Council disputes newspapers claims

Whakatane District Council has dismissed the article in Whakatane Beacon on Friday 16 November 2007 that it has refunded development contributions under threat as misleading, one-sided and a distorted representation of facts.

The Council’s Chief Executive, Diane Turner says contrary to the portrayal of Council being coerced or paying under threat, the refund was a result of negotiations which recognised that Omega place subdivision was unique in certain respects.

‘The settlement recognised that the Omega Place subdivision by Lysaght Development Ltd has unique aspects, partly as a reflection of its location as part of the “Coastlands” subdivision”.

In setting the amount of a development contribution when land is subdivided or developed, the Council is guided by its policy in the LTCCP (the Ten-year plan). That policy predicts the rate of residential and business growth over the next ten year period and assesses the effect the growth will have on community infrastructure.

“Where growth will result in the need for new or upgraded water, wastewater or stormwater services, improved roads, or more reserves or community facilities, the cost of those works is shared amongst those developing the land. The Council has indicated in its Ten-year Plan that it expects to receive $15 million in development contributions to help fund new and upgraded services in the district” says Ms Turner.

Councils throughout New Zealand, together with their communities, are grappling with the issue of how to fairly and equitably charge for the additional demands on community infrastructure that growth brings. The issue is sensitive as no one likes to pay more than they have to or think they should do, yet everyone want high quality services that work, and roads and reserves that can be used freely.

Ms Turner says the development contributions charged for the Omega Place subdivision were initially assessed under the 2004 policy. The policy was reviewed in 2006 and was refined again this year (2007). The challenge by Lysaght Developments Ltd to the amount of the contribution charged and the subsequent reduction of that contribution reflects the outcome of a process the Council has been going through for some time.

“While it was suggested that High Court action filed in January 2007 was the impetus for Council to “change its mind”, the reality is that the review of the Council’s work programme in 2006 and since provided scope to negotiate with Lysaght Development Ltd”.

The Council was able to refine its assessment from 2005 to more accurately gauge what benefit the Omega Place subdivision would get from the growth related projects it has planned. Some of the projects that this subdivision was originally charged for have been discontinued and fees charged for these projects were refunded. It is accepted that the Council should have recognised that change earlier. The Omega Place subdivision is not yet complete and Development Contributions will be payable on the future stages of that development.

The article also suggests that the Council was either unwilling to negotiate or only willing to do so under the threat of High Court action. This is not only mischievous but far from the truth. The Council has and is always willing to consider other points of view and provide opportunities for those views to be considered.

“That is one of the key principle and purpose of local government but in saying that there, will always be disagreements when decisions are made involving competing interests. In this case, the issue was one of public benefit versus private benefit, and where the cost of development should fall between the two” says Ms Turner.

The Council has over the last 30 years been involved in numerous negotiations with Lysaght Developments Ltd. The Council is currently in discussions with the company on at least three other matters; two before the Environment Court and one other under the threat of High Court action, which both parties have agreed to try and negotiate a settlement to avoid unnecessary Court proceedings and costs.

The article suggests the Council was trying to hide the detail of the settlement under a confidentiality clause. That is not correct. It is not unusual for settlements of this nature drawn up by legal advisors to include a confidentiality clause. The parties agreed that the clause was not necessary in this case.

The settlement with Lysaght Developments Limited at the end of October has allowed the Council to move forward with a planned review of the Development Contributions policy. “The Council has every intention to make the review as open and transparent as possible” says Ms Turner.

The review will include previous contributions that have been paid and will show whether others who have paid contributions in the past are also due a refund. Once this process is completed, the Council will directly contact those due for a refund. All development contributions collected are held in a separate account, which can only be used for the works specified.