Financial Contribution Policy

As part of the Draft Long Term Plan 2015-2025 public consultation, Council asked the community for its views on whether to keep, change or cancel the 2012 Development Contributions Policy.

Community feedback showed contributions were a disincentive to business and residential development. Council also took into account the cost of administering the policy.

Following submissions, Council decided to cancel its 2012 Development Contributions Policy and to no longer charge Development Contributions.

Instead the Council decided to adopt a Financial Contributions Policy that would enable it to charge Financial Contributions on developments in growth areas that require resource consent.

No, a District Plan Change has to be completed before the policy can be implemented. Council hasn’t yet proceeded with the Plan Change because changes to the Resource Management Act were made to phase out the use of Financial Contributions by 2022.  Council is currently awaiting the progress of new changes to the Resource Management Act that would enable Financial Contributions to be used beyond 2022 before deciding to proceed with the plan change.

In 2018, Council’s Strategy Committee again considered the need for development contributions. The committee found that Horowhenua has enough unused infrastructure capacity to accommodate growth in most cases. For developments that need an infrastructure upgrade, Council has other tools to obtain a contribution from the developer, such as Private Developer Agreements.

If a large development is proposed that requires Council to build new infrastructure or upgrade current infrastructure, Council has the option of entering into a Private Developer Agreement with the developer.

In general, yes. Developers pay for the infrastructure they require for their development, and the cost of connecting it to Council’s networks.

Once that infrastructure is connected, and Council is satisfied with the quality of the infrastructure, the developer vests the infrastructure with Council.

Essentially, ownership is transferred to Council and Council becomes responsible for maintenance and replacement at the end of the asset’s life.

The vesting of assets is accounted for in Council’s Annual Report as a non-cash item – the annual report shows the value of the infrastructure and it is itemised as a cost, even though no money changes hand.

Once vested in Council, the new infrastructure is included in Council’s planning and budgets – so if the asset is damaged or it comes to the end of its expected life then Council will either repair or replace it.

Yes. All councils are required by law to have either a Development Contributions Policy or a Financial Contributions Policy. Horowhenua and several other city and district councils have chosen to not have Development Contributions.