Fee refund possible for developers
Hamilton City Council has signalled a backtracking of sorts on the issue of development fee refunds.
A group of 19 businesses are pursuing a judicial review of the council’s development contributions policies. Their case, which is being heard in the High Court at Hamilton, argues a disproportionate amount of the cost of new infrastructure in the city is being loaded onto those who have to pay development contribution fees.
The development contribution, known informally as a DC, is a levy charged on a new development and is one of the main tools available to councils to help them fund infrastructure needed for growth. Councils’ other sources of funding include debt and rates.
Counsel Lachlan Muldowney, acting on behalf of the city council, said development contributions were assessed on water, stormwater, wastewater, reserves and transport activities, and were based on best estimates.
‘‘They are based on modelling and demand assessments,’’ Muldowney said.
‘‘This is the point, this whole [DCs] regime is based on assumption, laidon assumption, laid-on assumption.’’
Capital expenditure ‘‘that starts the ball rolling and finds its way into the schedule of assets’’ was also based on estimates, in terms of its cost and timing.
‘‘Everything is an educated guess, trying to approximate and to get as close to reality as possible, and that’s the regime that we are working with, and that’s what this policy achieves,’’ Muldowney said.
There were occasions when DCs were charged for a non-residential development but those fees were based on a building with an assumed gross floor area (GFA) which was larger than what was actually built, he said. Currently, the council did not issue refunds on those DCs and instead offered a credit that could be applied to that site.
However, the council is reviewing its development contributions policies and, pending the approval of city councillors, its plan is to remove the ‘‘no-refund element’’.
‘‘The city says its intention is to be more flexible in terms of the site refund point and if a developer wants to get its money back, it can elect to do so, it will be paid back,’’ Muldowney said. ‘‘Council wants to be more flexible and is prepared to accept that the policy needs changing.’’