Water contributions made to Griffith City Council since 1994 will be reviewed after councillors repealed a policy.
The Volumetric Contributions Policy was adopted on July 12, 1994, to accommodate for the city's growing water needs.
It required landholders contribute water entitlements on land which was sub-divided.
Councillors voted unanimously during last week's meeting to rescind the policy as legal advice showed it wasn't enforceable.
Mayor John Dal Broi said council had sought legal advice on the policy, and whether it could be enforced historically.
The mayor said the legal advice left council with no legal standing to maintaining the policy.
Griffith developer Giuseppe 'Zep' Lanza said the water policy "never sat right" with him and talks with other developers, especially out-of-town developers became a catalyst for questioning the policy.
"I'm pleased the council has acted quickly and responsibly on this matter," Mr Lanza said.
"I hope they don't dawdle and address the back issues as quickly as possible and they come to a decision which benefits all the stakeholders in the community soon."
Councillor Dal Broi said the policy had been introduced "in good faith at the time".
"We've got to wind the clock back to the day when water didn't have the value it has today," Cr Dal Broi said.
"Water trading didn't exist."
Cr Dal Broi said the policy stemmed from decisions by some farmers to sub-divide their properties on Lake Wyangan Avenue, and the need to provide water to more residents.
"Council was making provisions for the future by building up a bank of water," Cr Dal Broi said.
As well as rescinding the policy, councillors voted for staff to research the number and volume of contributions made over the last 25 years.
"It will take a bit of doing, we're not shying away from it," Cr Dal Broi said.
It's believed when the policy was first introduced contributions were simply in water, but as water was given property rights, developers simply handed council a cheque for the value of the water at the time.
Cr Dal Broi said the rising price of water had led to some complaints during the previous subdivisions.
He estimated the value could be in the millions; "(but) it's only a guess".
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