Guidelines to Accompany SPP 3.6 Development · PDF fileGuidelines to accompany StatePlannin...

© State of Western Australian

Published by theWestern Australian Planning CommissionGordon Stephenson House140 William StreetPerth WA 6000

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Published July 2016

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This document has been published by the Western Australian Planning Commission. Any representation, statement, opinion or advice expressed or implied in this publication is made in good faith and on the basis that the Government, its employees and agents are not liable for any damage or loss whatsoever which may occur as a result of action taken or not taken, as the case may be, in respect of any representation, statement, opinion or advice referred to herein. Professional advice should be obtained before applying the information contained in this document to particular circumstances.

Guidelines to accompany

State Planning Policy 3.6 Development Contributions

for InfrastructureJuly 2016

Guidelines to accompany State Planning Policy 3.6 Development Contributions for Infrastructure

INTRODUCTION2

CONTENTS

1. INTRODUCTION 3

1.1 Purpose of document 3

1.2 Relationship to State Planning Policy 3.6 3

2. BACKGROUND 4

2.1 Need for formal development contributions system 4

2.2 Need for further guidance 5

3. DEVELOPMENT CONTRIBUTIONS SYSTEM 6

3.1 Overall principles 6

3.2 Establishment principles 6

3.3 Categorisation of development contribution items 7

3.3.1 Inclusion in Development Contribution Plan not required 9

Category A. Infrastructure required as standard 9

3.3.2 Inclusion in Development Contribution Plan required 9

Category B. Cases of fragmented land-ownership or non-frontal development 9

Category C. Infrastructure important for liveability 9

Category D. Administrative items 9

3.3.3 Inclusion in Development Contribution Plan not appropriate 10

Category E. Infrastructure optional for liveability or with no demonstrable need/nexus 10

3.4 Voluntary agreements 10

4. DEVELOPMENT CONTRIBUTION PLANS 11

4.1 Formulation 11

4.1.2 Statutory context 11

4.1.3 Content overview 11

4.1.4 First steps for all Development Contribution Plans 12

4.1.4.1 General considerations 12

4.1.4.2 Define the Development Contribution Area 12

4.1.4.3 Establish Development Contribution Plan lifespan 13

4.1.4.4 Determine growth projections 13

4.1.4.5 Determine current and future infrastructure and administrative needs 14

4.1.4.6 Establish the items to be included in Development Contribution Plan 14

4.1.5 Requirements for Community Infrastructure Development Contribution Plans 14

4.1.5.1 Prepare Community Infrastructure Plan 14

4.1.5.2 Set community infrastructure facility standards 15

4.1.6 Final steps for all Development Contribution Plans 15

4.1.6.1 Establish infrastructure priority and timing 15

4.1.6.2 Estimate infrastructure costs and prepare Capital Expenditure Plan 16

4.1.6.3 Prepare Cost Apportionment Schedule 16

4.1.6.4 Prepare DCP report 18

4.1.6.5 Consultation 18

4.1.7 Endorsement and publication 18

4.1.7.1 Incorporation of DCP into local planning scheme 18

4.1.7.2 Adoption and publication of DCP report and Cost Apportionment Schedule 18

4.2 Operation 19

4.2.1 Provision of contributions 19

4.2.1.1 Imposition of requirement for contribution 19

4.2.1.2 Triggers for provision 19

4.2.1.3 Method of provision 20

4.2.1.4 Contribution credits 22

4.2.1.5 Unpaid contributions 22

4.2.1.6 Administration of funds 22

4.2.1.7 Funding shortfall or excess 22

4.2.2 Delivery of facilities 23

4.3 Monitoring and review 23

4.3.1 Annual statement of accounts 23

4.3.2 Review of Cost Apportionment Schedule 23

4.3.3 Review of Development Contribution Plan 23

4.4 Arbitration and appeals 23

SCHEDULES

Schedule 1: Categorisation of infrastructure items 25

Schedule 2: Development contribution plan template 37

Schedule 3: Cost apportionment schedule template 38

Schedule 4: Development contribution plan report template 39

Schedule 5: Static Feasibility Model 41


INTRODUCTION3

1. INTRODUCTION

1.1 Purpose of document

These guidelines seek to inform users of the Western Australian development contribution system about its practical application.

Guidance is provided on the various stages of formulating a development contribution approach; determining whether a Development Contribution Plan (DCP) is required; preparing a DCP when appropriate; collecting and using the resulting funds; and ongoing operational requirements.

The guidelines seek to provide additional information on implementation aspects of the development contribution system, as established in State Planning Policy 3.6 Development Contributions for Infrastructure (SPP 3.6).

The guidelines also include a schedule that categorises different items of infrastructure according to the method by which development contributions for those items should or shouldn’t be sought and provided, in the context of the overall development contribution system.

1.2 Relationship to State Planning Policy 3.6

The process by which government is able to require contributions from developers towards infrastructure associated with development is formally established in SPP 3.6. SPP 3.6 sets out the principles underlying development contributions for infrastructure and the form, content and process for the preparation of a DCP.

These guidelines have been prepared to accompany SPP 3.6, and to provide further guidance for users on how the development contribution system is to be applied.


BACKGROUND4

2. BACKGROUND

2.1 Need for formal development contributions system

In Western Australia, as in other Australian states, local governments face increasing pressures on the services they provide. These pressures arise from population and economic growth, and increasing community expectations for new and upgraded infrastructure.

Examples of these pressures exist in:

• greenfield development of land for urban purposes, where there are standard requirements for infrastructure and facilities which are imposed by the WAPC on developers/land owners as conditions on the subdivision or strata subdivision of the land, but where local governments may be expected to provide infrastructure or facilities over and above the common standards;

• infill development and redevelopment where common standard conditions of subdivision, strata subdivision or development still apply, but where significant changes in the type or intensity of land use may require new infrastructure and facilities or the augmentation of existing infrastructure and facilities beyond the normal scope of standard subdivision and development conditions;

• development in regional growth areas where new residents expect infrastructure of metropolitan standards, which is beyond the scope of regional local government to provide using standard rates and charges alone.

The capacity of local governments to provide the additional physical infrastructure and community facilities necessary to accommodate future growth and change is limited. As a result, local governments are increasingly seeking to use development contributions to fund the construction of infrastructure items and facilities beyond the standard requirements (those outlined in Appendix 1 of SPP 3.6) such as community centres, recreation centres, sporting facilities, libraries, child care centres and other such facilities.

SPP 3.6 was introduced to address a situation whereby the scope of development contributions being requested by government agencies had increased and become varied over time. The increase and variation was due mainly to a shift in what government and community considered to be important for the liveability of new communities, and an increasing trend towards including community infrastructure items along with the traditional infrastructure items in development contribution requests. At the same time, some developers were choosing to provide amenities in new urban subdivisions above State and local government requirements

(such as additional landscaping and facilities in public open space), often in response to consumer demand, with resultant long-term management implications for government agencies.

The objectives of SPP 3.6 are:

• to promote the efficient and effective provision of public infrastructure and facilities to meet the demands arising from new growth and development;

• to ensure that development contributions are necessary and relevant to the proposed development and are charged equitably between those benefiting from the infrastructure and facilities to be provided;

• to ensure consistency and transparency in the system for apportioning, collecting and spending development contributions; and

• to ensure the social well-being of communities arising from, or affected by development.

Under SPP 3.6, development contributions can be sought for items of infrastructure that are required to support the orderly development of an area.

Standard infrastructure items are those items listed in Appendix 1 to SPP 3.6, such as roads, water and sewerage facilities, utilities, and


BACKGROUND5

public open space. These items of infrastructure do not have to be included in a DCP to be required through conditions of subdivision or development.

Development contributions for infrastructure items that do not fall within the standard requirements may be sought only if the infrastructure items are identified in a DCP which has been incorporated into a local planning scheme, unless those items form part of a voluntary agreement with the relevant developer/s.

2.2 Need for further guidance

A well-functioning development contributions system should be able to balance the competing objectives of certainty, equity and flexibility, to the benefit of future communities and in the context of ensuring housing affordability.

The State Government is committed to the system of development contributions, and to ensuring that the system is workable and effective. SPP 3.6 was designed to ensure a consistent and transparent approach to development contributions, and the State Government has responded to feedback on how the system is working, and where further guidance is needed to ensure the policy is being implemented as intended.

These guidelines have been prepared to supplement SPP 3.6 by providing more detailed information on the operation of the policy in response to industry and government queries. In particular, the guidelines provide more specific information on DCPs, including what are and are not acceptable contribution items for inclusion in a DCP; on the circumstances where a DCP is required; and on the application and collection of DCP cost contributions.


DEVELOPMENT CONTRIBUTIONS SYSTEM6

3. DEVELOPMENT CONTRIBUTIONS SYSTEM

3.1 Overall principles

When SPP 3.6 was formulated, eight overall principles were established to guide the process for determining development contributions for infrastructure and the preparation of DCPs (for more detail, see SPP 3.6):

1. Need and the nexus

2. Transparency

3. Equity

4. Certainty

5. Efficiency

6. Consistency

7. Right of consultation and arbitration

8. Accountable

These principles should apply to the manner in which the need for any proposed infrastructure item is determined and to the method of calculating the level of contributions to be levied. It is essential that the overall principles form the basis for seeking development contributions, including the preparation of every DCP when a DCP is required.

3.2 Establishment principles

A further set of principles is useful to clarify the purpose and intent of the development contribution system as a whole and to guide local government, the development industry and all users of the system on what development contributions are aiming to achieve. These principles should be borne in mind when establishing what infrastructure is needed to support new and existing communities and when assessing whether there is a need for a DCP to enable this infrastructure to be provided.

1. Development contributions are only one mechanism to deliver planning outcomes

Development contributions are just one of a number of planning mechanisms that can be used to meet the physical and social infrastructure needs of growing urban communities. They are not a planning and development outcome in themselves. Development contributions must be seen as one element at the end of a strategic planning process, in which the infrastructure needs of a community are identified and strategies are devised and then implemented to meet those needs.

2. Development contributions should not replace normal government expenditure

Although in some circumstances development contributions may recover the full costs of individual items where there is a clear nexus between the infrastructure and the development, they are not intended to cover the costs of delivering the full suite of urban infrastructure required for new communities. Local government needs to use other streams of funding to deliver the full suite of urban infrastructure, particularly in established areas, including general rates and external grants.

3. Impact on affordability of housing should be a consideration

The development contributions system should not result in contributions that pass on unwarranted costs to prospective homeowners.

4. Development contribution infrastructure must be important for liveability

Only infrastructure that is important for liveability from the earliest stages of development may be required through the development contribution



system (see Section 3.3 for further information on how this concept is defined). Facilities that might be found in mature communities would generally be provided over time as rates and grants allow, but are not necessarily required or expected when a community is first established. In determining the appropriateness of individual items for delivery through the development contribution system, the WAPC has assessed whether an item is considered to be ‘important for liveability’, and has used this concept as a benchmark. It is recognised that whether or not an item is considered ‘important for liveability’ will to some extent vary between development settings, and will also need to be reviewed over time.

5. Some flexibility is important when considering different development contexts

While there is a need to provide certainty in specifying the scope of infrastructure that development contributions should fund and the expected costs for provision of that infrastructure, it is also important to allow local government some flexibility in determining priorities for the type and timing of infrastructure to be delivered. These priorities will vary over time in different parts of WA and in differing development contexts. Some flexibility is also needed to establish the cost of infrastructure

contributions across different development settings in different parts of the State.

6. Developer construction of works and delivery of infrastructure is an important part of the system

Allowing developers to make contributions in the form of construction of works and direct delivery of infrastructure, in lieu of a monetary contribution, is an important part of the system. However, when pursuing this approach, local government and the development industry need to be aware of the challenges involved in managing the timing of works, the cash flow issues associated with funding the works, and the complications associated with calculating credit owed to a developer against their monetary contribution liabilities.

7. Development contributions can be used for proportional improvements to existing infrastructure to accommodate growth

Development contributions should be able to be used towards improving, or replacing if improvement is not an option, existing infrastructure, in addition to providing new infrastructure but only in proportion to its likely use by the new residents in a growing population. Replacement of obsolete infrastructure that serves only the existing population; or

improvements / replacements to raise existing service standards, should be funded from rate or other revenue sources, and should not be paid for via new development.

8. Voluntary provision of infrastructure beyond that suitable for inclusion in a DCP is not precluded

The development contribution system does not prevent the provision of infrastructure above and beyond that required as a condition of subdivision or development, or that appropriate for inclusion in a DCP, if provided at the discretion of and cost of the developer or relevant government agency, or via a voluntary agreement to which all parties are willing signatories.

3.3 Categorisation of development contribution items

Under SPP 3.6, development contributions can be sought for the following, where justified based on specific circumstances:

• a new item of infrastructure;

• land for infrastructure;

• an extension to, or an upgrade in the standard of, an existing item of infrastructure;

• proportional costs of the replacement of necessary infrastructure once it has reached the end of its economic life;



• other costs reasonably associated with the preparation, implementation and administration of a development contribution plan.

The contributions must only be for the initial capital costs, not for ongoing maintenance or operating costs of the infrastructure.

In order to clarify the intent of SPP 3.6, these guidelines provide a list of infrastructure (at Schedule 1) that might be considered as part of new development. This includes guidance on the development contribution category each item falls into (note that whatever category is specified here, any item of infrastructure can be provided directly at the discretion of a relevant developer or government agency):

Category A Infrastructure required as standard (as identified at Appendix 1 of SPP 3.6) and essential for subdivision or development - can be required directly as a condition of subdivision/development

Inclusion in DCP not required

Category B Infrastructure required as standard (as identified at Appendix 1 of SPP 3.6) and essential for subdivision or development, in limited circumstances of fragmented landownership or non-frontal development, where cost redistribution is necessary

Inclusion in DCP required (if development contribution for item is to be sought)

Category C Infrastructure important for liveability from the earliest stages of development Inclusion in DCP required (if development contribution for item is to be sought)

Category D Administrative items associated with preparation of a DCP Inclusion in DCP required (if development contribution for item is to be sought)

Category E Infrastructure optional for liveability, generally found in mature communities; or where need and nexus cannot be demonstrated. Delivery of these items should be at the discretion of the relevant developer or government agency

Inclusion in DCP not appropriate



3.3.1 Inclusion in Development Contribution Plan not required

Category A. Infrastructure required as standard

Infrastructure required as standard includes those items identified at Appendix 1 of SPP 3.6. Such infrastructure has traditionally been delivered by developers via standard conditions of subdivision or development and can be defined as those items that are essential to the development of land.

Infrastructure required as standard is generally identified as a necessary development contribution in other WAPC legislative or policy documents and does not need to be identified in a DCP prepared according to SPP 3.6.

An exception to this may apply in limited cases of fragmented landownership or non-frontal development, as described below.

3.3.2 Inclusion in Development Contribution Plan required (if development contribution for item is to be sought)

Category B. Cases of fragmented land-ownership or non-frontal development

In areas with multiple land owners, or in non-frontal development, it may be difficult to coordinate and balance out provision of infrastructure in suitable locations, while ensuring that some landowners are not disadvantaged according to their spatial placement or the time at which they decide to undertake development.

Accordingly, on a case by case basis, certain items of infrastructure that would normally be required as standard may be able to be included as items in a DCP so that costs can be shared across owners and infrastructure can be delivered in a timely manner. Justification for taking this approach will be required to be documented in the relevant DCP report.

Category C. Infrastructure important for liveability

Infrastructure items that are suitable for inclusion in a DCP, beyond those required as standard, are those which are considered important for liveability of a community from the earliest stages of subdivision or development. These items must be included in a DCP if development contributions are to be sought. The need and nexus between the development and the infrastructure item should be demonstrable.

The rationale for defining items of infrastructure as important for liveability can be guided by the following principles:

• In the case of new communities, items suitable for inclusion would include infrastructure that is necessary to enable the sustainable functioning of a new community. This would include infrastructure designed to meet the initial needs of a community in the first five to 10 years of its development. It would not generally include higher order or regional infrastructure or infrastructure items that would only be required or provided in the longer term. Land acquisition to ensure appropriate future provision of infrastructure should be a priority.

• In the case of infill development in existing communities, items suitable for a DCP would include contributions towards upgrades or capacity increases for existing infrastructure, to accommodate the new population and so as to not unreasonably impact on existing facilities or disadvantage surrounding communities. In some cases larger infill sites may generate the need for entirely new facilities.

Category D. Administrative items

Administrative costs associated with the preparation and implementation of a DCP can be recouped from relevant landowners via inclusion as administrative items in that DCP.

Administrative items that can be included must relate directly to the work local government must do in order to prepare and implement the DCP, and can include legal, accounting, planning, engineering and other professional advice and any associated fees. Certain financial institution fees, charges and interest rates may also be reflected in the relevant DCP.

Costs associated with any other technical consultant work undertaken as part of the land development process should not be included in a DCP, unless in limited cases of fragmented land-ownership where inclusion in a DCP is the only way to facilitate subdivision.



3.3.3 Inclusion in Development Contribution Plan not appropriate

Category E. Infrastructure optional for liveability or with no demonstrable need/nexus

Certain infrastructure items are considered to be beyond the scope of what is truly important for liveability from the earliest stages of a community being established. These items are classified as being only optional for liveability, or they are more likely to be provided in a community that has been established for a long time and has developed a rate base that allows provision of more specialised or niche infrastructure products. These items are identified as Category E items at Schedule 1 and may also include other items not specifically listed in the schedule.

Category E items, being items not suitable for inclusion in a DCP, will also include any item of infrastructure that cannot validly be linked by need and nexus with development occurring in a DCA.

Delivery and funding of any Category E items should be at the discretion of the relevant service provider or government agency or should be provided on a voluntary basis by a developer or landowner.

3.4 Voluntary agreements

In some situations, it may be considered appropriate for a local government to enter into a voluntary agreement with a developer for the provision of non-standard infrastructure (infrastructure not identified at Appendix 1 of SPP 3.6). Voluntary agreements may, for example, be appropriate for large-scale, single ownership projects with a long development timeframe or in regional areas where a formal DCP is not considered by local government and contributing owners to be necessary to achieve desired infrastructure delivery outcomes.

While voluntary agreements fall outside the formal development contributions system and do not require state government assessment or approval, it is recommended that such agreements are formulated based on the principles outlined at Section 3.1 and 3.2. Any decision to deviate from these principles, for example to provide facilities of a higher quality or specification than standard, should be a voluntary decision by all parties to the agreement.


DEVELOPMENT CONTRIBUTION PLANS11

4. DEVELOPMENT CONTRIBUTION PLANS

The purpose of preparing DCPs relating to specific development contribution areas is:

(a) to provide for the equitable sharing of the costs of infrastructure and administrative costs between owners;

(b) to ensure that cost contributions are reasonably required as a result of the subdivision and development of land in the development contribution area; and

(c) to coordinate the timely provision of infrastructure.

4.1 Formulation

As established in SPP 3.6, the following requirements relate to all DCPs:

• there must be a clear and sound basis with linkages to the local government’s strategic and financial planning processes, with all assumptions documented and justified;

• there must be justification for the infrastructure and construction standards identified in the DCP and the authority responsible for providing the infrastructure must be identified;

• the costs of infrastructure must be appropriate and must include an annual adjustment using relevant indexes or costing reviews;

1 The model format provided in these Guidelines replaces Attachment A3.1 of the 2009 version of SPP 3.6.

• there should be a commitment to providing the infrastructure in a reasonable period;

• the development contribution area to which the DCP applies must be appropriate and the proposed location of the relevant infrastructure identified;

• cost sharing arrangements between owners in the DCP area must be transparent, fair and reasonable; and

• there must be adequate consultation with the owners affected by the DCP and with the wider community, as part of the local planning scheme amendment process

4.1.2 Statutory context

A DCP does not have effect until it is incorporated into a local planning scheme. Each DCP must be associated with a specific development contribution area (DCA), identified as a Special Control Area under the scheme.

Prior to (or concurrent with) identification of the first DCA within a local government area and associated formulation of a DCP for that DCA, scheme text provisions must be included in the relevant local planning scheme to provide the framework for formulating and implementing a development contribution plan.

4.1.3 Content overview

Each DCP is to be included in the relevant local planning scheme in the format provided at Schedule 21. The DCP is to specify:

• the development contribution area to which the DCP applies;

• the infrastructure and administrative items to be funded through the DCP;

• the method of determining the cost contribution of each owner;

• the period of operation of the DCP; and

• the applicable review process.

Each DCP must also be accompanied by a DCP report and a Cost Apportionment Schedule (CAS), which identify the strategic basis for inclusion of each infrastructure item in the DCP; specify the details of priority and timing for the provision of infrastructure; and set out in detail the calculation of the cost contribution for each owner in the DCA. These documents do not form part of the scheme, but provide important justification for the content of each DCP. The CAS must be advertised along with the DCP, and both the CAS and DCP report must be adopted by local government and made available to all owners in a DCA within 90 days of a DCP coming into effect.



DCPs which include community infrastructure items require additional supporting documents to those needed for DCPs that don’t include community infrastructure. Guidance on preparing these additional documents is provided in Section 4.1.5 below. If a DCP does not contain community infrastructure items, only those documents outlined in Sections 4.1.4 and 4.1.6 are required.

To ensure consistency in application of the development contribution system across WA, and to provide certainty for system users, it is preferred that the template CAS and DCP report formats provided at Schedules 3 and 4 of these Guidelines are used2. Any departure from the model format will need to be justified based on individual circumstances.

4.1.4 First steps for all Development Contribution Plans

4.1.4.1 General considerations

In order to meet the requirements relating to all DCPs, the following are some general considerations that a local authority should be aware of prior to and during formulation of a DCP.

Ensuring reasonable cost

• What will be the likely total of development contributions imposed through the DCP?

• Can the local authority contribute to funding any of the relevant infrastructure items from alternative revenue sources?

Apportionment between existing and new demand

• Is the infrastructure needed by the new community only, or will it also meet the needs of existing communities?

• Could the new community’s needs be met through capacity in existing infrastructure?

• Will existing community needs be addressed in apportionment of costs?

Timing of infrastructure provision

• Will all identified items of infrastructure be needed by the community within the timeframe of the DCP?

• Can the infrastructure be provided at the time the community needs it?

• Are there funding contingencies in place to ensure timely provision of infrastructure if sufficient development contributions have not been triggered?

• Would staging of infrastructure, based on priority, facilitate timely provision?

2 The model formats provided in these Guidelines replace Attachments A3.2 and A3.3 of the 2009 version of SPP 3.6

Formulation requires resources and expertise

• Is the local authority equipped in time and expertise to prepare necessary DCPs prior to contributions being needed?

• Should additional resources be taken on in order to efficiently and effectively formulate the DCP, given administrative costs can be included as a contribution to be required in a DCP?

4.1.4.2 Define the Development Contribution Area

Apportionment of infrastructure costs based on an area assumes that the land concerned has fairly common characteristics. Therefore, DCAs should be identified, as far as possible, with common characteristics so that cost contributions reflect future development potential. Where it is not possible to identify land with fairly common characteristics throughout the whole of a DCA, consideration should be given to dividing the area into contribution precincts or cells.

In calculating both the total area of land in a DCA, and the area of an owner’s land that is subject to a development contribution, land for the following uses should be excluded:

(a) roads designated under a region scheme as primary regional roads and other regional roads

(b) existing public open space

(c) existing government primary and secondary schools

(d) any other land specified in the DCP



In infill or brownfield DCAs, it may be appropriate to also exclude the total land area of local roads and the total land area of any non-residential development, from the total DCA. Such an approach will need to be considered and justified on a case-by-case basis.

4.1.4.3 Establish Development Contribution Plan lifespan

A DCP must specify the period during which it is to operate. The timeframe will depend on a number of factors associated with the characteristics of each DCA.

The recommended lifespan is five to 10 years. A lifespan longer than 10 years may be considered appropriate in limited circumstances, if justification for such a timeframe can be demonstrated and subject to the principle of equity being upheld.

When considering an appropriate lifespan for a DCP, local government should aim to ensure that the selected timeframe corresponds with any related strategic and infrastructure planning and financing cycles; that it reflects anticipated development growth rates; and that there is some certainty that the identified infrastructure items can be delivered within the chosen timeframes.

The recommended five to 10 year timeframe is considered most appropriate as there can be a reasonable level of certainty over development and population assumptions (as compared with longer timeframes); it coincides with

recommended local government strategic and financial planning timeframes; and the nexus between those contributing to infrastructure and ultimate users of the infrastructure will be stronger. If a longer timeframe were chosen, between 10 and 20 years for example, the principle of equity may be undermined as those paying for infrastructure would have to wait a long time to see any benefit accruing from those contributions.

Any extension of the period of operation of an already existing DCP requires a scheme amendment which will, in turn, require the approval of the Minister for Planning. If the lifespan of a DCP is longer than five years, reviews should occur at five year intervals (with the supporting CAS to be reviewed at least annually).

4.1.4.4 Determine growth projections

A fundamental prerequisite of a DCP is that local government has its strategic planning framework established in order to estimate future growth in development, population, and associated demand for infrastructure.

In order to determine infrastructure and administrative needs, an understanding of future populations, their distribution and demographic profile is necessary. At a more detailed level, the number of new dwellings to be created across a DCA needs to be estimated in order to accurately apportion infrastructure costs.

Population projections included in documents such as the WAPC’s ‘WA Tomorrow’ will assist in estimating future population growth; and likely future development outcomes can be determined using a local government’s own strategic and statutory planning documents, as well as through local understanding of developer’s intentions; and by referring to the various development projection publications released by the WAPC’s Urban Development Program.



4.1.4.5 Determine current and future infrastructure and administrative needs

Having established a strategic planning basis for the DCP, existing development can be documented, future development over the timeframe of the DCP estimated and associated infrastructure and administrative needs can be calculated.

It is likely that establishing non-community infrastructure requirements will be reasonably simple, using development industry standards, analysis of existing provision, considering any necessary upgrading or replacing of existing infrastructure and through a calculation of future requirements, including type and capacity. The relative demand for infrastructure from existing and future populations will need to be determined in later cost apportionment stages.

Confirming the need for community infrastructure items is part of the more detailed planning process necessary for community infrastructure DCPs, outlined at section 4.1.5.

4.1.4.6 Establish the items to be included in Development Contribution Plan

Based on the anticipated development, population growth, demographic trends and infrastructure and administrative needs already established, a list of infrastructure and administrative items can be put together for potential inclusion in the DCP.

This list should be checked against the categories of infrastructure items outlined at Schedule 1 of these guidelines, in order to determine which items are suitable for inclusion in the DCP. Some items that are considered desirable by the

relevant government agency may not meet the principles necessary to allow them to be required through the DCP process, and may therefore need to be excluded from the DCP and provided by alternative means.

Having established a list of potential items for inclusion in a DCP, the need for any community infrastructure items must be confirmed through the community infrastructure planning requirements outlined in Section 4.1.5.

If only non-community infrastructure items will be included in the DCP, Section 4.1.5 does not apply and the final steps outlined in Section 4.1.6 may be undertaken.

For practical purposes, infrastructure costing and investigation of funding sources are likely to be undertaken at the same time as the individual items of infrastructure are identified for inclusion in the DCP. In this way, the cost implications of each item can be determined, reasonableness of inclusion ensured, and alternative funding sources explored (further information on costing is provided at Section 4.1.6.2).

4.1.5 Requirements for Community Infrastructure Development Contribution Plans

In order to require development contributions for community infrastructure items (infrastructure over and above the standard items identified in Appendix 1 of SPP 3.6), local government must establish a clear strategic framework as justification.

DCPs for community infrastructure must be supported by:

1. A Community Infrastructure Plan (CIP) for the area, identifying the services and facilities required over the life of the DCP (supported by demand analysis and identification of service catchments);

2. A Capital Expenditure Plan (CEP) (with at least five out years) which identifies the capital costs of facilities and the revenue sources (including capital grants) and programs for provision;

3. A methodology for determining the proportion of costs of community infrastructure to be attributed to growth and the proportion to be attributed to existing areas (cost apportionment methodology).

All DCPs, whether for community or non-community infrastructure, should be supported by a CEP and a cost apportionment methodology. These documents are therefore addressed in Section 4.1.6.

4.1.5.1 Prepare Community Infrastructure Plan

Community infrastructure items may only be included in a DCP if those items are first identified as being necessary in a local government’s CIP.

In summary, preparation of a CIP requires completion of a number of key tasks, as follows:

1. Documenting the demographic profile of the existing community

2. Analysing current infrastructure provision and standards



3. Establishing any gaps or excess in current infrastructure provision

4. Confirming current infrastructure needs in relation to existing community profile

5. Estimating future development and population growth

6. Projecting any shift in community demographic profile resulting from growth

7. Calculating future infrastructure needs according to future community profile

8. Establishing a list of necessary new or replacement infrastructure

A number of local governments have prepared local planning policies setting out the applicable hierarchy and function of facilities, including ratios to determine the number, size and type of facilities in various locations, based on population or catchment distance. These policies may be useful in DCP preparation.

Each DCP for community infrastructure must be supported by projected growth figures including the number of new dwellings to be created per catchment. The cost apportionment between each existing and future owner will rely on these figures; therefore it is important that this analysis work is undertaken as accurately as possible (see Section 4.1.4.4).

4.1.5.2 Set community infrastructure facility standards

Community infrastructure planning requires not only the identification of which facilities are required, but the setting of standards for the construction and fit-out of those facilities.

It is the position of the WAPC that development contributions for community infrastructure may be sought based on the cost of infrastructure constructed and fitted-out to a standard that would meet basic and reasonable community needs and expectations for such a facility.

It is at the discretion of the relevant government agency to deliver infrastructure facilities to a higher standard than that necessary to meet basic needs, however the gap between the basic and higher delivery costs would need to be met by the relevant agency and may not be included as a development contribution requirement.

Any change to the proposed standards of infrastructure and facilities after a DCP is finalised and included in a local planning scheme can only be incorporated in a DCP through an amendment to that scheme (with associated formal processes, including public advertising). A change in standards would necessarily involve a change in total monetary or in-kind delivery development contributions being required of landowners and must therefore be progressed through the formal DCP process.

4.1.6 Final steps for all Development Contribution Plans

4.1.6.1 Establish infrastructure priority and timing

It is important to determine and specify in the DCP report the priority and estimated timing of delivery for each infrastructure item. This will help to clarify whether each considered item of infrastructure is actually likely to be delivered during the life of the DCP, and therefore whether it is an item for which the landowners in the DCA should be required to contribute.

It is understood that some flexibility is required when attempting to calculate timings for delivery of development and take-up of this development by new residents, and that any significant departure from these estimated calculations may lead to changing infrastructure priorities. On this basis, the infrastructure priorities and estimated timing of delivery do not need to be specified in the DCP that is inserted in the local planning scheme, as the DCP may only be modified via a local planning scheme amendment. Any changes can instead be accommodated though the regular reviews of the CEP and the Cost Apportionment Schedule (CAS).

If infrastructure delivery timing changes significantly enough to affect infrastructure costings, this may require a modification to the DCP itself through the formal amendment process.



4.1.6.2 Estimate infrastructure costs and prepare Capital Expenditure Plan

A CEP is required in support of a DCP for community infrastructure. It is also a recommended inclusion for any DCP, in order to clearly demonstrate the projected capital costs of delivery of each identified item of infrastructure, the timing of infrastructure delivery and the revenue sources and programs by which these costs will be met. Development contributions can be sought for:

• capital costs of providing or replacing infrastructure, including land and construction costs;

• costs of financing infrastructure, if delivered before all relevant contributions have been provided; and

• costs associated with design of an infrastructure item.

Contributions may not be sought for ongoing maintenance or operating costs of an item of infrastructure, or any other recurrent costs.

Cost estimation should be undertaken:

(a) in the case of land to be acquired, in accordance with the land valuation model provided at Schedule 53 (unless individual circumstances justify an alternative approach) and the requirements outlined in further detail at section 4.2.1.2; and

(b) in all other cases, in accordance with the best and latest information available to the local government.

The determination of infrastructure and administrative costs should be based on estimated timing of delivery of each infrastructure item. The timing and lead times for each project should be documented to ensure clarity of costing assumptions whenever the document is reviewed.

It is expected that costs estimates will incorporate a level of contingency allowance. While such contingencies are a realistic aspect of project budgeting, it is important to recognise the impact on cost estimates of an over-conservative contingency allowance. Excessive contingencies will result in development contribution amounts being set higher than is needed, and a likely excess of funds being available at the end of the life of the DCP. It is therefore important, in order to maintain the principle of equity, that any contingencies are set at realistic levels, consistent with development industry standards and subject to monitoring as part of the overall CEP review process.

The local government is to have any estimated costs independently certified by appropriate qualified persons and must provide proof of such independent certification to an owner when requested to do so.

Once estimated costs have been established, the CEP needs to establish the intended sources of funding for each infrastructure item. All potential sources must be explored, remembering that development contributions are only one of the ways in which infrastructure can be funded and that contributions should not be seen as a replacement for other sources of capital. Development contributions are intended to supplement traditional sources of infrastructure

funding including local government rates, state and federal funding, reserve funds and grants.

The CEP should, however, only include external funding that is known to be available at the time the DCP is prepared. If additional external funding is obtained following commencement of the DCP, the CEP can be reviewed to reflect this, with a likely consequent reduction in development contributions. This is a preferable scenario than if the availability of external funding was overestimated at the time of DCP preparation, with development contributions needing to be increased at a later date as a result.

4.1.6.3 Prepare Cost Apportionment Schedule

The CAS that accompanies each DCP must be advertised along with the DCP and published in final form within 90 days of gazettal of the DCP.

The CAS outlines the methodology by which costs are attributed proportionate to existing development and future growth; it establishes the demand unit to be used for calculating individual contributions; and it specifies the required contribution amount per demand unit. All assumptions relating to the calculation of levies within the CAS must be documented and expressed in a way that can be clearly understood by all stakeholders (an example template CAS is provided at Schedule 3).

Demand proportions

In order to ensure that the principles of nexus and equity are upheld, the cost of an infrastructure item must be met by all those who generate its need. This may include the existing local community, future populations and

3 The model provided in these guidelines replaces that contained in Appendix 2 of the 2009 version of SPP 3.6.



any users from outside the DCA itself. The DCP system may only require cost contributions from landowners for the proportion of infrastructure requirements directly generated by the development they undertake.

On this basis, the CAS needs to establish the demand for a facility generated by the current population; the demand created by external usage; and the demand that will be generated by future development. The resulting proportions can be applied to the cost per infrastructure item, to determine what portion of each cost can be recouped via the development contribution system.

Each infrastructure item (particularly community infrastructure) will have a catchment area from which it draws most of its usage. Establishing these catchments will assist in understanding how the need for the item is generated.

It is worth noting that some infrastructure facilities will be designed with excess capacity to service future needs beyond the lifespan of a DCP. Just like any existing or external demand, the proportion of costs associated with this long-term demand should not be included when calculating required development contributions.

Demand units

Infrastructure costs are apportioned by dividing the total cost of an item by each demand unit (having already excluded those portions of total demand generated by existing, external and future communities). Each landowner’s total development contribution will depend on how many demand units their development generates.

Some examples of demand unit include per dwelling, per lot, per hectare, or per m2 of floorspace. It is recommended, for the purposes of most DCPs, that cost apportionment is based on a per dwelling demand unit rather than a per land area unit. While this will result in higher contributions being paid by developers of higher density development, it is considered to be the most equitable approach which best reflects actual generation of infrastructure need. A high-density development is likely to produce more infrastructure users than a medium- or low-density development would.

A DCA may include land zoned for a variety of residential and non-residential land uses. DCPs may include infrastructure such as public open space or community facilities where the demand is only generated from the residential land uses. Thus, DCPs may need to incorporate multiple methodologies, to reflect differing infrastructure demand generated by residential and non-residential land uses.

Development contribution calculation

To calculate the total development contribution per demand unit, the total cost of each infrastructure item should be reduced by the proportion of its need not generated by development during the life of the DCP. The remaining cost should be divided by the number of demand units that will be created across the DCA during the life of the DCP.

The resulting development contribution would be expressed as a cost per dwelling unit, or a cost per hectare of net developable/subdividable land (see section 4.1.4.2) if a per land area apportionment methodology is used.

It is not the intent of these guidelines to indicate a standard or maximum contribution rate, as this would conflict with the principle that all contributions must reflect a nexus between development and the need for infrastructure it generates. In a State as extensive and diverse as Western Australia, different local governments will deal with DCAs with widely varying infrastructure needs and associated costs. Settting a standard or maximum contribution rate would fail to reflect these variations and would remove the accountability of the current system, which requires the need and nexus to be clearly demonstrated before a contribution rate can be established and required of developers.

It is, however, anticipated that the categorisation of infrastructure at Schedule 1 will ensure that only appropriate infrastructure items are included in DCPs, so that contribution rates are regulated as a result. In addition, all DCPs require WAPC assessment and Ministerial endorsement through the scheme amendment process, which will ensure a consistent approach is taken to setting contribution rates across the State.

CAS review

Where a CAS contains estimated costs, these costs are to be reviewed at least annually by the local government until the expenditure on the relevant item of infrastructure or administrative costs has occurred, and the reviewed CAS should be published and made available to all DCA landowners (see Section 4.3.2).



4.1.6.4 Prepare DCP report

A requirement of SPP 3.6 is that the local government is to adopt and make available a DCP report and CAS to all owners in the DCA within 90 days of the DCP coming into effect.

The specified 90 days is to allow time for the documents to be finalised, adopted by local government, and published. It is not to be interpreted as an opportunity to complete or make significant modifications to the document. The DCP report and CAS detail should be substantially complete and align with the contents of the scheme amendment documents at the time of advertising and final endorsement by the Minister to ensure transparency and accountability.

An example DCP report template is provided at Schedule 4 as a guide to the kind of information that should be included and the way that information might be presented to ensure it can be easily understood by all stakeholders.

4.1.6.5 Consultation

While a DCP is subject to a statutory public consultation process when it is included in a local planning scheme, it is recommended that early consultation on its proposed content is undertaken with relevant stakeholders, including key landowners in the DCA, providers of any infrastructure to be included in the DCP and the WAPC.

This early consultation will allow any issues or concerns to be identified and discussed early in the process, before the content of the DCP

is included in a statutory scheme amendment document subject to formal consideration by local government, the WAPC and the Minister for Planning.

For public advertising of a DCP, infrastructure and administrative items included in the cost apportionment schedule are to be supported by a detailed breakdown of the component costs of each infrastructure and administrative item to enable landowners to make an informed assessment of the appropriateness of the cost estimates.

4.1.7 Endorsement and publication

4.1.7.1 Incorporation of DCP into local planning scheme

A DCP does not have effect until it is incorporated into a local planning scheme, either as part of a new scheme, or through an amendment to a scheme. Each DCA should be identified as a Special Control Area on the scheme map and in the scheme text and a DCP for each DCA included as a schedule to the scheme text.

The DCP itself, as included in the scheme, is in some ways a summary document of the DCP report and all other supporting documents. However it has the status of being the formal, statutory DCP document and should therefore be considered to be the most important output of the DCP preparation process. The example template DCP provided at Schedule 2 should be used as a standard format for all DCPs.

A new local planning scheme or scheme amendment is progressed according to the statutory process established in the Planning and Development Act 2005 and subsidiary legislation. Inclusion of a DCA and associated DCP in a scheme must follow this same process, including a period of public consultation, review and assessment by the WAPC, a final decision by the Minister for Planning and publication in the Government Gazette (at which point the DCP takes effect).

Any change to a DCP must also follow this process, as the DCP in the scheme documents will need to be amended. While a DCP report and accompanying CAS are not themselves included in the planning scheme, and can therefore be reviewed without going through a formal amendment process, any changes to either of these documents that result in changes to the DCP itself will require the DCP to be formally amended.

4.1.7.2 Adoption and publication of DCP report and Cost Apportionment Schedule

Within 90 days of the relevant local planning scheme or amendment being published in the relevant Government Gazette, the DCP report and CAS that accompany a DCP must be adopted by Council and made available to all owners in the DCA.



4.2 Operation

To ensure that the process of DCP formulation results in a system that operates effectively and contributes towards the liveability of communities, procedures need to be in place to allow the timely and efficient provision of contributions, effective monitoring of contributions received and infrastructure provided, and identification of any enforcement or arbitration action where necessary. Local government should be satisfied that they have the right processes available to them to effectively implement DCPs and developers need to be sure that their contributions are being used appropriately.

Following finalisation of a DCP, further activities need to be undertaken by a variety of parties, to different timetables, sometimes extending over a number of years. Some of these tasks include:

• receipt of financial contributions at appropriate times;

• in-kind delivery of contributions by the developer to the required standard and timetable;

• delivery of infrastructure the local government or other government agency has agreed to provide to the required standard and timetable;

• appropriate monitoring and review of DCPs; and

• any necessary enforcement or arbitration action.

4.2.1 Provision of contributions

4.2.1.1 Imposition of requirement for contribution

The requirement for a landowner to make a DCP contribution can be imposed by a local government or the WAPC on the earliest of the following events:

• prior to final approval to subdivide/amalgamate land in the DCA; or

• prior to commencing development or a change of use on land in the DCA.

In many circumstances, the need for a contribution will be formalised through imposition of an associated condition of approval of subdivision or development, however a formal condition is not a prerequisite for a contribution being required, if the need is already established in an endorsed DCP.

A development contribution requirement associated with an endorsed development contribution plan cannot be imposed as a condition of a rezoning or other scheme amendment that facilitates development.

In addition, an owner should not be required to pay a cost contribution if simply developing a single house or outbuildings on a lot that existed at the time a DCP came into effect and which has not subsequently been subdivided or strata subdivided.

A local government should give consideration to other forms of development, of a minor or incidental nature, that should be excluded from triggering liability to pay a contribution (such as clearing of land or erection of a boundary fence, or a change of use which does not generate additional infrastructure demand).



A local government shall not withhold its support for subdivision or strata subdivision, or refuse to approve a development application, solely for the reason that there is no gazetted DCP for the subject land or that there is no other arrangement with respect to an owner’s contribution towards the provision of infrastructure.

Where there is an existing DCP included in a gazetted local planning scheme, a condition of subdivision will be applied to the effect that the relevant landowner should contribute towards the costs of providing infrastructure in accordance with the relevant local planning scheme.

Where a DCP has not yet been included in a local planning scheme via a gazetted amendment, but has been advertised as an amendment to the scheme, the WAPC will support imposition of as a condition of subdivision or strata subdivision that the relevant landowner should contribute towards the costs of providing infrastructure in line with the DCP, once the relevant amendment has been gazetted. This condition effectively anticipates some form of contribution being required, but acknowledges that the exact nature of that contribution cannot be known until the DCP has been endorsed by the Minister in its final form and included in a local planning scheme.

Development contribution requirements may only be imposed on subdivision via one of the WAPC Model Subdivision Conditions. No variation to model conditions will be supported with regard to development contributions.

4.2.1.2 Triggers for provision

DCP contributions required as a condition of subdivision or development are due and payable as part of the subject subdivision clearance process, before the WAPC endorses its approval on the relevant deposited plan or strata plan; or prior to commencement of the subject development or change of use. Contributions are generally only payable for the portion of land within the plan being requested for clearance.

In some circumstances, however, a DCP may identify infrastructure that needs to be provided to service the first development in a DCA (such as a major road extension/connection) or that is predominantly located on one owner’s land (such as a recreation facility that will service the wider DCA). In these circumstances, it is possible for the local government to require the provision of this infrastructure, as an in-kind contribution, at an earlier time than would be necessary if the standard contribution triggers were applied.

In addition, land may be required to provide an item of infrastructure early in the life of the DCP, so an owner may need to cede a greater portion of land than their relative contribution requires.

Both of these circumstances would result in a cost contribution credit being due to the relevant owner (see Section 4.2.1.3).

4.2.1.3 Method of provision

A development contribution may be provided by one or any combination of the following methods, subject to the agreement of the local government:

• ceding land for roads, public open space, primary school sites, drainage and/or other reserves;

• constructing infrastructure works to be transferred to a relevant government agency on completion (in-kind contributions);

• monetary contributions (by cash or cheque), to be used by the local government to acquire land or undertake works;

• transferring land to the local government or a government agency in satisfaction of a cost contribution; and

• some other method acceptable to the local government.

Payment may be in a lump sum, by instalments or in such other manner acceptable to the local government.

Payment of the cost contribution, including a cost contribution based upon estimated costs in a manner acceptable to the local government (see below), constitutes full and final discharge of an owner’s liability under the DCP and the local government shall provide certification in writing to the owner of such discharge if requested by the owner.



Estimated costs

Where cost contributions have been calculated on the basis of estimated costs, a local government may either accept a monetary cost contribution based on an estimated cost as a final cost contribution from an owner, or adjust the required cost contribution of any owner in accordance with revised estimated costs resulting from certified and published annual CAS reviews.

Payment of a cost contribution based on estimated costs in a manner acceptable to the local government constitutes full and final discharge of the owner’s liability.

Ceding land

Land may be ceded to the local government or other service provider to use for an item of infrastructure or as an alternative to a monetary contribution.

The value of such land should be determined by a licensed valuer using the static feasibility valuation model outlined at Schedule 5. As part of that valuation an appropriate profit and risk allowance is to be determined.

The static feasibility method is the preferred valuation model for the development contribution system because it provides a certainty and consistency in application across the system and is considered to be the most refined approach available for what can be a very complex task. There may be circumstances in which an alternative valuation method is considered to be more appropriate, such as a comparable sales or discounted cash flow method. This would need to be justified based on the specifics of the situation in question.

For the purposes of this section and Section 4.4:

• ‘value’ means the fair market value of land, at a specified date, which is defined as the capital sum that would be negotiated in an arms-length transaction in an open and unrestricted market, assuming the highest and best use of the land with all its potential and limitations (other than the limitation arising from the transaction for which the land is being valued), wherein the parties act knowledgeably, prudently and without compulsion to buy or sell; and

• ‘valuer’ means a licensed valuer agreed by the local government and the owner, or, where the local government and the owner are unable to reach agreement, a valuer appointed by the President of the Western Australian Division of the Australian Property Institute.

Other arrangements

At the discretion of the relevant local government, and with the agreement of the relevant contributor, alternative arrangements may be made for provision of a development contribution. Such arrangements may include, for example:

• infrastructure being provided in lieu of a monetary contribution;

• infrastructure being provided, the value of which is in excess of a required monetary contribution,

resulting in a potential reimbursement via a refund agreement or the application of appropriate contribution credits against future development by the same contributor; and

• a contribution being made at a different time to that identified in the DCP and/or proposed to be paid in instalments.

Agreements to such alternative arrangements are at the discretion of both parties – the relevant government provider and the contributing owner – however it is important that any such arrangements comply with the overall intent and principles of the relevant endorsed DCP.

Other alternative approaches might also be considered, but these would require an amendment to the DCP through a formal scheme amendment process, with associated WAPC assessment and Ministerial endorsement:

• alternative infrastructure being provided to meet the desired standards of service; or

• infrastructure being provided that was not originally identified in the DCP but which is deemed to deliver the same benefit as infrastructure that was identified in the DCP.



4.2.1.3 Contribution credits

In circumstances where an owner has agreed or been required to prefund an item of infrastructure, or to cede land early, to allow early infrastructure delivery, this prefunding is to be held as a credit against future contributions due from that owner, and the local government and owner must negotiate a fair and reasonable outcome in relation to this credit. Appropriate outcomes could include:

• the credit being held by the local government to be used to offset future contributions due on other land in the DCA held by the same owner;

• the credit being held by the local government until enough payments are received from subsequent contributors to enable the credit to be reimbursed; and

• the credit being reimbursed to an owner immediately on completion of the subject works/ceding of land, from contributions already received.

Any contribution credits should be indexed at the same rate at which the infrastructure costs in the DCP are indexed.

Contribution credits applied as a result of a prefunding arrangement should generally be for the cost of the infrastructure item as already identified in the CEP and CAS. The infrastructure item should be constructed to the same standard costed in the CEP, and any decision to provide a higher standard than this will require the relevant government agency or developer if on a voluntary basis, to meet the gap in costs.

If the actual amount of expenditure incurred when prefunding an infrastructure item unexpectedly varies significantly from that identified in the CEP and CAS, the local government should establish why the variation exists, whether such costs are justified, and it should determine whether the CEP and CAS need to be reviewed. If the CEP and CAS are reviewed, it is likely that the DCP itself (and therefore the cost contribution per demand unit) will require formal review, to ensure the principle of equity is upheld.

4.2.1.4 Unpaid contributions

The amount of any cost contribution for which an owner is liable, but has not paid, is a charge on the owner’s land to which the cost contribution relates and the local government may lodge a caveat, at the owner’s expense, against the owner’s certificate of title to that land.

The local government, at the owner’s expense and subject to such other conditions as the local government thinks fit, can withdraw such a caveat to permit dealing on the land and may then re-lodge the caveat to prevent further dealings.

When the cost contribution is paid in full, the local government, if requested to do so by the owner and at the expense of the owner, is to withdraw any such caveat.

Expiry of DCP

When a DCP expires and a landowner has not yet paid a contribution that is due under that DCP, an owner’s liability to pay shall be deemed to

continue in effect and shall be carried over into any subsequent DCP which includes that owner’s land.

4.2.1.4 Administration of funds

The local government is to establish and maintain a reserve account in accordance with the Local Government Act 1995 for each DCA, into which cost contributions for that DCA will be credited and from which all payments for the infrastructure and administrative items within that DCA will be made. The purpose of the reserve account or the use of money in the reserve account must be limited to the application of funds for that DCA.

Interest earned on cost contributions credited to a reserve account should be applied in the DCA to which the reserve account relates.

4.2.1.5 Funding shortfall or excess

Shortfall

If there is a shortfall in the total of cost contributions when all cost contributions have been made or accounted for in a particular DCA, the local government may -

• make good the shortfall;

• enter into voluntary agreements with owners to fund the shortfall; or

• raise loans or borrow from a financial institution to fund the shortfall.

The local government also has the right and power to impose a differential rate to a specified DCA to make up a shortfall in funding, subject to the usual requirements for such rating arrangements.



Excess

If there is an excess in funds available to a DCA when all cost contributions have been made or accounted for, the local government is to refund the excess funds to contributing owners for that DCA. If, however, it is not reasonably practicable to identify owners and their entitled amount of refund, any excess in funds shall be applied to the provision of additional facilities or infrastructure improvements in that DCA. Local government should make information publically available regarding any spend of excess funds.

4.2.2 Delivery of facilities

Identification of infrastructure as a contribution item in a gazetted DCP implies an agreement by government to provide that infrastructure.

While it is acknowledged that some level of flexibility in delivery timeframes is a realistic requirement, it is important that every effort is made by government to adhere to the estimated delivery timeframes for infrastructure for which development contributions have been made, to ensure that principles of equity and accountability are upheld.

Local government should provide updates on timing for the delivery of infrastructure through regular CEP reviews and through the five-yearly review of the DCP. Outcomes of the CEP reviews should be published by local government and made available to all relevant stakeholders.

4.3 Monitoring and review

4.3.1 Annual statement of accounts

The local government is to publish an audited annual statement of accounts for each DCA reserve account as soon as practicable after the statement becomes available.

4.3.2 Review of Cost Apportionment Schedule

The estimated costs in a CAS are to be reviewed at least annually by the local government to reflect changes in funding and revenue sources and to accommodate any change in timing of delivery, until the expenditure on each item of infrastructure or administrative costs has occurred. The costs should be indexed based on the building cost index or other appropriate index approved by the independent certifier (see below).

The local government is to have all reviews of estimated costs independently certified by appropriate qualified persons and must provide proof of such independent certification to an owner when requested to do so.

Outcomes of the annual CAS review should be published by local government and made available to all relevant stakeholders.

4.3.3 Review of Development Contribution Plan

Each DCP should be reviewed five years from the date of gazettal of the new or amended local planning scheme that incorporated the plan, or earlier should the local government consider it appropriate having regard to the rate of development in the area and the degree of development potential still existing.

Any modification to the DCP will require an amendment to the relevant local planning scheme, as would an extension of the life of a DCP. This would, through the scheme amendment process, require a period of public consultation and would require Ministerial approval before any modifications were endorsed.

4.4 Arbitration and appeals

With the exception of disputes relating to land valuation, any dispute between an owner and the local government regarding the cost contribution to be made by an owner is to be resolved by arbitration in accordance with the Commercial Arbitration Act 1985.

Cost contributions

If an owner objects to the amount of a cost contribution, within 28 days of being informed of the contribution they may give notice to the local government requesting a review of the cost contribution amount. The review is to be undertaken by an independent expert agreed to by both the local government and the owner and should be conducted at the owner’s expense.



If after this review the independent expert does not change the cost contribution to a figure acceptable to the owner, the cost contribution is to be determined -

(a) by any method agreed between the local government and the owner; or

(b) if the local government and the owner cannot agree on a method pursuant to (a) or on an independent expert, by arbitration in accordance with the Commercial Arbitration Act 1985, with the costs to be shared equally between the local government and owner.

Land valuation

If an owner objects to a valuation made by a local government appointed valuer (see section 4.2.1.2), the owner may give notice to the local government within 28 days of being informed of the value, requesting a review of the amount of the value, at the owner’s expense.

If, following a review, the valuer’s determination of the value of the land is still not a figure acceptable to the owner, the value is to be determined -

(a) by any method agreed between the local government and the owner; or

(b) if the local government and the owner cannot agree, the owner may apply to the State Administrative Tribunal for a review of the matter under part 14 of the Planning and Development Act 2005.


SCHEDULE 1: CATEGORISATION OF INFRASTRUCTURE ITEMS25

SCHEDULE 1: CATEGORISATION OF INFRASTRUCTURE ITEMS

Continued next page

Categories

A. Infrastructure required as standard (as identified at Appendix 1 of SPP 3.6) and essential for subdivision or development – can be required directly as a condition of subdivision/development, inclusion in DCP not required, if development contribution for item is to be sought.

B. Infrastructure required as standard (as identified at Appendix 1 of SPP 3.6) and essential for subdivision or development, in limited circumstances of fragmented landownership or non-frontal development, where cost redistribution is necessary – inclusion in DCP required, if development contribution for item is to be sought.

C. Infrastructure important for liveability from the earliest stages of development – inclusion in DCP required, if development contribution for item is to be sought.

D. Administrative items associated with preparation of a DCP – inclusion in DCP required, if development contribution for item is to be sought.

E. Infrastructure optional for liveability, generally found in mature communities, or where need or nexus cannot be demonstrated - delivery of these items should be at the discretion of the relevant developer or government agency, inclusion in DCP not appropriate.

Item no.

Item description Category Suitable for development contribution plan?

Supporting community infrastructure plan needed?

Method of delivery

Utilities

1a Water supply infrastructure: on-site works

B Only in limited cases of fragmented land or non-frontal development where inclusion in a DCP is the only way to facilitate subdivision

No Land and Construction of infrastructure or If included in a DCP, monetary contribution based on need/nexus

1b Water supply infrastructure: off-site capital works

B (where not prefunded by government agency)

Only in limited cases of fragmented land or non-frontal development where inclusion in a DCP is the only way to facilitate subdivision

No Land andConstruction of infrastructure orIf included in a DCP, monetary contribution based on need/nexus

2a Wastewater supply infrastructure: on-site works





Continued next page

Item no.



Method of delivery

2b Wastewater supply infrastructure: off-site capital works

B (where not prefunded by government agency)

Only in limited cases of fragmented land or non-frontal development where inclusion in a DCP is the only way to facilitate subdivision


2c Wastewater supply infrastructure: off-site land requirements, including any buffers

C Yes No Land acquired by relevant provider orMonetary contribution based on demonstrated need/nexus

3a Power: initial provision



3b Power: upgrades to existing services



4a Telecommunications: initial provision

E No No Delivery by and at discretion of developer/relevant provider

4b Telecommunications: upgrades to existing services

E No No Delivery by and at discretion of developer/relevant provider

5 Gas supply E No No Delivery by and at discretion of developer/relevant provider



Continued next page

Item no.



Method of delivery

Movement network

6 Primary roads E1 No No Delivery by relevant government agency

7 District Distributor roads (including intersection treatments)

B2 Yes No Land andConstruction of infrastructure 3 orMonetary contribution based on demonstrated need/nexus

8 Local roads (including intersection treatments)

B Only in limited cases of fragmented land where inclusion in the DCP is the only way to facilitate subdivision


9a Existing roads: widening

B 4 Only in limited cases of fragmented land where inclusion in a DCP is the only way to facilitate subdivision

No Land (ceded free of cost to the State as per WAPC policy, or acquired by relevant government agency, or subject to injurious affection) orIf included in a DCP, monetary contribution based on need/nexus

9b Existing roads:Upgrades (including intersection treatments)

B5 Only in limited cases of fragmented land where inclusion in a DCP is the only way to facilitate subdivision

No Construction of infrastructure 3 orMonetary contribution based on demonstrated need/nexus

10 Shared paths/PAWs E (unless as part of items 7-9)

No No Delivery by and at discretion of developer/relevant government agency (If part of items 7-9, Construction of infrastructure orMonetary contribution based on demonstrated need/nexus)

11 Regional cycle paths E No No Delivery by and at discretion of developer/relevant government agency

12 Grade separated pedestrian crossings

E (unless as part of items 7-9)

No No Delivery by and at discretion of developer/relevant government agency (If part of items 7-9, Construction of infrastructure orMonetary contribution based on demonstrated need/nexus)

13 Street furniture, trees, planting etc E No No Delivery by and at discretion of developer/relevant government agency

14 Public transport facilities E No No Delivery by relevant government agency



Continued next page

Item no.



Method of delivery

Public parkland and recreation

15 Land for public open space (local/district)

B No (except in limited cases of fragmented land where inclusion in the DCP is the only way to facilitate subdivision)

No Land (required 10% contribution of gross subdivisible area as part of WAPC policy) orMonetary contribution based on demonstrated need/nexus

16a Basic development of passive public open space (full earthworks, basic reticulation, grassing of key areas, pathways that form part of the overall pedestrian and/or cycle network, maintenance for two summers)

B No (except in limited cases of fragmented land where inclusion in the DCP is the only way to facilitate subdivision)

No Construction of infrastructure orMonetary contribution based on demonstrated need/nexus

16b Typical additional facilities for passive public open space (limited to provision of basic playground equipment, lighting of main pathways for safety purposes, basic seating, water fountains, litter bins)

C Yes No Construction of infrastructure orMonetary contribution based on demonstrated need/nexus

16c Enhanced facilities for passive public open space (eg extensive reticulation, extensive lighting, picnic facilities, gazebos, BBQs, elaborate playground equipment, outdoor fitness equipment, dog agility courses)

E No No Delivery by and at discretion of developer/local government

17 Local sports grounds and facilities (at local / neighbourhood parks)

C Yes Yes Land andConstruction of infrastructure orIf included in a DCP, monetary contribution based on need/nexus.



Continued next page

Item no.



Method of delivery

18a Multi-purpose district sport grounds (at district parks) (including grassed playing surfaces, maximum four multi-purpose hard surface outdoor courts, lighting, fencing; excluding sports equipment)

C Yes Yes Land (as part of item 15) andConstruction of infrastructure orMonetary contribution based on demonstrated need/nexus

18b Multi-purpose district sports pavilion (at district open space) (or similar building located on public open space or foreshore reserve, including toilets, change rooms, basic kiosk facility)

C Yes Yes Land (as part of item 15) andConstruction of infrastructure orMonetary contribution based on demonstrated need/nexus

19 Special purpose hard surface outdoor / covered courts

E No No Delivery by and at discretion of developer/relevant government agency

20 Specialist sports facilities (for exclusive use by specialist sports club eg lawn bowls)


21 Regional sports grounds and facilities (at regional open space) (eg aquatic centre, gymnasium)


22 Surf club rooms (for exclusive use by surf club)


23 Golf course grounds and facilities E No No Delivery by and at discretion of developer/local government

24 Boating facilities (such as jetties, boat ramps etc)


25 Foreshore reserve creation B Only in limited cases of fragmented land where inclusion in the DCP is the only way to facilitate subdivision

No Land (ceded free of cost to the State as per WAPC policy) orIf included in a DCP, monetary contribution based on need/nexus



Continued next page

Item no.



Method of delivery

26 Foreshore reserve management plan and/or upgrades)

B (or as part of items 16a-b)

Only in limited cases of fragmented land where inclusion in the DCP is the only way to facilitate subdivision (or as part of items 16a-b)

No Delivery by and at discretion of developer/relevant government agency orIf included in a DCP, monetary contribution based on need/nexus

Urban water management

27 Local drainage B Only in limited cases of fragmented land where inclusion in the DCP is the only way to facilitate subdivision

No Land (part of items 7-9 or 15) andConstruction of infrastructure orIf included in a DCP, monetary contribution based on need/nexus

28 Regional drainage E No No Delivery by and at discretion of developer/ relevant government agency

29a6 Environmental Protection Policy or Conservation category wetland core area

E7 No7 No Land (ceded free of cost to the State as per WAPC policy 7)

29b6 Environmental Protection Policy or Conservation category wetland buffer

B (if useable for recreation purposes and part of the overall public open space network)

Yes (if useable for recreation purposes and part of theoverall public open space network)

No Land (as part of allowable 2% restricted use portion of item 15, if useable for recreational purposes) orMonetary contribution based on demonstrated need/nexus

29c6 Environmental Protection Policy or Conservation category wetland management (including any rehabilitation)

E No No Delivery by and at discretion of relevant government agency



Continued next page

Item no.



Method of delivery

30a6 Resource enhancement wetland core area

B (if useable for recreation purposes and part of the overall public open space network)

Yes (if useable for recreation purposes and part of the overall public open space network)


30b6 Resource enhancement wetland buffer

B(if useable for recreation purposes and part of the overall public open space network)



30c6 Resource enhancement wetland management (including any rehabilitation)

E No No Delivery by and at discretion of developer or relevant government agency

31a6 Multiple use wetland core area (if land intended to be given up and rehabilitated for conservation purposes)

B(if useable for recreation purposes and part of the overall public open space network)





Continued next page

Item no.



Method of delivery

31b6 Multiple use wetland buffer B(if useable for recreation purposes and part of the overall public open space network)



31c6 Multiple use wetland management (including any rehabilitation)

E No No Delivery by and at discretion of developer or relevant government agency

32 Artificial lake or waterway with no drainage function


33 Technical consultant fees for studies and plans associated with urban water management


No Delivery by and at discretion of developer/local government orIf included in a DCP, monetary contribution based on need/nexus

Schools, institutions and community facilities

34 Primary school A No No Land (ceded free of cost to the State as per WAPC policy) or pro-rata contribution by landowners in catchment via condition of subdivision

35 High school E No No Land acquired by relevant government agency

36 Technical college (TAFE) E No No Land acquired by relevant government agency

37 Non-government schools (primary and high)

E No No Land acquired by relevant provider

38 Local / neighbourhood community building and facilities

C Yes Yes Land andConstruction of infrastructure orIf included in a DCP, monetary contribution based on need/nexus.



Continued next page

Item no.



Method of delivery

39 Multi-purpose district community building and basic facilities (including, for example, meetings rooms, indoor recreation rooms, small scale flexible performance space, kitchen facilities, toilets)

C Yes Yes Land (in some circumstances as part of item 15)andConstruction of infrastructureorMonetary contribution based on demonstrated need/nexus

40 District library building and basic facilities (excluding specialist interior fit-out and technology)


41 Child care/after school centre buildings and basic facilities (community-run centres only, excluding interior fit-out and technology)


42 Specialist community facilities (for exclusive use by specialist organisations eg seniors centre, youth centre, arts centre, health centre)


43 Performing arts facility E No No Delivery by and at discretion of developer/relevant government agency

44 Council offices / civic centre E No No Delivery by and at discretion of developer/local government



Continued next page

Item no.



Method of delivery

Administrative items

45 Costs to prepare and administer DCP D Yes No Monetary contribution based on demonstrated need/nexus

46 Costs to prepare and review cost estimates for DCP

D Yes No Monetary contribution based on demonstrated need/nexus

47 Costs to prepare cost apportionment schedule for DCP


48 Costs for undertaking valuations for DCP


49 Fees for professional services directly linked to preparation and implementation of DCP (eg legal and accounting fees)


50 Technical consultant fees for other studies, plans, reports, project management etc associated with development of land (except items 45-49)


No Delivery by and at discretion of developer/local government orIf included in a DCP, monetary contribution based on need/nexus

51 Costs for computer software and/or hardware upgrades necessary to enable DCP preparation


52 Costs associated with office accommodation and facilities for staff undertaking DCP administration

E No No Costs to be covered by local government as part of standard Council provision of staff accommodation and facilities

53 Proportion of staff salaries directly related to DCP administration




Item no.



Method of delivery

54 Financial institution fees and charges associated with administration of DCP funds


55 Interest charged on loans taken out to pre-fund items included in DCP (established based on lending rates at the time DCP is prepared)


Other

56 Marketing features (eg estate boundary walls or fencing, entry statements, public art, signage)


57 CCTV E No No Delivery by and at discretion of developer/local government

58 Business incubator units E No No Delivery by and at discretion of developer/local government

Notes1 – Except in special circumstances, such as where

superlots are created on the urban fringe to allow for future subdivision.

2 – As a condition of subdivision for major subdivisions, where district distributors abut or are included within area of subdivision, or are required to connect to existing major roads outside the subdivision area but within the same landholding.

3 – Earthworks for whole road reserve; construction of one carriageway comprised of two lanes; associated drainage works; and shared paths and/or grade-separated crossings if shown in structure plan for area.

4 – As a condition of subdivision or strata-subdivision where the proposal induces additional traffic and/or turning movements, or in other circumstances where justified; and/or as a condition of development where the development is a significant traffic generator or is serviced by vehicles with special access requirements. In other circumstances, land to be acquired by the appropriate authority.

5 – As a condition of subdivision where existing roads are inadequate to accommodate traffic generated by proposal.

6 – Items 29 to 31 have been categorised according to the principle that land for wetlands is not suitable for inclusion in a DCP purely for environmental

protection purposes. Such land should provide a community recreation benefit in order to be considered for inclusion, and any valuation of the land should reflect the lack of development potential resulting from its environmental constraints.

7 – Except in in very limited circumstances where subdivision/development is a priority and inclusion in a DCP is the only way to facilitate it, in which case, monetary contribution based on need/nexus. Land valuation to reflect environmental constraints (in previous cases such valuations have been calculated based on rural land values).



Definitions

Regional open space means land defined under a region scheme, regional structure plan or sub-regional structure plan as a parks and recreation reserve or as regional open space reserve, to accommodate active and passive recreation such as major playing fields and/or regional conservation and environmental features

District open space means an area of public open space notionally serving three neighbourhoods, generally between 2.5 to 7 hectares, which will accommodate a combination of informal play areas, formal playing fields and hard surfaces for organised sports

Local / neighbourhood park means an area of public open space, generally less than 5,000m2, designed and located for local children’s play, rest places, pedestrian connectivity, informal active recreation and play, and passive recreation.


SCHEDULE 2: DEVELOPMENT CONTRIBUTION PLAN TEMPLATE37

SCHEDULE 2: DEVELOPMENT CONTRIBUTION PLAN TEMPLATENote: this must be incorporated into the local planning scheme.

SCHEDULE ZZ Development contribution plan for development contribution area x

Reference No. DCP X

Area name: DCA XX

Relationship to other plans: The development contribution plan generally conforms to the Plan for the Future, the 10 year Financial Management Plan and the Community Infrastructure Plan.

Infrastructure and administrative Items to be funded:

1. District community centre• Single storey, xm2, plot ratio floor area building with x parking spaces situated on lot x, x street, x suburb

i. planning and designii. site acquisitioniii. earthworks and site (including servicing);iv. construction of facility (including associated tender )v. associated parkingvi. associated landscaping

2. Administrative costs including:• costs to prepare and administer the plan during the period of operation (including legal expenses, valuation fees, proportion of staff salaries, computer

software or hardware for purpose of administering the plan)• costs to prepare and review estimates• costs to prepare the cost apportionment schedule• valuation costs

Method for calculating contributions:

The contributions outlined in this plan have been derived based on the need for community infrastructure and/or non-community infrastructure generated by additional development in the development contribution plan. The local government’s Community Infrastructure Plan identifies the community infrastructure needs that impact on the development contribution plan. The method for calculating contributions excludes the:

• demand for a facility that is generated by the current population;• demand created by external usage - the proportion of use drawn from outside of the main catchment area; and • future usage – the proportion of usage that will be generated by future development outside of the development contribution plan timeframe.

Period of operation: X years

Timing and priority: In accordance with the development contribution plan report and the Community Infrastructure Plan.

Review process: The plan will be reviewed five years from the date of gazettal of the local planning scheme or amendment to the local planning scheme to incorporate the plan, or earlier should the local government consider it appropriate having regard to the rate of development in the area and the degree of development potential still existing.The estimated infrastructure costs shown in the cost apportionment schedule will be reviewed at least annually to reflect changes in funding and revenue sources and indexed based on the Building Cost Index or other appropriate index as approved by the qualified person undertaking the certification of costs.


SCHEDULE 3: COST APPORTIONMENT SCHEDULE TEMPLATE38

SCHEDULE 3: COST APPORTIONMENT SCHEDULE TEMPLATENote: This schedule does not form part of the planning scheme

LANDOWNER CONTRIBUTIONS FOR DCX – AAAAAA $ est.

Land acquisition costs

District community centre $0.00$0.00

Planning and design costs


Construction costs


Landscaping costs


Parking provisions

District community centre

Etc

$0.00$0.00$0.00

Administration costs

Costs to prepare the plan and administer

Etc

$0.00$0.00$0.00

Total projected demand for the district community centre $0.00

Less demand from existing residents $0.00

Less demand from external users $0.00

Less future demand outside of the development contribution plan timeframe

$0.00

Total demand associated with development contribution plan $0.00

Lotdescription

Demand generated Infrastructure requirement

Percent of total demand %

1

2

3

4

5


SCHEDULE 4: DEVELOPMENT CONTRIBUTION PLAN REPORT TEMPLATE39

(insert name) Development Contribution Plan Report

Development contribution area

The development contribution area is shown on the scheme map as: DCA X.

Purpose The purpose of this development contribution plan report is to -a) enable the applying of development contributions for the development of new, and the upgrade of existing infrastructure which is required

as a result of increased demand generated in the development contribution area;b) provide for the equitable sharing of the costs of infrastructure and administrative items between owners; c) ensure that cost contributions are reasonably required as a result of the subdivision and development of land in the development contribution area; andd) coordinate the timely provision of infrastructure.

This section should also include reference to any higher order strategic plans/structure plans which have identified infrastructure proposed to be provided through the DCP.

Period of the plan X years from June 30 20XX to June 30 20XX

Operation of development contribution plan

The plan has been prepared in accordance with State Planning Policy 3.6 Development Contributions for Infrastructure. It will come into effect on the date of gazettal of the local planning scheme or amendment to the local planning scheme to incorporate the plan.The plan will operate in accordance with the provisions of section X of the local planning scheme.

Application requirements Where an application for subdivision, strata subdivision, development or an extension of land use is lodged which relates to land to which this plan applies, the local government shall take the provisions of the plan into account in making a recommendation on or determining that application.

Principles Development contributions will be applied in accordance with the following principles:

1. Need and the nexus - the need for the infrastructure included in the plan must be clearly demonstrated (need) and the connection between the development and the demand created should be clearly established (nexus).

2. Transparency - both the method for calculating the development contribution and the manner in which it is applied should be clear, transparent and simple to understand and administer.

3. Equity - development contributions should be levied from all developments within a development contribution area, based on their relative contribution to need.

4. Certainty - all development contributions should be clearly identified and methods of accounting for escalation agreed upon at the commencement of a development.

5. Efficiency - development contributions should be justified on a whole of life capital cost basis consistent with maintaining financial discipline on service providers by precluding over recovery of costs

SCHEDULE 4: DEVELOPMENT CONTRIBUTION PLAN REPORT TEMPLATENote: This report does not form part of the planning scheme but provides the rationale and justification for the development contribution plan, the calculation of costs, and the cost apportionment schedule specifying the costs for each owner.


SCHEDULE 4: DEVELOPMENT CONTRIBUTION PLAN REPORT TEMPLATE40

6. Consistency - development contributions should be applied uniformly across a development contribution area and the methodology for applying contributions should be consistent.

7. Right of consultation and arbitration - land owners and developers have the right to be consulted on the manner in which development contributions are determined. They also have the opportunity to seek a review by an independent third party if they believe the calculation of contributions is not reasonable.

8. Accountable - there must be accountability in the manner in which development contributions are determined and expended.

Items included in the plan This section should list each of the administrative and infrastructure items, including land acquisition if required, and include a sufficient description of what each item is and the basis for its inclusion in the DCP. The need and nexus for each item is to be outlined clearly in this section. There may be a need for additional appendices to be included supporting information such as population projections, community infrastructure plans, traffic modelling or the like which has been used to demonstrate need and nexus for items. The section should also include reference to a Spatial Plan in an Appendix which shows the location of proposed infrastructure.Details of the cost apportionment can be seen in the cost apportionment schedule.

Estimated Costs Refer to Schedule of costs of each item of infrastructure and administrative items in Appendices. Schedule of costs should be detailed and give a clear description of what the total cost of each infrastructure item is comprised of , for example, all costs associated with the design and contribution of infrastructure, including cost of land acquisition of required and relevant contingencies. The schedule should include an asset ID for each infrastructure item which cross references to the spatial plan showing the location of each item of infrastructure.

Method of Calculating Contribution

Detailed methodology of, and formula for, calculating an owner’s cost contribution. Refer to Cost Apportionment Schedule in Appendices.

Priority and timing of infrastructure delivery

Detail when infrastructure is expected to be provided and what triggers this is based on (eg. threshold of population or additional dwellings). Details of the priority and timing can be seen in the Capital Expenditure Plan contained in Appendices.

Payment of Contributions This section is to outline how payment of contributions is to occur and should reference relevant scheme provisions. The section may also outline a local government’s approach to dealing with payments of cost contributions as provided for by the local planning scheme provisions, including conditions and method of calculating offsets.

Review The plan will be reviewed five years from the date of gazettal of the local planning scheme or amendment to the local planning scheme to incorporate the plan, or earlier should the local government consider it appropriate having regard to the rate of development in the area and the degree of development potential still existing.The estimated infrastructure costs as shown in the cost apportionment schedule will be reviewed at least annually to reflect changes in funding and revenue sources and indexed based on the Building Cost Index or other appropriate index as approved by the qualified person undertaking the certification of costs.

Appendices 1. Spatial Plan depicting DCA and location of proposed infrastructure items2. Schedule of Costs of infrastructure and administrative items 3. Cost Apportionment Schedule 4. Capital Expenditure Plan


SCHEDULE 5: STATIC FEASIBILITY MODEL41

Gross realisation

Net lot yield @ average market value per lot “X” lots @ “$Y” per lot $ $ (1)

Less GST @ standard / normal rates

(1) Multiplied by GST rate/(100+GST rate) $ (2)

(1-2) $ (3)

Less selling, marketing, advertising and settlement fees

@ market % multiplied by (1) $ (4)

Add back Input Tax Credit on selling fees (4) Multiplied by GST rate/(100+GST rate) $ (5)

(4-5) $ (6)

Balance after selling costs etc. and Input Tax Credit (3-6) $ (7)

Less profit and risk allowance

Market determined profit and risk allowance % (8)

EXPLANATION: (8) to be expressed as a whole number eg.15%=15 so Risk = (8) multiplied by risk rate/(100+(10)) $ (9)

Balance after profit & risk factor (7-9) $ (10)

Less development costs

@ “X” lots multiplied by “$Z” per lot $ (11)

Add back Input Tax Credit on (11)

(11) Multiplied by GST rate/(100+GST rate) $ (12)

Development cost after Input Tax Credit (11-12) $ (13)

Add interest on net development costs (13)

For 1/2 development and 1/2 selling term @ Applicable market rates (13) Multiplied by % rate/(100+%rate) $ (14)

(13+14) $ (15)

Balance after deduction of development costs & interest (10-15)

$ (16)

Less interest on land value

Assessed over 1/2 development and 1/2 selling term @ Applicable market rates(16) Multiplied by % rate/(100+%rate) $ (17)

Balance after interest on the land (16-17) $ (18)

Less rates and taxes

Applicable rates and taxes $ (19)

Balance after rates abd taxes (18-19) $ (20)

Less Stamp Duty @ current statutory rates

(20) Multiplied by stamp duty rate/(100+stamp duty rate) $ (21)

Residual Land Value prior to GST considerations (20-21) $ (22)

Add GST at prevailing statutory rate

(22) + GST at prevailing statutory rate $ (23)

ASSESSED LAND VALUE

(22+23) $

SCHEDULE 5: STATIC FEASIBILITY MODEL Note: This working sheet model is to be used in order to determine the value of land to be acquired for the purpose of providing infrastructure.


SCHEDULE 5: STATIC FEASIBILITY MODEL42

The Static Feasibility Model is based upon:

(i) The number of lots yielded from the land will have a gross sale price which, when multiplied by the number of lots created, establishes the Gross Realisation.

(ii) GST will be calculated by the standard/normal method.

(iii) Selling, marketing, advertising and settlement fees expressed as a percentage shall be added and then expressed as a total percentage against the gross realisation.

(iv) Development costs will be established as an appropriate servicing cost (inclusive of GST) per lot at the date of valuation, multiplied by the lots realised from the land.

(v) Interest against the development costs will be established by the application of bank lending rates for such projects at the date of valuation.

(vi) Interest against the land in development will be established by the application of bank lending rates for such development acquisitions at the date of valuation.

(vii) Rates and taxes will be applied for the full term of acquisition, development and sale.

(viii) Stamp Duty will be applied at the statutory rate as applicable at the date of valuation.

(ix) GST will be applied at the prevailing statutory rate as applicable at the date of valuation.

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