1. Presentation by: Alwyn Laubscher Pr. Eng. Pr. CPM REPORT TO MUNICIPAL WORKSHOP 31 OCTOBER 2013

2. PURPOSE OF THE PRESENTATION To explain the process previously followed at Swartland Municipality To highlight the lessons learnt through applying the system

3. CONTENTS Introduction Process to determine DC’s Growth Model Bulk Services Implementation Lessons Learnt Questions

4. INTRODUCTION It is the responsibility of Local Government to pro-actively plan for growth and development of their town. First it should determine the potential for growth, and then the required bulk services to serve such growth. And to establish sources of funding for such services.

5. PROCESS TO DETERMINE DC’S Need for Local Government to stimulate economic development Need to pro-actively plan for growth and development of City/Town Development of a long term Growth Model for the Area Compilation of master plans for bulk services to serve Growth Model

6. Calculate the cost of each of the bulk services Determine the contribution from each development opportunity to pay for bulk infrastructure Negotiate with Developer to provide bulk services in lieu of DC’s, where applicable Pay DC’s into a dedicated account (per service) to be used in future for the provision of bulk infrastructure PROCESS TO DETERMINE DC’S

7. Plan for estimated growth for different scenario’s (5; 10; 20 years) Assumed zoning; land use; and densities Brown Fields (densification) and Green Fields (new developments) Compile Excel Model for easy manipulation of What If questions GROWTH MODEL

8. GROWTH MODEL - MALMESBURY 20 JAAR

9. GROWTH MODEL - 20 YEAR

10. BULK ROAD NETWORK

12. WATER NETWORK NETWERK

13. SEWERAGE NETWORK

14. BULK WATER & SEWERAGE PLANNING

15. STORMWATER NETWORK

16. STORMWATER Ondersoek (Aanvaarding R30 000 per 500m lengte van rivier) R 1,020,000 Vloedlynstudie (Aanvaarding R15 000 per 100m rivier) R 1,500,000 EIA (Aanvaarding R500 000) R 500,000 Opgradering/Rehabilitering (Aanvaarding gebaseer op vorige projekte) R50,000,000 Sub totaalR53,020,000 Onvoorsiene UitgawesR 5,302,000 BTW (14%)R 8,165,080 TotaalR66,487,080

17. ELECTRICITY DESCRIPTION DENSITY OR COVER- AGE ADMD kVA AT 132/11 kV SUBSTATION LEVEL RATE PER kVA FOR 132/11 kV SUB- STATION “GREEN- FIELDS” CONTRI- BUTION ADD “BROWN- FIELDS” PRIMARY AND SECONDARY 11 Kv INFRA- STRUCTURE TOTAL RATE FOR BULK ELECTRICITY CONTRIBUTIONS (VAT EXCLUDED) Low Density4 u/ha4 kVA per unitR1 405-00R5 620-00R2 526-32 per unitR8 146-32 per unit Single Residential 15 u/ha3 kVA per unitR1 405-00R4 215-00R2 526-32 per unitR6 741-32 per unit Medium Density Residential 20–25 u/ha 2.5 kVA per unit R1 405-00R3 512-50R2 526-32 per unitR6 038-82 per unit High Density Residential 30–60 u/ha 2.5 kVA per unit R1 405-00R3 512-50R2 526-32 per unitR6 038-82 per unit Affordable Housing 30–40 u/ha 1.5 kVA per unit R1 405-00R2 107-50R1 263-16 per unitR3 370-66 per unit Subsidised30–40 u/ha 1.0 kVA per unit R1 405-00 R0-00 per unitR1 405-00 per unit Industrial and Commercial VariesOn ApplicationR351-25R1 405-00R157-90 per kVA R509-15 per kVA of Applied for Maximum Demand Co-incidence factor of 25% used between Non-Residential and Residential peak loads Direct connection costs such as mini-substations, metering, 11 kV secondary cables etc., excluded Credit will be given for 11 kV secondary cables installed on Municipality’s behalf and in accordance with the Electricity Master Plan

18. WASTE WATER TREATMENT WORKS Land UseUWD*USF* m³/unit/daym³/ha/day% of UWD*** m³/unit/daym³/ha/day Res Low Density1.0550.55 Res Single0.7600.42 Res Medium Density0.6600.36 Res High Density0.5650.325 Res Subsidy Housing0.3700.21 Industrial20.06012 Commercial Retail20.06012 Commercial Offices15.0609 WWTW = R94m for 10 000m³/day (10/12/2007) Upgrade adds 4 600m³/day Total Capital for refurbishment of existing WWTW = R30m Total Cost for 4 600m³/day = R94m – R30m = R64m Unit Cost = R64m/4 600m³/day = R13 894.57/m³/day UWD*= Unit Water Demand/ USF**-Unit Sewer Flow/% of UWD***-UH + 5% (infiltration)

19. Principles: Responsible Planning Everybody must contribute Based on land value SOCIAL INFRASTRUCTURE

20. T IMPLEMENTATION Liaise with Developers Approve as Council Policy Advertise with Tariffs Training of officials Guideline document (internal and external) Implementation across the board

21. QUESTIONS

22. Presentation by Alwyn Laubscher Pr. Eng. Pr. CPM REPORT TO MUNICIPAL WORKSHOP 31 OCTOBER 2013

23. PURPOSE OF THE PRESENTATION To share the considered key elements of such a policy To highlight the alignment between SDF; IDP; MTREF; and DC’s

24. LESSONS LEARNT - LEGISLATION LUPO provides for charging DC’s but is not very clear in its definitions …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. This lead to court cases around the quantum charged Electricity has less of a problem - legislation allows them to charge DC’s as a tariff It is therefore important how LUPA will deal with DC’s

25. LESSONS LEARNT - FINANCIAL Plan for growth of Town and see DC’s as an additional source of revenue This is not just another tax - it is a planning exercise Do not hand it over to Treasury Quantum and When it is payable must be known upfront by Developers - certainty Follow proper process of collecting DC’s – big numbers at stake

26. LESSONS LEARNT - ECONOMY Be aware not to scare investors away - you are in the business of selling your town and draw investors Approach DC’s as a partnership with Private Sector Mitigate impact on job creation through subsidies – DC’s on Commercial and Industrial developments are high. LUPO requires regard to the various rates and levies paid in the past or to be paid in the future by the owner of the land concerned - WWTW

27. KEY ELEMENTS OF DC POLICY Must find a balance between need to stimulate economy and job creation; and funding the growth of the town Private Sector is running huge risks with low margins - need support and certainty (look at number of entities that left development) Beware of line departments treating DC’s as a cash cow – delivery of service for which money was collected must take place Proper system and policy is required for administration - big amounts at stake

28. ALIGNMENT BETWEEN SDF; IDP; MTREF; & DC’S Planning for the future is responsible management In terms of the IDP it is a legal requirement In terms of MFMA a Medium Term Revenue and Expenditure Framework (MTREF) is a requirement Determination of your Spatial Development Framework is the starting point for compiling a Growth Model Engineers need to plan ahead for all bulk services (part of IDP): they can only do so if they have a Growth Model Planning by the Engineers must be budgeted for – back to MTREF MTREF relies on various sources of income - i.e. DC’s

29. QUESTIONS