Council has undertaken financial modelling of the Scheme based on a projected 40 year life.

Council considered all the factors outlined in the Policy on Development and Financial Contributions, Statement of Proposal and the subsequent hearings process to develop the funding model.

Key principles adopted included:

• The Scheme will be self funding over 40 years on a user pays basis;

• The Drainage District outlines the current boundary of beneficial users and this may be expanded if growth occurs outside these boundaries;

• Current ratepayers have already contributed to some extent in wastewater treatment capacities even if limited;

• A significant number of current ratepayers are on fixed incomes and reliant on retirement incomes;

• Basic maximum charge for development contributions was considered to be an approximate cost of a modern bio-cycle wastewater system;

• Council should not rely entirely on annual charges as this would significantly increase the financing cost associated with the project and penalise existing ratepayers; and

• Council should not be totally reliant on one off charges as this would mean the entire project was reliant on growth which may stall or slow in any one year but is unlikely to stop over a 15-30 year period.

• Pan Charges will be levied on a per pan basis for non-residential customers in line with Council policy across the district. This reflects the commercial benefits derived from non-residential applications and the increased environmental impact from multiple pans in a commercial setting. Operational subsidies can be applied to alleviate cost impacts on non profit community groups.

• Importantly the project funding has been modelled to result in a zero cash position after 40 years and therefore funds from development contributions will not exceed project costs.

Using these principles and the assumptions outlined in the Policy on Development and Financial Contributions (page 30) the model was run iteratively to produce:

1 A zero cash balance after 40 years,

2 Annual Pan Charges of less than $500 in Year 1,

3 Uniform Targeted Rate of less than $1,500 for “Current” sections, and

4 Overall Development Contributions of approximately $15,000.