ALBURY councillors will be told on Monday the city can comfortably afford to double its contribution for the $10.5 million art gallery redevelopment from $3.5 million.
And they will be warned there is a “corporate risk” if they decide to dump the project.
“The federal government’s perception and confidence in Albury Council’s ability to deliver future projects could be eroded,” senior staff will say.
“This could affect future funding requests.”
The staff’s report also said there was a risk Albury would lose its status as the regional centre of choice or “fulfil its role as a leading city for the region if the project does not proceed”.
The art gallery impasse will be high on the agenda of an all-day budget workshop with senior staff, including recently appointed general manager Frank Zaknich, who will not officially start work until next month.
Work on the council’s May budget has started and the workshop will be held a week before the council decides the fate of the art gallery project.
The councillors will also be presented in the next few days with the results of a survey about whether the council should cover the $3.5 million it had hoped the NSW government would provide.
But while the staff remains adamant the extra $3.5 million can be absorbed into the normal budget, some councillors remain opposed or need further convincing.
Some are acutely conscious of the fact that they were elected last year on a platform of fiscal responsibility.
In the latest staff advice, councillors have been told that “from a conservative financial perspective, the funding of this project can be achieved without affecting the council’s medium to long-term financial objective of achieving a surplus or break-even operating position”.
“Based on assessments of the council’s long-term financial plan, there is the capacity for that council to have a higher level of loan funding.”
It could do so while remaining within the good category for Local Government’s debt service ratio benchmarks (below 10 per cent).
“It is acknowledged adjustments will need to be made to the timing of other (special rate variation income) projects and the initiatives program over future years to accommodate this project,” staff said.
“Under all of these options there would be an underlying commitment the council seek any additional capital funding for this project, especially through the state government.”