Coughing up fees before getting any income is a financial burden Tamworth Regional Council wishes to alleviate from developers.
Residents will be able to have their say on a new policy which would mean Water and Sewer Headworks payments would be made upon sale of lots, rather than at the moment of subdivision approval.
Covid-19 financial pressures prompted council to investigate implementing the policy in April, however it may be the case the changes will remain in effect well into the future.
Council will vote to place the new draft policy on public exhibition at Tuesday night's ordinary council meeting. The move would bring the cost "closer to the income stream", making it more financially manageable to develop.
Industry representatives have advocated for deferred payments both prior to, and following COVID-19 relief package.
This change was part of a mayoral minute presented in April requesting approval for a series of measures to provide relief to residents and businesses.
The report says of 197 eligible lots, the offer was taken up by the developers of 54 lots spread across five subdivisions.
If the policy is successfully adopted, headworks payments which were made between March 1, 2018 and March 31, 2020 will be reimbursed if the land has not been sold.
"The process was supported by the industry, and feedback has been that a continuation of the practice to defer headworks payments would be of benefit to the industry," the report reads.
The advantage to the industry results in a reduction in "peak borrowings" from moving the payments closer to the income stream generated by lot sales.
"Industry representatives have advocated for deferred payments both prior to, and following COVID-19 relief package."
Potential risk to council was identified if the land hadn't been sold for a long time. The policy now reads that if land hasn't been sold after two calendar years, the fees must be paid.
If subdivided land was to be developed before a sale was made, the fees would be payable. A caveat would also be put in place making the original developers responsible for payment before any land sale, so the debt didn't transfer over to the new owners.
Council's development engineering manager Steve Brake notes in the report that this policy would place an added administrational burden on council staff. A fee of $250 per lot will be introduced to cover those extra third-party costs.
"With the deferral of the related income, there will be an impact on council interest revenue however, in the current climate, this impact is minimal and will be reviewed as required," the report reads.
If there are no changes or negative submissions to the draft policy, it would come into effect by early 2021.
Water and sewer headworks charges go towards the cost of upgrading and expanding trunk water supply and sewer infrastructure to accommodate the increases in demand associated with land subdivision and development.