The 2006/2007 Management Plan provides for an estimated deficit of $122,387 for the ensuing year, which will be funded from reserves.

The Management Plan, in accordance with the Strategic Business Plan and 30 year Financial Plan, also provides for an increase of 8% increase in water tariffs, which will see the consumption charge rise from $1.16 per kilolitre to $1.25 per kilolitre.

The availability charge will remain at $31.00 per quarter.

The General Manager, Tony Perry, said that in accordance with the NSW Government's Water Pricing Guidelines, the Management Plan continues with the inclining tariff for all residential and rural consumers.

Under this, the consumption charge rises by 50% for all water consumed above 450 kilolitres per year.

Mr Perry said the average residential consumption is around 300 kilolitres per year.

Mr Perry also said that the NSW Government is adamant that, to be financially viable, Local Government Water Utilities should be setting prices on a cost recovery basis, with that cost to include the provision for infrastructure replacement.

Mr Perry advised that, whilst Council is not yet operating on a cost recovery basis, the 30 year financial plan, incorporated in the Strategic Business Plan, indicates that Council will be operating in a cost recovery situation by 2008/2009 and, from then on, providing for the funding of major infrastructure replacements and upgrades.

The General Manager also said that the phasing in of the increase in developer charges over the three years enters its second year during 2006/2007 with the current charge of $4,425.00 per ET increasing to $5,940.00 per ET on January 1, 2007.

As well, the phasing in of the elimination of all non-residential cross-subsidies over a five-year period entered its second year, commencing on July 1, 2006.

The capital works program for 2006/2007 includes:

1. Replacement of reticulation water mains in Eugowra - $223,590.00.

2. Replacement of reticulation water mains in Lyndhurst - $251,150.00.