Expenditure outstanding under CP5 is valued at $4,482,205, comprising:
$3,711,128 on items to be completed; and
$771,077 of ‘reimbursement’ towards completed items (where actual expenditure exceeded planned expenditure);
Based on the above, there are sufficient funds ($5,035,944) for the completion of all outstanding expenditure ($4,482,205) and it is anticipated that there may be an end of plan surplus of approximately $550,000 (however this negligible surplus would only be realised following the completion of all outstanding works and receipt of all outstanding fees levied).
Outstanding Works
The indicative location, description and value of outstanding items under CP5 is identified in Figure 2 below. It is noted that all outstanding items are scheduled for completion within Council’s current 10 year works program. As detailed above, the total value of these outstanding works is $3,711,128.
Figure 2
CP5 Outstanding Items Strategy for Repeal of CP5
It is considered that the utility of maintaining CP5 as an individual Section 94 contributions plan has diminished on the basis that:
The majority of infrastructure to be provided under CP5 has been completed;
There are sufficient funds for the completion of all remaining items;
The envisaged 10 year time frame (2002-2012) is now complete;
The majority of future residential growth within the CP5 area will be located within the Castle Hill Station Precinct and as such, will be subject to a new contributions plan in the future. The repeal of CP5 is a necessary step prior to the commencement of any new contributions plan for land within the Castle Hill Precinct; and
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PAGE 99
Remaining growth within the CP5 area (outside of the Castle Hill Station Precinct) will likely be sporadic infill development. The application of The Hills S94A Plan to this area will allow Council to levy all development types (rather than just new residential development) and will generate a similar extent of income (if not greater) from future development, which can be more flexibly expended on infrastructure anywhere within the Shire (rather than just within the CP5 area).
In light of this, it is considered appropriate that CP5 be repealed by way of amendments to The Hills S94A Plan which repeal CP5, extend the application of The Hills S94A Plan to the areas currently covered by CP5 and include outstanding items under CP5 (as shown in Figure 2) within the Works Schedule to The Hills S94A Plan.
There may be scope to review the necessity for, or location of, particular outstanding items as part of subsequent review of The Hills S94A Plan Works Schedule in the future.
CONTRIBUTIONS PLAN NO.7 (SOUTHERN PRECINCTS)
CP7 came into force on 23 July 2002 and levies new residential development within the suburbs of Baulkham Hills, Northmead, North Rocks, Carlingford and Oatlands (as shown in Figure 3 below) to meet the cost of providing local infrastructure arising from additional population in these areas. The Plan is based on a 10 year time frame from 2002 to 2012 and as such the envisaged operation period of the plan is now complete.
It is anticipated that there is remaining development potential for approximately 1,200 new dwellings within the CP7 area, likely to occur as infill development.
Figure 3
Land to which CP7 applies Financial Status - Income
Total projected income under CP7 is valued at $24,542,349 comprising:
$13,048,502 which has already been spent on the completion of works;
$10,993,847 currently on hand/available; and
$500,000 in fees levied (on approved Development Applications) but not yet paid.
Based on the above, there is $11,493,847 of unspent income under CP7.
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PAGE 100 Financial Status - Expenditure
Expenditure outstanding under CP7 is valued at $5,004,193, comprising:
$4,701,702 on items to be completed; and
$302,491 of ‘reimbursement’ towards completed items (where actual expenditure exceeded planned expenditure).
Based on the above, there are sufficient funds ($11,493,847) for the completion of all outstanding expenditure ($5,004,193) and it is anticipated that there may be an end of plan surplus of approximately $6.48 million (however it is noted that this surplus would only be realised following the completion of all outstanding works if all outstanding fees levied (valued at approximately $500,000) were received).
Outstanding Works
The indicative location, description and value of outstanding items under CP7 is identified in Figure 4 below. It is noted that all outstanding items are scheduled for completion within Council’s current 10 year works program. As detailed above, the total value of these outstanding items is $4,701,702.
Figure 4
CP7 Outstanding Items Strategy for Repeal of CP7
It is considered that the utility of maintaining CP7 as an individual Section 94 contributions plan has diminished on the basis that:
The majority of infrastructure to be provided under CP7 has been completed;
There is sufficient funds for the completion of all remaining items;
The envisaged 10 year time frame (2002-2012) is not complete; and
The majority of remaining residential growth within the CP7 will likely be sporadic infill development. The application of The Hills S94A Plan to this area will allow Council to levy all development types (rather than just new residential development)
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PAGE 101 and generate a higher value of income from future development, which can be more flexibly expended on infrastructure anywhere within the Shire (rather than just within the CP7 area).
In light of this, it is considered appropriate that CP7 be repealed by way of amendments to The Hills S94A Plan which repeal CP7, extend the application of The Hills S94A Plan to the areas currently covered by CP7 and include outstanding items under CP7 (as shown in Figure 4) within the Works Schedule to The Hills S94A Plan.
There may be scope to review the necessity for, or location of, particular outstanding items as part of subsequent review of The Hills S94A Plan Works Schedule in the future.
Surplus Funds under CP7
As detailed above, the repeal of CP7 would result in an end of plan surplus of between
$5.9 and $6.48 million, which must in turn be expended on infrastructure which services the areas from which the surplus money was collected.
Accordingly, it is recommended that should CP7 be repealed, the following additional works (valued at approximately $5.6 million) should also be included within The Hills S94A Plan along with those currently outstanding under CP7:
1. Baulkham Hills Town Centre Public Domain Works (Stage 1 - valued at $1.5 million and Stage 2 – valued at $1.5 million): Given the role of the Baulkham Hills Town Centre as a key town centre which services the CP7 area, it is considered appropriate that approximately $3 million of the surplus funds be used as ‘reimbursement’ for the Stage 1 Public Domain works being completed in accordance with the adopted Baulkham Hills Town Centre Public Domain Plan; and
2. Traffic Signals at the intersection of Arthur Street and Seven Hills Road (valued at
$4.1 million with $2.6 million unfunded): The provision of traffic signals at this location is currently included within The Hills S94A Plan with an estimated cost of
$1.5 million. However, due to a range of unforeseen factors including the cost and delay associated with service relocation, the actual cost of this project has escalated to approximately $4.1 million. It is considered appropriate that approximately $2.6 million of the surplus funds be used to fund the remaining costs associated with this works item, which will service the CP7 area.
THE HILLS S94A PLAN
The Hills S94A Plan applies to all development types and allows Council to impose, as a condition of consent, a requirement that the applicant pay a development contribution levy based on a percentage of the proposed cost to carry out a development. Unlike a traditional Section 94 Contributions Plan, a Section 94A Contributions Plan does not need to demonstrate a direct nexus between the facilities and works to be funded and the development to be levied. Accordingly, this type of plan is most suited to locations where a greater degree of expenditure flexibility is required, which is particularly useful when providing for public facilities across the whole of the Shire.
In November 2011, Council’s Section 94 Contributions Plan Nos.1 (Bella Vista Village), 2 (West Pennant Hills Valley), 3 (Crestwood) and 4 (Glenhaven) were repealed and replaced by The Hills Section 94A Plan. The areas within the Shire currently subject to The Hills S94A Plan are identified below.
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PAGE 102 Figure 5
Land to which The Hills S94A Plan applies (identified in green)
As detailed within this report, it is recommended that The Hills S94A Plan be amended to facilitate the repeal of CP5 and CP7. It is also recommended that concurrent
‘housekeeping’ amendments to The Hills Section 94A Plan be made to extend the application of the Plan to all land within the Shire (including all commercial and local centres) and clarify the types of development which are exempt from the application of the Plan.
The proposed amendments to The Hills S94A Plan are identified in Attachment 1 and are detailed further below.
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PAGE 103 a. Repeal of CP5 and CP7
As detailed within this report, it is recommended that CP5 and CP7 be repealed by way of amendments to The Hills S94A Plan and that all outstanding items, as well as new items for the expenditure of surplus funds remaining under CP7, be included within the Works Schedule to The Hills S94A Plan.
To facilitate the repeal of CP5 and CP7, the following amendments are recommended:
1. Amend Clause 4 to include CP5 and CP7 in the list of plans repealed by The Hills S94A Plan. In accordance with Clause 32 of the Environmental Planning and Assessment Regulation 2000, the repeal of CP5 and CP7 would take effect at the time the proposed amendments to The Hills Section 94A Plan come into force; and 2. Amend the Works Schedule to The Hills S94A Plan to include all outstanding items in
CP5 and CP7 and new items for the expenditure of surplus funds collected under CP7 (as identified within this report). Funds on hand from CP5 and CP7 should be allocated to The Hills Section 94A Plan for expenditure on the provision of these outstanding works items.
It is proposed that The Hills S94A Plan will apply to all land previously subject to CP5 and CP7. While this would ordinarily require specific amendments to the Plan, the concurrent
‘housekeeping’ amendments to The Hills S94A Plan detailed below extend the application of The Hills S94A Plan to the whole of the Shire which will ensure that the land currently covered by CP5 and CP7 is subject to The Hills S94A Plan.
b. Extended Application of The Hills S94A Plan
A number of areas within the Shire are subject to Contributions Plans which only levy new residential development and as a result, non-residential development and development which increases the intensity of existing residential development can occur within these areas without any requirement for contributions to be made towards the provision of infrastructure and services within the Shire.
In addition, a number of commercial and local centres within the Shire are currently exempt from any Section 94 or Section 94A Contributions Plan (such as Round Corner Town Centre, Kenthurst Rural Centre, part of Norwest Town Centre surrounding Norwest Market Town and Showground Station Precinct). These exemptions were granted during the global financial crisis to remove barriers to development within these key centres however it is considered that this exemption is no longer necessary.
In order to ensure that all development within the Shire contributes towards the provision of the required infrastructure and services, it is recommended that the application of The Hills Section 94A Plan be extended to apply to the entire Shire. This would not interfere with or alter the operation of Council’s existing residential contributions plans however it would allow Council to levy Section 94A contributions (up to 1% of the cost of development) where a development is not subject to the relevant residential contributions plan.
It is considered that the application of The Hills S94A Plan to the whole Shire will ensure the costs of providing infrastructure and services are more fairly distributed across all development, rather than being borne primarily by residential development. Further, it is considered that the imposition of a maximum levy under Section 94A of 1% of the cost of development is reasonable and unlikely to act as a financial barrier to development.
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PAGE 104 To achieve this, the following amendments are recommended:
1. Amend Clause 3 to specify that the Plan applies to “all” land within the Shire;
2. Amend Figure 1 “Land to which this Plan applies” to include all land within the Shire;
3. Amend Clause 5 to specify that where an existing Section 94 Plan applies to land and a proposed development is eligible to be levied under that Plan, the development shall be levied in accordance with the applicable Section 94 Plan rather than The Hills Section 94A Plan (this ensures that fees are only levied under Section 94A where a development could not otherwise be levied under an existing Section 94 Plan).
c. Clarification of Development Types Exempt from the Application of the Levy A Ministerial Direction issued under Section 94E of the Environmental Planning and Assessment Act 1979 on 10 November 2006 identifies types of development which are exempt from the payment of Section 94A levies. These exemptions are for development for the purpose of disabled access, affordable housing (sole purpose), adaptive reuse of an item of environmental heritage (sole purpose) and where a condition has already been imposed under Section 94 of the Act relating to the subdivision of the land.
In addition to these mandated exemptions, Clause 8 of The Hills Section 94A Contributions Plan provides additional exemptions from the payment of the levy for developments for the purpose of:
Public libraries;
Community/education facilities;
Child care facilities;
Places of public worship;
Public hospitals;
Police stations; and
Fire stations.
While the granting of these additional exemptions is at the discretion of Council, it is required that all policies on exemptions are clearly stated in a Section 94A Contributions Plan.
Currently, the listing of discretionary exemptions in Clause 8 has prompted requests from applicants for exemption from the payment of Section 94A contributions with respect to a range of development types not listed (including non-government (private) schools and training facilities associated with places of public worship). While Clause 8 was not intended to provide exemptions to such development, the current clause has been subject to some misinterpretation causing angst amongst the community and developers.
In order to provide clear guidance on the types of development which are exempt from the payment of Section 94A contributions, it is recommended that the existing Clause 8 be deleted and replaced with the following:
“The only exemptions allowed are those the subject of a direction from the Minister for Planning under Section 94E of the EP&A Act.”
CONCLUSION
The proposed amendments to The Hills Section 94A Plan will facilitate the repeal of CP5 and CP7, ensure that the costs of providing infrastructure are fairly distributed across all
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PAGE 105 development within the Shire and provide certainty with respect to what development is exempt from the payment of Section 94A Contributions.
It will also be an important step towards creating a more streamlined, flexible and consistent contributions planning framework by reducing the number of contributions plans in operation and increasing the portion of the Shire subject to the provisions of The Hills Section 94A Contributions Plan.
It is recommended that Council publicly exhibit the draft amendments to The Hills S94A Plan provided as Attachment 1 to this report. Following public exhibition, the draft amendments would be reported back to Council for consideration.
IMPACTS Financial
With respect to CP5, the unspent income of approximately $5 million will be sufficient to fund the expenditure outstanding. It is anticipated that there may be a negligible surplus available following the completion of all outstanding works however this would only be realised following completion of all outstanding works and receipt of all outstanding fees levied.
With respect to CP7, the unspent income of approximately $11.49 million is sufficient to fund the expenditure outstanding. Following the completion of all outstanding expenditure, it is anticipated that there will be surplus funds remaining of approximately
$6.48 million (however the extent of this surplus would only be realised following the completion of all outstanding works if all outstanding fees levied were received). This report proposes to include additional works for the expenditure of this surplus within The Hills S94A Plan which service the area from which these funds were originally levied valued at approximately $5.6 million.
The repeal of CP5 and CP7 would result in the:
Transfer of outstanding expenditure and funds (as well as any future Section 94 contributions received by Council where originally conditioned under CP5) from CP5 to The Hills S94A Plan;
The transfer of outstanding expenditure and funds (as well as any future Section 94 contributions received by Council where originally conditioned under CP7) from CP7 to The Hills S94A Plan; and
The inclusion of approximately $5.6 million of new expenditure in The Hills S94A Plan for the expenditure of surplus funds collected under CP7.
It is estimated that the repeal of CP5 and CP7 and application of The Hills S94A Plan to these areas will result in a similar (if not greater) level of development contributions being received from future development within these areas.
RECOMMENDATION
1. Contributions Plan No.5 – Castle Hill and Contributions Plan No.7 – Southern Precincts be repealed by way of concurrent amendments to The Hills Section 94A Contributions Plan;
2. Draft amendments to The Hills Section 94A Contributions Plan (Attachment 1) be placed on public exhibition for a period of 28 days.
ATTACHMENTS
1. Draft The Hills Section 94A Contributions Plan (Amendment No. 2) (73 pages)
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