Development Servicing Plan 2017 - Sydney Wateredisp/dd_… · Draft Development Servicing Plan 2017...

Development Servicing Plan 2017

Oran Park and Turner Road

Recycled Water System

Draft Development Servicing Plan 2017 | Oran Park & Turner Road Recycled Water System Page | 1

Table of Contents

Executive Summary ........................................................................................................... 3

Oran Park & Turner Road recycled water system developer charge ......................................... 3

1 Development Servicing Plan methodology ................................................................ 5

1.1 Introduction .............................................................................................................................. 5

1.1.1 Developer charges and Development Servicing Plans ..................................................... 5

1.1.2 Regulation of developer charges ....................................................................................... 5

1.1.3 Payment of a recycled water developer charge ................................................................ 5

1.1.4 Dispute resolution .............................................................................................................. 6

1.1.5 Disclaimer .......................................................................................................................... 6

1.2 Regulation - principles and calculation method .................................................................. 6

1.2.1 Principles of the regulation ................................................................................................ 6

1.2.2 The 2006 Determination .................................................................................................... 6

1.2.3 Preparation of DSPs .......................................................................................................... 8

1.2.4 Consultation and review of the DSP and developer charges ............................................ 8

1.3 Forecasting urban development rates .................................................................................. 8

1.3.1 Existing development ........................................................................................................ 8

1.3.2 Forecasting residential development ................................................................................. 8

1.3.3 Forecasting non-residential development ......................................................................... 9

1.4 Forecasting system demand .................................................................................................. 9

1.4.1 Forecasting system demand ............................................................................................. 9

1.4.2 Defining an Equivalent Tenement ..................................................................................... 9

1.5 Determining relevant assets .................................................................................................. 9

1.5.1 Existing assets ................................................................................................................... 9

1.5.2 Future assets ...................................................................................................................10

1.5.3 Standards of service ........................................................................................................10

1.6 Asset valuation ......................................................................................................................10

1.6.1 Valuation of existing assets .............................................................................................10

1.6.2 Valuation of future assets ................................................................................................10

1.7 Operating result .....................................................................................................................11

1.7.1 Revenue ..........................................................................................................................11

1.7.2 Operating and maintenance costs ...................................................................................11

1.8 Cost offsets (avoided costs) ................................................................................................11

2 Oran Park & Turner Road Recycled Water Scheme ................................................. 13

2.1 Oran Park & Turner Road Recycled Water DSP .................................................................13

2.1.1 History of the Oran Park and Turner Road recycled water supply scheme ....................13

2.1.2 Boundaries ......................................................................................................................14

2.1.3 Recycled water infrastructure ..........................................................................................14

2.2 Development rates and demand rates ................................................................................15

2.3 Assets .....................................................................................................................................19


2.3.1 Existing assets .................................................................................................................19

2.3.2 Future assets ...................................................................................................................19

2.4 Plan of the network system ..................................................................................................24

3 Developer charge calculation .................................................................................... 25

3.1 Key assumptions and inputs ...............................................................................................25

3.2 Developer charge ..................................................................................................................30

Figures

Figure 2-1 - Recycled water infrastructure ......................................................................................... 24

Tables

Table 0-1 – Proposed developer charges for different development types ......................................... 4

Table 2-1 - Description of Oran Park and Turner Road Recycled Water DSP Area ......................... 14

Table 2-2 - Development rates – Oran Park and Turner Road Recycled Water System .................. 15

Table 2-3 - Demand rates (average ET) – Oran Park & Turner Rd Recycled Water System ........... 17

Table 2-4 - Recycled water gravity pipelines ..................................................................................... 20

Table 2-5 - Recycled water pressure pipelines .................................................................................. 22

Table 2-6 - Recycled water treatment plant works ............................................................................. 23

Table 2-7 - Recycled water pumping stations .................................................................................... 23

Table 2-8 - Recycled water reservoirs................................................................................................ 23

Table 3-1 - Inputs to the developer charge calculation model ........................................................... 25

Table 3-2 - Annual capital expenditure............................................................................................... 26

Table 3-3 - Capital charge .................................................................................................................. 27

Table 3-4 - Forecast revenue ............................................................................................................. 28

Table 3-5 - Net operating result .......................................................................................................... 29

Table 3-6 - Net Operating Result ....................................................................................................... 30

Table 3-7 - Components of the developer charge .............................................................................. 30

Table 3-8 - Schedule of proposed developer charges ....................................................................... 31


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 ($2016–17) 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 2016-17 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:

Email: [email protected] 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


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 ($ 2016-17)

Development Density Charge

$/dwelling

Residential

(dwellings per pure net hectare1)

0 – 20 $7,205

21 – 35 $5,476

36 – 50 $3,674

51 – 65 $3,027

66 – 81 $2,593

82 – 95 $2,450

96 – 125 $2,161

126 – 155 $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.


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

1.1.1 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).

1.1.2 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.

1.1.3 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


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.

1.1.4 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.

1.1.5 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

1.2.1 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.

1.2.2 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


• 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 =

2....n 1, years ifor 21

L

COiPV

L

CiRiNPV

L

K

L

K

Where:

RWDC - Recycled Water Developer Charge per Equivalent Tenement

K1 - Capital Charge for Pre 2007 Assets which will serve the DSP Area

calculated on a NPV basis discounted at rate r

K2 - 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

Ri - future Operating Revenues in each year i

Ci - 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:

GDDCACSCO iii


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

1.2.3 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.

1.2.4 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 2017.

1.3 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.

1.3.1 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.

1.3.2 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 2046.


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

1.4.1 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.

1.4.2 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.

1.5.1 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)


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).

1.5.3 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.

1.6.1 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.

1.6.2 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.


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.

1.7.1 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.

1.7.2 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 augmentation2. 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


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.


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

2.1.1 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 2004. 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).


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 2-1 - Description of Oran Park and Turner Road Recycled Water DSP Area

Area (hectares) 78 ha

Local Government Area Camden Council

Estimated Population 2016 2058

Projected Population 2046 2775

2.1.3 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.


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 1.2.4.

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 2-2 - Development rates – Oran Park and Turner Road Recycled Water System

Financial Year

Single Residential

Dwelling

Multi Residential

Dwelling

Non-Residential

kL

2007-08 0 0 0.0

2008-09 10 0 0.0

2009-10 19 0 0.0

2010-11 218 0 2,874

2011-12 255 15 1,825

2012-13 51 5 2,363

2013-14 9 2 1,214

2014-15 9 0 1,142

2015-16 93 0 1,142

2016-17 121 0 251

2017-18 91 0 753

2018-19 27 0 1,004

2019-20 0 0 0

2020-21 0 0 0

2021-22 0 0 0

2022-23 0 0 0

2023-24 0 0 0

2024-25 0 0 0

2025-26 0 0 0

2026-27 0 0 0

2027-28 0 0 0

2028-29 0 0 0

2029-30 0 0 0

2030-31 0 0 0

2031-32 0 0 0

2032-33 0 0 0


3 Financial yearly totals have been rounded in table, however total values calculated are based on exact values.

2033-34 0 0 0

2034-35 0 0 0

2035-36 0 0 0

2036-37 0 0 0

2037-38 0 0 0

2038-39 0 0 0

2039-40 0 0 0

2040-41 0 0 0

2041-42 0 0 0

2042-43 0 0 0

2043-44 0 0 0

2044-45 0 0 0

2045-46 0 0 0

TOTAL3 903 22 12, 568


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 2-3 - 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

2007-08 0 0 0

2008-09 10 0 0

2009-10 19 0 0

2010-11 218 0 26

2011-12 255 9 17

2012-13 51 3 21

2013-14 9 1 11

2014-15 9 0 10

2015-16 93 0 10

2016-17 121 0 2

2017-18 91 0 7

2018-19 27 0 9

2019-20 0 0 0

2020-21 0 0 0

2021-22 0 0 0

2022-23 0 0 0

2023-24 0 0 0

2024-25 0 0 0

2025-26 0 0 0

2026-27 0 0 0

2027-28 0 0 0

2028-29 0 0 0

2029-30 0 0 0

2030-31 0 0 0

2031-32 0 0 0

2032-33 0 0 0

2033-34 0 0 0

2034-35 0 0 0

2035-36 0 0 0

2036-37 0 0 0


Financial Year

Single Residential

Growth ET

Multi Residential

Growth ET

Non-Residential

Growth ET

2037-38 0 0 0

2038-39 0 0 0

2039-40 0 0 0

2040-41 0 0 0

2041-42 0 0 0

2042-43 0 0 0

2043-44 0 0 0

2044-45 0 0 0

2045-46 0 0 0

TOTAL3 903 13 113


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 2-8.

2.3.1 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

2.3.2 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.


Table 2-4 - Recycled water gravity pipelines

Financial Year

proposed Description Purpose

Length (m)

Diameter (mm)

Modern Material

% Growth

Value in DSP

($2016-17)

2010-11 Peter Brock Drive, Oran Park To serve growth in Oran Park Precinct 158 250 oPVC 100% $49,690

2011-12 Oran Park Drive, Oran Park Outside of committed scheme area 1 150 oPVC 0% $0

2011-12 Oran Park Drive, Oran Park To serve growth in Oran Park Precinct 14 250 oPVC 100% $4,413

2011-12 Oran Park Drive, Oran Park To serve growth in Oran Park Precinct 35 250 SCL 100% $18,782

2011-12 Oran Park Drive, Oran Park To serve growth in Oran Park Precinct 16 375 mPVC 100% $14,340

2011-12 Oran Park Drive, Oran Park To serve growth in Oran Park Precinct 8 375 SCL 100% $12,056

2011-12 Oran Park Drive, Oran Park Outside of committed scheme area 133 450 DICL 0% $0

2011-12 Oran Park Drive, Oran Park Outside of committed scheme area 40 450 SCL 0% $0

2011-12 Peter Brock Drive, Oran Park To serve growth in Oran Park Precinct 18 150 oPVC 100% $850



2012-13 South Circuit, Oran Park To serve growth in Oran Park Precinct 715 150 oPVC 100% $32,883

2011-12 South Circuit, Oran Park To serve growth in Oran Park Precinct 5 150 SCL 100% $466

2011-12 South Circuit and Grice Street, Oran

Park

To serve growth in Oran Park Precinct 663 150 oPVC 100% $30,483


Financial Year


Length (m)

Diameter (mm)

Modern Material

% Growth

Value in DSP

($2016-17)

2011-12 Central Avenue, Oran Park To serve growth in Oran Park Precinct 303 200 oPVC 100% $57,306

2012-13 South Circuit, Oran Park To serve growth in Oran Park Precinct 364 150 oPVC 100% $16,719


2011-12 Gregory Hills Drive, Gregory Hills To serve growth in Turner Road Precinct 74 150 oPVC 100% $36,114



2011-12 Gregory Hills Drive, Gregory Hills To serve growth in Turner Road Precinct 33 375 mPVC 100% $30,276

2011-12 Gregory Hills Drive, Gregory Hills To serve growth in Turner Road Precinct 1,151 375 mPVC 100% $1,042,358

2010-11 Donovan Boulevard and McKenzie

Boulevard, Gregory Hills

To serve growth in Turner Road Precinct 437 150 oPVC 100% $20,084

2010-11 Lead-in Mains Donovan Boulevard and

McKenzie Boulevard, Gregory Hills


2010-11 Lead-in Mains Donovan Boulevard,

Gregory Hills

To serve growth in Turner Road Precinct 49 150 SCL 100% $38,248

2010-11 Healy Avenue, Gregory Hills To serve growth in Turner Road Precinct 62 250 oPVC 100% $19,506

2011-12 Fairbank Drive, Gledswood Hills To serve growth in Turner Road Precinct 124 150 oPVC 100% $5,714

2011-12 Fairbank Drive, Gledswood Hills To serve growth in Turner Road Precinct 55 200 oPVC 100% $10,347


Financial Year


Length (m)

Diameter (mm)

Modern Material

% Growth

Value in DSP

($2016-17)


2013-14 Donovan Boulevard and McKenzie

Boulevard, Gregory Hills


2013-14 Donovan Boulevard, Gregory Hills To serve growth in Turner Road Precinct 113 200 oPVC 100% $21,392


2019-20 Camden Valley Way, Gledswood Hills To serve Turner Road Precinct 500 150 PVC 100% $1,273,817

2019-20 Oran Park Drive, Oran Park To serve Oran Park Precinct 820 300 PVC 100% $546,897

2019-20 Oran Park Drive, Oran Park Trunk main to Oran Park Precinct 2,700 300 PVC 100% $4,194,273

2019-20 Camden Valley Way, Gledswood Hills Potable water top-up 50 200 DICL 100% $57,649

Table 2-5 - Recycled water pressure pipelines

Financial Year

proposed

Description Purpose Length (m)

Diameter (mm)

Modern Material

% Growth

Value in DSP

($2016-17)

2019-20 Outlet Mains Boost pressure to Oran Park and Turner Road

Precincts

50 300 PVC


Table 2-6 - Recycled water treatment plant works

Financial Year

proposed

Description Purpose Type Size (ML)

% Growth

Value in DSP ($2016-17)

2019-20 Recycled Water Treatment Plant To serve Oran Park and Turner Road Precincts MBR 0.19 100% $11,225,075

Table 2-7 - Recycled water pumping stations

Financial

Year

proposed

Description Purpose Power

(kW)

Flows

(L/s)

Head

(m)

%

Growt

h

Value in

DSP

($2016-17)

2019-20 Recycled Water Pumping Station To serve Oran Park and Turner Road Precincts 21 32 42 100%

Table 2-8 - Recycled water reservoirs

Financial

Year

proposed

Description Purpose Type Size

(ML)

%

Growth

Value in

DSP

($2016-17)

2019-20 Recycled Water Reservoir (included in treatment

costs)

-- -- -- -- $0


2.4 Plan of the network system

Figure 2-1 - Recycled water infrastructure


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 3-1 - Inputs to the developer charge calculation model

Recycled Water Scheme Oran Park & Turner Rd

Present Year for Evaluation 2016-17

Real Pre-tax Rate of Return 5.9%

Recycled Water Charges

2016-17

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


Table 3-2 - Annual capital expenditure

Financial Year CAPEX

($2016-17)

Present Value of CAPEX

Average ET Growth

2007-08 $0 $0 0

2008-09 $0 $0 16

2009-10 $0 $0 28

2010-11 $161,547 $227,863 344

2011-12 $1,414,651 $1,884,210 374

2012-13 $49,602 $62,386 95

2013-14 $153,162 $181,902 25

2014-15 $0 $0 22

2015-16 $0 $0 109

2016-17 $0 $0 123

2017-18 $0 $0 92

2018-19 $0 $0 32

2019-20 $18,413,394 $15,504,078 0

2020-46 $0 $0 0

2020-21 $0 $0 0

2021-22 $0 $0 0

2022-23 $0 $0 0

2023-24 $0 $0 0

2024-25 $0 $0 0

2025-26 $0 $0 0

2026-27 $0 $0 0

2027-28 $0 $0 0

2028-29 $0 $0 0

2029-30 $0 $0 0

2030-31 $0 $0 0

2031-32 $0 $0 0

2032-33 $0 $0 0

2033-34 $0 $0 0

2034-35 $0 $0 0

2035-36 $0 $0 0

2036-37 $0 $0 0

2037-38 $0 $0 0


Financial Year CAPEX

($2016-17)

Present Value of CAPEX

Average ET Growth

2038-39 $0 $0 0

2039-40 $0 $0 0

2040-41 0

2041-42 0

2042-43 0

2043-44 0

2044-45 0

2045-46 0

Total4 $20, 192,356 $17, 860, 440 1262

Table 3-3 - Capital charge

Description Present Value $ per ET

Capital charge 2007-08 to 2015-16 $1,867

Capital charge 2016-17 to 2045-46 $12,282

4 Financial yearly totals have been rounded in table, however total values calculated are based on exact values.


Table 3-4 - Forecast revenue

Financial Year

Usage Revenue

Total Revenue Single

Residential Multi-unit

Residential Non-Residential

2016-17 $130,742 $2,717 $23,913 $157,372

2017-18 $154,567 $2,717 $24,363 $181,646

2018-19 $172,484 $2,717 $25,710 $200,912

2019-20 $177,801 $2,717 $27,507 $208,025

2020-21 $177,801 $2,717 $27,507 $208,025

2021-22 $177,801 $2,717 $27,507 $208,025

2022-23 $177,801 $2,717 $27,507 $208,025

2023-24 $177,801 $2,717 $27,507 $208,025

2024-25 $177,801 $2,717 $27,507 $208,025

2025-26 $177,801 $2,717 $27,507 $208,025

2026-27 $177,801 $2,717 $27,507 $208,025

2027-28 $177,801 $2,717 $27,507 $208,025

2028-29 $177,801 $2,717 $27,507 $208,025

2029-30 $177,801 $2,717 $27,507 $208,025

2030-31 $177,801 $2,717 $27,507 $208,025

2031-32 $177,801 $2,717 $27,507 $208,025

2032-33 $177,801 $2,717 $27,507 $208,025

2033-34 $177,801 $2,717 $27,507 $208,025

2034-35 $177,801 $2,717 $27,507 $208,025

2035-36 $177,801 $2,717 $27,507 $208,025

2036-37 $177,801 $2,717 $27,507 $208,025

2037-38 $177,801 $2,717 $27,507 $208,025

2038-39 $177,801 $2,717 $27,507 $208,025

2039-40 $177,801 $2,717 $27,507 $208,025

2040-41 $177,801 $2,717 $27,507 $208,025

2041-42 $177,801 $2,717 $27,507 $208,025

2042-43 $177,801 $2,717 $27,507 $208,025

2043-44 $177,801 $2,717 $27,507 $208,025

2044-45 $177,801 $2,717 $27,507 $208,025

2045-46 $177,801 $2,717 $27,507 $208,025


Table 3-5 - Net operating result

Financial Year Total Revenue O & M Costs

Net Operating Result

Present Value Net Operating Result

2016-17 $157,372 $210,482 -$53,110 -$53,110

2017-18 $181,646 $237,869 -$56,223 -$53,090

2018-19 $200,912 $258,470 -$57,558 -$51,323

2019-20 $208,025 $582,849 -$374,824 -$315,602

2020-21 $208,025 $492,849 -$284,824 -$226,460

2021-22 $208,025 $492,849 -$284,824 -$213,844

2022-23 $208,025 $492,849 -$284,824 -$201,930

2023-24 $208,025 $492,849 -$284,824 -$190,680

2024-25 $208,025 $492,849 -$284,824 -$180,056

2025-26 $208,025 $492,849 -$284,824 -$170,025

2026-27 $208,025 $492,849 -$284,824 -$160,552

2027-28 $208,025 $492,849 -$284,824 -$151,607

2028-29 $208,025 $492,849 -$284,824 -$143,161

2029-30 $208,025 $492,849 -$284,824 -$135,185

2030-31 $208,025 $492,849 -$284,824 -$127,654

2031-32 $208,025 $492,849 -$284,824 -$120,542

2032-33 $208,025 $492,849 -$284,824 -$113,826

2033-34 $208,025 $492,849 -$284,824 -$107,484

2034-35 $208,025 $492,849 -$284,824 -$101,496

2035-36 $208,025 $492,849 -$284,824 -$95,841

2036-37 $208,025 $492,849 -$284,824 -$90,502

2037-38 $208,025 $492,849 -$284,824 -$85,460

2038-39 $208,025 $492,849 -$284,824 -$80,698

2039-40 $208,025 $492,849 -$284,824 -$76,202

2040-41 $208,025 $492,849 -$284,824 -$71,957

2041-42 $208,025 $492,849 -$284,824 -$67,948

2042-43 $208,025 $492,849 -$284,824 -$64,162

2043-44 $208,025 $492,849 -$284,824 -$60,588

2044-45 $208,025 $492,849 -$284,824 -$57,212

2045-46 $208,025 $492,849 -$284,824 -$54,025

Total4 $6,156,599 $14,103,730 -$7,947,131 -$3,622,223


Table 3-6 - Net Operating Result

Description Present Value $ per ET

Net Operating Result

-$2,869

3.2 Developer charge

The following table details the components of the proposed developer charge calculation.

Table 3-7 - Components of the developer charge

Year Capital

Charge 2007-

08 to 2015-16

Capital

Charge 2016-

17 to 2045-46

Net Operating

Result

Avoided

Costs

Proposed

Developer

Charge

2016-17 $1,867 $12,282 -$2,869 $0 $17,018

While the above calculation shows a proposed developer charge of $17,018 per ET ($2016–17),

Sydney Water proposes to cap the developer charge at $7,205 per ET ($2016–17), 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.


Table 3-8 - Schedule of proposed developer charges

Proposed Capped developer charge ($ 2016-17)

Development Density Charge

$/dwelling

Residential

(dwellings per pure net hectare5)

0 – 20 $7,205

21 – 35 $5,476

36 – 50 $3,674

51 – 65 $3,027

66 – 81 $2,593

82 – 95 $2,450

96 – 125 $2,161

126 – 155 $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.

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

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