General Managers Report to Meeting Held 17 February 2009

GENERAL MANAGERS REPORT

Craig Deasey 1. TILLEGRA DAM EF07/75

Précis:

Reporting on developments associated with the proposed Tillegra Dam.

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The following report is broken down into several components to ensure that the Councillors are aware of the current situation.

Councillor Workshop

The outcomes of the last Councillor workshop focussed again on the resolution from the October meeting of Council. Accordingly I wrote to the CEO of Hunter Water on 16 December 2008 requesting that the Hunter Water give consideration to the funding of a statistically robust survey (Annexure ‘A’). On the 7 January letters were also written to the Minister for Planning The Hon Kristina Keneally MP and the Minister for Water the Hon. Phillip Costa MP to request that the assessment of the Tillegra Dam be undertaken by a Planning Assessment Commission (Annexure ‘B’).

At this point in time I have not received a response from Hunter Water nor the relevant Ministers Offices’.

The second component of the workshop entailed a session that I requested the Tillegra Dam Strategic Project Manager to facilitate, with the focus question being what are the key benefits that Dungog Shire Councillors wish to secure should Tillegra Dam proceed or not. The outcomes of this are reported further within the project managers section later on.

Critical Infrastructure

On the 9 January 2009, the Government Gazette included a declaration that the Tillegra Dam project has been categorised as critical infrastructure under the part 3A process. With the Gazettal of this project as critical infrastructure third party and objector appeals to the Land and Environment Court are excluded.

It should be noted that this still does not preclude the application from being assessed by an independent panel i.e. Planning Assessment Commission should the Minister so determine to refer such.

Environmental Protection & Biodiversity Conservation Act Referral

The Tillegra Dam proposal was referred to the Federal Government to ascertain whether the proposed dam is a controlled action under the Environment Protection and Biodiversity Conservation Act 1989 (EPBC Act). In effect meaning that the Federal Minister for the Environment would be required to issue an approval of the project once assessed by his Department declared that the project was a controlled action under the EPBC Act.

In November 2008, Council officers did make a submission to the Commonwealth Department of the Environment, Water, Heritage and the Arts concerning the proposed Tillegra Dam highlighting our concerns (Annexure ‘C’).

Ordinary Meeting of the Council of the Shire of Dungog, to be held Tuesday 17 February 2009 commencing 6.00pm.

On the 23 January 2009 the Department issued their decision on the assessment approach and have concluded that the action is a controlled action under the EPBC and will require assessment and approval by the Minister under this Act before it can proceed. The attached Annexure ‘D’ is a copy of such advice and a copy of the relevant workflow as provided to Council.

Strategic Project Manager

The following is an outline of the activities that the Strategic Project Manager has been actively involved in to date. As previously advised to Councillors this position is directly funded by both the Department of State & Regional Development and Hunter Water Corporation with a total allocation of $100,000 from both grantors with some assistance being provided by Council which is a mix of “in kind” (office space/rental, computer hardware, telephone etc.) and travel costs.

In recent weeks there has been some negative press in relation to this position, but the work that is being undertaken by this officer simply would not happen if the position was not established. As a consequence any of the benefits for the community that we are trying to achieve whether the Dam proceeds or not would not eventuate if this resource was not put in place. Furthermore the level of access to key government agencies for issues not just about the Dam but Councils ongoing problems with the Local Environmental Plan, road funding submissions etc. has certainly benefited the broader community. They may not be visible benefits as yet or any tangible “on the ground” assets but the effort and the enthusiasm to secure benefits is certainly there.

A snapshot of Mr Peterkin’s report to myself is outlined below with the outcomes of the focus question as put to Councillors at the workshop on 8 December 2008 attached as Annexure ‘E’.

Key Achievements

• Facilitated gazettal of LEP 6 prior to end of 2008 • Route Access Strategy continued briefing of key personnel to progressing proposal • Finalising RV Dump Site at Dungog Showground, funding of hardware and installation • NSW Forests and NPWS proposal to upgrade facilities, Dungog Bike Plan updated prepared and ready to be submitted for funding • Key relationships developed with State Ministers and Federal Ministers Staff and Federal MPs

Key Meetings

• Minister Costa and staff • Minister McKay • Minister Keneally staff • Senator Michael Forshaw • Mayors from Maitland and Port Stephens Councils • Departmental – DSRD, HWC, Premiers Department, NPWS, NSW Forests, RTA, potential stakeholder groups recreational fishing, triathlon events

Forecast Activities

• Dump Site Proposal – to be finalised in January and expected to have official opening in February 2009. • Route Access Strategy – State Minister Costa and Daley to meet in February to confirm state position and then seek contribution from Canberra to fund Raymond Terrace Road upgrade.

Ordinary Meeting of the Council of the Shire of Dungog, to be held Tuesday 17 February 2009 commencing 6.00pm.

• Proposals to be submitted for funding in January include NSW Forests and NPWS joint proposal for facilities upgrade, Dungog Bike Plan • Continued discussions with HWC for irrigation outcomes

Additional projects to be developed – First quarter 2009

• Secondary road funding – approximately $14.5 million • Sewerage for villages – approximately $20 million • Community infrastructure projects such as sporting fields, caravan park/recreational vehicle facilities

Public Exhibition Stage

What Councillors should now be considering is what role do they envisage undertaking when the Hunter Waters environmental assessment and statement of commitments is placed on public exhibition. This was raised by a Councillor at the last Tillegra Dam workshop but not resolved.

The documentation that Hunter Water Corporation submits to NSW Planning is going to be significant, Council staff will be reviewing the documentation and I would envisage that they will specifically review aspects that are within their fields of professional experience and providing input back as the senior management team collectively draft our response to the submission.

There should not be the expectation of Councillors that we will conduct several workshops on the environmental assessment, it is just not feasible as the timeframe will be tight and Council staff already have high workloads, the preparation of additional papers for a workshop is just valuable time lost.

IPART

On 17 December 2008 the State Government determined that the recovery of the costs of construction for Tillegra Dam is to be recovered through periodic charges alone. Council at the IPART hearing in Newcastle on 12 December 2008 (IPART review of prices for water, sewerage, stormwater and recycled water services for Hunter Water Corporation from 1 July 2009) and at Gosford on 14 November 2008 (IPART review of Gosford City and Wyong Councils water, wastewater and stormwater prices from 1 July 2009) put forward the argument as regards funding Tillegra Dam that with the projected growth in population the growth element should be captured by a developer charge i.e for the developers to contribute towards the demand and the climate change/drought security element picked up by the usage charge.

With the decision of the State Government, Hunter Water Corporation has had to again revise their submission to IPART as the cost of Tillegra dam to the residential household has increased.

The October 2008 submission to IPART by HWC stated that over the 4 years commencing 1 July 2009 that the average water and sewer bill will have increased by around $389 ($08/09) in total, following the Governments’ decision the revised increase is $412 ($08/09). The following table outlines the variations between the executive summaries contained in HWC’s submission:

Ordinary Meeting of the Council of the Shire of Dungog, to be held Tuesday 17 February 2009 commencing 6.00pm.

Oct 2008 Jan 2009 Increases in operating costs $78 $79 Increased infrastructure investment (excl Tillegra $215 $207 Dam) Tillegra Dam $33 $60 Maintain Credit rating $80 $84 Water Efficiency Programs $5 $5 Reduction in Environmental Improvement Charge -$23 -$23 Total $389 $412

The draft IPART report will not be released until May 2009, these increases will have a significant impact upon all households throughout the HWC area of operations. The impacts on small business within the Dungog area that are connected to sewerage will be greater than the impact upon residential households with the base sewer charge rising from $642.33 (2008/09) to $1,200.72 in 2012/2013 plus usage charge. Again this point was raised at the hearing on 12 December 2008 as small business in Dungog has suffered since the announcement of the proposed Tillegra dam.

IMPLICATIONS

Financial

The Tillegra Dam proposal has significant financial implications for Council and the community, whether the Dam proceeds or not there has been both a direct and indirect financial cost to our community to date.

Consultative

Council has conducted several workshops on Tillegra Dam to date and there are 2 councillor representatives on the Tillegra Dam Community Reference Group, Council officers and the Mayor continue to liaise with the political parties as regards the Tillegra Dam and also the Tillegra Dam Whole of Government Taskforce.

Community/Environmental

Previously reported to Council and also encapsulated within Councils submission on the draft Tillegra dam environmental assessment.

Minute No. 34334 RESOLVED on the motion of Cr Wall and seconded by Cr Mitchell that the report be received and information noted.

1 Hunter Water Corporation submission to IPART on prices to apply from 1 July 2009 dated October 2008, Hunter Water Corporation submission to IPART on prices to apply from 1 July 2009 updated January 2009

Ordinary Meeting of the Council of the Shire of Dungog, to be held Tuesday 17 February 2009 commencing 6.00pm.

ANNEXURE ‘A’ TO ITEM NO. 1 – GENERAL MANAGERS REPORT

Ordinary Meeting of the Council of the Shire of Dungog, to be held Tuesday 17 February 2009 commencing 6.00pm.

ANNEXURE ‘B’ TO ITEM NO. 1 – GENERAL MANAGERS REPORT

Ordinary Meeting of the Council of the Shire of Dungog, to be held Tuesday 17 February 2009 commencing 6.00pm.

ANNEXURE ‘C’ TO ITEM NO. 1 – GENERAL MANAGERS REPORT

Ordinary Meeting of the Council of the Shire of Dungog, to be held Tuesday 17 February 2009 commencing 6.00pm.

ANNEXURE ‘D’ TO ITEM NO. 1 – GENERAL MANAGERS REPORT

Ordinary Meeting of the Council of the Shire of Dungog, to be held Tuesday 17 February 2009 commencing 6.00pm.

ANNEXURE ‘E’ TO ITEM NO. 1 – GENERAL MANAGERS REPORT

DUNGOG SHIRE COUNCIL TILLEGRA DAM WORKING PARTY WORKSHOP – MONDAY DECEMBER 8 DRAFT REPORT

Background

The Strategic Project Manager, Tillegra Dam, was requested by the General Manager to facilitate a workshop with all Councillors to identify the benefits they wished to secure for the Dungog Community should the Tillegra Dam proposal proceed or not proceed.

The outcomes of this workshop would identify key areas for the Strategic Project Manager, Tillegra Dam, to concentrate efforts to seek funding and assistance to secure those benefits. It would also place Council in a strong position to work with government for funding.

Workshop

The Strategic Project Manager, Tillegra Dam provided the following introduction.

As part of the role I have at Council I have been asked by the General Manager to assist Council identify what benefits they wish to secure should the Tillegra Dam proceed or not proceed.

Strategic Project Manager, Tillegra Dam has a two year contract with Council. Councillors may remember that I presented to Council a few weeks ago outlining background, tasks and projects underway and the role the Tillegra Dam Community Reference Group has played. In that presentation the last slide posed a question about securing benefits.

Tonight the General Manager has asked me to pose the question to the Working Party in a workshop format, to identify the benefits Councillors would like to secure the Dungog Community should Tillegra Dam proceed or not proceed.

By doing this it will give my position further direction and allow Council to formulate projects and seek funding.

It also allows Council to put itself in a stronger negotiating position with both State and Federal Governments by identify those benefits we wish to secure early.

I have prepared this workshop on the following assumptions:

• All Councillors have access to and read the Tillegra Dam Community Reference Group meeting notes • All Councillors have access to the Hunter Water website • All Councillors have access to the Hunter Water newsletters • All Councillors have access to the information from Council • All Councillors are aware of the Part 3a assessment process • All Councillors are aware that this workshop was to happen

The process proposed for the workshop is as follows:

The focus question:

Ordinary Meeting of the Council of the Shire of Dungog, to be held Tuesday 17 February 2009 commencing 6.00pm.

What are the key benefits Dungog Shire Councillors wish to secure for the Dungog Community should Tillegra Dam proceed or not proceed?

(It was noted that Dungog Community be interpreted as the Dungog Shire Local Government Area).

Councillors were asked to answer the question writing one idea per piece of paper (unlimited pieces of paper were provided).

Once all ideas were written Councillors were asked to blu tac the pieces of paper to the wall.

Councillors were then asked to group ideas that were of similar intent. It was noted that all responses will be documented.

The following lists were formulated. Noted there is no priority or order.

Current actions being carried out by the Strategic Project Manager, Tillegra Dam related to the relevant lists have been identified.

List A • Improvement SF (State Forests) & NPWS tourism • Tourism • Tourism benefits • Sky walk and Eco Tourist development • Connecting bike walking trails tourism • Sust passive tourism/recreation opportunities • Improvements to SF (State Forests) & NPWS • Funding for bikeways/lanes

Current Action for List A • Joint proposal from NSW Forests and NPWS has been developed. It is anticipated the proposal will be formally submitted to Phillip Costa and Jodie Mackay for their support and funding – approximately $2 million proposal. Note that there are 22 letters of support and confirmations from local tourist operators supporting the proposal. • Dungog Shire Bike plan has been updated and it is anticipated the proposal will be submitted to Minister Phillip Costa and possibly Minister Albanese for funding – approximately $2 million proposal • Possible funding has been identified for skywalk through Federal government Regional Development Australia.

List B • Income to broaden Councils services • Funding in perpetuity • Encourage population growth, lifestyle, tourism • Money • An improved income stream • Royalty based income stream (s) • Return of lost income from shire eg rates • Bigger budget for Council

Current Action for List B • Awaiting for the Environmental Assessment for the proposal to go on exhibition

List C • Housing • Affordable housing Ordinary Meeting of the Council of the Shire of Dungog, to be held Tuesday 17 February 2009 commencing 6.00pm.

Current Action for List C

List D • New roads from 1 Maitland to Dungog 2 Clarence Town to Dungog • Roads • Roads • Gap Road Allyn River Road improvements • Road Upgrade • Roads • Better roads – because its expected that I say that • $22 million for roads • Additional funding for ancillary roads • Pushing for State significance

Current Action for List D • Route Access Strategy submitted to State Government for funding – Minister Costa and Minister Daley meeting in February. Once the State position is confirmed a proposal will be put to the Federal for a joint funding arrangement between the Federal and State Governments. Approximately $22 million proposal. • Secondary Road Funding – a second proposal is to be finalise to seek funds to upgrade the secondary road system within the Shire - $14.5 million

List E • Infrastructure • Playing fields for Clarence Town • Hunter Water to provide sewerage systems for villages o Martins Creek o Vacy (c) o Gresford (d) ? • Sporting facilities • Improvements to existing community infrastructure (Showground)

Current Action for List E • Awaiting for the Environmental Assessment for the proposal to go on exhibition • Contractors workshop proposed for February 2009

List F • Well planned & supported village clusters • Improvements to towns gateways

Current Action for List F

List G • Aged care within LGA • Medical services • Care for aging pop neg accommodation health • Improved health services for all towns & villages • Money for Clarence Town senior Cits Centre

Current Action for List G

List H • Habitat corridors linking Williams to GER + coast • Maintained rural & environmental amenity/scenery secured in perpetuity • Environmental issues addressed in EAR

Ordinary Meeting of the Council of the Shire of Dungog, to be held Tuesday 17 February 2009 commencing 6.00pm.

Current Action for List H • Awaiting for the Environmental Assessment for the proposal to go on exhibition

List I • A cultural/environment centre • New Council premises • Arts complex

Current Action for List I

List J Infrastructure eg c/van park motel Caravan park near Dungog Caravan Park for Dungog

Current Action for List J • Inspection of PSSC tourism parks has been arranged for January 2009 to discuss key budgetary and practical aspects

List K • Light industry • Employment • Employment opportunities jobs! • Diverse local business sector • Put in place strategies for constructing – business park, health facilities • More job opportunity • Viable ag sector w. associated services eg co-ops, rural supplies • Development of the technology based employment • Development of intensive food production below dam • Sustainable plantation & regrowth forest industry • New enviro based activity eg carbon trading, alternative energy, co-op based env • Industries • Irrigation flows for Williams

Current Action for List K • Irrigation proposal being discussed with HWC

Councillor Thompson raised the issue of putting the ideas under the grouping of environmental, social and economical categories and agreed to assist the Project Manager do this.

Ordinary Meeting of the Council of the Shire of Dungog, to be held Tuesday 17 February 2009 commencing 6.00pm.