Punarji Hewa Gunaratne wanted to suspend work on the Benalla Art Gallery and Visitor Information Centre projects and undertake further community consultation.

But his motion to that effect lapsed without a seconder at this week's council meeting, which considered nine submissions about the proposed 2021/22 budget, four of which felt consultation to be inadequate.

"I thought it's the right thing to do to suspend and listen to what they have to say," Cr Gunaratne later told The Border Mail.

The budget is due to be finalised on Wednesday, with the $4.829 million redevelopment a major part of Benalla Council's capital works program.

Benalla mayor Danny Claridge said extensive community consultation had taken place, for example councillors had visited rural townships and been available in Benalla's main street to discuss the council plan and budget.

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"Both those projects have been in the council plan, and one of them shovel-ready, for 10 years," Cr Claridge said.

Submission writer Jane Grimwade objected to including a cinema and cafe in the Visitor Information Centre proposal.

"Incorporating a subterranean picture theatre on the banks of a lake in a flood prone area ... is totally illogical," she wrote.

"Not to mention destroying the integrity of a historical building with so few left in Benalla."

Ms Grimwade said Benalla already had 21 sites to buy coffee and cake.

"Building another that is owned by council places all other traders at a disadvantage," she said.

Cr Gunaratne told the council meeting there was no solid basis for continuing with the cinema plan.

"The proposed cinema risks wasting a lot of public money and locking the council in to unsustainable long-term subsidies which will draw money and council staff's time away from the essential services," he said.

Councillors authorised chief executive Dom Testoni to execute the first stage of the Benalla Art Gallery redevelopment grant agreement.

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