Overview
We are seeking feedback from industry and community members about proposed changes to our policy about the Deferral of Water Headworks Payments and Sewer Headworks Payments.
Headworks charges are developer contributions used to fund upstream water and downstream sewer infrastructure (trunk mains, pump stations, reservoirs and treatment plants, etc) which are required to service the increased demand resulting from new development.
Tamworth Region Councillors endorsed the public exhibition of the proposed amendments to the policy to allow the community to make comment.
The proposed changes seek to provide more flexibility with the type of security Council requires developers to provide under the policy.
Local civil engineering and survey consultancies and large subdivision developers will receive a letter informing them about the public exhibition.
Thank you to everyone who provided feedback during the public exhibition.
Headworks charges are a contribution towards the cost of upgrading and expanding trunk water supply or sewer infrastructure to accommodate the incremental increase in demand from new development. These charges are levied under Section 64 of the Local Government Act in accordance with Council’s Development Servicing Plans. In the case of subdivisions, payments are required prior to the issue of a Subdivision Certificate.
Council’s current policy for the deferral of sewer and water headworks payment has been in effect since early 2021 and evolved from an earlier interim arrangement where sewer and water headworks charges were temporarily refunded for unsold lots as part of Council’s COVID-19 relief package. Since this policy was implemented, one developer has accessed it due to hardship and other developers have considered using the policy.
Council staff were approached in 2023 by a developer asking to defer headworks under the Policy, however the developer sought to provide a bank guarantee in-lieu of registering caveats on individual lots and potentially delaying the sale of individual lots. This request was declined at the time due to the strict application of Council’s policy.
With further investigation and informal discussions internally with relevant divisions and externally with industry stakeholders including consultants and developers, a bank guarantee is considered to be a suitable, even preferable, option for ‘security’ of Council’s interests, in particular, a single bank guarantee is less legally burdensome than caveats over each lot created from subdivision. However, it was also acknowledged that bank guarantees are not easily available to all developers, primarily due to constraints on their issuance by banking institutions.
Bank guarantees are currently accepted by Council as security for performance and maintenance obligations associated with Subdivision Works Certificates. This is in accordance with Council Policy – 9.3 Payment of Bond in Lieu of Constructions and Council’s Engineering Design Minimum Standards.
It was further found that bank guarantees were accepted by other Council’s in NSW, for the deferral of water and sewer contributions, namely Dubbo Regional and Junee Shire Councils.
In order to provide flexibility for acceptable ‘security’, amendments are required to the existing Policy.
