A REVIEW of the way in which water and sewerage developer charges are levied by MidCoast Water has resulted in a number of recommended changes which will see charges decrease for businesses across the service area.
These changes, which were endorsed by the board of MidCoast Water at its August meeting, are now on public exhibition to allow the community to express their views on the proposal before being formally adopted.
The changes have been made following a review of water demand from industrial development and see demand rates halved for the low and medium load categories (typically those businesses which do not use water as part of their operations, apart from providing amenities to staff), as well as the introduction of a new category for industrial land subdivision.
Businesses in the high load industrial category - operations which use water in their processes such as ready mix concrete, nurseries, food processing and laundries for example - will continue to have charges calculated based upon an individual water demand assessment.
Business and property owners have raised concerns with MidCoast Water in recent months about the way developer charges are allocated for businesses that use comparatively low volumes of water, the impact of the upfront cost of developer charges on growing businesses and a comparison with developer charges in other areas.
The change to the loading types and subdivision category is the first stage in a holistic review of developer charges by the water and sewer authority, according to general manager, Robert Loadsman.
"These changes still reflect a 'full cost recovery' for the provision of services to developers and any change to that - such as the potential for subsidising development costs - will be considered after a major review of our development servicing plans, a review we are currently undertaking," Mr Loadsman explained.
When this review is complete MidCoast Water will undertake community consultation on the potential effects any developer subsidies would have on water and sewerage prices.
The review of the development servicing plans involves reassessing the infrastructure needs for five water supply schemes and 14 sewerage schemes and is expected to be completed early in 2014.
Developer charges, which are levied under Section 64 of the Local Government Act are designed to recover the cost of upgrading assets such as water and sewerage treatment plants, pump stations and major pipelines due to growth in demand from new development.
"It is important for us to strike a balance. New infrastructure to service growth is expensive and developer charges ensure that new assets are sustainably funded and our customers' water and sewer rate increase are kept under control," Mr Loadsman said.
Mr Loadsman explained any change which would result in the overall customer base subsidising developer charges is only permitted by the NSW Government if MidCoast Water can clearly show there has been wide and transparent consultation with customers and that the customers are willing to subsidise developers.
"We are also currently investigating new ways for developer charges to be paid, including potentially a usage based capital charge, but currently there does not appear to be a precedent for this in NSW and further work is required to determine whether such a usage based charge is permissible under legislation."
Mr Loadsman said MidCoast Water does have a well-established precedent for developers who have genuine cash flow problems and are unable to pay the whole of the levied developer charges upfront to be offered time based payment instalments over a two to five year period.
Members of the community are encouraged to make comment during the public exhibition period, which will close at 5pm on Monday September 30. The new draft Equivalent Tenement Policy, which sets out changes to loading types and subdivision categories, is available on the MidCoast Water website www.midcoastwa ter.com.au and at customer service centres in Muldoon Street, Taree and Breese Parade Forster.