Facing a debt of nearly $11 million, the Southland District Council needs to review its mothballed developer contribution policy, Southland District councillor Matt Wilson said.
Cr Wilson said the council did not require financial contributions from developers because it wanted to promote growth in the regions.
But developers had made a lot of money as towns such as Lumsden grew, he said.
The contributions policy was put into general remission 10 years ago to encourage development in the Southland district, which was said to ultimately benefit the community as a whole.
Gore was the only Southland municipality collecting developers’ contributions.
According to Statistics New Zealand, in the past 10 years, 1262 new homes were built in the Southland District Council catchment while Invercargill built 1541.
Mr Wilson said some townships’ infrastructure had not kept pace with its development, leaving ratepayers to pick up the bill on infrastructure upgrades.
"We might need to have just another look to check that we’ve got that right and that we’re getting equitable outcomes, rather than encouraging growth, but putting the burden on existing ratepayers."
But he was told by the council the policy should be reviewed during the long-term plan process, three years away.
"Now the long-term plan is done, we can really drill down into some of these things."
He thought discussing the issues in the "downtime" rather than as part of a cyclic process would be more productive.
Mr Wilson said the Beyond 2025 plan identified Riverton and Lumsden as experiencing high growth and opportunity.
But their infrastructure had not kept pace with developments.
Growth had created stormwater issues which needed to be addressed, he said.
"However, that shouldn’t be put on us to pay for."
He said it should have been forecast and funded by the developers who were probably making a lot of money by realising the opportunity of the growth.
Lumsden’s stormwater project had been regularly deferred since 2015.
"This has been deferred so much that the long-term plan it originated off ... has already been and gone, that’s 10 years and it still hasn’t been done and still hasn’t been prioritised.
"At least do the investigation because while you defer this.
"I can point on a map to houses that are flooding when there’s a big downpour."
Jennian Homes spokesman Aidan Jury said property developers could pay contributions of between $50,000 and $80,000 per house to some councils, or up to 20% of the initial purchase price of the subdivision.
The no-contribution policy was great for developers.
"I can’t see how Invercargill or Southland will get away [with it] for too much longer without having to pay for development contributions in arrears to fund your infrastructure pressure.
"It can’t last because of your growth in that market."
Like it or not, the levies replacing developer contributions were coming, he said.
"It has to, because it’s not fair in my opinion that the ratepayers pick up the cost on all the additional pressure that’s going on in infrastructure, because eventually future bills are paying for infrastructure costs in arrears."
Under the present system, contributions could be assigned to other council projects, he said.
"A developer contribution is supposed to go to pay for parks and recreation, the quality of the environment you’re living in, and paying for the infrastructure, i.e. the major pipe work in the ground that you’re connecting into."
He said it was normal practice for developers to pay for water services, electricity and pipes which was gifted to the council.
But the Resource Management Act reforms would introduce a levy from 2027, requiring developers to provide enough infrastructure for 30 years’ growth, Mr Jury said.
— Toni McDonald
