What happened to Darebin's Developer Contribution Plan?
Current State of Play - 2021
Darebin Council finally sought planning approval for a new Developer Contributions Plan in 2021, seven years after officers allowed the previous plan to lapse without a replacement. Residents have been deprived of infrastructure that should have been funded with that income.
Below is a a compilation of Facebook posts, newspaper articles and correspondence from 2017-2018 to get a new DCP established. You can read about the current status of the process on the Darebin website here.
At a rough estimate Darebin Council has lost around $1.89 million per annum since 2014/2015 because it's predecessor council didn't renew the Development Contribution Plan (DCP). I've been told that at the time it was thrown in the too hard basket by council bureaucrats. The new council featured the renewal of a DCP in its 2017/2018 budget, and again in this year's draft budget. In short, it is still not complete.
The kindest interpretation I can put on the current delay is that the planning amendment process for a DCP is hopelessly difficult to design. That's a state government issue. Surely it would be simpler for the government to levy a flat tax on all developers and be done with it rather than having to apportion funds based on the open space needs of every street in every area? It costs councils hundreds of thousands to renew a DCP and the only winners are consultants and the beneficiaries of delays.
Acting Darebin CEO, Phil Shanahan, is characterising the lapse of the Development Contributions Plan (DCP), during the term of the former council, as merely a "bad error of judgment." This implies that no one may be held accountable for the loss. The lapse will continue to cost council millions until the DCP is renewed, which could be more than a year away.
31 May 2017
Darebin Acting CEO on the DCP
The previous Darebin Council (2012-2016) planned to renew its Development Contribution Plan (DCP), which lapsed in 2014. However, drafting of the planning amendment was discontinued without any formal process, costing the Council millions of dollars in revenue which should have been directed to public infrastructure.
I sent a formal grievance about the matter to the Acting CEO, Mr Phil Shanahan, and included my review of the relevant resolutions, 'Darebin's missing millions - what happened to the Development Contribution Plan?" https://tinyurl.com/me79uyc (republished below).
Following an investigation, Mr Shanahan has confirmed the accuracy of my summary and while he is unable to be "thoroughly conclusive" he has formed the view that the DCP was “scuttled” by Council’s Management, probably without reference to the elected Councillors.
The State Government is, in part, blamed for this action because it was assumed that the proposed new Infrastructure Contributions Plan (ICP) would supersede the DCP. Whether this was a reasonable assumption is not discussed. The only winners from this lapse are developers, who have not been paying their fair share for infrastructure in our community.
While the Acting CEO has made a good effort to try and determine the cause of the lapse, his investigation raises more questions than it answers. I have provided the full correspondence to the Minister for Local Government, Hon Natalie Hutchins MP and I am considering which government agency would be the most appropriate in which to lodge a formal complaint. NB: When commenting please be cautious about naming individuals. Any inappropriate or defamatory comments will be deleted.
Given that the legwork on a new DCP was done in 2014 it is very concerning that the original work will be scrapped and it will take two years and $350,000 to set up a new one (plus allow 6mths for the planning amendment to be approved by the government). If there's no other way then, at the very least, the Public Open Space levy needs to be immediately raised to a full 5% on all developments.
6 May 2017
Darebin’s missing millions - what happened to the Development Contribution Plan?
[First published on Facebook on 6 May 2017]
The Darebin Development Contribution Plan (DCP) was an upfront levy on developers towards improving town infrastructure. The DCP had a ten year window between 2004 and 2014. When it expired on 30 June 2014 it was not replaced. This omission was revealed in the Preston Leader by Ed Gardiner, on 18 April 2017, ‘Darebin Council misses out on millions due to failure to replace developer levy scheme.’ So how did this omission come about? Need for a new DCP recognised in 2014/2015 Budget Papers but not actioned The Issues and Discussions section of Darebin’s draft budget papers in 5 May 2014 (p.33) states that, ‘The Issues and Discussions section of Darebin’s draft budget papers in 5 May 2014 (p.33) states that, ‘Planning issues continue to be a major concern for Council with new funding allocated to the Northland Urban Renewal precinct, Junction Urban Master Plan, implementing the new residential zones and developing a new Developer Contribution Plan” [emphasis added]. The 2014/2015 budget states that, “Contributions are projected to decrease by $1.89 million or 35% compared to 2013/14 mainly due to the DCP plan concluding on 30 June 2014” [Council Meeting 30 June 2014, Item 4.2, Appendix A]. On 15 September 2014 a resolution was unanimously carried that would deal with around $6.5million in unspent funds in the expired DCP via an amendment to the Darebin Planning Scheme. However, this resolution merely ‘noted’ that a replacement for the DCP was being prepared by independent consultants; there was nothing in the resolution that would action the finalisation of a new DCP (Council Meeting 15 September 2014, Minute no.444). The consultant’s report which was attached to the minutes is called, “City of Darebin – Municipal Wide Development Contributions Plan 2015-24 - Working Draft.” The working draft at section 1.1 states that, “Council has resolved that future development must continue to pay for its share of the capital cost of scheduled infrastructure. SGS Economics and Planning (SGS) have been commissioned by City if [sic] Darebin to assist with the preparation of this (renewed) DCP” [15 September 2014, Item 905 Appendix A - Amendment C148]. I have been unable to find a final version of this report and suspect that it may not have been completed. The 2015/2016 budget continued to anticipate a replacement DCP, noting that, “Contributions are projected to increase by $1.7 million or 44.85% compared to 2014/15 mainly due to the introduction of the revised DCP plan.” (Council Meeting 22 June 2015, Item 4.2, Appendix A). Planning Scheme Amendment C148 only deals with unspent funds Early in 2015 the same independent consultants prepared a second report titled, Darebin DCP Audit Report and Management of Unspent Funds FINAL - March 2015. This report formed the basis for the DCP planning amendment C148. On 13 April 2015 there was an assembly of councillors who met to confidentially discuss the proposed DCP planning amendment C148 (Council Meeting 4 May 2015, Minutes p.11). The following week Council received a confidential officer’s report which was designed to gain a formal resolution to amend the Darebin Planning Scheme so that the unspent funds could be directed towards a multi-sport facility, the Darebin High Ball Stadium (Council Meeting 20 April 2015, Minute no.189). The amendment to the planning scheme was exhibited between 25 June 2015 to 27 July 2015, and there were no submissions and no planning panel. Rather extraordinarily the formal resolution to amend the planning scheme was not carried until December 2015 (Council Meeting 7 December 2015, Adoption of Darebin Planning Scheme Amendment C148, Minute 45). The resolution was forwarded to the Minister on 24 December 2015 and gazetted on 5 May 2016. I cannot find an explanation for the long delay between the end of the exhibition period in July and the submission of the resolution to the Minister on Christmas eve. The planning amendment C148 only dealt with unspent funds and not the replacement DCP. Conclusion It is evident that the Finance Unit was banking on a new DCP being included in its proposed 2015/2016 budget but this changed at some time after the budget was finalised. Meanwhile another area of council was only focused on ensuring that the unspent funds were retained and directed to the multi-sports centre. Councillors met at least twice in April 2015 to discuss the DCP but it is unclear whether they realised that the replacement DCP was left out of the motion which followed, or whether they made a conscious choice themselves to leave it out. The restrictions upon how DCP money can be used and the complex methodology for calculating the levy is no excuse for failing to renew the DCP. The independent consultants hired by Darebin Council were clearly capable of providing the necessary technical advice to enable the relevant planning amendment. It’s not good enough and the Darebin community deserves to know who, during the term of the previous council, made the decision to allow the DCP to lapse without a replacement and why they made this decision.
Photo credit: Terry Mason
Letter to Acting Darebin CEO - Phil Shanahan
2 May 2017
Mr Phil Shanahan
Acting CEO Darebin Council 274 Gower St
PRESTON VIC 3072
Via email: Phil.Shanahan@darebin.vic.gov.au
I am a local community activist with a strong interest in issues of good governance and accountability in local government.
I am writing to you to raise a formal grievance in relation to Darebin’s Development Contribution Plan (DCP) which lapsed in June 2014. Attached to this email is an analysis of council meeting minutes which show that planning amendment C148 was actioned to deal with unspent funds in the old DCP whereas the pursuit of a replacement DCP was dropped. I believe, but have been unable to confirm at this stage, that the replacement DCP was designated the planning amendment code C150.
Based on the 2015/2016 budget papers the forgone funds can be roughly estimated at around $1.7million per annum - over a three year period this comes to more than $5million dollars in lost funds.
This is a substantial amount of money which has been lost for municipal purposes which include: acquisition of land for public purposes;; construction of roads and bicycle paths;; construction of public transport infrastructure;; improvements to public open space;; drainage works;; and buildings associated with the care and education of children. This is an unacceptable lapse which is made worse by the fact that rates are going to be capped by the current government.
I have been encouraged to contact you directly in relation to this matter as the newly elected council has a stated commitment to transparency in its operations.
There are three possibilities which have occurred to me as constituting possible reasons for failing to renew the DCP:
For some reason, it was felt to be too hard;; and/or
Inadvertent delays caused by complications with the unspent funds in the previous DCP; and/or
I note that under the Local Government Act (Vic) that one of the functions of the Chief Executive Officer is, S94A(1)(b), “ensuring that the decisions of the Council are implemented without undue delay...”
At this stage I have not been able to find a standalone motion of Council that actions the replacement DCP, however, it is strongly implied that this was the intention of council given that the replacement DCP is referenced in several final budgets and councillors understood the matter to be in hand. A draft replacement DCP was included in the minutes dated 15 September 2014.
Given that the consultants were hired by Darebin Council to undertake the work of drafting the replacement DCP I would imagine that an explanation or instruction to them would be available via email and/or in a file relating to the preparation of the DCP. The matter may also have been the subject of discussion by the Executive Management Team and therefore recorded in officers' notes.
The community has a right to know why the decision was made to allow the DCP to lapse without a replacement. I have been advised by the Mayor that you are undertaking an investigation of this matter and I request that your findings be made public, inclusive of any relevant documentation that explains the omission.
Given the substantial loss of revenue this may be a matter that needs to be reported to a higher level of government.
I request a response to this letter by close of business 12 May 2017.
Thank you for your consideration and please feel free to call me if you would like to discuss this letter.
Darebin resident La Trobe Ward
Darebin Council misses out on millions due to failure to replace developer levy scheme - Ed Gardiner - Preston Leader
AN OVERSIGHT by a council in Melbourne’s north has cost it up to a million dollars a year in lost revenue from developers that could have paid for parks and roads.
UPDATE: DAREBIN Council has pledged to bring back a development levy that lapsed in 2014, costing millions in lost revenue that could have funded parks and roads.
In a council statement following Leader’s story, Mayor Kim Le Cerf said she was “shocked” to learn the levy had expired after it brought in more than $8 million over 10 years.
Councillor Le Cerf said a replacement levy was ordered late last year and would be included in the council’s next budget. Read more