Council is expected to enter the temporary water trade market from early next year, after a policy on water trading was adopted at this week’s council meeting.
Mayor Ashley Hall and CEO Jack Bond said the measure would allow council to improve its income, to be able to better meet the demands of the community.
Based on current temporary water prices and the average water available after community needs are met, this could generate more than $500,000 a year for council.
Cr Hall said it’s one of a number of income generating and cost saving measures being investigated to try and combat growing cost pressures on council, which are impacting on cash reserves.
He said all NSW councils are finding it increasingly difficult to maintain operations because of the continuous shifting of government responsibilities and costs to the local government sector.
NSW councils are also jointly lobbying for Commonwealth managed Financial Assistance Grants to councils to be increased to help combat the issue.
“With the state government cost shifting a lot to councils, we have to look at all options in terms of extra income,” Cr Hall said.
“This (selling excess water) has been spoken about for probably 20 or 30 years, but we were always of the assumption that couldn't happen, but with some mechanism in the department it can happen.
“We've done a further review and comprehensive study, in terms of what it means for us, is there any risk?
“So we think the benefit of getting that extra income is worth doing.
“It has some upside too, if we can sell within the MIL (Murray Irrigation Limited) footprint, that it stays in the basin and helps our farmers be more productive in terms of more water in the pool.
“That was a strong sentiment that councillors wanted to push.”
Cr Hall stressed that council’s decision to try selling on the temporary water market would not impact on town water supply in any way.
Mr Bond has been granted delegated authority by council to negotiate sales.
In an average year, council usually has about 2000 megalitres of water reaming after all community needs are met.
Mr Bond said council would keep some of that in reserve, and look to sell about 1500ML.
The price for temporary water fluctuates based on availability and demand, so the income council can generate from the sale will change from year-to-year.
Right now, with NSW Murray Valley irrigators only having access to 20 per cent of their general security water entitlements, prices are high.
Yesterday, based on MIL’s water exchange data website, temporary water was selling for between $405.50 per megalitre and $325.
At the current sell high price, council could earn $608,250 from 1500ML sold.
Council’s Temporary Trade of Water Policy will soon be available on the council’s website - www.edwardriver.nsw.gov.au. The draft version adopted by council at this week’s meeting has been printed in the December 16 agenda documents.
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