At 9.30pm Council entered into Closed Session
7. OPTIONS Option 1
ORDINARY MEETING OF COUNCIL 10 JULY, 2018
Council would require an updated flora and fauna report that responds to the new Biodiversity Conservation Act 2016, specifically whether the Biodiversity Offset Scheme would be triggered in this instance and whether the potential biodiversity impact is considered “serious and irreversible” if the proposal were to proceed.
7. OPTIONS
Strategic Plan - Hills Future
The planning proposal is inconsistent with Council’s Strategic plan in that it does not manage Council’s built and natural environment and facilitate an outcome of balanced urban growth.
RECOMMENDATION
The planning proposal to amend zoning and Terrestrial Biodiversity mapping for land at 32-34 Jacks Lane, Maroota not proceed to Gateway Determination for the following reasons:
1. The planning proposal is inconsistent with the objectives of state and local strategic policy, specifically the retention and protection of land with agricultural potential.
2. The planning proposal would facilitate an inappropriate outcome on a site that is unsuitable for intensification of development due to its proximity to bush fire hazard.
3. The planning proposal would result in the loss of land with agricultural potential and would contribute to the fragmentation and alienation of surrounding agricultural land.
4. The planning proposal will set a precedent for similar sites in the locality and diminish the role of the locality in encouraging and protecting agricultural land practices.
5. The opportunity to map biodiversity protection does not provide a significant benefit to justify strategic inconsistencies.
6. The planning proposal poses a significant bush fire risk that is not supported by the NSW RFS and non-compliance with Planning for Bush Fire Protection 2006 cannot be mitigated through design solutions.
ATTACHMENTS Nil.
ORDINARY MEETING OF COUNCIL 10 JULY, 2018
ITEM-3 VOLUNTARY PLANNING AGREEMENT AND WORKS- IN-KIND POLICIES (FP187)
THEME: Balanced Urban Growth.
OUTCOME: 7 Responsible planning facilitates a desirable living environment and meets growth targets.
STRATEGY: 7.2 Manage new and existing development with a robust framework of policies, plans and processes that is in accordance with community needs and expectations.
MEETING DATE: 10 JULY 2018 COUNCIL MEETING
GROUP: STRATEGIC PLANNING
AUTHOR: PRINCIPAL COORDINATOR FORWARD PLANNING NICHOLAS CARLTON
RESPONSIBLE OFFICER: MANAGER FORWARD PLANNING STEWART SEALE
EXECUTIVE SUMMARY
The Environmental Planning & Assessment Act (‘EP&A Act’) provides the mechanisms for Council to fund and deliver local infrastructure required to support development. This primarily occurs through Council’s Contributions Plans however recent growth in housing and the prevalence of planning proposals which enable growth not accounted for within existing Contributions Plans has highlighted the need to review procedures relating to:
• Works in Kind (Infrastructure specified in a Contribution Plan); and
• Planning Agreements (Infrastructure associated with increased/’unplanned’ density).
In order to apply a clear and consistent approach to Planning Agreements and Works-in- Kind this report recommends that Council publicly exhibit draft policies relating to planning agreements and works-in-kind (Attachments 3 and 4 respectively). The draft policies articulate Council’s approach, process and assessment criteria, provide template documents for developers to use when making offers to Council for consideration and clarify the strategic framework in which these agreements will be utilised to achieve Council’s planning and infrastructure objectives.
Importantly, consistent with the NSW Government guidance, the draft planning agreement policy does not establish a ‘tax’, ‘value capture’ formula or ‘contribution rate’
(as this should more appropriately occur through the preparation of Contributions Plans).
Rather, it seeks to provide a robust and transparent administrative and assessment framework within which discussions and negotiations can occur on a case-by-case basis.
Given the increasing frequency with which developers are seeking to enter into planning agreements or works-in-kind arrangements with Council, it is considered appropriate and prudent for Council to adopt specific policies relating to these matters in order to ensure
consistency, transparency and adequate management of risks associated with these agreements.
BACKGROUND
Works-in-Kind Agreements are agreements between Council and a person/developer under which the developer agrees to construct local infrastructure works that are identified within a Contributions Plan on behalf of Council. The EP&A Act enables Council to accept these works in partial or full satisfaction of monetary contributions that are required by a condition of development consent, under an applicable Contributions Plan.
Works-in-Kind agreements are legal contracts which detail the works to be completed by the developer and the extent to which the provision of the works satisfies the development contributions required under the development consent.
Voluntary Planning Agreements (‘VPAs’) are voluntary agreements between one or more planning authorities and a person/developer (‘the developer’) under which the developer agrees to provide public benefits in association with a development. These can take the form of dedication of land free of cost (or at reduced value), payment of monetary contributions, provision of any other material public benefits (including works) or any combination of these. Council may negotiate a VPA with a Developer in connection with any proposed application by that Developer for a change to an environmental planning instrument (planning proposal) or for development consent (development application) relating to any land in The Shire. VPAs are typically utilised:
• To secure contributions from unanticipated development where the yield exceeds that envisaged within existing Contributions Plans or where the strategic planning investigations for an area have not yet been completed. These VPAs are typically received in association with planning proposals and allow Council to collect contributions towards new infrastructure that is required to meet the immediate and/or cumulative demand generated by ‘unplanned’ growth. They also be received in association with a development application which seeks to vary the applicable development controls, resulting in increased development yields;
• Where a single land owner seeks to undertake major development of an area and provide all local infrastructure required to support the development or where a developer has an incentive to be directly involved in the delivery of community infrastructure (such as where quicker timeframes for delivery of infrastructure are required for the developer to bring product to the market); or
• To prescribe the nature of a development to achieve specific planning objectives or deliver additional public benefits as part of a development where opportunities arise.
Council currently considers and processes offers to enter into planning agreements in accordance with the legislative requirements under Environmental Planning and Assessment Act 1979 and the associated Practice Note on Planning Agreements. In November 2016 the NSW Government publicly exhibited revisions to the existing Practice Note as well as an associated draft Ministerial Direction. While these amendments have not yet been finalised by the NSW Government, the revised Practice Note and Ministerial Direction would require all Council’s to adopt a policy on planning agreements which is consistent with the content and direction within the Practice Note.
REPORT
The purpose of this report is to present draft Planning Agreement and Works-in-Kind policies (Attachments 3 and 4 respectively) which establish standard procedures and frameworks for the submission and assessment of offers from developers to enter into planning agreements and works-in-kind agreements.
ORDINARY MEETING OF COUNCIL 10 JULY, 2018
PLANNING AGREEMENT POLICY
Council does not currently have an adopted planning agreement policy. Internal guidelines were prepared in 2012 to assist Council officers with procedural and administrative matters when dealing with VPA offers. These guidelines were subject to legal review in 2012 and found to be consistent with the legislative framework at that time however they were never adopted by Council.
It is considered appropriate to update and formalise Council’s existing process, procedures and assessment criteria to comply with the NSW Government’s requirements and provide increased certainty and transparency for all parties (developers, Council and the community) with respect to the use and role of planning agreements within Council’s strategic planning and infrastructure framework.
Key elements of the legislative framework relating to VPAs are:
• Nexus: There is no strict requirement under the EP&A Act for direct nexus between development and the public benefits under a VPA. However, the relevant Practice Note advises that planning authorities should only enter into planning agreements where the public benefits are not wholly unrelated to the associated development;
• Requirements for VPA Policies: In November 2016, the NSW Government publicly exhibited revisions to the Practice Note. While these amendments have not yet been finalised, the draft Practice Note requires Council’s to adopt a formal policy on VPAs which has regard to the fundamental principles for planning agreements (Attachment 1) and addresses the matters specified within the Practice Note (Attachment 2);
• VPAs within a Strategic Framework: The draft Practice Note advises that holistic and coordinated strategic planning work and preparation of Contributions Plans should be favoured over site-specific VPAs. Where VPAs are considered, planning authorities should justify how infrastructure costs are apportioned to a development and identify what public benefit contributions will be allocated to, especially where the planning authority intends to pool contributions under several VPAs for future use;
• Value Capture and Development Feasibility: The draft Practice Note specifies that VPAs should not simply be used as a mechanism to ‘value capture’ windfall gain and that benefits should never be obtained in a form which could be considered ‘taxation’
or ‘revenue raising’. Where VPAs are considered, planning authorities must balance the necessity for new development to be appropriately serviced by infrastructure with development feasibility and the developer’s entitlement to a share of development profit.
Having regard to these elements, as well as the Department of Planning and Environment’s updated Practice Note, a draft planning agreement policy has been prepared and is provided at Attachment 3. It also offers an overview of the legal requirements relating to planning agreements under the Environmental Planning and Assessment Act 1979 and provides a fair and transparent framework for the negotiation and assessment of planning agreements. In particular, the draft policy includes the following critical elements:
• Overview of legislative context within which planning agreements can be utilised;
• Guidance as to when Council may consider entering into a planning agreement;
• Guiding principles which will controls Council’s use of planning agreements;
• Clarification as to what constitutes a ‘formal’ offer from a developer to enter into a planning agreement and associated submission requirements;
• ‘Acceptability test’ and key considerations for the assessment of planning agreements;
• Identification of the types of contributions that Council will consider being provided through a planning agreement and examples of potential public benefits and local infrastructure that developers may consider providing;
• Identification of Council’s ability and intention to pool monetary contributions collected through a number of different planning agreements for progressive expenditure on new local infrastructure to service growth;
• Clarification that the developer will be responsible for the payment of all Council’s costs incidental to negotiating, preparing, entering into and enforcing an agreement;
• Direction relating to the provision of security to cover a developer’s obligations under a planning agreement;
• Overview of the process for submission of VPA offers, internal assessment, reporting, legal review, exhibition, post-exhibition procedures;
• Administrative direction relating to the execution and amendment of planning agreements and registration of agreements on relevant land titles; and
• A standard template planning agreement.
Importantly, the draft policy does not establish a ‘rate’, ‘tax’ or ‘value capture’ formula.
Rather, it seeks to provide a robust and transparent administrative and assessment framework within which discussions and negotiations can occur on a case-by-case basis.
The draft policy provides a standard procedure for planning agreements as detailed below.
Figure 1
Planning Agreement Procedure
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WORKS-IN-KIND POLICY
While Council already has an internal process for dealing with offers by developers to complete works-in-kind, it is considered that formalisation of this process will provide upfront guidance for developers and reduce staff administration time. It will also provide Council with greater certainty (and protection should any disputes arise) regarding the process for determining the value and eligibility of works, the requirement for defects to be rectified and the timeframe in which offset/reimbursement must be claimed by a developer.
A draft Works-in-Kind Policy has been prepared and is provided at Attachment 4. The draft policy includes the following critical elements:
• Identification of when a works-in-kind agreement is appropriate versus when other mechanisms (such as planning agreements) should be pursued;
• Council’s assessment criteria for works-in-kind applications;
• Overview of the process for submission of works-in-kind offers, internal assessment and reporting;
• Details of the administration and limitations of offsets against contributions payable;
• Bank guarantee (or bond) requirements as security for performance of the agreement;
• Process for Council to inspect the works and require rectification of defects prior to accepting dedication of the works-in-kind;
• Clarification that developers will not, under any circumstances, be eligible for an offset, reduction or reimbursement associated with works completed unless a formal agreement has been executed prior to the commencement of the works;
• Clarification that where the value of the works exceeds $100,000, the tendering and procurement requirements under Section 55 of the Local Government Act 1993 must be met (even with respect to works-in-kind). Where this is the case, the draft policy requires the developer to either submit a brief that enables Council to tender for the works or alternatively, justify why Council should resolve not to require a public tender process (upon considering this request, Council may resolve not to tender in accordance Section 55(3) of the Local Government Act 1993); and
• A standard template works-in-kind agreement.
The draft Works-in-Kind Policy provided at Attachment 4 establishes a standard procedure for the submission and processing of requests to enter into works-in-kind agreements as detailed below.
Figure 2
Works-in-Kind Procedure CONCLUSION
The draft Planning Agreement and Works-in-Kind Policies will streamline and standardise Council’s procedures for the receipt, assessment, negotiation and processing of offers from developers to enter into works-in-kind or planning agreements. It will ensure that Council’s use of these agreements continues to be clear and transparent for all parties affected (including developers, Council and the broader community) and will provide clear guidance with respect to the strategic context in which these agreements and the benefits offered by a developer will be considered and assessed.
It is recommended that the draft policies be subject to legal review and placed on public exhibition concurrently to provide the community with the opportunity to provide feedback on the policies. Following the completion of a legal review and public exhibition period, the draft policies will be reported back to Council for further consideration.
IMPACTS Financial
The public exhibition of draft policies on planning agreements and works-in-kind agreements has no direct financial impact on Council. Should Council resolve to have the draft policies subject to external legal review concurrently with the exhibition period, a small budget allocation would need to be made for this process.
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The financial implications associated with any future works-in-kind or planning agreements offered to Council would be assessed by Council on a case-by-case basis.
The Hills Future - Community Strategic Plan
Works-in-kind and planning agreements can support the Community Strategic Direction by contributing to the delivery of facilities and infrastructure which will enhance and maintain an attractive, safe and tidy environment and ensure future development is consistent with the Shire’s character. The consistency of individual works-in-kind or planning agreements with this Direction would be assessed on a case-by-case basis.
RECOMMENDATION
1. The draft Planning Agreement Policy (Attachment 3 – ECM Document No.17010707) and draft Works-in-Kind Policy (Attachment 4 – ECM Document No.17010708) be subject to a legal review, prior to public exhibition.
2. The draft Planning Agreement Policy (Attachment 3 – ECM Document No.17010707) and draft Works-in-Kind Policy (Attachment 4 – ECM Document No.17010708) be updated, as required, prior to exhibition to incorporate the recommendations of the legal review.
3. The draft Planning Agreement Policy (Attachment 3 – ECM Document No.17010707) and draft Works-in-Kind Policy (Attachment 4 – ECM Document No.17010708) be publicly exhibited for a period of 28 days.
ATTACHMENTS
1. NSW Government – Fundamental Principles for Planning Agreements (1 Page) 2. NSW Government – Required Content of VPA Policies (1 Page)
3. Draft Planning Agreement Policy (50 Pages) 4. Draft Works-in-Kind Policy (40 Pages)
ORDINARY MEETING OF COUNCIL 10 JULY, 2018