Planning, Environment & Government Update – March 2006

• NSW councils told to lift their game

• New panel to unclog the system; clampdown on spot rezoning

• Developers held to ransom by "voluntary" contributions provisions

Forty per cent of councils fail to determine a development application within the 40-day deadline, according to NSW Planning Minister Frank Sartor. He expressed his dissatisfaction with councils’ performance at the second reading speech for the NSW Environmental Planning and Assessment Amendment Bill 2006 (the Bill). He was also concerned that many councils incur excessive legal fees in relation to planning and development.

The Bill seeks to make sweeping changes to local councils’ powers and broadens the opportunities for State Government intervention.

The proposed amendments expand the power of the Minister to appoint a planning administrator to councils. Further, the amendments allow for the appointment of a planning assessment panel instead of, or in addition to, the planning administrator. The Minister can make this appointment if he believes that the council’s performance in dealing with planning and development matters is unsatisfactory, or if the council agrees to the appointment.

Administrators or panels may be used to target specific areas, such as large-scale development. The Minister may specify the functions that will be exercised, and can direct the council to provide panels or administrators with staff and facilities.

The Bill also addresses Development Control Plans and developer contributions.

In the second reading speech, Mr Sartor alleged that some councils misuse planning controls. "Some councils ignore development standards to approve inappropriate development, such as large waterfront houses that contravene development controls," Mr Sartor said. "Other councils refuse appropriate development, despite compliance with development controls and endorsement from council officers."

The Bill permits the Minister to direct a council to make, amend or revoke a Development Control Plan (DCP). In the event of non-compliance by the council, the Minister may step in and make, amend or revoke the DCP himself. The amendments aim to eliminate errant planning controls that may be adopted by a particular council, and to co-ordinate local and State controls.

The Bill allows for a "special infrastructure contribution" to be levied by the State Government in addition to contributions imposed by the council. A special infrastructure contribution will be collected only in special contributions areas (at the moment this includes areas declared under the Growth Centres (Development Corporations) Act 1974).

The special infrastructure contribution will only be imposed if it is considered reasonable to impose an extra levy because of the extent and urgency of the area’s infrastructure requirements. Special provisions are designed to prevent double dipping between council and State Government contributions. Special infrastructure contributions may be not be appealed in the Land and Environment Court, but may still be subject to Supreme Court challenge.

There are growing concerns over the potential for abuse existing in the current development contributions provisions (see the Sydney Morning Herald article below, dated 11 February 2006). Responding to comments made by Anthony Whealy, Mr Sartor described the provisions as a "backdoor cash cow". In response to these concerns, the proposed amendments will allow the Minister to direct a council to make, amend or repeal a contributions plan on the council’s behalf, in the event of non-compliance, or with consent from the council. The Minister must be provided with a copy of a contributions plan as soon as

NEW PANEL TO UNCLOG THE SYSTEM; CLAMPDOWN ON SPOT REZONING

A new panel in NSW will weed out planning proposals which are inconsistent with State and regional planning objectives, to prevent these from clogging up the system.

From 22 February 2006, all proposed draft Local Environmental Plans (LEP), as well as draft LEPs that are already in the system, will be subject to review by the new LEP Review Panel (the Panel).

The task of the Panel is to scrutinise a draft LEP at a very early stage, before a council has prepared a formal proposal, and before it goes to the NSW Planning Minister.

The new system for most LEPs will be as follows:

1. The council resolves to prepare a draft LEP;
2. The council notifies the NSW Department of Planning of its intention under s 54(4) of the Environmental Planning & Assessment Act 1979 (EP&A Act). With this notification, the council must include a completed checklist of pro-forma evaluation criteria, to help the Panel to assess whether the proposal complies with its preferred criteria for the creation of new LEPs;
3. The Panel reviews the proposal against the evaluation criteria and provides advice to the council within 15 working days of the notification being received;
4. The Panel advises the Director-General and/or Minister about the proposed draft LEP;
5. The Panel advises the council whether or not to proceed with drafting the LEP. The council cannot proceed until it receives a "Written Authorisation to Exercise Delegation" from the Director-General;
6. The Panel may also direct the council with respect to the preparation and consideration of an environmental study and any other general issues that it considers relevant;
7. The Panel may reconvene at a later stage to assess the draft LEP before it is submitted to the Minister for approval.

The Panel will consist of the Director-General (or his nominee), senior departmental executives, and a nominee from the Local Government and Shires Association. It is expected that a representative from the council will also generally be invited to contribute to Panel considerations.

Six LEP categories have been identified. Different evaluation criteria apply to each. The categories include:

1. Spot Rezoning;
2. Reclassification (from community to operational use);
3. Precinct (part of local government area);
4. Policy;
5. Comprehensive (entire local government area); and
6. Surplus Government Land.

The procedural changes potentially make spot rezoning more difficult.

The Department has expressed a clear dislike for spot rezoning. The new provisions will require a compelling reason to be provided for any spot rezoning, as the Department’s preference is to avoid this type of LEP wherever possible. This will present a significant headache for developers where the viability of a proposed development is dependent upon rezoning of the site by the council.

In circumstances where developers are seeking a spot rezoning, legal advice should be obtained. The process should be commenced as early as possible. A submission should be prepared. The submission should address the evaluation criteria for "spot rezoning".

To provide greater certainty on the proposed development, if possible, a design scheme of the development proposal should be submitted, together with the spot rezoning seeking in principle acceptance by the council and the Department.

DEVELOPERS HELD TO RANSOM BY "VOLUNTARY" CONTRIBUTIONS PROVISIONS

The Sydney Morning Herald has published comments by Anthony Whealy on how some councils in NSW pressure developers into entering into "voluntary" planning agreements. These agreements encourage a favourable contribution to councils, in return for a fast-tracked development consent. click here for the article...

Gadens Lawyers’ September 2005 update, "Section 94 development contributions overhauled", has more information on the developer contribution regime. click here...

This publication is provided to clients and correspondents for their information on a complimentary basis. It represents a brief summary of the law applicable as at the date of publication and should not be relied on as a definitive or complete statement of the relevant laws.