Draft Infrastructure Cost Schedule Review 2009 Review Overview Introduction Since the Infrastructure Cost Schedule 2008 was adopted by Council in August 2008, Town Planning Scheme No. 4 Amendment No. 43 has been gazetted which has increased the area covered by the Development Contribution Plan No. 3 by about 125ha and added new infrastructure items to be funded by the Plan. References to Amendment No. 43 should be read to include adoption by the City and Western Australian Planning Commission of the associated Structure Plan. Where new infrastructure has been included as a result of Amendment No. 43, this is noted below. All costs which are fixed and expected to or already appear in the audited statements are shown in italics, as is the associated text. The letters PD next to a year identify in which financial year the cost was incurred. For some specified works the total of fixed costs and estimated costs is shown for information. Sub-totals are underlined. The letters and numbers in brackets that follow explanation of the cost basis (or PD) tie to the City’s records system so detailed information on the costs can be retrieved on request. If viewing the draft Infrastructure Cost Schedule 2009 (the draft ICS 2009) using Excel, the formulas or data used to do the calculations can usually be seen. Colour coding has been used to enhance interpretation of the draft ICS 2009 (e.g. fixed costs are shown in blue italics, grants are shown with a minus sign in red), but it can be printed in black and white without loss of information. Annual costs have been projected out ten years to 2019. Although in 2006 it was envisaged that Development Contribution Plan No. 3 would expire after 10 years, the inclusion of new areas into Development Contribution Area No. 3 through Amendment No. 43 in February 2009 means that 10 years from now is a reasonable period. It is intended to update the draft Infrastructure Cost Schedule 2009 (the draft ICS 2009) during the advertising period to show all costs incurred up to the end of the 2009 financial year. Some re-costing exercises have experienced delays, so parts of some estimates provided are preliminary estimates. Refined estimates received during the advertising period and 2009 financial year information will be included in the Infrastructure Cost Schedule 2009 provided to Council for adoption in August 2009. The Consumer Price Index (CPI) for Western Australia which was 2.2% to March 2009 has been used where appropriate throughout the draft ICS 2009. Items that could be listed under 3.6.2 General Works such as consulting fees, survey and lodgement fees and the like are where practicable listed under the relevant Specified Work to provide a more realistic view of project costs. It is considered that the decrease in the Contribution Cost Per Lot has occurred despite ongoing and significant increases in construction costs because of the additional area added through Amendment No. 43 and an overall decrease in land values. Calculation of “D” In the public comment period for the Infrastructure Cost Schedule 2008, concern was expressed that the value for D of 10 lots per hectare specified by Clause 3.4.2 (a) in Development Contribution Plan was too low in view of the yields being achieved. In response, the City committed to monitoring changes in the lot density being achieved. In 2008 a density of 10.08 lots per hectare was being achieved, and that has now increased a density of 10.91 lots per hectare. The value of D is intended to be slightly low so that when costs are higher than anticipated, the scheme has additional funds that can cover the higher costs. The density of lots produced will continue to be monitored. The value of D can only be changed through a Scheme amendment. Arterial roads and paths Processes that refine road costs have continued since the Infrastructure Cost Schedule 2008, with construction of Wright Road nearly completed, Nicholson Road final design being commissioned from Harrisdale Drive to Mason Road Roundabout, and refinement of the Warton Road Final design costing. In regard to Warton Road, a significant increase in costs has arisen due to a policy change by Western Power regarding the proximity of power poles to the carriageway which affects the need for undergrounding of power. The City is challenging the policy change and will remove this cost if during the advertising period the policy change is withdrawn. However, in the interim the cost needs to be included in the draft ICS 2009. The City has successfully obtained a grant of $2.29m for Warton Road, which is reflected in the draft ICS 2009. The grant must be spent over the next two years. The City has reached agreement with a number of landholders along Warton Road regarding compensation for road widening and the agreed values are shown in the draft ICS 2009. Survey and other fees are now included where these are likely to arise. Costs to be refined during the advertising period include: The cost of relocating infrastructure that is now on private property but will be in the widened road reserve for Warton Road. This cost was not identified in the Infrastructure Cost Schedule 2008 cost and a preliminary cost estimate is now included. The Nicholson Road construction cost is still largely based on the 15% design, although the final design is currently being done by a consultant. Therefore it includes some preliminary cost estimates (e.g. for earthworks). New Specified Works (5c & 5d) which arise from Amendment No. 43 and which relate to intersections with Armadale Road are now included. The cost is based on a 15% design, which is now with Main Roads for approval. Detailed costs for street lighting and Western Power service relocation are still being sought, and preliminary estimates have been used for these costs in the interim. The cost for temporary works at the intersection of Nicholson and Armadale Roads (3d) has been increased to $250,000 in view of concerns about the extent of service relocation that is likely to be necessary at the intersection. With regard to Specified Work 5c (Armadale/ Wright/ Taylor Road intersection) a small area of road widening is required, and Proposed Values have been determined. The contribution towards Regional Paths has increased from $80 per m to $100 per m and the path width for Regional Paths has been increased from 2.2m to 2.5m to align with new engineering standards. An allowance of 10% of the value of Regional Paths has been included in Specified Work 6c to cover gaps in the path network that typically arise Amendment No. 43 results in additional paths from the SP South area being included (Specified Work 6a) and extension of the path along Armadale Road (Specified Work 6c). Arterial Drainage With regard to Specified Works 7a and 7b the layout has been reformatted for ease of understanding and the following significant changes have occurred: fees and other costs relating to the works are now included; the Southern Precinct Open Drain (Open drain servicing sub-catchments BA9 & BA10) cost has been removed because it is understood that the area on the only downstream lot (22 Nicholson Rd) that would be affected by a 1:10 year storm event upstream is negligible. A similar situation exists with respect to SP South area (i.e. downstream lots are not significantly adversely affected). The downstream area affected by a 1:10 year storm event was used to derive areas and drain lengths in the North Forrestdale Stage 1 Structure Plan area, and there has been no change to the area and drain lengths used for those calculations. for the section of drain on the northern end of Lot 53 Skeet Road the cost of stabilising the drain with native vegetation and using culverts where the drain passes under Western Power’s high voltage transmission line are now included; and the cost of construction from the western end of Lot 53 Skeet Road to Baileys Branch Drain is now based on an estimate developed by the City’s Technical Services Directorate, using survey data and information from the North Forrestdale Stage 1 Structure Plan Report, rather than a linear metre rate. With regard to Specified Work 7e it has been decided that Development Contribution Plan No. 3 should be responsible for the cost of monitoring required by Local Water Management Strategies as these documents cover multiple landholders. This is consistent with the Better Urban Water Management approach and on this basis the draft ICS 2009 has generally assumed that the Department of Water is responsible for District Water Management Strategy monitoring costs and developers are responsible for Urban Water Management Plan monitoring costs. In some instances the same equipment or data is needed to meet the requirements of each Strategy or plan. For example, the installation cost of the flow monitoring station at the western end of Lot 53 Skeet Road is being shared equally between the Department of Water, Development Contribution Plan No. 3 and Stockland (for Vertu Urban Water Management Plan - Lot 50 Wright Rd). For this station, agreement has yet to be reached on operational costs, but the full operational costs are reflected in the draft ICS 2009 under SP Central - LWMS Surface Water Monitoring Costs for a 10 year period. Reaching agreement on operational costs is complicated by a number of factors including differing monitoring periods for the Strategies and Plans. A fully costed Sampling and Analysis Plan to cover the requirements of the SP South and SP South East Local Water Management Strategies has been developed by consultants for the City and it is currently with the Department of Water for approval and discussion on some key points. It is anticipated that Sampling and Analysis Plan for SP South and South East will enable Urban Water Management Plans to be more easily formulated and opportunities for cost sharing to be identified, reducing costs for developers and Development Contribution Plan No. 3. Groundwater monitoring costs for North Forrestdale - Stage 1 Structure Plan area (SP Central) are a preliminary estimate based on the Sampling and Analysis Plan for the SP South and South East. Surface and groundwater monitoring requirement will continue to be refined during the next year. Signage to explain how the drainage system works in North Forrestdale is also needed to help residents understand that some park areas are underwater for periods of time, so this has been added into Specified Work 7e. Following Amendment No. 43 the community education cost has been increased on a pro- rata basis based on expected lot yield data provided by consultants, and three new items relating to James Drain (7f, 7g and 7h) have been added. Care has been taken not to apply the 15% contingency to fixed costs. Community facilities The City’s Manager Property Services reports that building costs have again increased 25% over the last year, and the City’s Manager Recreation Services advises costs have increased 10% for sporting facilities. Costs and contributions have been revised accordingly. Development of a concept plan for Specified Work 8b, the community facility on Lot 48 Nicholson Road, has identified that the building will most likely need to be about 500sqm, rather than 400sqm as originally envisaged. It is considered that a Structural Report and an allowance for structural works is no longer needed for Bakers House so these costs have been deleted from Specified Work 8c. The need for adequate project management, design and documentation, and fit-out associated with the proposed community facility buildings that have not yet been built (Specified Works 8b & 8g) has been identified and an estimate included assuming that the City will bear half of these costs. As a result of Amendment No. 43, Specified Work 8f has an additional oval, and a new Specified Work 8g that covers a new community facility including a sporting pavilion is included. As a result of relocation of the sites of the proposed ovals and the additional oval, the 15% design has been re-done for the ovals and each oval re-costed based on the design. Grant funding has been estimated at 25% to allow for the effort expended in achieving grants. Sewer and power, Conservation category wetlands and General Works Changes since the Infrastructure Cost Schedule 2008 in these areas are generally minor and are explained on the draft ICS 2009. As a result of an assessment of risks to Development Contribution Plan No. 3, a contingency amount has been added for staff replacement. Proposed values - Land The process detailed in Development Contribution Plan No. 3 has been followed to derive revised land values. Although there have been some significant changes to values both up and down in response to new sales information or new information about previous sales, there has been an overall drop in land values of about 18%, with a drop in the order of 15% being relatively common. Based on the remaining land to be acquired, the new values save the scheme in the order of $970,000. However, given that the lower land values do not come into effect until after adoption by Council on 25 August 2009 is likely that some owners may seek to expedite road widening and associated compensation agreements during the advertising period.