Proposed Policy changes
Proposed changes to the Significance and Engagement Policy
The Council is proposing to make minor changes to its Significance and Engagement Policy. This policy was initially adopted by the Council as part of the 2015-2025 Long-Term Plan, and reviewed as part of the Long-Term Plan 2018-2028 process.
All councils are required by the Local Government Act 2002 to adopt a Significance and Engagement Policy, which must set out how they determine the significance of proposals and decisions relating to issues, assets and other matters, and how they will engage and consult with communities on significant matters.
The changes proposed are not substantive and do not alter the intent of the policy. They include removing some non-critical matters and matters of technical detail; and removing matters which are covered elsewhere, for example in legislation or other policies.
The alternative option is to leave the policy unchanged. This is a feasible option, but is not preferred by the Council as it would be a missed opportunity to make the policy easier to understand.
Proposed change to the Revenue and Financing Policy
The Revenue and Financing Policy sets how the Council uses its various sources of income (including rates, user charges, subsidies and development contributions) to fund its activities. It explains the reasoning behind its choices based on the legal framework established by the Local Government Act 2002. This framework takes account of why the Council provides the service, who benefits from the activity, who creates the need for the activity and the overall impact of its funding approach on the well being of the community.
The Council is proposing one change to the Revenue and Financing Policy. This is to increase the proportion of funding for the Building Control activity funded from user charges from ‘medium/high’ to ‘high’. This is from the range 60-79% of costs to the range 80-100%. As a consequence of this, funding required from general rates will fall from the current 20-39% to 0-19%.
This proposed change reflects that the majority of benefits from this activity are received by those applying for building consents, whilst still allowing for some funding from general rates to take account of the broader public benefits of this activity. This change also reflects the high level of building work in the district which has increased the scale of the Building Control function, and without this change the activity would require an increasing level of funding from general rates. By way of illustration, the Building Control activity costs about $8.5 million per year and therefore funding each 1% of costs requires income of $85,000.
The alternative option is to leave the policy unchanged. This would mean a lower increase in user charges for this activity and an increase in the amount of general rates funding required for this activity.
Proposed changes to the Development Contributions Policy
The Development Contributions Policy determines how much land developers should pay towards the cost of providing the additional community facilities required to meet the demands of population and economic growth. This includes including roads, water systems, wastewater systems, stormwater systems and reserves.
The main changes proposed are:
Expansion of the Eastern Selwyn Sewerage Scheme catchment area (Section 4)
The existing Eastern Selwyn Sewerage Scheme (ESSS) serves the townships of Rolleston, Lincoln, Prebbleton, West Melton and Springston. The existing Ellesmere Sewerage Scheme serves the townships of Leeston, Southbridge and Doyleston. The planned connection of the Ellesmere Sewerage Scheme, as well as the Malvern townships of Darfield and Kirwee, to the ESSS will create the Selwyn Sewerage Scheme.
The total capital cost of the scheme over 30 years is $233 million. This includes:
- the existing deficit balance on the ESSS development contribution account (this deficit reflects the remaining scheme capacity that will be absorbed into the expanded Selwyn Sewerage Scheme);
- the staged expansion of the wastewater treatment plant;
- the construction of pipelines, pump stations and associated works;
- the purchase of additional land for the expansion of the treatment site; and
- interest costs.
The total costs will be funded proportionately as follows:
The development contribution payable per Household Unit Equivalent within the expanded catchment area will be $5,464 (including GST) in 2021/22. This is lower than the existing development contributions for sewerage for both the existing Ellesmere Sewerage Scheme and the ESSS.
The creation of the Selwyn Sewerage Scheme will also bring benefit to the existing communities of Leeston, Southbridge, Doyleston, Darfield and Kirwee. The proportionate cost of connecting these existing communities equates to 17% of the total scheme cost and will be funded from other sources of revenue including rates and Government grant.
The alternative option to expanding the ESSS catchment area is to have three separate catchment areas; ESSS, Ellesmere and Malvern. The development contributions payable for the three separate catchment areas for 2021/22 compared with the expanded catchment area are set out below.
|Catchment area||Development contribution payable - separate|
catchmemt areas 2021/22
$ (including GST)
|Development contribution payable - single|
catchmemt areas 2021/22
$ (including GST)
Although the alternative option is feasible, it makes sense to have a single catchment area as the scheme becomes a single integrated scheme. Applying separate catchments will not reflect the practical reality of each catchment being serviced by a single integrated sewerage scheme. This is consistent with the approach that was taken when the Eastern Selwyn Sewerage Scheme was created and the previously separate township based catchments where brought together to reflect the new integrated scheme. The amount of development contributions payable are lower than the existing sewerage development contributions and this will encourage continued growth across the district.
Adjustments to the amount payable in respect of other development contributions (Table1)
Development contributions have been adjusted to reflect the Council’s updated assumptions on growth, capital expenditure, interest rates and inflation in its draft Long Term Plan.
The alternative option is to leave the development contributions at the existing level, or increase them by an inflation index. In both cases this would mean the development contributions are inconsistent with the Council’s Long Term Plan and would potentially shift the burden of cost between developers and rate payers in a manner that is inconsistent with Council policy and legislative requirements. This option is not feasible.
Inclusion of an increase in the Household Unit Equivalent for large residential properties (Section 3)
Large residential properties are defined as having four or more bathrooms (including ensuites). The Household Unit Equivalent assessment for these properties would be increased by 0.25 for each bathroom (including ensuites) greater than three. For example, this means a property with five bathrooms would be treated as equivalent to 1.5 Household Unit Equivalents, effectively paying 50% more than a typical residential property.
The aim of this proposed change is to reflect the increased demand placed on community facilities by larger properties that are typically occupied by a larger number of people.
The alternative option is to not make this change and not make a distinction in the amount of development contributions payable for larger properties. Although this is feasible it would continue the inequity whereby very large properties which are likely to have a larger number of occupants make the same contribution as more typical properties.
Administrative changes for reserve development contributions (Section 7)
Minor administrative changes are proposed to simplify the administration of reserve development contributions. Such contributions can result in complex calculations as they may involve credits for vested reserves and may involve multi-stage subdivisions. The proposed changes are:
- simplification of the calculation of reserve development contributions payable for multistage subdivisions;
- clarification of the applicable date for the valuation of land to vest as reserves; and
- clarification of the proportion of land value available as a credit towards reserve development contributions.
The alternative option would be to leave the existing policy as it is in respect of these matters. This is feasible but would mean the opportunity for simplification and clarity is missed.
Proposed change to the Rate Remissions Policy including Māori Freehold Land
This policy sets out the remissions available from payment of some rates for certain parties, or in certain circumstances. The policy has been amended to include an additional remission.
Remission on rating units as a result of a pandemic or other similar event
This change will provide authority for the Group Manager Organisational Performance to develop a temporary rates penalty remission policy in response to a pandemic or other similar event affecting rating units in the Selwyn District. The nature of the penalty remission will depend on the nature and extent of the event. The reason for the proposed delegation to the Group Manager Organisational Performance is to allow for a quick response at a time when normal Council business practice may be either too slow or disrupted. The remission is limited to penalties and any broader rates remission would require the usual Council and consultation process.
The alternative option is to leave the policy as it is. This is feasible and still allows for flexibility as the policy does include a more general provision for the Manager to remit penalties ‘where it would be reasonable to do so’. It is however preferable to have a more specific delegation given our recent experience of the Covid-19 pandemic.
Proposed Rates Postponement Policy
This policy will allow ratepayers (usually those aged over 65) to postpone paying their rates by placing a charge over their property. This is similar to a reverse mortgage. The rates will usually be paid when the ratepayer ceases to be the owner of the rating unit. The policy has specific eligibility criteria and is designed so that it does not place additional costs on other ratepayers. The advantage of the proposed policy is that it provides an option to some ratepayers that may otherwise struggle to pay their rates. It is however a big decision to take and the policy therefore requires an applicant to obtain independent advice from an appropriately qualified and trained person before entering into a rates postponement.
The alternative option is to not have a rates postponement policy. This is a feasible option and the Council has not had such a policy in the past. However, it means that we will not be able to offer ratepayers an alternative approach to meeting their obligation to pay rates.
Lump Sum Policy
The Lump Sum Policy allows ratepayers to make a lump sum payment rather than pay an annual targeted rate in certain circumstances. This may apply when the Council is providing new infrastructure to a community that will be funded by an annual targeted rate over a number of years. The policy has been place since 2004 and we are not proposing any changes to the policy.