Development Servicing Plan Oran Park and Turner Road Recycled Water System

Transcription

1 Development Servicing Plan 2017 Oran Park and Turner Road Recycled Water System

2 Table of Contents Executive Summary... 3 Oran Park & Turner Road recycled water system developer charge Development Servicing Plan methodology Introduction Developer charges and Development Servicing Plans Regulation of developer charges Payment of a recycled water developer charge Dispute resolution Disclaimer Regulation - principles and calculation method Principles of the regulation The 2006 Determination Preparation of DSPs Consultation and review of the DSP and developer charges Forecasting urban development rates Existing development Forecasting residential development Forecasting non-residential development Forecasting system demand Forecasting system demand Defining an Equivalent Tenement Determining relevant assets Existing assets Future assets Standards of service Asset valuation Valuation of existing assets Valuation of future assets Operating result Revenue Operating and maintenance costs Cost offsets (avoided costs) Oran Park & Turner Road Recycled Water Scheme Oran Park & Turner Road Recycled Water DSP History of the Oran Park and Turner Road recycled water supply scheme Boundaries Recycled water infrastructure Development rates and demand rates Assets...19 Draft Development Servicing Plan 2017 Oran Park & Turner Road Recycled Water System Page 1

3 2.3.1 Existing assets Future assets Plan of the network system Developer charge calculation Key assumptions and inputs Developer charge...30 Figures Figure Recycled water infrastructure Tables Table 0-1 Proposed developer charges for different development types... 4 Table Description of Oran Park and Turner Road Recycled Water DSP Area Table Development rates Oran Park and Turner Road Recycled Water System Table Demand rates (average ET) Oran Park & Turner Rd Recycled Water System Table Recycled water gravity pipelines Table Recycled water pressure pipelines Table Recycled water treatment plant works Table Recycled water pumping stations Table Recycled water reservoirs Table Inputs to the developer charge calculation model Table Annual capital expenditure Table Capital charge Table Forecast revenue Table Net operating result Table Net Operating Result Table Components of the developer charge Table Schedule of proposed developer charges Draft Development Servicing Plan 2017 Oran Park & Turner Road Recycled Water System Page 2

4 Executive Summary Oran Park & Turner Road recycled water system developer charge This draft Development Servicing Plan (DSP) is for recycled water developer charges in the Oran Park and Turner Road recycled water supply scheme service area. It has been prepared in accordance with the Independent Pricing and Regulatory Tribunal s (IPART) Recycled Water Developer Charges, Determination No 8, 2006 (the 2006 Determination). In previous DSPs, Sydney Water levied non-residential developer charges based on the area of the development. In 2008, Sydney Water changed this approach to offer developers the option of having developer charges calculated on the basis of projected flows for non-residential development. In this draft DSP, the charges for non-residential and multi-residential development will be determined on a flows basis. A single residential dwelling will be charged as one Equivalent Tenement (ET) in line with the 2006 Determination. Using the methodology in the 2006 Determination, the developer charge for the Oran Park and Turner Road recycled water system is $17,018 ($ ) dollars per ET. However, Sydney Water does not believe that this rate supports the supply of new, affordable homes in south west Sydney, as it is not a reasonable equivalent to the lowest cost to the community to meet BASIX. In accordance with section 18(2) of the Independent Pricing and Regulatory Tribunal Act 1992 (the IPART Act), the NSW Treasurer approved Sydney Water to set a price below the maximum price calculated using the 2006 Determination. Sydney Water proposes set the developer charge for the Oran Park and Turner Road recycled water system at $7,205 in dollars per ET. This is considered to be equivalent to the provision of a rainwater tank to meet BASIX. Table 0-1 below provides the proposed developer charge for different development types including multi-unit residential and non-residential development. Once the DSP is registered, Sydney Water will apply the Colebee Recycled Water Developer Charge to all developments that connect to this system. Written submissions in response to this draft DSP must be provided to Sydney Water by 5 pm Friday 9 June 2017 to: developercharges@sydneywater.com.au or Post: Oran Park & Turner Road Developer Charge Kate Wild, Senior Analyst Sydney Water PO Box 399 Parramatta NSW 2124 In finalising the DSP, Sydney Water will consider all public submissions received in response to this draft. Sydney Water will then forward the finalised DSP to IPART for registration. The final charge will be subject to an annual adjustment in line with Draft Development Servicing Plan 2017 Oran Park & Turner Road Recycled Water System Page 3

5 movements in the Consumer Price Index. The quantum of each adjustment is determined by IPART. The first adjustment will take effect from 1 July 2017 Table 0-1 Proposed developer charges for different development types Proposed Capped Developer Charge ($ ) Development Density Charge $/dwelling Residential (dwellings per pure net hectare 1 ) 0 20 $7, $5, $3, $3, $2, $2, $2, $1,945 > 155 $1,585 Non-Residential $7,205 /ET based on assessed flows 1 The per pure net hectare is the actual size of a development site taking into account land use considerations such as: Battleaxe handle where the handle forms part of the allotment (excluded if it is a right of way) Car parking and landscaping Dedicated public reserve areas are generally excluded. However, unless recycled water services are required for irrigation or amenities block etc then it is charged on a flow basis Drainage easements are excluded on the basis that the land is sterile. If piped, and land is usable, then it is included in the area calculation Environmentally constrained land (flood prone/land slip/foreshore protection/heritage/riparian zones) is excluded unless development is permitted (such as a dwelling), in which case it may be appropriate to include the building envelope area Land affected by transmission line easements is generally excluded unless the land has the ability to draw a recycled water demand (eg irrigation for landscaping, wash down for trucks etc) Generally excludes public open space and roads etc. Draft Development Servicing Plan 2017 Oran Park & Turner Road Recycled Water System Page 4

6 1 Development Servicing Plan methodology Part 1 of this draft Development Servicing Plan (DSP) outlines the regulation of developer charges and explains the way in which charges are calculated. 1.1 Introduction Developer charges and Development Servicing Plans The Sydney Water Act 1994 (the Act) allows the Sydney Water Corporation (Sydney Water) to levy charges on developments that will make use of the services it provides. These developer charges are a means by which Sydney Water can recover the cost of providing infrastructure to service urban development. The information used to calculate developer charges is set out in this draft DSP. Sydney Water levies developer charges for recycled water services in accordance with the Independent Pricing and Regulatory Tribunal of NSW s (IPART) Recycled Water Developer Charges, Determination No. 8, 2006 (the 2006 Determination) Regulation of developer charges IPART is an independent authority that regulates the pricing of declared government monopoly services. This includes setting prices for water, wastewater and stormwater services. IPART s Determination 2006 specifies the methodology to be applied by Sydney Water when preparing the recycled water developer charge. For the purposes of a full and transparent preparation of the Oran Park and Turner Road recycled water developer charge, Sydney Water has prepared this document in accordance with the 2006 Determination. A maximum price will be calculated using the 2006 Determination. In accordance with section 18(2) of the IPART Act, Sydney Water obtained approval from the NSW Treasurer to set a price below the maximum price. While IPART does not set the recycled usage charges for the Oran Park and Turner Road scheme, it has endorsed that our prices are reasonable. The recycled water usage charge and the drinking water charge used in this review are those contained in the Sydney Water Corporation - Maximum prices for water, sewerage, stormwater drainage and other services from 1 July 2016, Determination No. 5, 2016, (the 2016 Determination). There is no recycled water service charge for the Oran Park and Turner Road scheme Payment of a recycled water developer charge As a condition of development consent, the consent authority (usually council) requires a developer to make satisfactory arrangements with Sydney Water for the provision of water services to a new development. To identify the necessary arrangements, a developer must submit an application for a Section 73 Compliance Certificate to Sydney Water. Upon receiving the application for a Compliance Certificate, Sydney Water investigates the impact of the proposed development on its systems. Sydney Water then issues a Notice of Draft Development Servicing Plan 2017 Oran Park & Turner Road Recycled Water System Page 5

7 Requirements under s74 of the Act. This sets out the conditions that must be met before Sydney Water will issue a Section 73 Compliance Certificate. For areas with recycled water services, the Notice of Requirements will include the developer charges payable and/or works that a developer must construct before the services are made available Dispute resolution The dispute process is set out in section 31 of the IPART Act. (Note, the regulation may exclude some determinations from this process). A developer who is dissatisfied with Sydney Water s application of IPART s determination methodology may lodge a complaint with us. If a developer is still dissatisfied with the outcome of the review, a request to have the matter reviewed by way of arbitration can be made. An arbitrator is to be appointed by agreement between the developer and Sydney Water and the costs of the arbitration are to be borne equally Disclaimer This draft DSP and the developer charge it contains has been prepared by Sydney Water to meet the requirements of the 2006 Determination using the latest available information. 1.2 Regulation - principles and calculation method Principles of the regulation In the 2006 Determination, IPART set a methodology for fixing the maximum price of recycled water developer charges. The principles underlying the methodology are that developer charges should: enable the full recovery of relevant costs reflect variations in the costs of servicing different developments result in new development areas meeting the costs of constructing the services provided cover only infrastructure expenditures on recycled water assets that can be clearly linked to development. In order to support development in south west Sydney, Sydney Water will seek approval from the NSW Treasurer to set a price below that determined using the 2006 Determination, in accordance with s18(2) of the IPART Act The 2006 Determination The 2006 Determination requires developer charges to be calculated for one Equivalent Tenement (ET) of development by applying Net Present Value (NPV) principles. IPART defines an ET as the recycled water consumption of an average residential dwelling. Sydney Water has taken this definition to mean the average water consumption by a freestanding or semi-detached residential property. A developer charge is calculated by: taking the present value of the capital costs of the assets used to service the DSP area Draft Development Servicing Plan 2017 Oran Park & Turner Road Recycled Water System Page 6

8 deducting the present value of the future net operating result expected to be incurred by providing the services to the DSP area deducting the present value of the cost offsets associated with the recycled water scheme dividing by the present value of the number of the benefiting ETs in the DSP area. IPART s formula for calculating developer charges is shown below. RWDC = K L 1 Where: K L 2 NPV Ri Ci PV COi L L for i years1, 2...n RWDC - Recycled Water Developer Charge per Equivalent Tenement K 1 - Capital Charge for Pre 2007 Assets which will serve the DSP Area calculated on a NPV basis discounted at rate r K 2 - Capital Charge for Post 2007 Commissioned Assets and/or Post 2007 Uncommissioned Assets which will serve the DSP Area calculated on an NPV basis discounted at rate r L - the Present Value of the number of Equivalent Tenements in the DSP Area and the Present Value of the number of Equivalent Tenements to be developed in the DSP Area, calculated at discount rate r R i - future Operating Revenues in each year i C i - future Operating Costs in each year i r - the Discount Rate n - the forecast period for the assessment of expected revenues and costs and is 30 years from the date of calculating the RWDC CO - cost offset in each year i, calculated as follows: CO S i AC i DC i GD Draft Development Servicing Plan 2017 Oran Park & Turner Road Recycled Water System Page 7

9 Where: S - any subsidy received in each year i by a Water Agency for the provision of Recycled Water Developer Services to a Development AC - Avoided Costs in each year i DC - Deferred Costs in each year i GD - costs associated with a Government Directive Preparation of DSPs The 2006 Determination identifies the minimum level of information to be included in each DSP. The information requirements relate to the description of the DSP area, demographic and planning assumptions, the standards of service provided, descriptions of assets and the calculation of a developer charge. We have prepared this draft DSP in accordance with these requirements Consultation and review of the DSP and developer charges The draft DSP will be placed on public exhibition for a period of 30 working days. Sydney Water will consider and respond to submissions received during the public exhibition period. The DSP will then be sent to IPART for registration. Sydney Water will inform the Tribunal of its responses to any submissions made. Once registered, the DSP and developer charge must be reviewed once in each five-year period. The final developer charge will be subject to an annual adjustment in line with movements in the Consumer Price Index. The quantum of each adjustment is determined by IPART. The first adjustment will take effect from 1 July Forecasting urban development rates Developer charges are influenced by existing and forecast development that use up the capacity of assets, and the timing of future capital works to service growth. In addition, the operating revenue will vary over time based on periodic pricing determinations Existing development Sydney Water has used its corporate billing and geographic information systems to determine the extent and type of existing development in the DSP area Forecasting residential development Sydney Water has applied the latest Department of Planning and Environment and developer information to forecast the population and residential development in the DSP area. Residential population growth is projected to increase from 686 dwellings in 2016 to 925 dwellings by Draft Development Servicing Plan 2017 Oran Park & Turner Road Recycled Water System Page 8

10 1.3.3 Forecasting non-residential development Commercial and industrial development forecasts have been based upon development trends in the DSP area over the last ten years. 1.4 Forecasting system demand Forecasting system demand The growth forecasts for the Oran Park and Turner Road Recycled Water Scheme development area have been used to estimate future demand on the recycled water system. System design allowances have been applied to identify infrastructure requirements to meet growth and ensure standards of service are met. Demand has been expressed in terms of average day demand Defining an Equivalent Tenement The 2006 Determination requires developer charges to be expressed in terms of an ET. IPART defines an ET as a measure of recycled water consumption for an average residential dwelling equal to 110 kl per year. For the purpose of calculating developer charges it is assumed that an average residential dwelling is a single detached dwelling with one 20 mm recycled water meter. As such, the design allowances for a single detached dwelling represent the demand of one ET. All other residential development types are equated to a number of ET based upon the relative design allowances for that development type. For example, if the design allowance for a high density residential flat is half that of a single detached dwelling, then the flat is considered to be 0.5 ET. All demands are equated to an ET for the purpose of calculating a developer charge. Non-residential properties, including commercial and industrial developments and special uses such as schools and parks, are equated to a number of ET based upon the relative design allowances for that development type. It is assumed for the DSP calculations that the commercial and industrial development demand is 913 kl per hectare per year (or 2.5 kl per hectare per day). 1.5 Determining relevant assets The developer charge calculation includes all recycled water assets that Sydney Water has funded or will fund to provide services to new development Existing assets Sydney Water s financial, developer and geographic information systems were used to identify works that have been constructed to provide a benefit to future development. The recycled water infrastructure includes: major works (include large diameter recycled water distribution mains) reticulation mains (required to deliver recycled water services within the Oran Park and Turner Road Recycled Water Scheme) Draft Development Servicing Plan 2017 Oran Park & Turner Road Recycled Water System Page 9

11 1.5.2 Future assets The 2006 Determination allows Sydney Water to recover the cost of assets that are yet to be constructed and which are identified as being necessary to service future development. Future recycled water infrastructure within the network is identified in the Oran Park and Turner Road Recycled Water Scheme Options Report (AAJV, 2016) Standards of service The standards for recycled water supply are set out in the Sydney Water Customer Contract. These standards may vary over time with the renewal of the Operating Licence. Sydney Water s is required to ensure recycled water supplied to customers complies with the Australian Guidelines for Water Recycling 2006 except to the extent otherwise specified by NSW Health. 1.6 Asset valuation The 2006 Determination identifies the methods of asset valuation that are to be adopted in the calculation of developer charges. Assets existing at the time of the review are to be valued on a Modern Engineering Equivalent Replacement Asset (MEERA) basis. Proposed assets are to be valued at estimated efficient costs Valuation of existing assets The valuation of existing assets was calculated from actual capital expenditure obtained from Sydney Water s financial information system and indexed to 2016 dollars based on the historical construction index. Sydney Water has applied updated estimates of MEERA values for existing assets Valuation of future assets Capital expenditure for future works included in the calculation of developer charges has been based on Sydney Water s Cost Estimating Tool, and where applicable from recently completed projects. Draft Development Servicing Plan 2017 Oran Park & Turner Road Recycled Water System Page 10

12 1.7 Operating result The operating result equals the operating revenue from future development less the operating and maintenance costs associated with servicing this development. The forecast operating result is based on the expected urban development in the recycled water DSP area over the next 30 years Revenue The operating revenue forecasts are based upon the 2016 IPART determinations for drinking and recycled water pricing. Beyond the price path, the current service and usage charges have been assumed to remain constant in real terms. That is, the charges only change by the inflation rate. The operating revenues are based on average usage of 110 kl per year by a single detached dwelling as required in the 2006 Determination Operating and maintenance costs The future operating and maintenance costs for the Oran Park and Turner Road Recycled Water Scheme are based on actual and estimated costs for Oran Park and Turner Road systems. The method of calculating costs identifies: the processes and activities required to produce the recycled water (eg treatment, distribution) the cost driver for each process/activity (eg electricity, chemicals) fixed or variable (cost per kilolitre) costs for each process/activity. Many operating and maintenance cost components are constant and do not vary with throughput. Some operating cost components (e.g energy and chemical use) are variable and depend on throughput. Volume dependent components (energy and chemical consumption) of the operating costs are based on actual costs. Total operating costs for the recycled water schemes are forecast to increase in line with development forecasts and an assumed usage of 110 kl per ET. Replacement costs for the recycled water infrastructure such as pumps, mixers, diffusers and meters have been based on similar costs across the Sydney Water network. The average lifetime of each element has also been factored into the calculations. 1.8 Cost offsets (avoided costs) The 2006 Determination established a framework for recycled water charges that includes consideration of avoided or deferred costs. IPART defines an avoided cost as the expected change in the present value of a water agency s operating costs and capital expenditure resulting from the permanent deferral of water or sewerage system augmentation 2. In other words, cost savings made in water and wastewater systems due to the provision of recycled water services can be deducted or offset against recycled water developer 2 IPART Report Nos 8 and 9, 2006, Appendix C Guideline for the Calculation and Treatment of avoided and Deferred Costs of Recycled Water Draft Development Servicing Plan 2017 Oran Park & Turner Road Recycled Water System Page 11

13 charges. These avoided costs are then recoverable under general water or wastewater pricing. No avoided costs were included in the calculations for the Oran Park and Turner Road Recycled Water Scheme as none were applicable to the scheme. Draft Development Servicing Plan 2017 Oran Park & Turner Road Recycled Water System Page 12

14 2 Oran Park & Turner Road Recycled Water Scheme This section provides information about the area served by the Oran Park and Turner Road Recycled Water Scheme and the infrastructure relating to this DSP. The development and demand rates used in the calculation of the developer charge are also detailed. 2.1 Oran Park & Turner Road Recycled Water DSP History of the Oran Park and Turner Road recycled water supply scheme In 2003, the NSW Government announced that all new residential developments must achieve drinking water savings of at least 40% commencing July Oran Park and Turner Road recycled water scheme was identified as a scheme to enable the achievement of drinking water savings in new release areas. In 2009, a water servicing strategy was developed for the South West Priority Growth Area (SWPGA). In response to this, Sydney Water engaged consultants to investigate options to minimise drinking water demand. Their report concluded that dual reticulation via a recycled water scheme was the preferred option. Sydney Water commenced construction of the scheme based on the rate of growth forecasted at the time by the Department of Planning and Environment. In 2010, Sydney Water undertook financial analysis of the proposed dual reticulation strategy. The strategy was found to be economically unviable, which led to the Sydney Water Board s decision to not proceed further with dual reticulation in this area. Prior to the decision to move away from a recycled water strategy, Sydney Water had considered supplying recycled water to some areas within Oran Park and Turner Road (SWPGA) through issue of Section 74s Notice of Requirements. These areas have been developed with dual reticulation; however the customers are currently receiving drinking water through the dual reticulation network via cross-connections to the drinking water supply. The dual reticulation area within Oran Park and Turner Road includes approximately 686 dwellings. The recycled water network within Oran Park and Turner Road is currently cross-connected to the Narellan South Water Supply Zone (WSZ). Draft Development Servicing Plan 2017 Oran Park & Turner Road Recycled Water System Page 13

15 2.1.2 Boundaries Boundaries of Oran Park and Turner Road DSP are defined by existing recycled water infrastructure servicing the area. The recycled water scheme area is shown in Figure 2-1 (see Section 2.4) Table 2-1 details the area covered by the Oran Park and Turner Road DSP, the LGAs and estimated population in 2016 and 2046 projected population. Table Description of Oran Park and Turner Road Recycled Water DSP Area Area (hectares) Local Government Area 78 ha Camden Council Estimated Population Projected Population Recycled water infrastructure The existing and proposed recycled water infrastructure includes: headworks (requires a membrane bioreactor sewage treatment) major works (the recycled water delivery pumping station, drinking water top-up services, service reservoirs and large diameter recycled water distribution mains) lead-in works (linking developer areas to the existing system) reticulation mains (required to deliver recycled water services within the Oran Park and Turner Road Recycled water dual reticulation area). Recycled water will be provided to the dual reticulation areas in Oran Park and Turner Road via sewer mining at SP1156. A new treatment facility will be located adjacent to SP1156 within the existing lot. A new pumping station will also be required to boost the recycled water to customers in Oran Park and Turner Road. All additional infrastructure are outlined in Table 2-4 to Table 2-8. Draft Development Servicing Plan 2017 Oran Park & Turner Road Recycled Water System Page 14

16 2.2 Development rates and demand rates Table 2-1 details the actual and forecast development within the Oran Park and Turner Road Recycled Water System based on residential dwellings and non-residential flows (kl). These rates are based on the method outlined in Section Note: There is only a small amount of future growth expected in Oran Park/Turner Road scheme for around 50 lots that front a recycled water main. Table Development rates Oran Park and Turner Road Recycled Water System Financial Year Single Residential Dwelling Multi Residential Dwelling Non-Residential kl , , , , , , , Draft Development Servicing Plan 2017 Oran Park & Turner Road Recycled Water System Page 15

17 TOTAL , Financial yearly totals have been rounded in table, however total values calculated are based on exact values. Draft Development Servicing Plan 2017 Oran Park & Turner Road Recycled Water System Page 16

18 Table 2-3 details the actual and forecast demand within the Oran Park and Turner Road Recycled Water System based on ETs. These rates are based on the method outlined in Section 1.4. Table Demand rates (average ET) Oran Park & Turner Rd Recycled Water System Financial Year Single Residential Growth ET Multi Residential Growth ET Non-Residential Growth ET Draft Development Servicing Plan 2017 Oran Park & Turner Road Recycled Water System Page 17

19 Financial Year Single Residential Growth ET Multi Residential Growth ET Non-Residential Growth ET TOTAL Draft Development Servicing Plan 2017 Oran Park & Turner Road Recycled Water System Page 18

20 2.3 Assets The assets included in the calculation of the Oran Park and Turner Road Recycled Water DSP have been identified and valued in accordance with the method described in sections 1.5 and 1.6. The assets are provided in Table 2-4 to Table Existing assets The majority of the Oran Park and Turner Road Recycled Water Scheme trunk infrastructure has been constructed. All post 2007 constructed assets are operational. Pre 2007 assets have been commissioned in line with the 2006 IPART Determination methodology. Proposed assets are to be valued at estimated efficient costs. Existing trunk infrastructure in the Oran Park and Turner Road Recycled Water Scheme includes: Sewage Pumping Station in Turner Road (SP1156) source for sewer mining and localised treatment Oran Park recycled water mains Turner Road recycled water mains Future assets Planned future assets included in the developer charge are detailed in Table 2-4 to Table 2-8. The proposed timing of commissioning of future assets is also identified in the tables. Draft Development Servicing Plan 2017 Oran Park & Turner Road Recycled Water System Page 19

21 Table Recycled water gravity pipelines Financial Year proposed Description Purpose Length (m) Diameter (mm) Modern Material % Growth Value in DSP ($ ) Peter Brock Drive, Oran Park To serve growth in Oran Park Precinct opvc 100% $49, Oran Park Drive, Oran Park Outside of committed scheme area opvc 0% $ Oran Park Drive, Oran Park To serve growth in Oran Park Precinct opvc 100% $4, Oran Park Drive, Oran Park To serve growth in Oran Park Precinct SCL 100% $18, Oran Park Drive, Oran Park To serve growth in Oran Park Precinct mpvc 100% $14, Oran Park Drive, Oran Park To serve growth in Oran Park Precinct SCL 100% $12, Oran Park Drive, Oran Park Outside of committed scheme area DICL 0% $ Oran Park Drive, Oran Park Outside of committed scheme area SCL 0% $ Peter Brock Drive, Oran Park To serve growth in Oran Park Precinct opvc 100% $ Peter Brock Drive, Oran Park To serve growth in Oran Park Precinct opvc 100% $66, Peter Brock Drive, Oran Park To serve growth in Oran Park Precinct opvc 100% $30, South Circuit, Oran Park To serve growth in Oran Park Precinct opvc 100% $32, South Circuit, Oran Park To serve growth in Oran Park Precinct SCL 100% $ South Circuit and Grice Street, Oran Park To serve growth in Oran Park Precinct opvc 100% $30,483 Draft Development Servicing Plan 2017 Oran Park & Turner Road Recycled Water System Page 20

22 Financial Year proposed Description Purpose Length (m) Diameter (mm) Modern Material % Growth Value in DSP ($ ) Central Avenue, Oran Park To serve growth in Oran Park Precinct opvc 100% $57, South Circuit, Oran Park To serve growth in Oran Park Precinct opvc 100% $16, Peter Brock Drive, Oran Park To serve growth in Oran Park Precinct opvc 100% $8, Gregory Hills Drive, Gregory Hills To serve growth in Turner Road Precinct opvc 100% $36, Gregory Hills Drive, Gregory Hills To serve growth in Turner Road Precinct opvc 100% $1, Gregory Hills Drive, Gregory Hills To serve growth in Turner Road Precinct opvc 100% $11, Gregory Hills Drive, Gregory Hills To serve growth in Turner Road Precinct mpvc 100% $30, Gregory Hills Drive, Gregory Hills To serve growth in Turner Road Precinct 1, mpvc 100% $1,042, Donovan Boulevard and McKenzie Boulevard, Gregory Hills Lead-in Mains Donovan Boulevard and McKenzie Boulevard, Gregory Hills Lead-in Mains Donovan Boulevard, Gregory Hills To serve growth in Turner Road Precinct opvc 100% $20,084 To serve growth in Turner Road Precinct opvc 100% $34,020 To serve growth in Turner Road Precinct SCL 100% $38, Healy Avenue, Gregory Hills To serve growth in Turner Road Precinct opvc 100% $19, Fairbank Drive, Gledswood Hills To serve growth in Turner Road Precinct opvc 100% $5, Fairbank Drive, Gledswood Hills To serve growth in Turner Road Precinct opvc 100% $10,347 Draft Development Servicing Plan 2017 Oran Park & Turner Road Recycled Water System Page 21

23 Financial Year proposed Description Purpose Length (m) Diameter (mm) Modern Material % Growth Value in DSP ($ ) Healy Avenue, Gregory Hills To serve growth in Turner Road Precinct opvc 100% $33, Donovan Boulevard and McKenzie Boulevard, Gregory Hills To serve growth in Turner Road Precinct opvc 100% $7, Donovan Boulevard, Gregory Hills To serve growth in Turner Road Precinct opvc 100% $21, Healy Avenue, Gregory Hills To serve growth in Turner Road Precinct opvc 100% $124, Camden Valley Way, Gledswood Hills To serve Turner Road Precinct PVC 100% $1,273, Oran Park Drive, Oran Park To serve Oran Park Precinct PVC 100% $546, Oran Park Drive, Oran Park Trunk main to Oran Park Precinct 2, PVC 100% $4,194, Camden Valley Way, Gledswood Hills Potable water top-up DICL 100% $57,649 Table Recycled water pressure pipelines Financial Year proposed Description Purpose Length (m) Diameter (mm) Modern Material % Growth Value in DSP ($ ) Outlet Mains Boost pressure to Oran Park and Turner Road Precincts PVC Draft Development Servicing Plan 2017 Oran Park & Turner Road Recycled Water System Page 22

24 Table Recycled water treatment plant works Financial Year proposed Description Purpose Type Size (ML) % Growth Value in DSP ($ ) Recycled Water Treatment Plant To serve Oran Park and Turner Road Precincts MBR % $11,225,075 Table Recycled water pumping stations Financial Year proposed Description Purpose Power (kw) Flows (L/s) Head (m) % Growt h Value in DSP ($ ) Recycled Water Pumping Station To serve Oran Park and Turner Road Precincts % Table Recycled water reservoirs Financial Year proposed Description Purpose Type Size (ML) % Growth Value in DSP ($ ) Recycled Water Reservoir (included in treatment costs) $0 Draft Development Servicing Plan 2017 Oran Park & Turner Road Recycled Water System Page 23

25 2.4 Plan of the network system Figure Recycled water infrastructure Draft Development Servicing Plan 2017 Oran Park & Turner Road Recycled Water System Page 24

26 3 Developer charge calculation 3.1 Key assumptions and inputs This section sets out key assumptions in the calculation of developer charge and financial inputs including capital expenditure and future operating expenditure and revenues. Table Inputs to the developer charge calculation model Recycled Water Scheme Oran Park & Turner Rd Present Year for Evaluation Real Pre-tax Rate of Return 5.9% Recycled Water Charges Service Charge (20mm, $/year) 0 Usage Charge ($/kl) 1.79 Recycled Water Average Consumption ET Consumption (kl/year) 110 Multi Residential (kl/dwelling/year) 69 Non Residential (per dwelling) 913 Draft Development Servicing Plan 2017 Oran Park & Turner Road Recycled Water System Page 25

27 Table Annual capital expenditure Financial Year CAPEX ($ ) Present Value of CAPEX Average ET Growth $0 $ $0 $ $0 $ $161,547 $227, $1,414,651 $1,884, $49,602 $62, $153,162 $181, $0 $ $0 $ $0 $ $0 $ $0 $ $18,413,394 $15,504, $0 $ $0 $ $0 $ $0 $ $0 $ $0 $ $0 $ $0 $ $0 $ $0 $ $0 $ $0 $ $0 $ $0 $ $0 $ $0 $ $0 $ $0 $ $0 $0 0 Draft Development Servicing Plan 2017 Oran Park & Turner Road Recycled Water System Page 26

28 Financial Year CAPEX ($ ) Present Value of CAPEX Average ET Growth $0 $ $0 $ Total 4 $20, 192,356 $17, 860, Table Capital charge Description Present Value $ per ET Capital charge to $1,867 Capital charge to $12,282 4 Financial yearly totals have been rounded in table, however total values calculated are based on exact values. Draft Development Servicing Plan 2017 Oran Park & Turner Road Recycled Water System Page 27

29 Table Forecast revenue Usage Revenue Financial Year Single Residential Multi-unit Residential Non-Residential Total Revenue $130,742 $2,717 $23,913 $157, $154,567 $2,717 $24,363 $181, $172,484 $2,717 $25,710 $200, $177,801 $2,717 $27,507 $208, $177,801 $2,717 $27,507 $208, $177,801 $2,717 $27,507 $208, $177,801 $2,717 $27,507 $208, $177,801 $2,717 $27,507 $208, $177,801 $2,717 $27,507 $208, $177,801 $2,717 $27,507 $208, $177,801 $2,717 $27,507 $208, $177,801 $2,717 $27,507 $208, $177,801 $2,717 $27,507 $208, $177,801 $2,717 $27,507 $208, $177,801 $2,717 $27,507 $208, $177,801 $2,717 $27,507 $208, $177,801 $2,717 $27,507 $208, $177,801 $2,717 $27,507 $208, $177,801 $2,717 $27,507 $208, $177,801 $2,717 $27,507 $208, $177,801 $2,717 $27,507 $208, $177,801 $2,717 $27,507 $208, $177,801 $2,717 $27,507 $208, $177,801 $2,717 $27,507 $208, $177,801 $2,717 $27,507 $208, $177,801 $2,717 $27,507 $208, $177,801 $2,717 $27,507 $208, $177,801 $2,717 $27,507 $208, $177,801 $2,717 $27,507 $208, $177,801 $2,717 $27,507 $208,025 Draft Development Servicing Plan 2017 Oran Park & Turner Road Recycled Water System Page 28

30 Table Net operating result Financial Year Total Revenue O & M Costs Net Operating Result Present Value Net Operating Result $157,372 $210,482 -$53,110 -$53, $181,646 $237,869 -$56,223 -$53, $200,912 $258,470 -$57,558 -$51, $208,025 $582,849 -$374,824 -$315, $208,025 $492,849 -$284,824 -$226, $208,025 $492,849 -$284,824 -$213, $208,025 $492,849 -$284,824 -$201, $208,025 $492,849 -$284,824 -$190, $208,025 $492,849 -$284,824 -$180, $208,025 $492,849 -$284,824 -$170, $208,025 $492,849 -$284,824 -$160, $208,025 $492,849 -$284,824 -$151, $208,025 $492,849 -$284,824 -$143, $208,025 $492,849 -$284,824 -$135, $208,025 $492,849 -$284,824 -$127, $208,025 $492,849 -$284,824 -$120, $208,025 $492,849 -$284,824 -$113, $208,025 $492,849 -$284,824 -$107, $208,025 $492,849 -$284,824 -$101, $208,025 $492,849 -$284,824 -$95, $208,025 $492,849 -$284,824 -$90, $208,025 $492,849 -$284,824 -$85, $208,025 $492,849 -$284,824 -$80, $208,025 $492,849 -$284,824 -$76, $208,025 $492,849 -$284,824 -$71, $208,025 $492,849 -$284,824 -$67, $208,025 $492,849 -$284,824 -$64, $208,025 $492,849 -$284,824 -$60, $208,025 $492,849 -$284,824 -$57, $208,025 $492,849 -$284,824 -$54,025 Total 4 $6,156,599 $14,103,730 -$7,947,131 -$3,622,223 Draft Development Servicing Plan 2017 Oran Park & Turner Road Recycled Water System Page 29

31 Table Net Operating Result Description Present Value $ per ET Net Operating Result -$2, Developer charge The following table details the components of the proposed developer charge calculation. Table Components of the developer charge Year Capital Charge to Capital Charge to Net Operating Result Avoided Costs Proposed Developer Charge $1,867 $12,282 -$2,869 $0 $17,018 While the above calculation shows a proposed developer charge of $17,018 per ET ($ ), Sydney Water proposes to cap the developer charge at $7,205 per ET ($ ), which is considered equivalent to the provision of a rainwater tank. The capped charged has been approved by the NSW Treasurer in accordance with section 18(2) of the IPART Act. Accordingly, the table below provides the proposed developer charge for different development types including multi-unit residential and non-residential development. Draft Development Servicing Plan 2017 Oran Park & Turner Road Recycled Water System Page 30

32 Table Schedule of proposed developer charges Proposed Capped developer charge ($ ) Development Density Charge $/dwelling Residential (dwellings per pure net hectare 5 ) 0 20 $7, $5, $3, $3, $2, $2, $2, $1,945 > 155 $1,585 Non-Residential $7,205 /ET based on assessed flows 5 The per pure net hectare is the actual size of a development site taking into account land use considerations such as: Battleaxe handle where the handle forms part of the allotment (excluded if it is a right of way) Car parking and landscaping Dedicated public reserve areas are generally excluded. However, unless recycled water services are required for irrigation or amenities block etc then it is charged on a flow basis Drainage easements are excluded on the basis that the land is sterile. If piped, and land is usable, then it is included in the area calculation Environmentally constrained land (flood prone/land slip/foreshore protection/heritage/riparian zones) is excluded unless development is permitted (such as a dwelling), in which case it may be appropriate to include the building envelope area Land affected by transmission line easements is generally excluded unless the land has the ability to draw a recycled water demand (eg irrigation for landscaping, wash down for trucks etc) Generally excludes public open space and roads etc. Draft Development Servicing Plan 2017 Oran Park & Turner Road Recycled Water System Page 31

33 SW204 04/17 - Sydney Water. All rights reserved.