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A water price hike at Dubbo from July 1 is just the first of successive rises proposed for the utility in the next four years.
Annual increases of 6, 7, 8 and 5 per cent respectively have been slated for the period ending in 2017-2018 as Dubbo City Council positions itself to carry out $32.7 million of capital works.
Together totalling a 26 per cent increase in four years, they are the council’s latest strategy to meet both its costs in providing the utility and community expectations for infrastructure.
The proposed increases are all above the cap on rates, set at 2.3 per cent for 2014-2015, and annual inflation, which recently reached 2.9 per cent.
The council’s water fund has experienced some turbulence in recent years.
The usage charge rose by a dramatic 63 per cent to $1.53 per kilolitre in 2010-2011 to plug a projected $80 million blowout by 2030.
Consumers initially responded by turning on their taps less, aided by two wet summers, but more recently revenue levels made some recovery.
Last year the council raised the water usage charge by 6.1 per cent to $1.74 per kilolitre and the water access availability charge by $40 to $228.25.
The changes to the water charging system have prompted fierce debate in the community and among councillors in recent years.
The release of reports about the draft budget, which will be considered at an extraordinary council meeting today at midday, revealed water pricing was still a challenge.
The funding strategy, starting with this year’s 6 per cent increase, was essential to ensure the viable ongoing operations and the construction of major capital works, council technical services director Stewart McLeod said in his report.
Projects for the four-year
period included safety works at the South Dubbo weir, additional water storage, the Eumungerie water supply scheme, pipelines and the purchase of additional high security water licences.
“Water supply is one of the essential services provided by Dubbo City Council,” he said.
“A strong revenue base is necessary to ensure that council’s operations meet the standard expected by the community as well as regulatory agencies.”
Mr McLeod stridently advocated a flat rate rather than a tiered option, and was supported by general manager Mark Riley.
“I believe the council should not consider moving back to the stepped usage tariffs of yesteryear in the face of such clear opposition from the likes of the Office of Water, IPART
and the Productivity Commission,” Mr McLeod said in his report.
The director also contested customers had become used to the new charging regime of the past two years.
“Two dry years have seen consumption levels based on flat rate tariffs return back nearer to ‘normal’, and in my view the introduction of stepped tariffs will damage the relative degree of certainty which has now been regained by council in the minds of its customers,” Mr McLeod said.
If adopted today the draft budget will go public exhibition from May 2 for 28 days and submissions invited.