Cost-shifting concerns have motivated Kiama council to seek state government funding to undertake reports on a century-old dam at Jamberoo.
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Fountaindale Dam, built to supply Kiama with water, is a concrete arch dam constructed in 1909 by the NSW Public Works.
The dam is 15 metres high with a crest length of 89 metres. It was designed to have a capacity of about 61 megalitres, but its capacity has been reduced to about 20 megalitres by siltation.
Kiama council is soon to decommission Jerrara Dam.
A 2008 report estimated that decommissioning Fountaindale Dam could cost about $700,000, but this figure did not include detailed environmental studies or management on the environmental effects of a decommissioning.
Funding for Fountaindale Dam studies were considered for inclusion in the 2015/16 draft budget at Tuesday night's council meeting.
This included a structural analysis ($135,000), preparation of operation and maintenance ($35,000), review dam safety emergency plan ($25,000) and potential loss of life study ($10,000).
"Should the stability analysis determine that the dam is not structurally sound, council will need to consider decommissioning," council's report said.
"Council has received permission from the Dam Safety Committee to defer these studies for several years due to the costs currently being incurred with the Jerrara Dam, however have now specified that they must be completed by June 2016."
At the meeting, councillors resolved that Fountaindale Dam not be included in the draft 2015/16 budget, and instead seek government funding to either remove the dam or complete the studies required.
Councillors expressed concerns that the dam was originally state infrastructure that had been handed to council, which was now having to foot the bill.
Councillor Dennis Seage suggested the reports had been forced upon council by the Dam Safety Committee, who he suggested had displayed bullying tactics.
"(A total of) $205,000 worth of ratepayers' money to report on a dam that no one knows where it is . . . I've lived here for 40 years, I've never heard of it," he said.
"Now they're saying, in order for you to keep this thing that has absolutely no environmental value, that has no commercial value, yet we've got to spend $205,000 on reports.
"I refuse to spend $205,000 worth of ratepayers' money on bureaucratic reports forced upon us by a state government department."