DCC: Growth v development contributions

Worth a read —Whaleoil link received from Anonymous
Tuesday, 11 February 2014 8:11 p.m.

Whale Oil Beef Hooked logo### whaleoil.co.nz February 10, 2014
Why do Property Developers hate development contributions?
By Cameron Slater
A property developer writes:
“Lately Developers and Councils have been busy preparing submissions on the proposed changes to the Local Government Act relating to development contributions. There are many issues. Firstly, the issue with charging developers for improvements that have nothing to do with growth.
(1) Hiding the real cost apportionment and charging developers for improvements that [have] nothing to do with new development growth:
When developing up capital works and budgeting the Annual Plan councils develop formula and apportion some of the costs to ‘growth’ – which is then charged to developers. Councils argue that as cities grow and intensify – the costs of that growth include replacing or improving infrastructure. Hence they want new developments to pay for it.
Developers take issue however with the amount of money required from them to pay for the infrastructure improvements not that they have to pay for their share of growth. As such the argument is about whether the right pro-rata apportionment is applied.
Obfuscating the debate is that all Councils must replace infrastructure as it ages and is due for replacement. Additionally, most Councils are in recent times adopting new development standards that increase the capacity of assets and they improve assets as technology advances.
Replacing assets is supposed to occur from a built sinking fund that is generated over the life span of an infrastructure asset. Council receive money over the lifespan in cash as depreciation as part of rates. Over time, and subject to annual revaluation each asset builds up a depreciation sinking fund that should be sufficient to replace it. Developers are concerned that Councils spend that money through internal loans to OPEX and other creative accounting and then hope to use ‘growth’ as a mechanism for replacing the assets. A psuedo ponzi scheme with ratepayers the duped investors.”
Read more


DCC: Development Contributions Policy
Development contributions are charges paid by property developers to meet the increased demand for infrastructure resulting from growth.
The Council is proposing some significant changes to its Development Contributions Policy.
In April 2011, the Council released a Statement of Proposal to adopt a Draft Revised Development Contributions Policy (the Draft Policy). The proposal included a schedule of charges which could apply if the Draft Policy was adopted. Submissions on the Draft Policy closed in July 2011 and were followed by hearings in November 2011. After beginning its deliberations the Hearings Committee decided that more information was required from Council staff before the Draft Policy could be considered further. Deliberations started again in December 2012 with Council staff reporting back to the Committee on the information it requested. The Committee has yet to conclude its deliberations.
As a final decision on the Draft Policy is yet to be made, the Council’s existing Development Contributions Policy applies until further notice. Read more

DCC: Spatial Plan for Dunedin
‘Dunedin Towards 2050′ (The Spatial Plan), sets the strategic direction for Dunedin’s growth and development for the next 30+ years. It outlines a broad set of principles, strategic directions, policies, and actions and visually illustrates how the city may develop in the future. It will be used to guide land-use planning in the city as well as influencing how future infrastructure and services may be provided or limited. The Spatial Plan is primarily, but not solely, concerned with Dunedin’s urban form and design. Urban form and design refer to the spatial arrangement of a city, in other words, the shape of a city as seen from the air including the overall pattern of development, activities, and infrastructure as well as the design or ‘look and feel’ of the city and how it functions. Urban form and design have a significant impact on the sustainability, liveability and economic performance of cities.

DCC: Second Generation Plan for Dunedin
The Dunedin City District Plan controls what people can do on their land and how it can be developed. While there have been some changes and new zones added (eg the Stadium, Airport and Harbourside zones), most of the current Plan has not been reviewed since 2006 and a lot of it dates back to the 1990s. The council is reviewing the Plan as a whole to fix the parts that are not clear or working properly, to recognise the changes to land use and development within Dunedin, to discourage poor development and to align with changes in national policy guidance. The review will produce a second generation plan (2GP), which is the second plan prepared under the Resource Management Act 1991. This is a long process with a lot of research and analysis, and input from stakeholders and the community.

DCC: Strategic Directions
The Strategic Directions of the second generation plan will establish the overall management approach for the 2GP, stating the important outcomes for the city:
● Dunedin is Environmentally Sustainable and Resilient
● Dunedin is Economically Prosperous
● Dunedin is a Memorable and Distinctive City with a Strong Built and Natural Character
● Dunedin has Strong Social and Cultural Capital
● Dunedin has an Attractive and Enjoyable Built Environment
● Dunedin has Affordable and Efficient Public Infrastructure
● Dunedin has Quality and Affordable Housing
● Dunedin is a Compact City with Resilient Townships

On the local . . .
Meanwhile, developers across the Taieri are champing at the bit to re-create ‘Wanaka sprawl’ on the flood plain with little regard for the protection of high class soils —despite the objectives of the spatial plan that places wise emphasis on the rural area becoming the city’s food basket (resilience).

Pearl of the Plain (Mosgiel sign) 3### ODT Online Wed, 12 Feb 2014
Benefits seen for Taieri area
By Rosie Manins
Mosgiel, Middlemarch and the wider Taieri area will benefit from a new marketing approach by the Dunedin City Council, chief executive Sue Bidrose says. The establishment of an in-house marketing agency at the council, replacing Tourism Dunedin, would offer ”more bang for buck”, she said. The agency would use existing council staff, such as those in human resources and finance, and run alongside the council’s economic development unit.
Read more

sue bidrose [whatifdunedin]New chief executive Sue Bidrose says the council will review performance of the in-house marketing agency after 18 months, with a view to assessing if in the longer term the agency should become a council-owned company. (via ODT)

Other ODT stories:
Riccarton Rd widening set to begin Asked if the upgrade was designed to accommodate more heavy vehicle traffic, Mr Matheson played down those concerns. [Evan Matheson hasn’t referenced the revising ‘district plans’ then]
Trail trust awaits talks outcome The group behind a project aiming to provide a cycle link between Mosgiel and Dunedin is awaiting the result of crucial land negotiations.
Crematorium not yet begun Hope and Sons is yet to begin construction of its new Mosgiel crematorium, but hopes to have it operating this year. Managing director Michael Hope said it was still working on gaining building consent.
Police presence of concern
Town’s population to disappear Mosgiel’s Pearl of the Plain sign in Quarry Rd is to lose its population figure and receive a general spruce-up. [spot feathery bill]
Hope signal problems fixed

Syd Brown Mosgiel sign 1Syd Brown, Taieri property developer and ex city councillor/FSD chairman

Related Posts and Comments:
10.2.14 University of Otago major sponsor for Highlanders [rugby, a pool]
5.2.14 Mosgiel pool sluts get their tops off for ex ORFU guy
4.2.14 DCC: Mosgiel Pool, closed-door parallels with stadium project . . .
30.1.14 DCC broke → More PPPs to line private pockets and stuff ratepayers
20.1.14 DCC Draft Annual Plan 2014/15 [see comment & ff]
18.11.13 DCC: New chief executive
16.11.13 Community board (Mosgiel-Taieri) clandestine meetings
7.10.13 DCC councillors, no idea annual cost of owning, operating FB Stadium
23.6.13 DCC Community Boards
21.4.13 Councils “in stchook” —finance & policy analyst Larry.N.Mitchell
6.12.12 Local Government Act Amendment Bill
6.12.12 DCC debt —Cr Vandervis
6.9.12 DCC pays out $millions to cover loss making stadium and rugby…
30.11.11 amalgamation, Anyone?
8.11.11 Development contributions
9.8.11 CRITICAL Dunedin City Council meeting
25.7.11 DCC Finance, Strategy and Development Committee – meeting postponed
16.7.11 Major Dunedin City Council infrastructure assets NOT INSURED
7.7.11 More than $1 billion of infrastructure assets NOT insured
23.3.11 Dunedin City Council’s rock and its hard place

Posted by Elizabeth Kerr


Filed under Business, DCC, Economics, Geography, Hot air, Media, Name, People, Politics, Project management, Property, Site, Sport, Tourism, Town planning, Urban design, What stadium

22 responses to “DCC: Growth v development contributions

  1. Aww, how cute… touchyfeelymosgielsurveyfordeveloperschequebooks

    ### dunedintv.co.nz February 12, 2014 – 6:58pm
    Mosgiel a great place for families
    A recently completed survey has revealed Mosgiel is a great place for families, but it can be a hard one for new families finding their way.

  2. Received from Anonymous
    Thursday, 13 February 2014 9:48 a.m.
    Subject: For “work”, read rates and fees

    Dilbert 13.2.14 [stuff.co.nz cartoons]13.2.14 http://www.stuff.co.nz/blogs/opinion/cartoons

  3. John P.Evans, concerned citizen

    Development contributions are another way of funding DCC staff costs without ANY benefit to ratepayers.

    One notices that all of the benefits that Dunedin has to offer, there is no mention of the distinct negative about Dunedin, the management of the city is peurile, not in the interests of the greatest good for the greatest number and servicing mainly the interests of the employees of the DCC.

  4. People, read ALL of the developer’s comment at Whaleoil (see post at top of thread) – you need to understand what DCC’s up to. And you need to write coherent submissions on ‘Development Contributions’ or be treated like DCC’s BANK yet again…

    ### dunedintv.co.nz February 19, 2014 – 6:21pm
    Development Contributions Policy to be consulted on
    Proposed changes to the Dunedin City Council’s Development Contributions Policy will be consulted on as part of the Draft Annual Plan. The proposed changes aim to ensure developers, rather than ratepayers, pay more of the costs associated with creating subdivisions and constructing new buildings. The DCC said it was aware that its development contributions were much lower than most other large local authorities. The revised policy could contribute between $6.3m and $19.2m over ten years, if adopted. Policy changes would apply to applications for resource consent, building consent or service connections lodged from the 1st of July this year.
    Ch39 Link [no video available]

  5. ”This is another case of stadium-itis. It’s just revenue-gathering.”
    –Pat Cummings, developer

    ### ODT Online Thu, 20 Feb 2014
    Development fee increase proposed
    By Debbie Porteous
    Dunedin developers will pay increased contributions to the Dunedin City Council but ratepayers will not immediately see a reduction in rates increases, under a proposed new allocation of development-related costs.
    Read more

  6. Hype O'Thermia

    Now, I don’t know what Pat Cummings’ stance was – a stadium opponent or one of those who thought it would give the promised returns – but it’s clear that here is yet another quick and accurate diagnosis of its current effects:
    ”This is another case of stadium-itis. It’s just revenue-gathering.”
    –Pat Cummings, developer

    Whatever additional fees, permit costs, new charges are levied by the DCC while they keep rates rises to “only” a little over the rate of most people’s income rises, Dunedin people have at last noticed the effect and cause the “naysayers” tried so hard to communicate, back when the F.U.B.A.R. could still have been avoided.

  7. Robert

    If developers have a problem with being ripped off by having to contribute towards the stadium. Then go complain to their Developer mate who was one of the main supporters of the stadium at the council table.

  8. The development community are certainly not homogenous – a good many of their number (developers and property investors) who opposed the spend of public money for the stadium, or who supported those who openly campaigned against it, are NO FRIENDS OF SYD BROWN, and never have been.

    Needless to say they didn’t respond to Malcom Farry’s clarion call for Private Sector Funding. They know a dog of a business proposal when they see one. The stadium was glaring. What’s more, they had long knowledge of what that particular gentleman and his cronies represented.

    What local developers and property investors didn’t foresee was that DCC – the Councillors – would vote to build the stadium based on piss-poor financial knowledge and accountability.

    We have that in common, I suggest. It comes with a sense of the incredible.
    Doesn’t matter if you have money, credit, assets or nothing.

  9. Peter

    We are now paying the price for not more of these kind of people, with money, for failing to speak up against the stadium for fear of losing business or whatever. Now they are having to pay and, let’s face it, the council has to revenue gouge, where it can, to pay the bills. It’s called facing consequences.
    All set to happen again with oil and gas. Promises promises promises… spouted out by ex and present COC people / ‘financial advisers’, who thought the stadium would be a financial bonanza for the city, plus ‘a city leader’ whose claim to fame is running a little golf course.

    • Peter, what did you think of the developer’s comments at Whaleoil?

      • Hype O'Thermia

        Elizabeth, is this one of the developer’s points you’re referring to?
        “If developer suspicions are right – that Council’s have spent the money already and are trying to get developers to pay for it – then the changes will mean many Councils will have to fess upto their dodgy behaviour and that they have mismanaged rate payer’s money.”

  10. Elizabeth

    Desperate DCC and its Consolidated Debt – this is another (legal) means for the council to make a claim for ‘city growth’ and when the growth does not eventuate the funds accumulated can be used to borrow against. This is a re-financing ploy — not to pay for subdivision infrastructure, but for other unrelated council activities [DCC: “Everyday I’m Shufflin…”]

    There’s nothing that would make me want to build in Dunedin. Not under the present council regime. Full stop.

    Council chief executive Sue Bidrose said the revised policy was expected to contribute between about $6.3 million and $19.2 million to the council over 10 years.

    ### ODT Online Sat, 17 May 2014
    Higher developers’ charges endorsed
    By Chris Morris
    The Dunedin City Council has endorsed a new development contributions regime that will result in developers contributing more to council coffers. Councillors at yesterday’s 2014-15 annual plan deliberations voted in favour of the revised fees, subject to final approval with the rest of the coming year’s budget. The revised policy, which has been under review since 2009, would have a new proposed charge of up to $5300 per section.
    Read more

  11. Elizabeth

    Aside from some areas of Mosgiel, the old policy only charged a development contribution for reserves, of $250 per section, compared with other cities which charged on average about $12,000 per household unit. The council recently adopted a new policy of up to $5300 per equivalent household unit in the Dunedin city area. (ODT)

    ### ODT Online Tue, 8 Jul 2014
    New policy spurs rush of consent applications
    By Debbie Porteous
    A rush to get building projects on the books before increases in development contributions take effect resulted in the Dunedin City Council last month receiving the highest number of resource consent applications for one month. However, council staff say they do not think the rush will translate into a rash of building projects around the city.
    Read more

  12. Elizabeth

    See the ‘Pearl of Plain’ sign at the post at the top of this thread. DCC wrongly looked upon as Santa, again!

    The Mosgiel and Districts Lions Club has applied to the Dunedin City Council for the funding and the outcome of the application is expected to be known tomorrow.

    ### ODT Online Wed, 30 Jul 2014
    Perking up ‘Pearl’ sign
    By Timothy Brown
    All signs are pointing to the future for Mosgiel – at least it is hoped that will be true come tomorrow. The Mosgiel and Districts Lions Club has applied for about $3000 to begin the renovation of Mosgiel’s ”Pearl of the Plain” sign and nearby information kiosk, past president and project convener John Bone says.
    Read more

    Pearl of the Plain (Mosgiel sign) 3

  13. Brian Miller

    The above article is interesting. About three years ago when I was on the Mosgiel Taieri Community Board, there was board money set aside for the above signage. Maybe the board chair Bill Feather could tell us just what happened to that money?

    • Elizabeth

      Presumably, Brian, the sum set aside back then was funding received by the community board from DCC. In which case an LGOIMA request worded in such a way as to prevent ratepayers paying twice is for the public good. And Mr Feather, the current board chairman, owes all ratepayers a public explanation.

  14. Elizabeth

    ### ODT Online Wed, 17 Dec 2014
    New policy on remissions
    By Debbie Porteous
    The Dunedin City Council is to adopt a new process to deal with requests to not pay some or all of required development contributions. The council’s new development contribution policy, which came into force on July 1, required the full council to make decisions on all requests. The council has now agreed to devolve the decision making, depending on the scale of the request being made, to create a more practical process.
    Read more

    Report – Council – 15/12/2014 (PDF, 119.4 KB)
    Development Contributions – Hearings Process

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