Editorial: Mathematically challenged

18:45, Jan 28 2013

Invercargill ratepayers should not have to subsidise the real cost of processing building consent applications, but after the experience of the Niagara sawmill operators in trying to get approval to erect a canopy at their Kennington site (revealed in Saturday's Southland Times) there has to be serious doubt over whether the Invercargill City Council has the fee structure right, or even knows what it is.

Calder Developments, the contractors appointed by Niagara to build the canopy, applied to the council for consent late last year and got it, along with a bill for $17,620. Niagara owner Ken Richardson paid the bill even though he thought it "outrageous" - the fee is up to six times what other southern local authorities would charge for the same work - and clearly someone at the council agreed with him because last month it offered Calder an $8056 refund.

The discrepancy was explained away on the basis that the fee rate had changed and the original fee structure did not suit the type of building Niagara wanted erected. So the new fee, as of last month, was $9564. Everyone makes mistakes, though this was a biggie, but at least it appeared to be sorted.

Until last week, when The Southland Times asked the council to justify the fee and environmental and planning services director Pamela Gare told us council records showed the fee was $6864.60, almost $11,000 less than the original bill. She also said the company would get a rebate, which is nice for Niagara but will leave others having to go through the same process wondering whether council's building department has any idea what it is doing.

Ms Gare was unapologetic that the council was now trying to make the concents process 100 per cent user-pays and city ratepayers, who until last year provided heavy subsidies towards the fee-processing cost from the general rate, will have no quarrel with that. Before mid-2012 the city council's cost structure was similar to that of the other southern local authorities, which is why their charges are now much less - their fees are heavily subsidised by their ratepayers.

Last July, soon after the city council introduced the new user-pays fee structure, it was warned the move could slow the recovery of the building sector in the south. Southland Registered Master Builders Association vice-president Kerry Archer said the fees, that now charge per square metre of property instead of on how long council staff took to process an application, would double the cost of some consents. In spite of the increase, though, he conceded that dropping the subsidies was a "good idea".

It is a good idea. The problem is that every applicant from now on has the right to be extremely sceptical about what the real user-pay cost is. Based on Niagara's experience - three different prices in three months - the charge-out rate is more likely to be based on that old "think of a number and double it" system than any real criteria.

The cost of obtaining building consents is a real problem throughout New Zealand. The government, concerned not only at the charges being imposed but also at what it sees as unnecessary delays holding up new developments, has been threatening to take central control of consents and has already announced that a pilot scheme for a national on-line consenting system will be trialled later this year.

The government is promising the on-line system will make it easier, and cheaper, to build homes to ease the shortage of housing, especially in Auckland and Christchurch. It will also introduce certainty to the fee structure, which when it is expanded to cover the southern region will save city council staff from the difficult task of having to work it out, again and again and again.


The Southland Times