Government change would hurt ratepayers

Vanessa Van Uden
Vanessa Van Uden
Queenstown Lakes ratepayers will have to make up the shortfall if Government changes mean the council can no longer levy development contributions for community infrastructure, Mayor Vanessa Van Uden says.

She said the Local Government Amendment (No 3) Bill, introduced to Parliament, proposes to remove a long-standing source of revenue for councils which could result in ''significant'' rates increases in some parts of the district to offset loss of revenue.

The council had assessed the impact of the proposed legislative changes could be an average rates increase of 5.7%.

Under the Bill, councils would no longer be able to levy development contributions for community infrastructure, other than public toilets, playgrounds and community halls, the mayor said. Other forms of community infrastructure, such as libraries, parks and sporting facilities, will have to be funded from alternative sources, primarily rates.

''In a high-growth community like ours, developers have quite reasonably been required to make contributions to offset the financial impact their development has on the district.

''For example, a 250 house subdivision has infrastructure impacts such as new footpaths; increased water and sewerage capacity and increased maintenance of roads.

''But population growth also means we have to invest in additional community infrastructure, such as increased library capacity, new parks, sports fields and other recreational needs.''

The mayor said it made no sense to say the cost of new playgrounds could be funded from development contributions but sports facilities could not.

''The reality is that, while we welcome development and the growth that it generates, existing ratepayers should not have to foot the bill for new costs created by developers,'' she said.

In the past five years, rates have comprised only 55%-60% of the district's total revenue and development contributions have comprised 10%-20% of total revenue.

Ms van Uden said the greatest impact would be on key pieces of community infrastructure, in particular the Queenstown Events Centre (QEC) and the proposed Wanaka sports facility, which were budgeted on the understanding development contributions would form part of the funding, ''but this will not be the case under the proposed changes''.

''As a consequence, ratepayers will have to pay more to continue to enjoy the same services, in the case of QEC, or to have a new facility, in the case of the Wanaka Sports Facility.''

The mayor said the council would be supporting a submission from Local Government NZ against the changes, as well as making its own submission, and encouraged ratepayers to raise concern by submitting to the select committee themselves.

''Our message is simple - if you don't want to pay more as a ratepayer for existing or future community infrastructure, then you need to make your views known.''


Levy from whom?

OK, so councils wouldn't be able to "levy development contributions", I get that. And "developers have quite reasonably been required to make contributions to offset the financial impact their development has on the district." But developers develop, then sell to people who then pay the rates on the property that has been developed. Is the levy a one-off (which must increase the price paid by whoever buys the property) or is it attached to the property for years to come? If so this means those ratepayers pay extra, year after year. Does this levy apply to people who buy run-down housing and flatten it to rebuild on the sections, and those who build on what has been farmland? Does it also apply to those who re-develop historic buildings, with earthquake strengthening and modernisation of the facilities to suit today's market?

Another thing concerns me, and that is the danger of pinning large projects on hoped-for money taken from developers. These are mobile characters, when one town or one council proves to be a pain (or too expensive, or slow) to work with they tend to look for a workable opportunity somewhere else. Councils have a poor record of ever saving up ahead, to spend on a non-essential. Ours has not even done well in putting aside money for totally vital core business, e.g. replacement of ancient drains. Someone out there is sure to understand this issue better than I do. I hope that a fuller explanation leads to less, rather than more, reason to worry.

Don't burden ratepayers

No way should ratepayers be responsible for paying totally for the infrastructure required for developers' projects, like subdivisions for instance.  Developers need to factor these costs in when they sell their sections or developments.  If the figures don't stack up, don't develop.  Wanaka already has a great number of unsold sections and developers don't need to forge ahead developing even more at ratepayers' expense and for their profits.

Also, as far as the Wanaka sports facility is concerned, the Council needs to bear in mind that it would not be fair to burden ratepayers with increased rates so that this facility be pushed ahead when a cheaper option is available and preferred by many. Remember that Callum McLeod was elected with a sizeable majority to Council on this ticket. Yes, a new sports facility is desirable but not at any cost.  Although the sports facility has been given the go-ahead by the Council, please don't rush in and don't assume that the bill won't be passed.  I urge the Council to keep in mind the folly of the Dunedin white elephant Stadium to which we all will contribute to for years to come. The proposed new legislation is a wake-up call. Do the maths!