Mount Gambier council defends $25m Community and Recreation Hub blowout
Mount Gambier council says rates won’t rise and it remains on good financial ground despite confidential documents showing its flagship project will cost tens of millions more than planned.
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The final cost of a two-storey flagship sporting and leisure centre in Mount Gambier has blown out by as much as $25m.
Mount Gambier Council has conceded construction of its Community and Recreation Hub, which will boast multiple sports courts and an indoor pool, has blown out from $37m to $57m.
However, The Advertiser has seen confidential council documents that show the project could cost as much as $64m.
The rec hub, to be built on Margaret St next to an existing 50m outdoor pool, has been on the community agenda for more than three decades.
In a statement, Mayor Lynette Martin acknowledged the cost blowout to $57m and said the initial figure was based on an intermediate design in 2018.
Ms Martin said industry-wide changes had occurred since the initial costing, including to the building code and the final cost also included the refurbishment of the 50m outdoor pool and solar power.
SA-owned national builder, BADGE, has been awarded the tender for the development.
A confidential council report presented to elected members last month, however, showed a $4.2m contingency fee and costs for an opening event were not included in the final project figure.
The council has committed $10m to the project, with a $15m contribution from the Federal Government and $10m from the State Government.
Ms Martin said, in a statement, the council remained committed to not increasing rates beyond the 4.5 per cent outlined in its long-term financial plan to cover the cost blow out.
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Instead, the council would fund it through borrowings at a low interest rate over a period of 20 years. At a confidential meeting in July, elected members heard the council was in a “very strong financial position”.
“The council has grants to deliver the project totalling $25,350,000,” a council report stated. “This would leave a shortfall of $31,429,244.50 against the construction cost and potentially $39,125,750.76 against the project cost, noting that the contingency may not all be used.”
The documents also reveal operational costs – including court and pool use, cleaning and wages – would be between $2.5m and $2.6m “with some variation” over the first four years.
The rec hub will include a children’s water play area, a 25m pool, six multipurpose sports courts, community meeting rooms and conference rooms.
Works are expected to be finished in autumn 2022. The council did not respond to questions about the $64m figure.