Understanding Developer Contributions

The City of Melton is one of Australia's fastest-growing municipalities. With our population expected to continue growing significantly over the coming decades, careful planning is required to ensure new communities have the roads, parks, community facilities and infrastructure they need.

One of the ways this infrastructure is funded is through developer contributions.

Developer contributions are payments made by developers in new growth areas to help fund the infrastructure required to support future residents. These contributions play an important role in helping deliver new communities and ensuring that growth is supported by the facilities and services people need.

Developer contributions are planned and managed through a framework established by the Victorian Government. The Victorian planning system sets out how growth areas are planned, how Development Contributions Plans are prepared, what infrastructure can be funded, and how contributions are collected and spent. Council administers developer contributions in accordance with these State Government requirements and approved planning documents.

View the current development infrastructure levies for construction costs and land values in the City of Melton.

Planning for new communities

Before a new growth area is developed, a Precinct Structure Plan (PSP) is prepared.

A PSP is a long-term blueprint for a new community. It identifies where homes, roads, parks, schools, community facilities, sporting reserves, drainage infrastructure and employment areas will be located. The PSP ensures that new communities are planned in a coordinated way rather than developing piece by piece over time.

Each PSP is supported by a Development Contributions Plan (DCP). The DCP identifies the infrastructure required to support the new community and outlines how developer contributions will help fund that infrastructure.

Together, PSPs and DCPs help ensure that growing communities have access to the facilities and infrastructure they need both now and into the future.

How developer contributions work

When land is developed within a PSP area, developers are required to make contributions towards future infrastructure.

These contributions may take several forms, including:

• Monetary contributions paid to Council
• Land provided for future community infrastructure
• Infrastructure constructed directly by the developer and transferred to Council.

Developer contributions help fund infrastructure such as:

• Roads and intersections
• Bridges
• Drainage infrastructure
• Walking and cycling paths
• Parks and open space
• Sporting reserves
• Community facilities.

Developer contributions are an important funding source, but they generally do not cover the full cost of delivering infrastructure in growth areas. Council often contributes additional funding through rates, government grants and other funding sources.

Why can't developer contributions be used elsewhere?

One of the most common questions Council receives is why developer contributions cannot be used in other parts of the municipality.

Developer contributions are governed by planning controls and legislation. The funds collected through a Development Contributions Plan can only be used for the infrastructure identified within that plan.

For example, money collected from development in one growth area cannot be redirected to fund infrastructure in another suburb or township. Council holds these funds in dedicated reserve accounts until they are required for the infrastructure projects they were collected to help deliver.

This ensures the funds are used for the purpose for which they were collected and provides transparency and accountability to both developers and the community.

Why isn't infrastructure built immediately?

Another common question is why infrastructure is not always delivered as soon as developer contributions are received.

The timing of infrastructure delivery depends on a range of factors, including:

• Population growth
• Community demand
• Land availability
• Construction sequencing
• Project priorities
• Funding availability.

For example, major roads and drainage infrastructure may need to be completed before a community centre or sporting reserve can be constructed.

In many cases, developer contributions are collected years before the associated infrastructure project is delivered.

Understanding developer contributions in Council's budget

Developer contributions are recorded as income when Council receives them.

This can sometimes create the impression that Council has received additional unrestricted funding or that it is holding large amounts of money that can be spent anywhere across the municipality.

However, developer contributions are not general revenue. The funds are held in dedicated reserve accounts and can only be used for the infrastructure projects identified within the relevant Development Contributions Plan. Any interest earned on these reserve accounts remains with the reserve and contributes towards the future delivery of infrastructure in that area.

Developer contributions help Council deliver infrastructure for growing communities, but they are not available to fund everyday Council operations, services or projects outside the area where the contributions were collected.

FAQs