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Local Government (Water Services) Act 2025

Provision of water services: operational matters - Development contributions - Development contributions policy

126: Maximum development contributions

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"How much developers must pay towards water services"

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When a water organisation calculates the maximum amount of development contributions, they must follow certain rules. They need to work out the cost of a unit of demand and multiply it by the number of units of demand for a development. The cost must also be adjusted for any changes in the Producers Price Index, as stated in section 122(2) and (3).

To calculate the maximum development contribution, a water organisation must first identify the total cost of capital expenditure for a group of water services activities. They must then identify the share of that expenditure for each unit of demand. A water organisation can consider capital expenditure for assets that will be built after the period covered by their water services strategy, as long as these assets are identified in their development contributions policy.

A water organisation must demonstrate that they have attributed units of demand to developments on a consistent and equitable basis. This means they must show that they are treating all developments fairly and using the same method to calculate the units of demand.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=LMS1004459.

Topics:
Environment and resources > Food and water safetyGovernment and voting > Local councils
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"Agreement for council to help manage water organisation's development contributions"

Part 3Provision of water services: operational matters
Development contributions: Development contributions policy

126Maximum development contributions

  1. This section describes how a water organisation must calculate the maximum amount of development contributions.

  2. Development contributions for water services infrastructure for a particular development or type of development must not exceed the amount—

  3. calculated by multiplying the cost of a relevant unit of demand calculated under subsections (3) to (5) by the number of units of demand assessed for the development or the type of development; and
    1. amended for any Producers Price Index adjustment adopted in the water organisation’s development contributions policy in accordance with section 122(2) and (3).

      1. To calculate the maximum development contribution in respect of a group of water services activities for which a separate development contribution is to be required, a water organisation must first—

      2. identify the total cost of the capital expenditure that the organisation expects to incur in respect of the group of water services activities in order to meet increased demand resulting from growth within the service area, or part of the service area; and
        1. identify the share of that expenditure attributable to each unit of demand, using the units of demand for the group of water services activities by which the organisation has assessed the impact of growth.

          1. A water organisation may identify capital expenditure for the purposes of calculating the development contributions in respect of assets or groups of assets that—

          2. will be built after the period covered by the organisation’s water services strategy; and
            1. are identified in the organisation’s development contributions policy.

              1. The total cost of the capital expenditure identified in subsection (3)(a) may, in part, relate to assets intended to be delivered after the period covered by a water organisation’s water services strategy if—

              2. the assets concerned are identified in the organisation’s development contributions policy; and
                1. the total cost of capital expenditure does not exceed that which relates to the period over which development has been assessed for the purpose of setting development contributions.

                  1. For the purposes of determining the maximum development contribution that may be required for a particular development or type of development under subsection (2), a water organisation must demonstrate in its methodology that it has attributed units of demand to particular developments or types of development on a consistent and equitable basis.

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