Transcript Document

DEVELOPMENT CONTRIBUTION
PRINCIPLES APPLIED IN
STELLENBOSCH
By Vincent Harris
Manager: Development Services
Directorate: Engineering Services
DC Principles applied in Stellenbosch
INDEX
•APPLICATION OF DC’s
•Legislation
•Principles as proposed by Venter Commission
•In-house Development Conditions
•Typical land-use process
•Bulk infrastructure in-lieu of dc’s (SA’s)
•DETERMINING OF DC’S
•WC024 excluding Klapmuts & Klapmuts
•Escalation
•LESSONS LEARNED & SUGGESTIONS
DC Principles applied in Stellenbosch
•APPLICATION OF DC’s
•Legislation (LUPO) ←
•Principles as proposed by Venter Commission
•In-house Development Conditions
•Typical land-use process
•Bulk infrastructure in-lieu of dc’s (SA’s)
•DETERMINING OF DC’S
•WC024 excluding Klapmuts & Klapmuts
•Escalation
•LESSONS LEARNED & SUGGESTIONS
DC Principles applied in Stellenbosch
There is no legal obligation on Council to provide municipal services
to land simply because the owner wishes to develop his or her land.
Section 152 of the Constitution emphasises the fact that Council must
structure its administration and budgeting and planning processes to
give priority to the basic needs of the community.
Chapter 5 of the Municipal Systems Act no 32 of 2000 (the Systems
Act) requires municipality to adopt an integrate development plan for
the development of the municipality. This document aligns the
resources and the capacity of the municipality with the
implementation of the plan and forms the policy framework and
general basis on which annual budgets must be based.
DC Principles applied in Stellenbosch
A municipality is required in terms of the Systems Act to
undertake developmentally orientated planning.
“Development” is defined as sustainable development, which
includes integrated social, economic, spatial, infrastructural,
institutional, organisational and human resources up-liftment of
a community aimed at –
•
Improving the quality of life of its members with specific
reference to the poor and other disadvantaged sections of
the community; and
•
Ensuring that development serves present and future
generations.
DC Principles applied in Stellenbosch
Therefore, Council’s expenditure on infrastructure will be
guided by the IDP and will be aimed primarily, but not solely,
on the provision of basic services.
Additional expenditure for services in other areas, where
there is no reserve created by development contributions will
therefore have to wait in line until there is additional funding
available.
If a developer wishes to develop outside the programme
developed by Council, he or she will have to fund the
provision of services to enable to development to take place.
DC Principles applied in Stellenbosch
In terms of section 42 of the Land-use Planning
Ordinance (LUPO) developers may be required to
contribute towards the cost of the infrastructure,
based on the size of the development and the
capacity taken up in the services.
LUPO is very prescriptive as to how the contribution
from developers must be calculated.
DC Principles applied in Stellenbosch
Any condition relating to the payment of money is
subject to the stipulation that the amount must be
directly related to the requirements resulting from
the authorisation.
Furthermore, section 42(2) also stipulates the
factors which may be taken into account when
imposing conditions relating to the payment of
money.
DC Principles applied in Stellenbosch
At present the relevant provisions of section 42
reads as follows:
“(1) When the Administrator or council grants
authorisation, exemption or an application or
adjudicates upon an appeal under this Ordinance,
he may do so subject to such conditions as he may
think fit.
DC Principles applied in Stellenbosch
(2) Such conditions may, having regard to –
(a) the community needs and public expenditure which in his or its
opinion may arise from the authorisation, exemption, application or
appeal concerned and the public expenditure incurred in the past which
in his or
its opinion facilitates the said authorisation, exemption,
application or appeal, and
(b) the various rates and levies paid in the past or to be paid in the
future by the owner of land concerned,
include conditions in relation to the cession of land or the payment
of money which is directly related to the requirements resulting
from the said authorisation, exemption, application or appeal in
respect of the provision of necessary services or amenities to the
land concerned.”
DC Principles applied in Stellenbosch
In addition to the factors, which must be taken into
account when determining the amount of money to be
paid, the payment of money must be directly related to
the requirements arising out of the authorisation
(money must be used to upgrade the services leading
to that particular development) and money may only
be claimed for the provision of necessary services.
The implication is that LUPO can not be used to collect
such moneys over a broad spectrum of different
developments…..
DC Principles applied in Stellenbosch
•APPLICATION OF DC’s
•Legislation (LUPO) √
•Principles as proposed by Venter Commission
•In-house Development Conditions
•Typical land-use process
•Bulk infrastructure in-lieu of dc’s (SA’s)
•DETERMINING OF DC’S
•WC024 excluding Klapmuts & Klapmuts
•Escalation
•LESSONS LEARNED & SUGGESTIONS
←
DC Principles applied in Stellenbosch
The Commission of inquiry into township establishment:
Venter Report (1982/1983), recommends:
“(i) The determination of cost liability should firstly be a
matter for negotiation between the township establisher
and the local authority.”
DC Principles applied in Stellenbosch
(ii) In the absence of an agreement the general principles spelt out
below should apply and should be taken into account by the appeal
body referred to…….”
Phrases included in principles:
“equal treatment”
“old township not to subsidise the new township”
“internal cost for developer”
“payment to be determined at early stage”
“payment should make provision for connecting internal with
external services”
“township establisher should have control over installation of such
services”
“internal and external services must be defined”
DC Principles applied in Stellenbosch
•APPLICATION OF DC’s
•Legislation (LUPO) √
•Principles as proposed by Venter Commission
•In-house Development Conditions
←
•Typical land-use process
•Bulk infrastructure in-lieu of dc’s (SA’s)
•DETERMINING OF DC’S
•WC024 excluding Klapmuts & Klapmuts
•Escalation
•LESSONS LEARNED & SUGGESTIONS
√
DC Principles applied in Stellenbosch
Development Conditions related to DC’s
97. that the “Developer” hereby acknowledges that development contributions
are payable towards the following civil services: water, sewerage, roads,
stormwater and solid waste as per Council’s Policy;
98. that the “Developer” hereby acknowledges that the development contribution
levy as determined by the “Municipality” and or the applicable scheme tariffs will
be paid by the “Developer” towards the provision of bulk municipal civil services in
accordance with the relevant legislation and as determined by Council’s Policy,
should this land-use application be approved;
DC Principles applied in Stellenbosch
99. that the “Developer” immediately familiarise himself with the latest
development contributions applicable to his/her development;
100. that the “Developer” accepts that the development contributions will be
subject to annual escalation up to date of payment. The amount payable will
therefore be the amount as calculated at the time that payment is made;
101 that the “Developer” may enter into a development agreement with the
“Municipality” to install or upgrade bulk municipal services at an agreed cost, to be
off-set against Development Contributions payable in respect of bulk civil
engineering services;
DC Principles applied in Stellenbosch
102.
that the “Developer” is aware that a contribution is required for municipal
services to permit the development at this stage;
103.
that the “Developer” accepts the average amount, as reflected in this
document as the amount required for the provision of municipal services in the
event that the development is approved;
104.
that the Development Contribution levy to the amount of R … (Excluding
VAT) as reflected on the BICLS Contribution calculation sheet, dated ……….. 2013,
and attached herewith as Annexure BICLS, be paid by the “Developer” towards the
provision of bulk municipal civil services in accordance with the relevant legislation
and as determined by Council’s Policy;
DC Principles applied in Stellenbosch
105.
Based on the 2013/2014 tariff structure and the approved lay-out, the
following amounts are payable:
Phase 1
Water
:
R X 000 000.00
Sewerage :
R X 000 000,00
Roads
:
R X 000 000,00
Stormwater :
R X 000 000,00
Solid Waste :
R X 000 000,00
Total (Phase 1 Civil Services) exclusive of VAT: RZZ 000 000,00
Phase 2
Water :
R X 000 000.00
Sewerage :
R X 000 000,00
Roads :
R X 000 000,00
Stormwater :
R X 000 000,00
Solid Waste :
R X 000 000,00
Total (Phase 2 Civil Services) exclusive of VAT: RZZ 000 000,00
DC Principles applied in Stellenbosch
106.
that the Development Contribution levy be paid by the “Developer” per
phase –
-prior to the approval of any building- and/or services plans in the case of a
Sectional title erf in that phase and or;
-prior to the approval of a Certificate in terms of Section 31 in all cases and or;
-prior to the erf or portion thereof being put to the approved use;
107.
that it be noted that the Development Contributions as reflected on the
BICLS Contribution calculation sheet will be subject to annual escalation up to date
of payment. The final amount payable will therefore be the amount as calculated at
the time that payment is made;
DC Principles applied in Stellenbosch
108.
that the development shall be substantially in
conformance with the Site Development Plan submitted in
terms of this application. Any amendments and/or additions to
the Site Development Plan, once approved, which might lead to
an increase in the number of units i.e. more than xx units, or
which might lead to an increase in the Gross Leasable Area i.e. a
GLA of more than xx m², will result in the recalculation of the
Development Contributions;
109.
Bulk infrastructure contribution levies and
repayments are subject to VAT and are further subject to the
provisions and rates contained in the Act on Value Added Tax of
1991 (Act 89 of 1991) as amended;
DC Principles applied in Stellenbosch
•APPLICATION OF DC’s
•Legislation (LUPO) √
•Principles as proposed by Venter Commission
•In-house Development Conditions
√
•Typical land-use process ←
•Bulk infrastructure in-lieu of dc’s (SA’s)
•DETERMINING OF DC’S
•WC024 excluding Klapmuts & Klapmuts
•Escalation
•LESSONS LEARNED & SUGGESTIONS
√
DC Principles applied in Stellenbosch
DC Principles applied in Stellenbosch
•APPLICATION OF DC’s
•Legislation (LUPO) √
•Principles as proposed by Venter Commission
•In-house Development Conditions
√
•Typical land-use process √
•Bulk infrastructure in-lieu of dc’s (SA’s) ←
•DETERMINING OF DC’S
•WC024 excluding Klapmuts & Klapmuts
•Escalation
•LESSONS LEARNED & SUGGESTIONS
√
DC Principles applied in Stellenbosch
• Bulk infrastructure in-lieu of dc’s (SA’s) ←
•refer to Master Plans …
•refer to 15 year budget planner …
•refer to Insufficient capacity in general – 3 / 4 wwtw’s, 8 reservoirs, bulk
pipeline, roads …
•Almost no new developments does not need bulk infrastructure upgrade to
accommodate that development…
•Bulk services installed by developer in-lieu of the development contributions
he/she would have paid ...
•Services Agreement between Developer and Local Authority … (item 76 b of MSA)
DC Principles applied in Stellenbosch
•APPLICATION OF DC’s
•Legislation (LUPO) √
•Principles as proposed by Venter Commission
•In-house Development Conditions
√
•Typical land-use process
√
•Bulk infrastructure in-lieu of dc’s (SA’s)
√
•DETERMINING OF DC’S
•WC024 (excluding Klapmuts) & Klapmuts
•Escalation
•LESSONS LEARNED & SUGGESTIONS
←
√
DC Principles applied in Stellenbosch
WC024 (excluding Klapmuts)
• Tender 2009/2010 for determining dc’s and compilation of Development
Policy
• Final document submitted in March 2011
• Combined Greenfield and Brownfield approach
• Policy and amendments to it get approves by Council annually
Klapmuts
• Greenfield process commenced in 2007
• Final dc’s determined and presented to Council by end of 2008
DC Principles applied in Stellenbosch
•APPLICATION OF DC’s
•Legislation (LUPO) √
•Principles as proposed by Venter Commission
•In-house Development Conditions
√
•Typical land-use process
√
•Bulk infrastructure in-lieu of dc’s (SA’s)
√
•DETERMINING OF DC’S
•WC024 (excluding Klapmuts) & Klapmuts
•Escalation ←
•LESSONS LEARNED & SUGGESTIONS
√
√
DC Principles applied in Stellenbosch
•APPLICATION OF DC’s
•Legislation (LUPO) √
•Principles as proposed by Venter Commission
•In-house Development Conditions
√
•Typical land-use process
√
•Bulk infrastructure in-lieu of dc’s (SA’s)
√
•DETERMINING OF DC’S
•WC024 (excluding Klapmuts) & Klapmuts
•Escalation √
•LESSONS LEARNED & SUGGESTIONS
←
√
√
DC Principles applied in Stellenbosch
•LESSONS LEARNED (from an engineering perspective)
•DC’s will differ from area to area due to different stormwater – and sewer
catchments, different water supply zones, status of road network, wwtw’s, etc.
•Most LA’s already does not have the bulk services capacity to accommodate a
new development … therefor bulk needs to be provided in-lieu of dc’s;
•LA’s does not have the capacity (finance and personnel) to be pro-active and
stay ahead in providing bulk services for future developments;
•LA’s Procurement policies and cash flow (of the developer)makes it
impractical to receive dc’s and to provide the services thereafter;
•Whether the concept of the developer providing services in-lieu of dc’s is
acceptable or not ….. it was the concept responsible for successful investment
of billions of rands of infrastructure over the past decades;
•Don’t change something if it is working ….
DC Principles applied in Stellenbosch
•SUGGESTIONS FOR A REVISED SCHEME (from an engineering perspective)
• Acknowledging that DC’s will differ from area to area, the
formula for calculation therof (methodology) must be consistent
for all areas;
• The principles as per Venter Commission should still be
applicable;
• Providing of bulk services by the developer in-lieu of dc’s needs
to be based on fair, transparent, general acceptable and audible
practices;
• DC’s paid MUST be ring fenced to ensure utilization therof for
the specific services for which it was paid;
•Keep it simple!
Thank you
Dankie
Enkosi
Tel: +27 21 808 8020 | Fax: +27 21 883 9874
Physical Address: Plein Street, Stellenbosch, 7600 | Postal Address: PO Box 17, Stellenbosch, 7599
Website: www.stellenbosch.gov.za