AGENDA OF Policy Planning Environment & Master Plan Implementation Committee 21 September 2011

POLICY PLANNING ENVIRONMENT & MASTER PLAN IMPLEMENTATION COMMITTEE

NOTICE OF MEETING
Wednesday, 21st September 2011

15 September 2011.

His Worship The Mayor and Councillors

I have by direction to inform you that a meeting of the Policy Planning Environment & Master Plan Implementation Committee of the Council will be held at the Civic Centre, Hurstville on Wednesday, 21st September 2011 at 7.00 pm for consideration of the business mentioned hereunder.

Victor G D Lampe
General Manager

BUSINESS
1. Apologies
2. Disclosures of Interest
3. Consideration of report
PPE011-11 - Draft Hurstville Section 94 and Section 94A Development Contributions Plan 2011 - For Public Exhibition.

COMMITTEE MEMBERSHIP
Deputy Mayor, Councillor C Hindi (Chair)
Councillor D Perry
Councillor W Pickering, OAM
Councillor C Wong

The Quorum for the meeting is 3

POLICY PLANNING ENVIRONMENT & MASTER PLAN IMPLEMENTATION COMMITTEE
Wednesday, 21st September 2011

PPE011-11	DRAFT HURSTVILLE SECTION 94 AND SECTION 94A DEVELOPMENT CONTRIBUTIONS PLAN 2011 - FOR PUBLIC EXHIBITION
Report Author(s)	Executive Planner, Ms N Stores
File	06/1163-2
Reason for Report	For approval
Existing Policy?	Yes	New Policy Required?	Yes
Financial Implications	Yes, within existing program budget
Previous Reports Referenced	Yes

EXECUTIVE SUMMARY

This report seeks Council's resolution to proceed to public exhibition of the Draft Hurstville Section 94 and Section 94A Development Contributions Plan 2011 ("the Draft Plan"). The Draft Plan is presented in Appendix A. The recommendation is based on the recommendations of Council’s specialist section 94 and economic consultants and the associated research and supporting studies undertaken. Council resolved in May 2007 to prepare a new S94 and S94A Plan for the LGA and the Draft Plan reflects this decision of Council.

The Draft Plan was presented to Council on 25 May 2011 and it was resolved that the matter be deferred for consideration at a Councillor Workshop, which was held on 17 August 2011.

The Draft Plan enables Council to levy both section 94 contributions and section 94A levies on development. A development consent however can only be subject of either a section 94 contribution or a section 94A levy, not both. Table 2 in this report outlines the section 94 contribution rates for the different types of development. Consistent with the Ministerial Direction, the Draft Plan sets a cap on the section 94 contributions of $20,000 per residential dwelling/lot. Table 3 in this report outlines the section 94A levies. Section 94A enables Council or an accredited certifier to impose conditions on development consents or complying development certificates, where the cost of the development is more than $100,000, requiring a section 94A levy towards the provision of facilities and services identified in the Draft Plan.

The Draft Plan identifies a comprehensive list of works, with a total cost of $282.9 million that will service both the existing and future population up to 2031. Only those works required by the future population and identified as Priority 1 will receive section 94 funding (refer to Appendix B). Section 94A funds may be expended on Priority 1, 2 or 3 works. The total projected income up to 2031 from section 94 contributions is approximately $110 million and from section 94A levies approximately $10 million (refer Table 4).

The Draft Plan is required due to legislation changes and will repeal Council’s existing Section 94 Contributions Plans if adopted by Council following exhibition.

AUTHOR RECOMMENDATION

THAT Council endorse the Draft Hurstville Section 94 and Section 94A Development Contributions Plan 2011 for public exhibition.

THAT Council provide a copy of the Draft Hurstville Section 94 and Section 94A Development Contributions Plan 2011 to the Department of Planning and Infrastructure as part of the public exhibition.

THAT Council agree the Director of Planning and Development may make minor modifications to any numerical, typographical, interpretation and formatting errors, if required, in preparation for the public exhibition of the Draft Hurstville Section 94 and Section 94A Development Contributions Plan 2011.

THAT the Draft Hurstville Section 94 and Section 94A Development Contributions Plan 2011 be publicly exhibited for a period not less than twenty eight (28) days.

FURTHER THAT the outcomes of the public exhibition be reported back to Council.

REPORT DETAILS

Preparation of the Draft Plan & Supporting Studies
Due to changes to Environmental Planning & Assessment Act and Regulation,new Ministerial Directions relating to section 94 and the introduction of section 94A provisions, a review of Council’s existing Section 94 Contributions Management Plans is required. Council's existing seven (7) Section 94 Plans were prepared prior to these legislation changes.

At Council’s meeting on 16 May 2007 Council resolved to prepare a new Section 94 Plan and a Section 94A Plan for Hurstville LGA and to prepare supporting studies to identify the projects and works to be included in the plan. Further it was resolved that "Council endorse the General Manager to ensure adequate staffing resources are provided to support the preparation and ongoing management of the Section 94 Plans".Specialist consultants (Newplan Urban Planning Solutions and SGS Economics) were engaged by Council to recommend the best type of contributions system for Hurstville LGA and to prepare the new contribution plans.

The preparation of the Draft Plan involved extensive research, the preparation of background studies and developing a new contributions plan framework for the Hurstville LGA. Supporting studies and research undertaken included:

Population and Dwelling Projections up to 2031 (undertaken by consultants Id Informed Decisions)
Extensive public consultation (undertaken by consultants Elton Consulting)
"Open Space, Recreation, Community and Library Facilities Strategy" (undertaken by consultants Clouston Associates and Elton Consulting)
Review of traffic management, roads and car parking facilities (Council staff)

The "Open Space, Recreation, Community and Library Facilities Strategy" was adopted by Council on 30 June 2010. This critical study identifies the infrastructure, facilities and services required by Hurstville's existing and future population and informs both the Draft Plan and Council's Management Plan.

On 12 May 2010, Councillors were provided with a detailed workshop briefing with respect to the new Draft Plan. Following that workshop, on 25 August 2010, the Draft Plan was presented to Council for the purpose of public exhibition. Council resolved to adopt the Plan for public exhibition.

Following this resolution and prior to putting the Draft Plan on public exhibition, Council required approval from the Department of Planning to exhibit the Draft Plan. On 23 March 2011 the Department provided comments and requested various changes to the Draft Plan. One key change related to re-writing the Draft Plan under the current section 94 planning legislation and not the draft section 94 legislation (Part 5B). The Draft Plan had been prepared based on the proposed new draft legislation, however this draft legislation was not enacted by the NSW Government.

The Draft Plan was re-written in early 2011 and amended to reflect the current Section 94 legislation. In addition various other amendments have been made to the Draft Plan to ensure that it is accurate and complies with the Environmental Planning and Assessment Act and Regulation. The Department of Planning and Infrastructure have indicated that they support the exhibition of the Draft Plan and will comment further during the public exhibition period.

On 25 May 2011 the Draft Plan was presented back to Council for the purpose of public exhibition. At this Meeting Council resolved that the matter be deferred for consideration at a Councillor Workshop, which was held on 17 August 2011.

This report now presents the Draft Plan back to Council for the purpose of public exhibition.

Overview of the Draft Plan
The Draft Plan has been prepared to address anticipated demand for public facilities and services generated by new development up to 2031. The Draft Plan applies to all land within the Hurstville LGA and applies to all development, except development described in clause 2.7.1 of the Draft Plan and outlined below:

for the purpose of 'seniors housing' as defined in SEPP (Housing for Seniors or People with a Disability) 2004;
for the sole purpose of 'affordable housing' as defined in SEPP (Affordable Rental Housing) 2009;
for the sole purpose of disabled access;
for the purpose of reducing the consumption of mains-supplied potable water, or reducing the energy consumption of a building;
for the sole purpose of the adaptive reuse of an item of environmental heritage;
development exempted from contributions by a Direction of the Minister pursuant to section 94E of the EP&A Act, current at the time of assessment of the application;
other than the subdivision of land, where a condition under section 94 of the Act has been imposed under a previous development consent relating to the subdivision of the land on which the development is proposed to be carried out (applies to section 94A development only).

The Draft Plan addresses both section 94 contributions and section 94A levies. Section 94A(2) of the Environmental Planning and Assessment Actstates that "a consent authority cannot impose a condition of the same consent a condition under this section (94A) as well as a condition under section 94" ie a development consent can only be subject of either a section 94 contribution or a section 94A levy, not both.

The Draft Plan authorises Council or an accredited certifier to impose conditions on development consents or complying development certificates requiring a development contribution for the development types identified in Table 1 below.

Table 1: Development subject to development contributions under the Draft Plan

Section 94 Contributions
Section 94 of the Environmental Planning & Assessment Act permits Council, as the consent authority, where it is satisfied that a development will or is likely to require or increase the demand for public amenities and services, to grant consent with a condition requiring either the payment of a monetary contribution or dedication of land free of cost or both.

Table 2 below outlines the section 94 contributions proposed under the Draft Plan. Consistent with NSW Government Ministerial Direction dated 3 March 2011, the Draft Plan does not authorise a monetary contribution exceeding $20,000 per residential dwelling. Contribution rates also cannot be indexed above $20,000. For those contribution rates less than $20,000 per dwelling the Draft Plan enables Council to index the rates in line with the Consumer Price Index (CPI).

Table 2: Proposed Section 94 contribution rates for development

The Draft Plan section 94 contribution rates are generally higher than the section 94 contribution rates under the existing Section 94 Plans. This increase is a result of the extensive review of the facilities and services required by the future population, the current cost estimates for these facilities, updated population and dwelling projections and the fact that the existing Section 94 Plans have not been reviewed for some time. In addition the Draft Plan introduces a new contribution in the local commercial centres of Penshurst and Mortdale for non-residential development where insufficient carparking is provided on-site.

The section 94 contributions levied under the Draft Plan can only be used to help fund the infrastructure identified as Priority 1 Works (see Appendix B). The Priority 1 works include:

active recreation facilities
passive recreation facilities
pedestrian footpath / cycleway connections
new and expanded community facilities
local commercial centre carparks

It is noted that the projected section 94 income up to the year 2031 will not be sufficient to fully fund the Priority 1 infrastructure works. As outlined below (Financial Implications section) Council also has a financial obligation under the Draft Plan to provide the works.

Section 94A Levies
Section 94A permits a consent authority (i.e. Council or an accredited certifier) to collect development contributions by a fixed levy on development consents and complying development certificates.

Where the proposed cost of carrying out the development is more than $100,000 a section 94A levy may be imposed. As shown in Table 1 the types of development that would be covered by section 94A under the Draft Plan include new single dwellings, alterations and additions to existing development, industrial development, subdivisions other than where additional house lots are created, and commercial and retail development outside of the City Centre.

Council may chose to exempt certain other types of development from section 94A levies. Such exemptions are at the discretion of the Council and may be based on strategic planning, economic or social purposes. Refer to the section below "Options for Consideration" for further discussion on options for section 94A. Also as noted above, a section 94A levy cannot be levied on a development consent which is subject to a section 94 contribution.

Section 94A levies are calculated as a percentage of the cost of development. The maximum percentage of the cost of development which can be levied is set by the Environmental Planning & Assessment Regulation 2000 and is shown in the table below.

Table 3: Section 94A levies

Section 94A does not require a nexus or connection to be established between the development and the increased demand for the facilities and services (as required under section 94). Therefore the allocation of the section 94A income is more flexible than section 94 contributions and may be allocated to the range of facilities and services identified as Priority 1, 2 or 3 in the Draft Plan. Council's existing Section 94 Plans do not cover or levy section 94A contributions.

Financial Implications – Application of Contributions and Council's Commitment
The Draft Plan identifies a comprehensive works program (Appendix E in the Draft Plan) with an estimated cost of $282.9 million. This works program includes open space works, public domain works, community facilities and services, libraries, roads and traffic management works, car parking and other infrastructure required by both the existing and future population up to 2031.

These works have been prioritised in the Draft Plan (Priority 1, 2 or 3) according to the extent to which they would meet the needs of future development. The cost of the works by Priority is as follows:

Priority 1 works: $156.9 million

Priority 2 works: $77.4 million

Priority 3 works: $48.7 million

Priority 1 works are those works that have a high priority as they are required to meet future development demand and therefore can reasonably be funded through Section 94 contributions. Appendix B provides the list of Priority 1 works from the Draft Plan.

In contrast to Section 94 funds, Section 94A funds can be allocated to ‘any’ works in the comprehensive works program (i.e. Priority 1, 2 or 3 works).

As shown in Table 4, the total projected income up to 2031 from Section 94 development contributions is approximately $110 million and from section 94A levies approximately $10 million. This is based on projected development and may vary depending on development patterns.

It is noted that the development contributions income from the Draft Plan will not cover the cost of the works identified in the plan. The Draft Plan, as per Council's existing Section 94 Plans, places a financial obligation on Council to contribute/allocate funding to deliver the public facilities and services identified in the Draft Plan. Council will be required to ensure future budgets address both Council's financial obligation as well as allocate the appropriate section 94/section 94A funds when projects are programmed. Council has the opportunity to plan for alternative sources of funding (such as general revenue and grants) to assist in delivering the works program. Table 4 below shows Council's financial obligation under the Draft Plan up to 2031.

In addition to this, an indeterminate amount of section 94 contributions will be received for public car parking in the Hurstville City Centre, Penshurst, Mortdale, Beverly Hills and Riverwood local commercial centres from non-residential developments where there is a shortfall in the provision of car parking on-site. These contributions will be used to assist in developing the existing car parking areas in these centres in order to provide more car parking spaces.

Table 4: Possible income and application of section 94 contributions and section 94A levies

Future Review of the Draft Plan
The Draft Plan, if adopted by Council, would be reviewed regularly to ensure that it remains financially sustainable, reflects development patterns and continues to address the priority infrastructure needs generated by new development. The review process of the Draft Plan will be linked with Council’s Management Plan and Community Strategic Plan.

The priorities for the works in the Draft Plan were determined at the time the Draft Plan was prepared. However it is likely that the scope of, and priority attached to each of the works will change over the life of the Plan. It is also likely that the estimated cost of items will need to be adjusted as facility designs are firmed up. Where works are re-prioritised or costs change for example, the Plan would need to be re-exhibited.

Existing Section 94 Contributions Plans
The Draft Plan, if adopted by Council following exhibition, will repeal the existing Section 94 Contributions Plans, which include the following:

Plan No. 1 Traffic Management & Car Parking (19 December 2006)

Plan No. 2 Open Space & Community Recreation Facilities (26 October 2004)

Plan No. 3 Drainage (29 September 1998)

Plan No. 4 Community Services and Facilities (10 July 2001)

Plan No. 5 Management (12 April 2001)

Plan No. 6 Library & Information Services (10 July 2001)

Plan No. 7 Urban Spaces (8 April 2004)

When a contributions plan is repealed, the associated works program is also repealed and the monies received under pre-existing contributions plans shall generally be applied according to the following principles (in priority order):
1. Money should be allocated toward the specific projects for which it was collected; or
2. If these projects are no longer considered necessary, the money should be spent in the area in which it was collected for the general purpose (infrastructure category) for which it was collected; or
3. If there is no necessity to provide infrastructure in the relevant category, the money should be spent in the area in which it was collected for a similar purpose to that for which it was collected. That is, money should be spent to deliver infrastructure to support the community that provided the funds.

Options for Consideration
This report recommends that Council endorse the Draft Hurstville Section 94 and Section 94A Development Contributions Plan 2011 for public exhibition. This recommendation is based on the recommendations of Council’s specialist section 94 and economic consultants and the associated extensive research, supporting studies and consultation undertaken. Council resolved on 17 May 2007 to prepare a new S94 and S94A Plan for the LGA and the Draft Plan reflects this decision of Council.

As requested at the Councillor Workshop on 17 August 2011 the following options for the type of contributions plan would be available to Council. Each option results in different contributions on development and income to Council.

The Department of Planning's "Development Contributions Practice Notes - July 2005" states that councils may chose to exempt certain types of development from section 94A levies. Such exemptions are at the discretion of the council and may be based on strategic planning, economic or social purposes. It is noted that any change to the types of developments which are levied a section 94A levy would result in a reduction in the projected income from section 94A.

Any changes to the Draft Plan will require further review and analysis by staff and approval from the Department of Planning and Infrastructure. The Department of Planning Circular PS10-022 requires that "before a draft plan is publicly notified a council must seek approval from the Department to publicly exhibit the draft plan".

If Council resolves to make major amendments to the Draft Plan (for example Options 3 or 4 below), the Plan would need to be referred to and approved by the Department of Planning, and then reported back to Council prior to public exhibition. If Council resolves to make minor amendments to the Draft Plan (for example the Option 2 examples), the plan would need to be referred to and approved by the Department of Planning, and then could be placed on public exhibition.

Options for Type of Section 94 / Section 94A Plans

Public Exhibition Process
Clause 28 of the Environmental Planning and Assessment Regulationprovides that a draft contributions plan must be publicly exhibited.

Subject to Council's resolution, the Draft Plan and supporting documents will be exhibited for a period not less than twenty eight (28) days. Any person may make written submissions to the Council about the Draft Plan during the relevant submission period.

Post Exhibition Process
Following the exhibition of the Draft Plan a report will be presented back to Council outlining any submissions/comments on the Draft Plan. Clause 31 of the Environmental Planning and Assessment Regulation provides that “After considering any submissions about the draft contributions plan that have been duly made, the council:

(a) may approve the plan in the form in which it was publicly exhibited, or

(b) may approve the plan with such alterations as the council thinks fit, or

(c) may decide not to proceed with the plan.

The Council must give public notice of its decision in a local newspaper within twenty eight (28) days after the decision is made. Notice of a decision not to proceed with a contributions plan must include the Council’s reasons for the decision.

Conclusion
The Draft Plan has been prepared in accordance with the requirements of the Environmental Planning and Assessment Act 1979, Environmental Planning and Assessment Regulation 2000, Ministerial Directions and Department of Planning Circulars and Practice Notes.

Extensive research, studies and consultation has been undertaken to determine the future population and dwelling projections and the future demand for community facilities and services and infrastructure up to 2031. The Draft Plan sets out the justification and application of the section 94 contributions and section 94A levies to the various community facilities and services.

The Draft Plan is presented in Appendix A for Council's endorsement and resolution for public exhibition. Appendix B is an excerpt from the Draft Plan and is the list of works which will receive section 94 contributions to assist in their provision.

COMMITTEE RECOMMENDATION - PPE

THAT Council not endorse the Draft Plan for public exhibition.

THAT Council resolve not to have a Section 94A Plan for the Hurstville LGA.

THAT the Draft Plan be amended to remove all clauses relating to Section 94A and not apply Section 94A to any developments in the Hurstville LGA.

THAT the revised Draft Plan be referred to the Department of Planning and Infrastructure for approval prior to reporting the Draft Plan to Council for the purpose of public exhibition.

FURTHER, THAT the amended Draft Plan be reported back to Council prior to public exhibition.

(Moved Councillor C Wong / Seconded Councillor W Pickering, OAM)

RESOLUTION - CCL

THAT Council not endorse the Draft Plan for public exhibition.

THAT Council resolve not to have a Section 94A Plan for the Hurstville LGA.

THAT the Draft Plan be amended to remove all clauses relating to Section 94A and not apply Section 94A to any developments in the Hurstville LGA.

THAT the revised Draft Plan be referred to the Department of Planning and Infrastructure for approval prior to reporting the Draft Plan to Council for the purpose of public exhibition.

FURTHER, THAT the amended Draft Plan be reported back to Council prior to public exhibition.

(Moved Councillor J Jacovou / Seconded Councillor A Istephan)

APPENDIX
Appendix A - Draft Hurstville Section 94 and Section 94A Development Contributions Plan 2011

Appendix B - Priority 1 Works Program - Projects that may be funded through Section 94 Contributions