News · Stormwater charge · Lake Macquarie
Lake Macquarie’s stormwater charge raised $2.47 million in its first year and spent $872,000. A rewrite of its rules went to councillors on 26 October
Since July 2025 eligible urban homes in the city have paid $25 a year ($12.50 for a strata unit) on their rates notice for stormwater work, to start on a backlog of 166 problem sites. The council’s first annual account of the charge shows about 35 cents of each dollar raised was spent, on a list led by planning, design, inspection and maintenance, with construction finished at one location as initial emergency works. The policy going to the 26 October meeting spells those kinds of costs out in more detail, and says a property can be charged with no drain beside it.
The short answer. Lake Macquarie City Council’s Annual Report 2025-2026,
on the agenda for the ordinary council meeting of Monday 26 October, reports that
Council received a total of $2,468,661 in stormwater management services charge funds.
It carried out capital and operating works worth $872,162 with that money, about 35 per cent of
it. A footnote says about $141,000 more of stormwater work done in the year is not counted yet;
with it, the share is about 41 per cent. The rest, $1.596 million in the audited financial
statements, is held in a restricted reserve for later years. Year one is the first test of a
charge the council introduced in March 2025.
What the charge is, and why it started
State law has let NSW councils levy a stormwater management services charge since 2005.
Lake Macquarie held off for two decades, first because the 1999 to 2009 “Lake Levy”
special rate variation and later levies paid for similar work, its March 2025 report says. That
report, which recommended the charge, gave the case: updated national flood guidelines have
lifted modelled runoff in the city by about 30 per cent for most storms, so most of the network
is now under capacity on paper, and the backlog was growing. In the report’s words,
There are currently 166 locations where stormwater issues have been identified in the priority matrix backlog
:
89 catchment drainage or road flooding sites, 41 with uncontrolled flows outside council
easements and properties, and 36 asset failures.
The report also said
Council is in the minority with respect to the levying of a SMSC
,
citing an industry group’s figure that 91 per cent of Greater Sydney councils levy it,
and stating that every Hunter council except Port Stephens does. It proposed the charge at the
regulation’s upper limits: $25 a year for a house or a multi-occupancy residential
property, $12.50 for a residential strata unit, and $25 for every 350 square metres of a
business property, with the council’s own cap of $5,000 a business. It forecast $2.2 million a year. Year one brought in about $270,000 more than that.
The 2026-27 rates are the same, and the council estimates the yield at $2,529,358.
Where the first year’s money went
Lake Macquarie’s stormwater charge, 2025-26
The council’s own figures, from three documents. The shares are our division.
| Item | Amount | Share of the charge |
|---|---|---|
| Forecast in the March 2025 report | $2,200,000 | |
| Received in 2025-26 | $2,468,661 | 100% |
| Capital and operating works reported | $872,162 | 35% |
| Shown in the capital table | about $410,000 | 17% |
| Further work done but not yet counted | about $141,000 | 6% |
| Held in the restricted reserve at 30 June 2026 | $1,596,000 | 65% |
The statutory report lists what the money did. Planning was done for 11 locations and
designs finished for five, two of them interim works. Construction was completed at one
location, Wommara Avenue, described as initial emergency works. Two sites were deferred or
removed, one because no capital works were needed and one over landowner issues to be resolved. The money also started
a citywide pipe and conduit inspection program, vegetation maintenance of priority
biobasins and geomorphic assessments of priority creeks, and paid for extra drainage
maintenance and what the report calls
Resourcing support to deliver the SMSC program.
It says the unspent balance carries over: Funds raised from the levy were spent exclusively on stormwater and related infrastructure, with the remaining balance to be carried over to fund future projects.
Year two looks similar on paper. The adopted 2026-27 Operational Plan lists 17 projects under the charge: one to complete (49 Tudor Street, Belmont), one to deliver (Atherton Close, Rankin Park) and 15 for planning and design, among them detailed design of priority creek rehabilitation. A “stormwater enhancement program” is scheduled for delivery from 2027-28. The plan budgets $1.3 million in capital works for the charge this year, against the $2.53 million estimated yield; the plan says the charge also funds operating work, among it asset management plans, more proactive inspections and maintenance of pipes, pollution traps and bioretention basins.
What version 3 changes
Item 26SP063 asks councillors to rescind version 2 of the charge policy and adopt version
3. The staff report says
Several minor changes are recommended to clarify the legislative basis, eligible expenditure, assessment methodology and reporting requirements.
It says no community engagement was done for the review, and that customer requests about the
charge were few and showed no recurring or systemic issues. The policy does not set the
amount; that stays with the annual fees and charges.
The tracked-changes copy in the agenda shows what is new:
- A longer list of what the money can pay for. Version 2 already covered planning, construction and maintenance of drainage systems and allowed monitoring. Version 3 adds asset inspections and condition assessments, investigations, creek and channel rehabilitation and asset management planning, and names stormwater-quality monitoring and increased maintenance. Much of the list describes things year one’s money already paid for. It also adds that revenue is to be separately identified and used only for eligible new or additional stormwater management services.
- A definition of when the service is available. Version 2 already
counted creeks, open watercourses and Lake Macquarie itself as part of the network. Version 3
defines the service as available where a property’s runoff passes through, or is received
by, a stormwater system or receiving environment for which the council undertakes stormwater
management functions, and says outright that
The absence of formal drainage infrastructure immediately adjoining a property does not, by itself, mean that a stormwater management service is unavailable.
For an owner thinking of appealing because there is no pit or pipe in their street, that is the sentence that matters. - A tighter definition of vacant land. Version 2 exempted undeveloped land unless it had impervious surfaces. Version 3 excludes vacant land, defined as land with no buildings, car parks or material impervious surface under the council’s assessment criteria.
- A seven-step order for deciding eligibility, with zoning used for a first automated screen and a property-specific assessment where the result is uncertain or disputed.
The appeal ground is unchanged: an owner can appeal only on the basis that the eligibility criteria were applied incorrectly. Hardship goes through the council’s Financial Hardship Policy.
Our view
A first year spent mostly on surveys, designs and inspections is not by itself a failure. Drainage work needs investigation and design before anything is dug up, and the unspent money sits in a reserve the audited accounts class as externally restricted, and is reported. But the charge was sold mainly on a backlog of 166 sites and flooding in residential areas, alongside lake water quality and more maintenance, and after one year construction has been completed at one location, with two more scheduled this year. Version 3 adds inspections, investigations, creek rehabilitation and asset management planning to an already broad list. All of it is legitimate, and none of it is a new pipe. Councillors deciding on it on 26 October could reasonably ask for one more line in each annual report: how many of the 166 sites are fixed, and what share of the year’s charge went to construction. This view is ours, built on the council’s documents cited below.
We will report whether councillors adopt version 3 as recommended when the minutes of the 26 October meeting are published.
Updated 28 October 2026. Council met on 26 October, and our headline now puts that in the past tense. We have not yet seen the minutes, and will report the decision from them. Nothing else has changed.
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