Gunnedah risks losing out to Tamworth if the shire council does not reconsider its development fees and charges, a developer and a surveying company in the neighbouring town fear.
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Emerge Developments' George Avard and Stewart Surveys' Kathryn Yigman have both written to the Gunnedah council about its draft delivery program 2017-2021 and operational plan 2019/20.
Mr Avard said two major companies had told him "Tamworth is more attractive to them" and Ms Yigman said "residential development in Gunnedah is currently unviable" in many cases.
But the council has defended the charges, saying they had been "independently audited and found to be satisfactory", and it had "one of lowest rates for water and sewer user charges of any council in the state".
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In its letter, Stewart Surveys lists the cost of water, sewer and stormwater works or contributions, and additional residential lot contributions - sourced from local government areas' draft or finalised operational plans.
It calculates a total of $20,644 for south Gunnedah and $28,719 for north Gunnedah; $5423 for Tamworth; $9785 for Narrabri; $14,964 for the Liverpool Plains; and $3595 for the Warrumbungle shire.
Ms Yigman wrote that "a number of factors" made the regional city apparently more attractive to builders; "however, developer contributions is one area where our fees are significantly higher".
"The construct costs of developing roads, stormwater and services combined with the cost of the land and headworks charges exceeds the current vacant land value," Ms Yigman wrote.
Mr Avard wrote that "if council's attitude to developers and development does not change significantly then there will be no residential development".
"I hope this will be ... given due consideration otherwise our projected population of some 15,000 people within the town boundaries in in five years will only become a wishful dream."
In Gunnedah Shire Council's June meeting business paper, chief engineer Daniel Noble wrote that council had recently exhibited the draft development servicing plans for water supply and sewerage, but "had received zero submissions".
The proposed changes were audited, approved, and adopted at the April meeting.
"Council has been found to be 'Fit for the Future' based on sustainable financial management," he wrote.
"The application of headwork charges are in the majority applied to the subdivision of land, not all development. Hence, they do not often affect 'mum and dad' developers, builders or first home owners."
