A NEW funding mechanism vital for City infrastructure development has received the broader approval of the business community.
However, its effect in discouraging investment as well as being unaffordable for ‘the man in the street’ has been widely criticised.
The ‘Policy for Engineering Services Contributions for Roads and Stormwater’ was workshopped at the Richards Bay Civic Centre, chaired by City Engineer Yogi Naidoo.
In terms of the policy document, any person proposing a new development will share with the municipality the cost of arterial roads and related infrastructure.
But the policy also includes proposals involving land use and zoning changes, as when a home is converted to a day care facility and thus receives ‘enhanced land use rights’ and ‘exceeds the original consent use applications’.
The meeting was assured the policy, due to be approved by council in July, will not be backdated; neither will existing municipal roads be subject to the new policy.
A special formula and spread sheet has been designed to estimate the developer’s contribution and all funds derived will be ring-fenced for roads.
Naidoo said the city itself is subject to the policy, as when developing the affordable housing development at Aquadene.
Creating capital
Hilton Reynold of the city’s finance department said the policy filled a capital funding model void that had seen the city almost brought to its knees in 2008.
‘There is a limit to borrowing and we need to create capital funding.
‘Rates are running at a significant loss and are subsidised by electricity.
‘We could double the rates but funding through the engineering service contributions is a fairer option,’ said Reynold.
While the meeting was told there was ‘little room for manoeuvre by officials’, the city was urged to ensure the financial survival of smaller ‘developers’.
An example was given of a home owner’s crèche application that would have to fork out around R135 000 for the rezoning – without any new roads being built or altered but based on an assessed road traffic impact.
