Over the remainder of this Council’s term, I plan to write to you with accurate information about issues of importance and as a means of connecting and endeavouring to build your trust and confidence in Council. In this first newsletter I focus on water and water charges.
During the severe drought through 2019 and most of 2020, water security and supply was a key focus for Council. There were significant impacts on the community and Council’s water supply. The combined impact of increased costs associated with drought response and a reduction in revenue from water user charges negatively impacted water reserves by $5.7M.
The current forecast for capital works is $135M over the next ten years. While Council will be able to secure some external funding for these works, a proportion of costs will need to be met from water reserves.
In late July 2020, while the Councillors were under suspension by the NSW Minister for Local Government, the Interim Administrator resolved to increase water charges by approximately 60 per cent, from $2.60kl in Armidale and $2.15kl in Guyra to $4.20kl. This has caused considerable concern in the community.
I share some of those concerns. Some residents feel they have been unfairly penalised for doing the right thing and reducing water consumption during the recent drought. As your Mayor I congratulate and thank you on behalf of Council for your wonderful efforts to conserve our precious water.
The aim of the water charges increase, was to rebuild the Water Reserve funds after a negative impact through the drought, as well as to place greater value on water as a limited resource. In my view, if such an increase was necessary, it should have been incrementally applied over a period of years. The $5.7M cost I refer to was comprised of 2019-2020 drought response, leak repairs across the network, rebate programs, bore drilling, ground water infrastructure, Guyra water carting and significantly reduced water usage revenue.
The Water Reserve Fund is expected to approximate $21M at 30 June 2021 after accounting for these costs. At 30 June 2018 the Reserve amounted to $23.25M. The Dumaresq Dam wall restoration has recently commenced. This is the number one at risk dam in NSW. Council has a funding deed with the NSW Government but is required to meet 50 percent of the repair costs. This will reduce the Council’s Water Reserve by around four million dollars.
Additionally, Council has commenced the upgrade of the Puddledock Dam to Armidale pipeline and pump systems. This project is expected to cost $11,540,000 with the NSW Government contributing 50 per cent of the funding.
The Water Reserve Fund is also required to replace ageing water mains and other infrastructure over time. Furthermore, Council’s costs of engineering design and costing of the Malpas Dam wall raising must be met from the reserve. This highlights the importance of maintaining an adequate water reserve fund.
Council is in the final stages of Malpas wall height options study in collaboration with State agencies and is under pressure to submit these to the NSW Government by the end of April. Our local member Hon Adam Marshall is committed to seeking State Government funding for the full cost of this project. There are a number of studies to complete including a final design and preliminary cost estimate; an Environmental Impact Assessment; a review of the impact on the Macleay Water Sharing Plan and downstream communities; a Business Case for NSW Treasury and confirmation of the community’s willingness to pay.
Council has committed to Water Minister Pavey and our local Member Adam Marshall to apply additional resources to ensure that these studies are completed this year. It would be an excellent outcome if Council was in a position to go to tender for the wall height increase before the completion of Council’s term in September 2021.
As at 8th March Malpas Dam was at 60 per cent of capacity while the Guyra and Puddledock Dams were holding 93 per cent of capacity.
As part of the way forward I believe it is essential that Council prepare and adhere to long range water and sewerage infrastructure renewal plans which should also quantify the necessary rates and charges levels to accommodate these renewals.
Given the foregoing matters, it will be important that Council ensure that it has sufficient revenue to be able to provide a safe, reliable, secure water supply for our residents. This will make the next operational plan and budget process difficult for both your elected representatives and Council staff. A fair and considered approach to future water rates and charges will be important.
Cr Ian Tiley
Mayor
Armidale Regional Council
Published on 19 Mar 2021