Tauranga City Council uses development contributions to fund growth-related capital expenditure, like new or expanded infrastructure for waters, transport or reserves. Development contributions are payable when people develop – e.g. if they subdivide a property, build or alter a residential or non-residential building, or change the use of an existing building.
The Development Contributions Policy (DCP) sets out the fees for the financial year that the work was consented. The DCP is reviewed annually in conjunction with the council’s annual plan or long-term plan processes, with an amended policy becoming operative on 1 July of each subsequent year.
Council recently made available for public consultation a draft version of the 2020/21 DCP, in parallel with consultation on the draft Annual Plan 2020/21. In the meantime, COVID-19 brought about significant impacts on council’s financial position. Council decided to delay hearings on the draft Annual Plan 2020/21 as originally proposed, and to consider reconsulting on the plan and the capital expenditure budgets within it. If this occurs, then it is likely that the documents will not be adopted by 30 June 2020.
The contents of the DCP are directly linked to the capital expenditure budgets contained in the annual plan. Therefore, the DCP 2020/21 cannot be adopted before the Annual Plan 2020/21 is adopted.
To enable Tauranga City Council to continue collecting development contributions to fund growth-related capital expenditure, we are proposing to amend the 2019/20 DCP to extend the period to which it applies.
The proposal is to replace the words in section 1.1.1 “applicable from 1 July 2019-30 June 2020” with the words “applicable from 1 July 2019 until a subsequent Development Contributions Policy becomes operative”.
The impacts of this option on the development community are likely to be minimal as the fees within the policy are largely equal to or lower than the development contributions fees contained in the draft 2020/21 DCP. The consequence for Tauranga City Council is that the DC fees applied to developments lodged after 1 July 2020 but before a new policy becomes operative will not be able to be charged under the higher fees expected to be contained within the 2020/21 DCP. This essentially results in a decreased revenue which will need to be recovered via another funding source – likely to be rates. This revenue loss cannot be quantified but will be significantly less than the revenue loss by not charging any development contributions.
Council considered other options before deciding to consult on this proposal. You can read about them in the Statement of proposal below.
Statement of proposal: Development Contribution Policy 2019/20 extension (161kb pdf)
Access the 2019/20 Development Contributions Policy
Have your say
Have your say by Friday, 5 June 2020
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If you have any questions or would like to discuss your submission please contact the Growth, funding and policy team on 07 577 7000.