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The proposal was put forward to revise the approved budget from $10million to $17.2million in the Queenstown District Lakes Council (QLDC) 10-year plan.
Three Waters strategic manager Brandon Ducharme said the QLDC was facing rapid cost escalations across the board.
"Costs are increasing as a result of global supply chain disruptions and domestic skilled labour or professional resource shortages as a flow-on effect of the Covid-19 pandemic.
"The design of any new drinking water scheme will need to be future-proofed to ensure it meets the regulatory requirements being signalled. We must also give as much consideration as possible to ensuring design and operation will be able to meet both the current requirements of QLDC as well as any reasonably foreseeable requirements of a possible future water entity," Mr Ducharme said.
The proposal also required a corresponding increase to the 2021 development contributions policy.
Estimates of capital costs and debt recovery also increased $8490 per dwelling to $16,490.
The increases to the 2021 development contributions policy were proposed to allow for the small scheme subsidy of 20% to be used to provide the township with new Three Waters services.
This subsidy does not apply to properties within Mount Cardrona Station zone, which would be charged a development contribution of $20,070.
Submission forms and information about the proposal are available on the QLDC website. A hearing will be held on July 25.
-- Aspen Bruce