOSE

The Revenue and Financing Policy sets out how the Council funds each of its activities and why it funds them in the way it does.  The Council is required by Section 102 of the Local Government Act 2002 to have this Policy, among others, in order to provide predictability and certainty to residents and ratepayers about the sources and levels of funding.

 

The purpose of the Revenue and Financing Policy is to describe how Council funds its operating and capital expenses from the funding sources available to it and why it chooses the various mechanisms to fund the operating and capital expenditure of the Council.

 

The Act requires that the Revenue and Financing Policy is included as part of the Long Term Plan.  Other funding and financial polices required by Section 102(2) of the Act do not need to be included as part of the Council’s Long Term Plan.  

 

 

2.         POLICY DETAILS

2.1       Our Funding Approach

In determining how activities are funded, Council has considered the requirements of the Local Government Act 2002 Section 101(3).  The Council is obliged to share the costs of delivering services across different users including across generations.  In deciding how to fund each activity, the Council takes into account:

 

·                      The community outcomes to which an activity primarily contributes;

·                      The distribution of benefits between the community as a whole, identifiable parts of the community and individuals;

·                      The period during which the benefits are expected to occur;

·                      The extent to which actions, or inactions, of individuals or groups contribute to the need to undertake the activity; and

·                      The costs and benefits of funding the activity separately from other activities.

 

It then considers the overall impact of any allocation of liability for revenue needs on the District.

 

Deciding on who should pay for an activity, asset or service is more complex than simply allocating costs to primary users.  Some activities result in benefits for the wider community as well as specifically for the individuals who use them.  For example, recreational facilities contribute to vibrant thriving communities and have impacts on community health, well-being and sustainability.  Council also considers that people should not be excluded from using a service or engaging in an activity because of affordability.  For these reasons, Council has decided to fund several activities using a general rate or a combination of targeted and general rates. 

 


 

For a full analysis of Section 101(3) of the Local Government Act 2002 requirements for each activity, please refer to the Activity Funding Needs Analysis, which can be found on Council’s website (www.southlanddc.govt.nz).   

 

2.2       Description of Funding Mechanisms

2.2.1    Types of Expenditure

Broadly speaking, Council has two types of expenses: operating expenditure and capital expenditure.

 

Operating expenditure is used to fund the ongoing day to day activities and services of the Council.

 

Capital expenditure is money spent in acquiring or upgrading a business asset such as equipment or buildings.  The Council has three categories of capital expenditure spread across its activities:

·                      Renewals - Defined as capital expenditure that increases the life of an existing asset with no increase in service level.

·                      Increased Level of Service (ILOS) - Defined as capital expenditure that increases the service level delivered by the asset.

·                      Additional Demand (AD) - Defined as capital expenditure that is required to provide additional capacity necessary to accommodate growth, in whole or part under Council’s Development and Financial Contributions Policy.

 

2.2.2    Funding Mechanisms

Council uses different funding sources for different types of expenditure.  The Council funds its expenditure using the funding mechanisms outlined below.

 

2.2.2.1    User Fees and Charges

User Fees and Charges apply to individuals or groups who are directly using a Council service.   Where user fees and charges apply, there is a direct benefit to an individual.  When a decision is made to fund an activity through user fees and charges, the beneficiaries must be able to be identified and charged directly for the service they receive.  The Council also considers issues like the affordability of user charges or how they compare to the market rate for services.  In some cases, user fees and charges may be balanced with other funding sources.  This may occur where the Council believes that setting a charge too high will reduce the use of a service and therefore diminish its value to the community and impose a greater cost on ratepayers. 

 

2.2.2.2    Rates

There are two main types of rates:

·                      Rates with general effect:

o    General Rate

o    Uniform Annual General Charge (UAGC); and

·                      Targeted Rates

 

A General Rate is a rate assessed across all rateable properties in the District based on a property valuation system.  It is used to fund those services where the Council believes there is a public benefit to the whole of the community across the District.

 

When using the General Rate, the Local Government (Rating) Act 2002 only allows a choice of one valuation system from three options:

 

1        The annual value of the land; or

2        The capital value of the land; or

3        The land value. 

 

Council has chosen to set a General Rate which is assessed on a capital value basis. 
The general rate is not set on a differential basis.

 

A Uniform Annual General Charge (UAGC) is a rate assessed across all rateable properties in the District.  It is used to fund those services where the Council believes there is an equal public benefit across the District.  Council has a Uniform Annual General Charge which is assessed per rating unit.

 

A Targeted Rate is a rate set for a specific activity or group of activities.  Some targeted rates are charged to all ratepayers in the District.  Targeted Rates can be set in a number of different ways including:

·                      Capital Value,

·                      Land Value,

·                      Value of improvements,

·                      Property Location (Rating Boundary),

·                      Land Use (as defined by Council’s Valuation Service Provider),

·                      Per Rating Unit (Fixed Charge),

·                      Per Separately Used or Inhabited Part of a Rating Unit (Fixed Charge),

·                      Per supply of service (bins, water, sewerage etc).

 

Policy Statement

 

Where a ratepayer has settled their rates in full for the current financial year, Council will apply any further payments that the ratepayer should chose to make against that assessment to the rates account for that assessment as a credit balance.  It will be held until the ratepayer makes a request in writing for a refund of the credit balance or the subsequent year's rates are assessed.  Once the subsequent year's rates are assessed the credit balance will be applied to the rates.

 

2.2.2.3    Financial and Development Contributions

 

The Council's Policy on Development Contributions and Financial Contributions set out the conditions in which contributions are required and the method used to calculate them.  Development Contributions are currently in remission under this policy, due to low growth in the District. This position will be reviewed again in conjunction with the 2018 Long Term Plan.  Financial Contributions are underpinned by the operative District Plan.

 

Development Contributions required under the Local Government Act 2002 are generally used to fund growth related capital expenditure on infrastructure provided by the Council as part of its normal capital works programme. 

 

Financial Contributions are required under the Resource Management Act 1991.  They are imposed to address the effects of activities for which resource consent is sought. 

 

Although the Council can require both development contributions and financial contributions, it cannot require both from the same development for the same purpose. 

 

2.2.2.4    Grant and Subsidies

Grants and Subsidies are funding received from other agencies, usually for a specific purpose.  As such, they are used to fund those purposes. 

 

2.2.2.5    Reserves

Reserves are funds for specific purposes. 

·                      Retained earnings are used to fund operating or capital expenses at the Council's discretion. 

·                      Special reserves will be used to fund either operating or capital expenses according to the policy applying to those reserves. 

 

2.2.2.6    Investment Interest and Interest on Reserves

Net Investment interest is used to reduce the amount of General rate required.

 

Interest on reserves is calculated on the average balance of each reserve during the year.  Interest is allocated at a prescribed interest rate (typically based on the Reserve Bank rates for six-month term deposits over a suitable period).  Both positive and negative reserves get interest charged or applied.  For the Local reserves this interest is added to the reserve, which has no impact on the rate requirement, these reserves are usually positive and are set aside for future projects.  For the majority of District reserves, the interest is allocated to the relevant business unit, which in turn will reduce the rates required or increase the rates required if the reserve has a negative balance.

 

2.2.2.7    Borrowing

Borrowing is not a source of revenue itself.  Rather it is a 'bridging' mechanism to assist with the financing required for the construction of long term assets.  Debt arising from borrowing still needs to be repaid from other sources of revenue (eg rates).  The use of debt allows Council to enjoy the asset in the present while paying the debt back over time.  Borrowing is usually called upon to fund capital works and assets built or provided now before future new consumers use those services.  It is used to ensure fairness or intergenerational equity so that current ratepayers pay for the services they use now, and future ratepayers pay their share too. 

 

2.2.2.8    Lump Sum Contributions

Lump Sum contributions are where ratepayers agree to pay a capital (or lump sum) payment towards meeting the cost of providing a particular asset in their community (eg upgrading of a water supply) rather than paying for these capital costs via an annual targeted rate. 
These contributions will be used to fund the retirement of debt for specific capital activity from time to time.

 

2.3       Application of Funding Mechanism to Expenditure

Funding Mechanism

Operating Expenditure

Capital Expenditure

Additional Capacity

Increased Level of Service

Renewals

General Rates (incl. UAGC)

ü

 

ü*

ü*

Targeted Rates

ü

 

ü*

ü*

Lump Sum Contributions

ü

*

ü*

ü*

Fees and Charges

ü

 

ü*

ü*

Borrowing

 

ü

ü

ü

Asset Sales

 

 

ü

ü

Development Contributions

 

ü

 

 

Financial Contributions

 

ü

 

 

Grants and Subsidies

ü

 

ü

ü

Depreciation

 

 

ü

ü

*      Application depends on how the activity to which capital expenditure relates is funded.

 

2.4       Funding of Activities

 

The Council has considered how to apply the available funding mechanisms to its activities.  The following table is a summary of this approach.  A copy of the detailed assessment, titled Activity Funding Needs Analysis is available on our website.  

 

 For operational expenditure, funding portions contributing to each activity are expressed as ranges, from low to high.  These ranges equate to the following percentages:

Low:   0-33 percent                Medium:    34-66 percent                  High:      67-100 percent

 

Capital expenditure funding contributions are identified.  The proportion of capital costs funded from each source will vary depending upon the nature of each capital works project. 

 


Council

18 March 2015

 

 

Activity Group

Activity

Funding of Operating Expenditure

Funding of Capital Expenditure

Catchment(s)**

Detail and Rationale

General Rates (including UAGC)

Targeted Rates

Fees and Charges

Grants Subsidies and other Funding Sources

 

 

 

 

Community Services

Community Assistance

(includes: Grants and Donations, Work Schemes, Roving Museum Officer)

High

Low

 

Med/Low

Asset Sales, Depreciation, Borrowing, General rate, Targeted rates, Fees and Charges. 

District

 

District Grants are funded via General rate (high/med) in recognition of the broad public benefits provided.

Local Grants are funded via Targeted Local Rates (low).

All in the District benefit from Council providing this activity as it contributes to the social and economic well-being of our communities.

Grants subsidies and other funding Sources - (med/low).  Funding is sourced from the users of the work scheme service with some government grants provided.  Capital expenditure relates to work schemes. 

 

 

Parks and Reserves

Low

High

Low

 

Borrowing, Targeted Rates, General Rate, Reserves, Development and  Financial Contributions

District, Area of Service for local reserves. 

Targeted Local Rates - (high).  Each community decides whether to charge their local rate on the basis of a fixed charge per rating unit or a rate in the dollar on land value. 

 

Each community funds its own parks and reserves in recognition of the local benefit.

 

 

 

Parks and Reserves continued

 

 

 

 

 

 

District reserves are funded from General Rate (low) in recognition of the district wide public benefits provided by these reserves. 

Some limited user fees (Low) are received from groups that occupy Council reserve. 

 

 

Cemeteries

 

Low

Med

Low

Reserves, Borrowing, Targeted Rates

Area of Service

Targeted Local Rate (low) based on land value per rate in the dollar or fixed charges dependent on location. This allocation recognises broader community benefits from having a local service.

Fees and Charges (med) for the direct costs of burial and other associated costs through interment fees.  This recognises the private benefit to the users of these facilities.

 

 

Community Facilities

(includes: Council Buildings, Community Centres)

Low

Med

Low

Low

Targeted Rate, Borrowing, Reserves

District for Council Facilities/buildings and Area of Service for Community Centres. 

Council Facilities/Buildings are funded via General rate (low) recognising the district functions performed by Council.

Community Centres funded via Targeted Rate (med) recognising the benefit to local communities. 

Fees and Charges - (low) recognising the direct benefit to users.

Grants and Subsidies (low) may be received from time to time and used for this activity.

 

 

Community Housing

Low

 

High

 

Asset Sales, Grants and Subsidies, Reserves, General rate.

District

General rate - (low) in recognition of broader social benefits associated with this activity. 

Fees and Charges - (high) for direct operating costs via tenant rent. These recognise the private benefit provided to tenants.

 

 

Library Service

High

Low

Low

 

Reserves, Targeted Rates, General Rate

District, Area of Service

General Rate (high)

This reflects that the supply of this service provides a benefit that is available to all ratepayers.

Targeted Local Rate - (low) recognises that communities close to libraries derive a greater benefit than those further away therefore some of the local rate is collected for this service.

Fees and Charges - (low).  Service fees and fines for late return.

 

 

Public Toilets

High

 

 

 

General Rate, Borrowing, Reserves. 

District

 

General Rate (high) reflecting the widespread public benefits associated with this activity.

 

 

Airports

 

High

Low

 

Borrowing, Reserves, Targeted Rate

Area of Service

Local Targeted rate fixed charge per rating unit - (area of service) - (high) recognising that the economic benefits primarily flow to the local community. 

Fees and Charges - (low) operating costs aim to be funded via user charges given that they are readily identifiable.

 

 

Electricity Supply

(SIESA)

 

 

High

 

Borrowing, Asset Sales, Reserves

Area of Service

Fees and Charges - (high).  Electricity generation, distribution, general operations and maintenance are recovered through user pay fees applicable to consumers who are using the supply.

 

Regulatory Services

Building Control

(includes: Regulation of building work)

 

Low

 

High

 

Asset Sales, Depreciation, General Rate, User fees.

District

General Rate (low)

This links the level of development of a property to its liability for the targeted rate.  Fees and Charges (high) are the main funding source for this activity reflecting that the users are readily identifiable.

 

 

Resource Management

(includes: District Plan, Resource Consents)

High

 

Low

 

Borrowing, Asset Sales, Depreciation, General Rate

District

General Rate - (high).  All ratepayers benefit from this activity given the desirability if managing land use across the district.

Fees and Charges - (low) for the costs associated with resource consent applications recognising that the users are readily identifiable.

 

 

Environmental Health

(includes: Registration an inspection of licenced premises, noise control, liquor licensing)

Med

 

Med

 

Borrowing, Asset Sales, Depreciation, General Rate

District

General Rate - (med) recognises that there is a level of public benefit to all ratepayers from having these activities managed.

 

Fees and charges are applied to ensure that service users fund a reasonable amount of this service (med) as they are readily identifiable. 

 

 

Animal Control

Low

 

Med/High

Low

Borrowing, Asset Sales, Depreciation, General Rate

District

Fees and charges are applied to ensure that service users fund a reasonable amount of this service (med/high). 

 

General Rate (low) - recognises the public benefit to all ratepayers. 

From time to time income is received from other sources (ie fines).

 

Emergency Management

Emergency Management Southland

High

 

 

 

Asset Sales, Depreciation, Borrowing, General Rate

District

General Rate (high).  All people in the District derive a benefit from having appropriate management capability in place. 

 

 

Rural Fire

High

 

 

 

Asset Sales, Depreciation, Borrowing, General Rate

District

General Rate (high). 

All people in the District derive a benefit from having appropriate management capability in place. 

 

District Leadership

Representation and Advocacy

 

High

Low

 

Low

Borrowing, Asset Sales, Depreciation, General Rate 

District

General Rate (high). 

All in the District benefit from Council providing this activity and have the opportunity to contact their local elected members and/or Council.  

Targeted Local Rate - (low). This is used to fund CDA and Community Board costs reflecting the local community benefit of these services.

 

 

Community Development

(includes District Development Services, Venture Southland)

High

 

 

 

Not applicable

District

General Rate (high) reflecting the public benefits that flow from this activity.

 

 

 

District Support

(includes: Customer service, Secretarial support)

High

Low

 

 

Targeted Rate, Borrowing, General Rate

District

General Rate (high) reflecting the desirability of Council providing a district wide customer service centre network.

Fixed Charge plus rate in the dollar on Capital Value.  All ratepayers benefit from this activity.

Targeted Local Rate - (low) funds the costs of providing support to local CDAs and Community Boards.

 

 

Corporate Support (includes: Strategy and Communication, IT, Finance)

High

 

 

 

Not Applicable

District

 

General Rate - (high) reflecting the public benefits associated with this activity.  

 

 

Solid Waste

Solid Waste Management

High

Low

Low

 

General Rate, Targeted Rates, Borrowing, Asset Sales, Depreciation

District

General Rate (high) to fund solid waste and landfill rehabilitation costs given the public benefit of this aspect of the activity.  Targeted Rate based on supply of service for bins (low) as the users are readily identifiable.

Fixed charge per bin.  User charges - (low) collected via transfer stations as users are readily identifiable.

 

Roads and Footpaths

Roads and Footpaths

 

Med

 

Med

Development and Financial Contributions, Borrowing, Asset Sales, Depreciation, Targeted Rates, Grants and Subsidies

District

District Wide Targeted Rate (med).  Fixed charge per rating unit plus a differentiated rate in the dollar on capital value. The district wide rate recognises the public benefits associated with having a district wide transportation network that allows for development of the district as a whole.

The differentiated targeted rate recognises the exacerbator costs created by heavy vehicles. 

There are also local targeted rates charged to fund local roading activity which delivers benefits specific to those local communities.  This activity attracts NZTA funding for roading maintenance and capital work.

The funding policy for this activity is applied to the balance of the rating requirement, following the NZTA subsidy.

 

Wastewater

Wastewater

 

High

 

 

Development and Financial Contributions, Borrowing, Asset Sales, Depreciation, Targeted Rates,

District and local

District Wide Targeted rate for operating expenditure reflecting the benefits that those connected or able to connect receive from the service provided.

Local Targeted rates for capital costs funded via lump sum contributions reflecting the benefit that those connected or able to connect receive.

Local Targeted Rate for septic tank cleaning reflecting that the beneficiaries of this service are easily identified.  All rates fixed charged per unit of service.  Rating units outside of the range of reticulation networks or septic tank area of service are not charged these rates.  This enables the costs to be passed onto the ratepayers that benefit from the activity.

 

Stormwater

Stormwater

 

High

 

 

Borrowing, Asset Sales, Depreciation, Targeted Rates

District

Area of Service (Scheme)

 

Local Targeted Rate by area (high) reflecting that the benefits are primarily derived by the local communities in which the schemes are located.  This activity does not have its own rate but is collected as part of the Community Board and Community Development Area Rates as it is not economic to collect as a separate rate.

 

 

 

Stormwater continued

 

 

 

 

 

 

Development in areas serviced by stormwater will pay the Development Contributions applicable to that stormwater area.

 

Water Supply

Water Supply

 

High

Low

 

Development and Financial Contributions, Borrowing, Asset Sales, Depreciation, Targeted Rates

Area of Service (Scheme)

 

 

District Wide Targeted rate for operating expenditure reflecting that those connected or able to connect directly benefit from the service being provided by Council.  Some metered water supply.  Some water charging is via a direct contractual arrangement with the user. 

Development connecting to a water scheme will pay the Development Contribution applicable to that scheme.

Income from other sources is received from time to time.

*       There is a variety of Targeted Rates

**     Unless otherwise stated, Development Contribution catchments are the same as the capital expenditure catchments indicated in the table

 

Explanatory Note:

 

Separately Used or Inhabited Part (SUIP)

 

A Separately Used or Inhabited Part includes any portion of a rating unit used or inhabited for residential purposes by the owner or any other person who has the right to use or inhabit that part for residential purposes by virtue of a tenancy, lease, licence or other agreement.  Examples of a SUIP are any building or part of it which is separately used or inhabited for residential purposes.  For the purposes of this definition, vacant land which is not used or inhabited for residential purposes is not a SUIP. 


 

Background

Under the Local Government (Rating) Act 2002 charging Separately Used or Inhabited Parts of a Rating Unit is an option for both a Uniform Annual General Charge and for targeted rates.  The following are examples of where, under the Council’s definition of a SUIP, there may be application of multiple charges for Separately Used or Inhabited Parts of a Rating Unit:

·                      Single dwelling with flat attached.

·                      Two or more houses, flats or apartments on one Certificate of Title (Rating Unit).

·                      Business premise with flat above.

·                      Farm property with more than one dwelling.


Council

18 March 2015

 

3.         ROLES AND RESPONSIBILITIES

 

Party/Parties

Roles and Responsibilities

Chief Financial Officer

Ensure compliance with the Revenue and Financing Policy.

Revenue Manager

Implement and monitor the Revenue and Financing Policy.

 

 

4.         ASSOCIATED DOCUMENTS

·                      Local Government Act (2002).

·                      Local Government (Rating) Act (2002).

·                      Draft Development and Financial Contributions Policy (r/14/11/17513).

 

 

5.         REVISION RECORD

The Revenue and Financing Policy will be reviewed three-yearly as part of the Long Term Plan process.

 

Date

Version

Revision Description

«Type Date»

«Version»

«Revision»

«Type Date»

«Version»

«Revision»

«Type Date»

«Version»

«Revision»

 

 


Council

18 March 2015

Description: sdclogo

 

Proposal - Schedule of Fees and Charges

Record No:        R/15/2/3821

Author:                 Tamara Dytor, Policy Analyst

Approved by:       Rex Capil, Group Manager, Policy and Community

 

  Decision                             Recommendation                        Information

 

  

 

Purpose

1        This report presents the draft Schedule of Fees and Charges and the corresponding Proposal for Council’s consideration. If approved, these documents will be used for public consultation and hearings will be held concurrently with hearings for the Long Term Plan 2015-25, from 19-20 May 2015.

Executive Summary

2           This report outlines the draft Schedule of Fees and Charges and seeks Council approval to release the draft Schedule of Fees and Charges and the Proposal for public consultation (attached).

 

Recommendation

That the Council:

a)         Receives the report titled “Proposal - Schedule of Fees and Charges” dated 9 March 2015.

b)         Determines that this matter or decision be recognised as not significant in terms of Section 76 of the Local Government Act 2002.

c)         Determines that it has complied with the decision making provisions of the Local Government Act 2002 to the extent necessary in relation to this decision; and in accordance with Section 79 of the Act determines that it does not require further information, further assessment of options or further analysis of costs and benefits or advantages and disadvantages prior to making a decision on this matter.

d)         That Council approves the draft Schedule of Fees and Charges for release for public consultation.

e)         That Council endorses the Proposal for use in public consultation on this document.

f)          Consult through a process which will run parallel to the consultation process for the Long Term Plan 2012-25; with hearings from 19-20 May 2015.

 


 

Content

Background

3        The Proposal allows the draft Schedule of Fees and Charges to be released for public consultation in compliance with s82(A) of the Local Government Act (2002). Consultation will occur via a process which will run parallel with consultation for the Long Term Plan 2015-25 (LTP).  The Schedule of Fees and Charges will have the same consultation period as the LTP, so that anyone wishing to speak to their submission can do so at the LTP hearings (19-20 May 2015).

4        The Proposal will be available at Area Offices, and on the Southland District Council website. Submissions will be able to be made by post or on the website.

Issues

5        The Fees and Charges document has been updated from previous documents: it has incorporated services that Council provides that have previously not been noted, such as Alfresco Dining licenses and under-verandah lighting, and does not mention Development Contributions as this has been put into remission.

Factors to Consider

Legal and Statutory Requirements

6                    Under s150 of the Local Government Act (2002), Council must set fees and charges and make them available to the public, after consulting with the public under s82 of the Local Government Act (2002).

Community Views

7                    The consultation process proposed will allow Council to consider community views regarding this policy.

Costs and Funding

8                    These are the fees charged to the public to pay for the services provided by Council, and therefore are revenue for Council. There are also minor consultation costs around advertising.

Policy Implications

9                    This policy will be included in the final Long Term Plan 2015-25 and will be mentioned but not in detail in the consultation document for the Long Term Plan. Consultation will occur through a separate parallel process along with other council policies which are currently being reviewed.

Analysis

Options Considered

10      Council could choose to:

·    Adopt proposed Schedule of Fees and Charges and associated Proposal

·    Not adopt proposed Schedule of Fees and Charges and associated Proposal

Analysis of Options

Option 1: Approve proposed Schedule of Fees and Charges and associated Proposal for public consultation

 

Advantages

Disadvantages

·        The proposed Schedule of Fees and Charges has been updated by staff to be relevant to the cost of Council to undertake these services

·        The Schedule of Fees and Charges has been updated to incorporate services which Council provides which had previously not been stated, such as Alfresco Dining licences, and under-verandah lighting.

·        Promotes user-pays system for people using specific Council services

·        No significant changes in fees

·        None

Option 2: Not approve proposed Schedule of Fees and Charges and associated Proposal for public consultation

Advantages

Disadvantages

·        Promotes user-pays system for people using specific Council services

·        Council would have to retain the current Schedule of Fees and Charges, last updated as part of the 2014-15 Annual Plan.

·        The Schedule of Fees and Charges would not be relevant to 2015-2025 and the costs borne by Council to cover these fees would have to be funded by another source, such as rates.

·        The 2014-15 Schedule of Fees and Charges not cover services which Council provides, such as Alfresco Dining licences, and under-verandah lighting.

Assessment of Significance

11      The review of the Fees and Charges has not been assessed as significant. The financial impacts of any of the options listed above will be relatively minor and proposed changes are unlikely to have a substantial impact on communities or large numbers of ratepayers.

Recommended Option

12      It is recommended that Council approve the draft Schedule of Fees and Charges and Proposal for release for public consultation (Option 1).

Next Steps

13      If Council approves the draft Schedule of Fees and Charges and associated Proposal for release for public consultation, the public will be able to submit on the draft Schedule of Fees and Charges and hearings for submitters wishing to speak will be held from 19-20 May 2015.

14      Council would then adopt the proposed Schedule of Fees and Charges with any appropriate amendments its meeting on 24 June 2015.

 

Attachments

a         DRAFT Schedule of Fees and Charges 2015 - 2025 View

b         Proposal - Schedule of Fees and Charges 2015 - 2025 View     


Council

18 March 2015

 

Fees and Charges

The table below shows the fees and charges for 2015/2016 compared to 2014/2015.  Additional information can be found in the Council's Schedule of Fees and Charges.  All fees are GST inclusive except stated otherwise.

 

 

2014/2015

 (GST Incl)

2015/2016

 (GST Incl)

Airport - Te Anau Manapouri

 

 

 

Landing Fees

 

 

 

Weight Category [3] < or = 2,000

 

$17.26

$17.26

2,001 - 4,000

 

$34.50

$34.50

4,001 - 5,700

 

$57.50

$57.50

5,701 - 10,000

 

$115.00

$115.00

10,001 - 20,000

 

$230.00

$230.00

>20,000

 

$322.00

$322.00

Helicopters

 

$17.26

$17.26

Honesty Box Landing Fees

 

 

 

< or = 2,000 (no GST)

 

$15.00

$15.00

2,001 - 4,000 (no GST)

 

$30.00

$30.00

4,001 - 5,700 (no GST)

 

$50.00

$50.00

Helicopters (no GST)

 

$15.00

$15.00

Overnight Fee

 

 

 

< or = 2,000

 

$NIL

$NIL

2,001 - 4,000

 

$NIL

$NIL

4,001 - 5,700

 

$NIL

$NIL

5,701 - 10,000

on request

$57.50

$57.50

10,001 - 20,000

on request

$115.00

$115.00

>20,000

on request

$172.50

$172.50

Helicopters

 

$NIL

$NIL

Ground Handling Fees

 

 

 

The ground handling fees include runway inspection, marshalling, toilet servicing as required and security cones.

 

 

 

Without baggage

 

$241.50

$241.50

With baggage (two persons assist)

 

$322.00

$322.00

Additional person

 

$80.50

$80.50

Ground power unit assistance (minimum one hour)

 

$172.50

$172.50

After hours call out fees

 

$80.50

$80.50

Function Centre Fees

 

 

 

Per Night fee

 

$350.00

$350.00

Bond (Refundable)

 

$200.00

$200.00

Optional contract clean

 

$200.00

$200.00

Alcohol Licensing

 

 

 

These fees are set by Statute.  The fees collected are those contained in the Sale and Supply of Alcohol (fees) Regulations 2013, and are subject to the fees that may be prescribed by a bylaw authorised by the Sale and Supply of Alcohol (Free-setting Bylaws) Order 2013

 

 

 

Application for Class 4 Gambling Venue Certificate

 

$146.00

$816.50

Alfresco Dining

 

 

 

Licence Fees

 

 

 

Administration/Application fee

one-off charge

 

$120.00

Occupation fee calculated on the area used per square metre per year

 

 

$20.00

The per square metre charge is an annual fee applied to the applicable area as at 30 June each year. 
For new applications subsequent to this date, the square metre charge will be applied on a pro-rata basis to 30 June.

 

 

 

Animal Control

 

 

 

Dog Registration

 

 

 

Dog classified as dangerous

 

 

see note[4]

A dog impounded by SDC released to a SDC authorised rehoming provider for either fostering or rehoming (initial registration only)

 

 

see note4

Fee (if paid before 1 August 2015)

 

 

see note4

Working dog

 

 

see note4

Entire dog (not desexed)

 

 

see note4

Desexed dog

 

 

see note4

Responsible dog owner licence, not desexed

 

 

see note4

Responsible dog owner licence, desexed

 

 

see note4

Fee (if paid on or after 1 August)

 

 

 

Working dog

 

 

see note4

Entire dog (not desexed)

 

 

see note4

Desexed dog

 

 

see note4

Responsible dog owner licence, not desexed

 

 

see note4

Responsible dog owner licence, desexed

 

 

see note4

Registration per dog per annum

 

$25.00

see note4

Penalty for late payment

 

$12.50

see note4

Part-year registration, per month

 

$2.10

see note4

Dog Control Fees

 

 

 

(a) Dog hearing lodgement fee

 

 

see note4

(b)        Multiple dog licence application fee, per owner

 

 

see note4

(c)        Responsible dog owner licence application fee, per owner

 

 

see note4

Sale of collars

 

$9.00

$9.00

Dog Microchipping

 

 

 

(a)        Microchipping of a dog registered by SDC

 

$NIL

see note4

(b)        Commercial breeders that require more than four pups to be microchipped per registration year

for the fifth and subsequent dog

$25.00

see note4

Dog Impounding Fees

 

 

 

(a)        Impounding of dogs

 

$100.00

see note4

(b)        Sustenance of impounded dog per day or part thereof

 

$15.00

see note4

(c)        Destruction of impounded dog

 

$40.00

see note4

Stock Impounding Fees

 

 

 

(a)        Fees for impounding of stock:

 

 

 

      (i) Horses, donkeys, asses, mules, cattle, deer

per head

$60.00

$60.00

      (ii) Sheep, goats, pigs, and other stock

per head

$30.00

$30.00

      (iii) All stock less than three months of age

per head

$10.00

$10.00

(b)        Time taken by Pound Keeper and/or Animal Ranger per hour (inclusive of GST)

 

$75.00

$75.00

(c)        Travel by Pound Keeper and/or Animal Ranger per kilometre

 

$0.77

$0.77

(d)        Sustenance

 

Actual cost

Actual Cost

Hire Charges

 

 

 

Cat Trap

Weekly hire

$5.00

$NIL

 

Lodgement Fee (refundable on return)

$30.00

$NIL

Dog Barking Collars

Weekly hire

$10.00

$NIL

 

Lodgement Fee (refundable on return)

$50.00

$NIL

Building Consents

 

 

 

Note:

 

 

 

•    Where building work and inspections vary from the examples indicated below specific fees will be calculated.

 

 

 

•    National Multi Use Approval applications will have processing component of the fee deducted.

 

 

 

•    Indicative building consent fees do not include DBH/BRANZ levies for building work $20,000.00 in project value.

 

 

 

•    Council’s preference is for the invoicing of fees at the time of issuing.  The exception being Certificate of Acceptance and Alternative Solution/Waiver applications or where there is history of poor payment, the fees are to be paid at the time of lodging.

 

 

 

 

 

 

•    Processing time and inspections in excess of those indicated will be invoiced as additional           charges.

 

 

 

•    Costs associated with review of a PS1 will be invoiced as an additional charge.  Complex            projects may require calculations and/or a PS2 in support of a PS1.  A PS2 design review             statement will be required for projects exceeding $1 million. 

 

 

 

•    Fees and charges outstanding at submission of Form 6 “Application for Code Compliance              Certificate will prevent issuing of the Code Compliance Certificate.

 

 

 

Processing time charge-out rate: 

BC Administration (per hour)

$108.00

$109.00

 

BC Officers (per hour)

$167.00

$171.00

Inspection charge-out rates - allow a site arrival fee plus time on-site for inspection / compiling field notes and any necessary follow-up.

per 0.75/hr

$227.00

$232.00

 

per 1.0/hr

$269.00

$275.00

 

per 1.5/hrs

$352.00

$360.00

Indicative Building Consent Fees

 

 

 

Building Work Proposed

 

 

 

Freestanding Solid-Liquid-Gas Fired Heating Unit

 

$268.75

$274.75

0.25 hrs - Processing

 

 

 

0.75 hrs - Final inspection

 

 

 

Inbuilt Solid-Liquid-Gas Fired Heating Unit

 

$495.75

$506.75

0.25 hrs - Processing

 

 

 

0.75 hrs - Pre-installation

 

 

 

0.75 hrs - Final inspection

 

 

 

Plumbing - Drainage, Swimming-SPA Pool, Fencing, Demolition, Other Minor works

 

$464.50

$472.50

1.33 hrs - Site-services assessment

 

 

 

0.50 hrs - Processing

 

 

 

0.75 hrs - Final inspection

 

 

 

Farm Building, Dairy Shed, Deck, Conservatory, Garage

PS1 design review

$691.50

$704.50

1.33 hrs - Site-services assessment

Pre-pour block inspection

 

 

0.50 hrs - Processing

Precast concrete inspection

 

 

0.75 hrs - Foundation inspection

 

 

 

0.75 hrs - Final inspection

 

 

 

Note:  National Multi Use Approval applications to have processing component of the fee deducted

Pre-lining inspection

 

 

 

Post-lining inspection

 

 

 

Drainage inspection

 

 

Altered Dwelling

 

$775.00

$790.00

1.33 hrs - Site-services assessment

PS1 design review

 

 

1.00 hrs - Processing

Plumbing inspection

 

 

0.75 hrs - Pre-lining inspection

Skeleton inspection

 

 

0.75 hrs - Final inspection

Post-lining inspection

 

 

 

Drainage inspection

 

 

 

Heating unit inspection

 

 

Relocated Dwelling

 

$1,002.00

$1,022.00

1.33 hrs - Site-services assessment

PS1 design review

 

 

1.00 hrs - Processing

Heating unit inspection

 

 

0.75 hrs - Foundation inspection

 

 

 

0.75 hrs - Drainage inspection

 

 

 

0.75 hrs - Final inspection

 

 

 

Addition to Dwelling

 

$1,312.50

$1,339.50

1.33 hrs - Site-services assessment

PS1 design review

 

 

1.50 hrs - Processing

Pre-pour block inspection

 

 

0.75 hrs - Foundation inspection

Skeleton inspection

 

 

0.75 hrs - Pre-floor inspection

Plumbing inspection

 

 

0.75 hrs - Pre-lining inspection

Waterproof membrane

 

 

0.75 hrs - Final inspection

Post-lining inspection

 

 

 

Pre-plaster inspection

 

 

 

Half high brickwork

 

 

 

Drainage inspection

 

 

 

Heating unit inspection

 

 

New Dwelling

 

$2,782.00

$2,842.00

(< 300 M2 floor area)

PS1 design review

 

 

1.33 hrs - Site-services assessment

Pre-pour block inspection

 

 

3.00 hrs - Processing

Plumbing inspection

 

 

0.75 hrs - Foundation inspection

Waterproof membrane

 

 

0.75 hrs - Pre-floor inspection

Post-lining inspection

 

 

1.00 hrs - Skeleton inspection

Pre-plaster inspection

 

 

0.75 hrs - Pre-lining inspection

Half high brickwork

 

 

0.75 hrs - Cladding option inspection

Heating unit inspection

 

 

0.75 hrs - Drainage inspection

 

 

 

1.00 hrs - Final inspection

 

 

 

Note: National Multi Use Approval applications to have processing component of the fee deducted

 

 

 

New Dwelling

 

$3,342.00

$3,415.00

(> 300 M2 floor area)

PS1 design review

 

 

1.33 hrs - Site-services assessment

Pre-pour block inspection

 

 

4.00 hrs - Processing

Plumbing inspection