North Sydney Olympic Pool budget almost doubles to $122m, prompting council rate rise proposal

North shore ratepayers could be set for huge rates bills as the local council searches for millions of dollars to redevelop a pool, which is set to cost almost 2200 times the backyard variety.

Thousands of north shore residents could be slugged with huge bills, with the local council considering a massive rates hike as it searches for millions of dollars in extra cash to complete the over-budget redevelopment of the North Sydney Olympic Pool.

North Sydney Council has revealed $17m in extra funding is needed to complete the rebuild of the harbourfront pool, with the final price tag expected to rise to $122m.

That would be almost double the original budget of $64m for the project, which has faced ongoing delays and construction issues, including errors that forced parts of the multimillion-dollar project to be dismantled and replaced.

A scathing independent review of the project last year found the council’s budget process did not give consideration to all costs, such as internal project management, equipment and fit-outs, and did not provide sufficient contingencies.

Construction work on the North Sydney Olympic Pool.

The pool – originally due for completion by Christmas in 2022 – is now not expected to be completed until May next year.

The latest budget blowout makes the pool one of the most expensive council-led developments ever to be undertaken in Sydney.

The estimated final bill is far higher than other pool redevelopments, including the Parramatta Pool rebuild, which cost $88m, and the $44m Ashfield Pool redevelopment.

It also comes in almost 2200 times higher than the figure of $56,000, which a leading pool quotes business says is at the lower end of the range a person should expect to pay for a backyard pool in Sydney.

Due to the rising costs of the project, a sharp rate hike could now be on the cards for thousands of north shore residents as the council looks to plug a financial blackhole plagued by the budget increases and loan costs.

The council has modelled various rate rise options, including lifting minimum rates from $715 to $1300 next financial year — and up to $1400 the following year — for residential ratepayers.

The increase would take average residential rates in the council area from $1040 to about $1600 next financial year, while average business rates would jump from $6724 to $11,307.

The pool, prior to its closure.

A council report stated the increase would address the council’s financial deficit, reduce loan borrowing costs, help pay for asset renewal maintenance, and clear a backlog of delays.

“The additional capital costs incurred during the redevelopment of the North Sydney Olympic Pool have weakened the financial position of the council and are expected to place further pressure on its financial performance,” a council report stated.

“The North Sydney Olympic Pool project underscores the financial risks associated with neglecting governance and administrative frameworks.

“(A rate rise will) provide council with additional revenue to support the growing infrastructure needs and services required for the expanding population while also helping to reduce the financial burden on existing ratepayers.”

Mayor Zoe Baker said she shared the “community frustration and anger” over the rising cost of the project, attributing it to “financially perilous decisions” made by the former council.

These included entering into a building contract before final construction drawings were available.

“As a result of the pool project, a decade of neglect of maintenance of council properties and assets and the financial impacts of Covid, this council must undertake a financial repair strategy to ensure financial stability for council now and into the future,” she said.

“As a community, we need to consider every option including a review of rating revenue.”

The pool redevelopment was originally due for completion by 2022.

A total of $34m has already been borrowed from the council’s internal reserves to pay for the pool in addition to $51m in external loan borrowings.

The borrowing requires interest repayments of around $900,000 a year.

Councillors are due to debate the proposed rate rise at the next North Sydney Council meeting next week.

If the increase gains support from councillors, the rate increase would be subject to a community consultation process and an application would be referred to the Independent Pricing Tribunal, which would have a final say on whether the increase can be approved.

Council modelling shows the rate rise would require residents to pay more than those in many other Sydney councils areas, with the annual rates bill to cost more than Willoughby, the City of Sydney, Mosman and the Northern Beaches by 2027.