Development Contributions

Witzenberg Municipality

30 October 2013

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;

• "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.

• 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.)

MUNISIPALE DIENSTE KAPITAAL BYDRAE Tulbagh Dorp Tulbagh Buite PAH Ander

1. WATER

R1 776 R1 874 R1 878 R1 686

2. RIOOL

R6 880 R7 262 R7 274 R6530

3. STRATE

R3 016 R3 185 R3 190 R2 865

4. STORMWATER

R1 578 R1 666 R1 669 R1 498

TOTAAL

R13 250 R13 987 R14 011 R12 579

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.

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.

• 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).

Development contribution triggersa) 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-use Application 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.

Practical Example – Ceres Golf Estate Development

• 296 units over 3 phases• 1st phase 83 units• GLS Report showed bulk water items that needs

upgrading (to accommodate the golf estate together with other development areas):

• Incremental cost to developer (whole development):

• Cost for phase 1 (83 units)

Capital Contribution as on 8 2 2013 for Ceres Golf Development

Fixed Cost Actual Cost Total Cost

Description Fixed Number of standsAmount (incl vat)

Storage Capacity needed (m3)

Estimated Cost (incl vat)

Water 1 686.00 83 139 938.00 453 752.03 453 752.03Sewer 6 530.00 83 541 990.00 541 990.00Roads 2 865.00 83 237 795.00 237 795.00Storm water 1 498.00 83 124 334.00 124 334.00Total 12 579.00 83 1 044 057.00 1 357 871.03

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.

THE END