Toowoomba City Council recycles Water Futures funding application ...

This Agenda item for the Council Committee meetings on 21 and 22 August 2007 is such a joke an excerpt is worthy:

Agenda Item 20

REPORT TITLE Process for Submitting Application for Funding of Purified Recycled Water Treatment Plant in Toowoomba

AUTHOR Director Engineering Services (Kevin Flanagan) - 14 August 2007

PURPOSE OF REPORT

To advise Council of a procedure for submitting an application for funding of a stand alone Purified Recycled Water Treatment Plant in Toowoomba.

CORPORATE PLAN REFERENCE

1.2 Provide ongoing support for planning, design, construction, operation and maintenance of the City's water and wastewater systems.

BACKGROUND

Previous Council decision 14/8/07 (Committee of the Council 7-8 August 2007 Item 38.1) -

"That the Chief Executive Officer be requested to advise Council, at a future meeting of the Committee of the Council, on the process required to make an application to the Federal Government for funding to build a purified recycled water treatment plant in Toowoomba."

ISSUES AND RESPONSES
...

2.0 PROCESS FOR A FURTHER APPLICATION FOR FEDERAL GOVERNMENT FUNDING ASSISTANCE FOR A STAND ALONE PRW PLANT IN TOOWOOMBA

Should Council wish to seek funding assistance for a stand alone PRW Plant in Toowoomba, then it would need to consider:

- Revised Project Cost
- Level of subsidy from State Government
- Level of subsidy from Commonwealth Government
- Level of TCC funding

2.1 Revised Project Cost

The original Water Futures Project was expected to cost $68M (June 2005). The project included a Visitor Information Centre, Pipelines to Acland Mine, Hampton Irrigation area, and to Cooby Dam.

The project, if it had received funding in September 2005 as was expected, competitive tenders would have been received and it is believed the project could have been delivered on time (August 2007) and on budget. However the delay and the huge water infrastructure initiatives in SEQ from late 2006 has seen large increases in project costs mainly due to a high demand for contractors, suppliers, consultants, etc.

If a project was to proceed today, the scope would be modified as follows:

- No Visitor Information Centre

- Given Council's negotiations to supply effluent to New Acland Coal Mine are proceeding, costs of a pipeline to Acland would be met by NAC.

- No pipeline would be built to Hampton Irrigators.

- As the State is proposing to introduce PRW into Wivenhoe Dam without the need for a withholding period, any scheme to introduce PRW to Cooby would follow the State Government directions in this regard.

Recent preliminary costings carried out by consultants under the SEQ Regional Water Supply Strategy Study indicates that a stand alone PRW Plant in Toowoomba would cost in the order of $90 to $100M.

2.2 Commonwealth Funding

The Australian Government's Water Smart Australian program provided funding of $1.6 billion to fund significant innovative and demonstrative projects around Australia. In considering projects for funding, the National Water Commission considers level of proponents' funding and whether State or private funding is also proposed.

Advice from the National Water Commission is that the fund is approaching full commitment with $1.2 billion in projects approved to date and the balance expected to be expended in projects currently under consideration and contingency allowances.

2.3 State Government Funding

The State Government provides a subsidy of up to 50% for Beneficial Reuse of Effluent. It is expected that a stand alone PRW scheme would attract such a subsidy.

2.4 Possible Funding Mix (State, Commonwealth, Council)

The range of Commonwealth Government Funding percentage has varied in projects funded to date and range from 12.5% through to 60%. State Government provides subsidies up to a maximum of 50% for eligible schemes.

If Council desires to proceed with a further application then it would be strongly recommended that it be on the basis of equal State and Commonwealth funding. It is further suggested that the State and Commonwealth share be 40% each and Council meet 20%. Therefore for a project costing $100M, the funding split would be:

- Commonwealth $ 40M
- State $ 40M
- TCC $ 20M
- Total $100M

3.0 REQUIREMENTS TO NOTIFY MINISTER UNDER s159ZW OF THE REFORM ACT

Under section 159ZW of the Act, a merging local government must not make a major policy decision in the transition process. There could be exceptional circumstances that apply where it may be necessary to make a major policy decision. In this event, the local government must notify the Minister for Local Government, Planning and Sport immediately of the decision and the nature of the exceptional circumstances.

CONCLUSION

Funding under previous submission has lapsed.

State Government has decided that Toowoomba's long term water supply is guaranteed by a connection to the SEQ Water Grid via a pipeline from Wivenhoe to Perseverence.

State Government recognises Council's preference that a local purified recycled water scheme may represent an alternative supply option for Toowoomba.

The Australian Government's Water Smart Australia fund is near full committment (sic) .

A subsidy of up to 50% is available from the State Government for eligible schemes.

A stand alone PRW Scheme in Toowoomba is expected to cost between $90 and $100M.

A suitable funding ratio would be TCC 20%, State 40% and Commonwealth 40%.

See - Council Committee Meetings - 21-22 August 2007.