Description: COAT-ARM Hastings District Council


Civic Administration Building

Lyndon Road East, Hastings

Phone:  (06) 871 5000

Fax:  (06) 871 5100










Commissioner Hearing MEETING


 Development Contribution Objection - Jara Family Trust


Meeting Date:

Tuesday, 28 November 2017




Landmarks Room

Ground Floor

Civic Administration Building

Lyndon Road East




Hearing Commissioner

Chair: Commissioner Paul Cooney

Commissioner Helen Atkins and Commissioner Brian Hasell

Officer Responsible

Chief Financial Officer – Bruce Allan

Committee Secretary

Carolyn Hunt (Extn 5634)


TRIM File No. CG-14-21-00039





A Commissioner Hearing MEETINg will be Held in the Landmarks Room, Ground Floor, Civic Administration Building, Lyndon Road East, Hastingson

Tuesday, 28 November 2017AT 9.00am




1.       Apologies 

2.       Irongate Road East, Hastings Lot 2 DP 3067 (CFR) H4/1146)

Documents circulated for Hearing - Compiled as One document

Document 1       The covering administrative report                                                             Pg 1



Irongate Industrial Map


Pg 17


Scheme Plan


Pg 19


Minutes of Landowners Meeting held 24 June 2016


Pg 23









The Application and Submissions can be viewed on the Council website and a reference hardcopy is held at the Council Civic Administration Building.


The associated web site link is




File Ref: 17/1219



REPORT TO:             Commissioner Hearing

MEETING DATE:       Tuesday 28 November 2017

FROM:                       Financial Policy Advisor

Ashley Humphrey

SUBJECT:                 Irongate Road East, Hastings Lot 2 DP 3067 (CFR) H4/1146)        




1.1     An objection to a Development Contributions Assessment has been lodged with the Hastings District Council (HDC or Council) by Jara Family Trust (Jara or the objector).  The objection relates to the development contributions assessment issued on 9 August 2017 in relation to subdivision consent RMA20170079.


1.2     This report outlines the basis for the assessment generated and addresses the points raised by the objector in its objection and in the statement of evidence from John Alan Roil dated 7 November 2017. It concludes with the view that:


A)   the assessment issued has been generated in accordance with HDC’s 2016/17 Development Contributions Policy (DCP), and


B)   HDC rejects those points raised in the objection and believes the contribution should be paid in accordance with the Local Government Act 2002 (LGA 2002).




          The Land


2.1     Jara Family Trust is the registered owner of Irongate Road East, Hastings (Lot 2 DP 3067 / CFR H4/1146). The site consists of 4.98ha of land and prior to development, was predominately used for horticulture / farming purposes.


          The Development Contributions Policy and the Irongate Industrial Catchment


2.2     HDC first introduced its DCP in July 2007 in accordance with the relevant provisions of the LGA 2002.  In accordance with that Act, the purpose of the DCP is to recover from those undertaking developments, a fair, equitable and proportionate share of the costs of capital expenditure necessary to service growth. In general, the policy was established using a mainly district wide approach, to set and recover development contributions. 


2.3     Following consultation, Council adopted an amended DCP in 2010, which included the creation of specific local catchments for the proposed industrial areas at Irongate and at Omahu. This has enabled and will enable Council to recover the capital costs associated with growth development in the Irongate Industrial Area, from those landowners / developers benefitting from, and creating the need for, the infrastructure assets required to accommodate that growth.


2.4     The capital expenditure costs being recovered through the Irongate Industrial Area relate primarily to the physical works proposed within the catchment area. A decision to exclude a share of the wider network growth-related costs was made by Council at the outset in order to allow for a lower DC rate for Irongate.


2.5     In May 2011, Irongate was formally rezoned for industrial purposes under Plan Change 50. The objector’s land forms part of the 71.5ha of land that was rezoned.


2.6     To minimise the exposure to Council, the development was proposed over two stages, 35.3ha Stage 1 and 36.2ha Stage 2. Each stage was anticipated to provide 10 years growth. Council’s DCP in place at that time was to recover contributions on a Gross Floor Area basis with a contribution of approximately $273,000 (excl. GST) per ha based on a 2500m2 GFA building.


2.7     Concerns were raised by land owners around servicing options and the quantum of development contributions, and in 2015, Council commissioned a review of the services through BECA and PwC. The BECA report concluded that the level of service for the provision of reticulated infrastructure to service Irongate was appropriate and that the costs associated with providing the services was also appropriate.


2.8     With land owners concerns still evident, in March 2016, Council formally resolved to proceed with Variation 2 that would a) remove the need to connect to a Council reticulated scheme for Stormwater, b) remove staging and deferment and c) increase the area by an additional 46.9ha. A map showing the current area and proposed additional area is attached under Attachment 1.


2.9     Workshops were held with land owners in February and May 2016 who were supportive of Council’s approach and also receptive to a proposed change in how the DC was recovered, moving from a per m2 Gross Floor Area Basis to a per m2 of Land Area basis.


2.10    Following consultation, Council amended its policy to reflect a) remove the need to connect to a Council reticulated scheme for Stormwater, b) remove staging and deferment, c) update the budgets that underpin the DC calculation, and d) change the basis for recovering the DC from m2 GFA to a per m2 of land area. As concerns were raised around DC’s and other stipulations under which development was allowed to occur by land owners whose land formed the additional 46.9ha, no change was made to land area at this point. The rates per m2 of land set under council’s DCP Schedule of Fees & Charges is based on a capital expenditure of $7.855m before interest and inflation, servicing the total Plan Change 50 area of 71.5ha of industrially zoned land.


2.11    Council is currently working through resolving a number of appeals to the variation which include requirements around the maximum building height, setbacks, servicing, and the minimum site size. Council has signalled its intention to revise its Schedule of Fees & Charges and DCP (which would factor in the additional 46.9ha) once all matters relating to the appeals are resolved.


2.12    Whilst additional infrastructure is envisaged, the additional area now likely to be included in the zone is likely to result in an overall reduction in the DC rate per m2. This is noted in Council’s DCP under Section 4.6.  Jara was advised of this in the assessment letter issued on 9 August 2017 and in subsequent email correspondence. If a revision results in a development contribution rate that is lower than the development contribution paid, a refund of the difference will be made to the person who has paid the development contribution.


2.13    Until any revision is formally adopted by Council, the current Schedule of Fees and Charges and 2016/17 DCP applies to any development.


          The Application for Subdivision Consent


2.14    Subdivision consent was sought by Jara to subdivide its land at Irongate Road East, over two stages, into four industrial lots intended for development. The Scheme Plan is attached under Attachment 2.

·    Stage 1

Lot 1 of 1ha in size

Lot 2 of 3.687ha (balance lot)

Lot 5 of 1608m2 (to vest as Esplanade Reserve)

Lot 6 of 766m2 (to vest as Bed of River)

Lot 7 of 622m2 (to vest as Esplanade Reserve)


·    Stage 2, being a subdivision of the balance lot (Lot 2, above)

Lot 2 of 1ha

Lot 3 of 1.241ha

Lot 4 of 1ha

Lot 5 of 4460m2 (to vest as Road)


          The subdivision consent was approved under the Resource Management Act 1991 by Council.


          Assessment of Development Contributions


2.15    The resource consent approval triggered a requirement for Council to undertake an assessment of development contributions in accordance with 6.1 and 6.1.2 in the 2016/17 DCP.


6.1 Timing of Development Contributions




Under Section 202 of the LGA 2002, Council can apply a development contribution upon the granting of:


A resource consent (subdivision or land use)

A building consent

An authorization for a service or infrastructure connection.

In the case subdivisions, in the majority of applications, contributions will be collected at subdivision consent stage. Council considers that the subdivision consent stage is generally the most appropriate stage to take a development contribution …


Table 6.1.2   Timing of Development Contributions Milestones – Residential and non-Residential Applications


Timing of Action

Assessment of the Development Contribution

Upon granting:

1.         Subdivision Consent

2.         Land Use Consent

3.         Building Consent (Including Certificate of Acceptances)

4.         Authority to make service or infrastructure                    connection

Payment of the Development Contribution

1.         Before issue of 224 Certificate; or

2.         On issue of Code Certificate Of Compliance; or

3.         On issue of an authority to make service or infrastructure connection.


2.16    The land, situated at Irongate Road East, is to the south of Hastings City and lies within Map 10 Irongate Industrial Catchment as identified in the 2016/17 DCP.  The costs of providing infrastructure to support development in this area have been ring-fenced.


2.17    The consent conditions stipulate that the development is required to connect to council reticulated services (water and wastewater). The development will be required to address all stormwater matters onsite.


2.18    There is a causal nexus link between this development (and others cumulatively within the catchment area) and the infrastructure being provided, for which the development contributions are required.


2.19    An assessment of the contributions for roading, wastewater and water infrastructure in respect of both Stage 1 and Stage 2 of the development was generated in accordance with Section 4.6 of the 2016/17 DCP which states that:

“The assessment will cover development contributions in respect of Roading, Wastewater and Water Infrastructure services calculated on the land area of the site being developed.”


2.19    Each assessment was generated using the Schedule of Fees and Charges as outlined in Table A-2 in Appendix A of the 2016/17 DCP:





DC per m2 Of Land

(Excluding GST)

DC per m2 of Land

(Including GST)







Water Supply





2.20    For Stage 1, an assessment in respect of Lot 1 (1ha) only was generated. No assessment was generated in relation to the balance lot (Lot 2), which was the subject of the Stage 2 assessment (see below), nor Lot 5, Lot 6 and Lot 7 which are intended to be vested in Council and not developed.


2.21    For Stage 2, a cumulative assessment in respect of Lot 2 (1ha), Lot 3 (1.241ha) and Lot 4 (1ha) was generated. No assessment was generated in relation to Lot 5 which is intended to be vested in Council and not developed.


2.22    The assessments and invoice for Stage 1 were formally issued to Jara on 9 August 2017. 


2.23    Under section 199C of the LGA 2002, Jara formally objected to the development contribution assessment issued on 23 August 2017, within the required timeframe.




3.1     The permissible scope of a development contribution objection is set out in section 199D of the LGA 2002. An objection to a development contribution may be made only on the grounds that the territorial authority has: 


a)       failed to properly take into account features of the objector’s development that, on their own or cumulatively with those of other developments, would substantially reduce the impact of the development on requirements for community facilities in the territorial authority’s district or parts of that district; or


b)       required a development contribution for community facilities not required by, or related to, the objector’s development, whether on its own or cumulatively with other developments; or


c)       required a development contribution in breach of section 200; or


d)       incorrectly applied its development contributions policy to the objector’s development.


3.2     Four main points are raised in the objection.  These are related to matters around:

·        Interest costs

·        Roading costs

·        Water

·        Fairness, equity and proportionality under ‘Closing Comments’.


3.3     The statement of evidence of Mr Roil dated 7 November 2017 expands on these grounds.  Many of the matters raised in the objection and in Mr Roil’s evidence are not available grounds of objection.  By responding to those matters the Council is not to be taken as accepting that they are properly the subject of an objection under the LGA 2002.




4.1     The objector raised a number of issues in their initial objection and clarified their concerns in their brief of evidence, which could be claimed to relate to grounds 3.1a and 3.1b. The following outlines Council’s response to those points raised.

          Interest Costs

          The objector believes the interest cost component of the development contribution is disproportionate and unfair, and should not be applied to those developing in the early years of the lifetime of the project.


4.2     Council does not agree that the interest component of the development contribution is disproportionate and should not be applied to those developing in the early years of the lifetime of the project. 


4.3     First, the objector’s calculations around the Year 1 interest component for all activities are incorrect as it has started by incorrectly calculating the rate per m2 by dividing the $7.855m capital expenditure cost by an area of 100ha. The 2016/17 Policy and Schedule of Fees and Charges is based on servicing an area of 71.5ha over a 20 year period. The following is taken from 4.6 of the 2016/17 DCP which outlines the basis for the current calculation.


The basis for the calculation under this schedule of charges is a developable area of 71.5ha of land which reflects the current District Plan.


4.4     Council has referenced 100ha in the policy as the potential extent of the area to be zoned under Variation 2. Upon resolution of the Variation 2 appeals, Council has signalled its intention to revise and update its DC rate to encompass both any additional servicing costs and the increased area. However, the current policy basis is presently 71.5ha.

4.5     By dividing the capital expenditure by 100ha, the objector has significantly overstated the interest component of the DC rate as being $4.84 per m2. The correct portion of capital expenditure and interest for those developing in Year 1 for each activity is listed below, on a per square metre basis (excl. GST):



Cost / Area = Rate per m2

Interest Component

DC Policy Rate


$4.199m / 71.5ha = $5.87






$1.282m / 71.5ha  = $1.79






$2.373m / 71.5ha = $3.32














4.6     Council does not believe that the interest component in Year 1 is disproportionate.


4.7     Secondly, the LGA 2002 makes provision for councils to recover the total cost of capital expenditure which may (and in most cases, will) include an interest component.  When taking into account the different timeframes of all developments, applying a portion of the interest cost to those developing in Year 1 is not unfair nor an unreasonable approach. Early development triggers the requirement for Council to invest in the infrastructure to which the charge relates, and Council will start to incur interest costs.  If Council was to remove the interest component from early developments, then all of the interest costs would need to be passed on through a higher development contribution for land owners within the catchment who do not develop until later.  Those later developers could well argue that they should not have to pay interest costs incurred merely because some developers required the infrastructure earlier than they did.


4.8     There is also the fact that the earlier developers will have had the use and benefit of the infrastructure over a longer period, and the later developers will have less use and benefit, particularly as the infrastructure approaches the end of its design life.


4.9     It should be noted that those developing in Year 1 do receive a somewhat discounted rate in so far as they will pay a lower rate per m2 of land than those developing in later years. The Year 1 rate ($12.70m2) that is set in Council’s DCP, has been modelled to allow for an ‘inflationary adjustment’ for future years.  Council intends to update its Schedule of Fees & Charges annually with the new rate, or add a table upon its next revision outlining the rates for the next three years. This ‘adjustment’ has been communicated to landowners previously through various workshops.


4.10    The following table shows the level of development contribution forecast to be required each year. Through the adjustment, those developing in later years will indirectly be required to pay a greater share of the interest cost. 



4.11    Council intends to monitor all of its assumptions including interest rates over the lifetime of the project, and intends to revise its future development contribution calculation where required, to ensure it does not under or over recover contributions over the lifetime of the project.


4.12    Council considers it reasonable and fair that all developments within the Irongate Industrial area pay a share of the interest cost incurred over the lifetime of the project.



          Roading Costs

The objector believes that as the intersection upgrades (roundabouts) for Irongate Rd and York / Maraekakaho Rd are not required until 2030, and as they fall outside the Council’s 10-year LTP, they should be excluded from the calculation. The objector believes that with a reduction in speed limit, some of the proposed works (including Maraekakaho Road widening and proposed roundabouts) are not required. The objector notes that LTNZ are only making a small contribution towards the cul de sac costs ($50,000).


4.13    The current development contribution calculation has been set based on a budget of $4.2m, to specifically cover the following works:


·        T-intersection at Irongate Rd (modelled to commence in 2018/19)

·        Upgrades to Irongate Road including a cul de sac (modelled to commence in 2018/19)

·        Upgrade from a T-intersection to a roundabout at Irongate Rd, (modelled to commence in 2030/31) 

4.14    The objector makes reference to works that are not part of the current policy calculation. The current policy calculation does not include any costs relating to the York / Maraekakaho Road roundabout nor the Maraekakaho Road widening. These works specifically relate to additional infrastructure that would be required to support the wider variation development area (100ha), once appeals are resolved.  They are not within the scope of infrastructure projected to service the 71.5ha. While Council’s Program of Capital Works could have been more detailed, a number of workshops have been held with land owners which have outlined the scope of the infrastructure servicing requirements for both the current 71.5ha area, and the proposed 100ha Variation 2 area should it be adopted.


4.15    During the design stage, Council engaged Stantec (previously MWH) to independently undertake detailed traffic data analysis to support the proposed programme of works. With regards to the above programme of works, they were firmly of the view that a reduction in the speed limit would not remove the need for a roundabout at Irongate Rd / Maraekakaho Road, and they reiterated their view in a workshop held with Irongate land owners in September 2017. 


4.16    The capital expenditure associated with an upgrade from a T-intersection to a roundabout at Irongate Rd is contained within Council’s 2015-25 LTP being forecast to be undertaken in 2021/22 and 2022/23. However, since the 2015-25 LTP was adopted, more detailed design estimates have been provided and these estimates ($4.2m) were used for setting the DC rate in Council’s 2016/17 DCP.


4.17    The current calculation is modelled on the upgrade from a T-intersection to a roundabout at Irongate Rd / Maraekakaho Road commencing in 2030/31, although the actual timing of the work is somewhat fluid, as the traffic modelling has identified that the upgrade will be required once 36ha of development has occurred.


4.18    Deferring the upgrade to 2030/31 was very optimistic considering likely uptake rates. There is every likelihood that the work will be required much sooner, and well within the 10 year LTP. For the purpose of modelling and setting its DC rate, given the fluidity of uptake rates, Council made the decision to leave the timing of this particular work in 2030/31 and review its policy as actual uptake information becomes available. Bringing forward the upgrade works would result in higher interest costs being incurred which would be reflected in a higher DC rate.


The objector argues that the assessment does not align with Council’s development contribution policy.


4.19    The objector implies the water component is incorrectly set, however the assessment issued ($43,600 per ha or $4.36 per m2) aligns with council’s Schedule of Fees and Charges as set out in its 2016/17 DCP.

4.20    The objector uses an incorrect figure of $23,700 per ha or $2.37 per m2 of land area as a figure that should be assessed for water, however this has been incorrectly calculated using the proposed Variation 2 area, refer to paras 4.3 to 4.5 above.


4.21    It should be noted that none of the wider district water costs have been included in the Irongate Industrial rate. A decision to exclude the wider network costs was made by Council at the outset in order to set a lower DC rate for Irongate land owners.


          Budgetary Misalignment between Council’s LTP and DCP Policy


          The objector focuses on differences between the budget information contained within Councils 2015-25 LTP and the 2016/17 DCP as additional capital expenditure which is unexplained and doesn’t relate to their development.


4.22    The budget information contained in the 2015-25 LTP was based on servicing 35.3ha of land under Stage 1 only. Following consultation a number of changes including changes to the budget were made to Council’s DCP from July 2016. The capital expenditure costs listed within the 2016/17 DCP Policy do relate to those developments within Irongate.


          Council entering into unfair and inequitable development agreements not aligned to the 2016/17 DCP 


The objector implies that Council has entered into private agreements with developers and provided them with different assessments that are less than the 2016/17 DCP. 


4.23    Council entered into one agreement with a land owner in the Irongate Industrial Area. By securing their commitment to paying the DC, Council was able to update its assumptions around early uptake which underpin the calculation, with this change being reflected in the 2016/17 DCP. The payment had a positive impact on the DC rate through reduced interest costs which benefitted all land owners. The basis for their agreement was the 2016/17 DCP rate of $12.70 per m2 (excl. GST).


          Actual Budgets Vs Estimated Budgets


          The objector implies that Council is over recovering DC’s as actual capital costs are less than budgeted costs in the DCP


4.24    The implementation of reticulated services has not yet been completed. The objector submitted a LGOIMA request on 7 November regarding costs to date which Council will respond to within the permitted timeframes. Council has been transparent in its policy and communication that once the Variation 2 appeals are resolved, it will go through the process of revising its DC rate to reflect the wider extent of the area and any updated servicing costs, and consult on those changes with affected land owners.


4.25    Where a DC has been paid that is greater than the rate set after revision following the resolution of the appeals under Variation 2, a one off refund will be made of the difference between the new rate and what was paid. Council will continue to monitor its budgets and assumptions around interest rates and uptake to ensure it does not over recover contributions from those developing within the Irongate Industrial catchment, in accordance with its legislative obligations.


          Fairness, Equity and Proportionality under Closing Comments


The objector does not believe the development contribution assessed is fair, equitable or a proportionate portion of the total cost of capital expenditure necessary to service Irongate.


4.26    Council acknowledges that ‘growth’ provides some benefits to the wider community in terms of job creation and economic wellbeing, however, its current funding approach is to recover growth-related capital costs from those causing the growth and benefiting from the assets, and not to reduce its development contribution through some form of explicit public subsidy.


4.27    Council believes that it has recognised any benefit from the assets accrued to the wider community through its cost allocation process (particularly for water) and that those costs being recovered through the contribution are fair, equitable and proportionate.


4.28    The objector uses the proposed water link via Maraekakaho Road as evidence of greater resilience for the community. Council does not support this view and believes that the link actually provides greater resilience to those developments within the Irongate Industrial area as they are now to be serviced from two sources. This link was originally proposed for Omahu Road so there is no additional benefit accrued to the wider community over and above what they would have received had the work been undertaken in its original intended location.


4.29    It should be noted that none of the costs associated with this link are being recovered from the Irongate development contribution. Council has simply replaced the link it was going to undertake in Omahu Road with a link in Maraekakaho Road which is to be funded by other sources (rates).


4.30    The costs as they are outlined in the Program of Capital Expenditure within the 2016/17 DCP implies that 100% of the capital expenditure cost is being recovered from those developing within the Irongate Industrial Catchment area without any reduction for funds sourced from elsewhere.  However that is not in fact the case. Aside from the fact none of the wider district costs have been included in the Irongate Industrial development contribution rate, which was a decision taken by Council at the outset in order to set a lower rate, the figures shown in the 2016/17 DCP are in actually net capital expenditure after factoring in a $50,000 subsidy from LTNZ, and water cost allocations attributing a share of the Trunk Main Wilson Road, and Wilson Road Bore Upgrade costs to non-growth (rates).  Council intends to update the policy wording at its next reiteration to correct this mistaken impression.




5.1     As noted earlier in this report, Mr Roil is wrong to treat the area covered by the DCP as 100ha.  The 2016/17 DCP was prepared on the basis of the Irongate Industrial Zoning as then proposed, being 71.5ha.  Variation 2 should extend this to 100ha (undeveloped) but that has not been completed and until it is the DCP figures must stand.  Mr Roil’s recalculation of the development contribution rates is therefore incorrect.


5.2     At para 29 Mr Roil contends that the development contribution includes financing costs over a 30-year period.  This is incorrect.  A period of 20 years has been assumed for the 71.5ha development area covered by the current DCP.  Council’s position around financing costs is covered under para 4.7.


5.3     Mr Roil’s calculation at para 30 of a “financing fee” of $4.84 (GST exclusive) is wrong.  Based on the correct area of 71.5ha as the basis for the DCP amounts, the interest and inflation component of the development contributions charged to Jara is $1.72 per m2 (excl. GST).  Refer to para 4.5 above.


5.4     At para 32 Mr Roil complains about the provision made for ‘contingencies’ in the assessment of the likely cost of the infrastructure provision.  It is common practice to include an allowance for contingencies when estimating the likely future costs of construction work.  There can be any number of matters arising between when cost estimates are provided and the final costs are established following completing of the work.  Council’s experience is that an allowance for contingencies is both necessary and appropriate.


5.5     At para 36 Mr Roil refers to the Council’s Long Term Plan (LTP) which showed roading projects totalling $2.761m.  These costs were for the originally intended Stage 1 works based on servicing an area of only 36ha.  Stage 2 costs sat outside the 10-year window at that time.  As explained earlier in this report, the anticipated uptake has meant that this has had to be brought forward and provision made to service 71.5ha (and soon 100ha).  Council is currently in the process of its 3-yearly review of the LTP as the result of which these figures will be updated.


5.6     At para 37 Mr Roil refers to the roading expenditure of $4,199,800 which he then says should equate to $4.19 per m2, and says he has instead been charged $4.99 psm.  His calculation of $4.19 per m2 is based on the erroneous figure of 100ha, when the correct figure (as per the DCP) is 71.5ha.  The amount charged to Jara was, as per the DCP (Tabe A-2) $5.99 per m2 or $6.89 GST inclusive.


5.7     At para 38 Mr Roil refers to unnamed sources of information that the expenditure is for road widening [and] the construction of roundabouts at York Road and at the Irongate Road / Maraekakaho Road intersection. While the $4.199m includes the roundabout at Irongate Road / Maraekakaho Road, it does not include any costs towards the York Road roundabout nor the road widening at Maraekakaho Road.  The Irongate Road / Maraekakaho Road roundabout does relate to Jara’s development being within the 71.5ha development area.


5.8     At para 39 Mr Roil asserts (again based on unknown sources) that some of the works are unlikely to be constructed until 2030.  A traffic impact analysis undertaken by Stantec (formerly MWH) showed the need for the upgrade is being driven by development at Irongate.  The rate of uptake as now anticipated makes it very likely this will be brought forward.  Had this been carried through into the modelling it would have increased the interest costs, resulting in a higher overall development contribution rate.


5.9     Again, at paras 40 and 41 (this time in relation to water supply) Mr Roil refers to the LTP projections.  As noted above, these were based on Stage 1 only, servicing 36ha.  Stage 2 servicing costs sat outside the 10-year window of the LTP at that time.  The 10-year timeframe of the LTP does not dictate the longer term planning which underpins the DCP.


5.10    In para 42 Mr Roil compounds the error by spreading the water supply costs over the Variation 2 100ha area, instead of the 71.5ha in the DCP.  The development contribution charged to Jara was at the rate of $4.36 per m2 (excl. GST) as set out in Table A-2 of the DCP.  This provides a ‘raw’ cost of $3.31 per m2 and an additional $1.05 per m2 for finance and holding costs.


5.11    At para 43 Mr Roil refers to agreements with individual landowners at Omahu.  His speculation about these agreements is incorrect.  The LGA 2002 provides that Council may enter into such agreements.  They are not relevant to Jara’s land or to the grounds of its objection.


5.12    At para 44 Mr Roil asserts that the developers in Irongate are being charged 100% of the costs of roading and water supply. This is incorrect (although it is acknowledged that the wording of the DCP gives this impression).  In fact, the amounts set out in the DCP are for the net growth portion only. Funds received (or to be received) from other sources are not clearly stated, but the amounts shown are net of these contributions.  The wording of the DCP will be updated at its next iteration to reflect funding from other sources such as LTNZ and rates (for non-growth related share of the assets).


5.13    It should also be noted that none of the district-wide growth-related water supply or roading costs have been included in the Irongate development contribution figures.  This is a significant concession to the Irongate landowners and was done so as to allow a lower overall DC rate for Irongate.


5.14    At para 45 Mr Roil asserts that properties to the east of the Irongate Industrial area will obtain a benefit from the water main constructed from the Flaxmere Pump Station, being looped back along Maraekakaho Road.  This overlooks that the looped service now provides greater resilience for developments at Irongate which are serviced from two sources.  The ‘loop’ was always intended to be provided via Omahu Road, so there is no additional benefit to the wider community from the loop now running up Maraekakaho Road.  The cost of the loop itself is not included in the calculation of the Irongate development contribution. 


5.15    Mr Roil is therefore mistaken at para 47 where he claims that 100% of the costs attributable to the reticulation from Flaxmere has been included.  The cost have been apportioned, as part of the formulation of the DCP, based on the potential demand from Irongate to the upgrades that have resulted from this new development.


5.16    Mr Roil’s para 49 refers to the roading improvements which have been addressed above.  The need for, and benefit from, the Irongate Road / Maraekakaho Road roundabout is directly driven by development within the Irongate catchment.


5.17    At para 52 Mr Roil complains that the money he pays now represents money the Council will not have to borrow and so incur interest on.  The contribution rate in the DCP has applied assumptions around those paying early as well as those paying later.  It is reasonable that those paying earlier should pay a share of the interest costs incurred over the lifetime of a project.


5.18    At para 53 Mr Roil complaints that there is no “explanation or justification” in Appendix D of the DCP as to the amount of the capital costs.  The 2016/2017 DCP was consulted on prior to it being adopted by the Council in June 2016.  Changes to the costs in Appendix D were made mainly because of the removal of the Stage 1 and Stage 2 staging, and reflecting the costs associated with servicing 71.5ha and not just Stage 1 (35.3ha) as was in the LTP.


5.19    It should also be noted that a number of workshops and meetings have been held with the objector and other land owners where details around capital costs. As an example, a meeting was held on 24 June 2016 where the objector and other land owners were provided with a detailed breakdown of the water capital costs. Attachment 3 records the minutes of that meeting.


5.20    In summary, Mr Roil has sought to recalculate the development contribution rate set out in the DCP on the basis of an incorrect land area and using LTP figures which applied to an earlier (and no longer applicable) staging scenario.  This has resulted in an under-calculation of the rates as set out in the DCP, and a considerable over-calculation of the interest component of the rates.




6.1     The assessment has been generated in accordance with the 2016/17 HDC DCP.     


6.2     While there are some areas for improvement in terms of how the information contained in the DCP is expressed, specifically the Program of Capital Works, these will be corrected at the next policy reiteration.  However, Council rejects the points raised in the objection, and believes the development contribution assessed should be paid in accordance with the LGA 2002.







Irongate Industrial Map




Scheme Plan




Minutes of Landowners Meeting held 24 June 2016






Irongate Industrial Map

Attachment 1


PDF Creator

Scheme Plan

Attachment 2


PDF Creator


PDF Creator


PDF Creator


Minutes of Landowners Meeting held 24 June 2016

Attachment 3


PDF Creator


PDF Creator


PDF Creator


PDF Creator


PDF Creator


PDF Creator