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Development Contributions Witzenberg Municipality 30 October 2013.

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Presentation on theme: "Development Contributions Witzenberg Municipality 30 October 2013."— Presentation transcript:

1 Development Contributions Witzenberg Municipality 30 October 2013

2 Definitions "External / Bulk Services” means all primary engineering services, i.e. engineering services that serve the town as a whole or, alternatively, that serve the major part of the town/suburb and include raw water storage dams, water source developments, reservoirs, water purification works, main water supply and feeder pipelines together with main pump stations, waste water treatment works, sewer mains together with main pump stations, classes 1, 2 and 3 roads, main stormwater channels/pipelines, main sub- stations together with associated works and equipment;

3 "Internal Services” all engineering services found within the bounds of the development such as water reticulation, sewerage, roads and stormwater drainage, together with all associated services and equipment. "Link Services” which means all engineering services that are necessary to connect the internal services to the external or bulk services.

4 Fixed costs (an average tariff based on infrastructure need. Because it would be complicated, impractical and time-consuming to calculate the exact contribution for each development on a case-by-case basis) Actual / Direct costs (the cost to upgrade or establish infrastructure either because no bulk services available or only partly available. Calculated on case-by-case basis.)

5 Principles Council’s programme in terms of the IDP is aimed at basic human needs and hence it does not necessarily develop additional services capacity for private developments. There is no legal obligation on Council to provide municipal services to land simply because the owner wishes to develop his or her land. Private developments need to carry the cost of infrastructure provision.

6 Policy Engineering service contributions are financial or equivalent contributions made to a municipality by an applicant, usually a property developer, who has been granted enhanced land use rights (re zoning) in order to develop a piece of land. Contributions pay towards the increase impact on municipal services such as roads, water, stormwater and sewerage, which have either already been provided or which must still be provided by the municipality.

7 The developer may connect to the external (bulk) services provided that there is sufficient capacity. The developer is responsible for the installation of all the internal and link services required for the development. The developer pays engineering service contributions according to the municipalities approved tariffs for the increased demand on bulk services (fixed cost). In the event that external (bulk) services are not available or insufficient the developer has the option to construct/upgrade the service at his own cost and to a standard agreed with the municipality (actual/direct cost).

8 Development contribution triggers a)Subdivisions All subdivisions resulting in an increase in the number of units and/or erven. a)Rezonings Any rezoning that will have an impact on bulk services i.e. Re-zonings from residential to business/industrial, from Agricultural to commercial, from commercial to residential, etc. a)Increase in land-useApplication for additional bulk / GLA / Coverage a)Subsidised housing 100% discount on engineering service contributions. a)Social (GAP) housing Social housing aims to provide housing opportunities to a specific lower income group (R3 500 – R15 000). The levy will be charged at 50% of a residential unit levy. *refers to the number of additional units/erven allowed as a result of the rezoning/subdivision.

9 Practical Example – Ceres Golf Estate Development 296 units over 3 phases 1 st phase 83 units GLS Report showed bulk water items that needs upgrading (to accommodate the golf estate together with other development areas):


11 Incremental cost to developer (whole development): Cost for phase 1 (83 units) Capital Contribution as on 8 2 2013 for Ceres Golf Development Fixed CostActual CostTotal Cost DescriptionFixedNumber of stands Amount (incl vat) Storage Capacity needed (m3) Estimated Cost (incl vat) Water1 686.0083139 938.00 453 752.03 Sewer6 530.0083541 990.00 Roads2 865.0083237 795.00 Storm water1 498.0083124 334.00 Total12 579.00831 044 057.00 1 357 871.03

12 Points needing clarification How do we deal with offsets? When does offsets apply? Is our approach in line with section 49(4) of SPLUMA in terms of offsets? Our contributions only deal with civil services, what about social services? Agree on certain principles and standard calculation method. Simplicity required as far as possible.


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