Toodyay’s new $14 million Sport and Recreation Centre under construction last year.
By Michael Sinclair-Jones
A CLAIMED $600,000 budget shortfall at the end of November has prompted the Toodyay Shire Council to delay seeking a new $4.5 million loan to pay for the town’s new sport and recreation centre.
The shortfall was claimed in the shire’s November accounts which were presented to last month’s council meeting.
Councillors voted 2-4 not to accept the accounts after Cr Mick McKeown asked questions that CEO Suzie Haslehurst took on notice to be answered later due to corporate services staff absences.
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Shire President Rosemary Madacsi said the final cost of building the new sport and recreation centre was being assessed by a quantity surveyor and would be provided to the council at a later date.
Cr McKeown said his reading of the shire’s November accounts was that “we’ve actually spent $600,000 more than we budgeted for”.
Construction of the new sports and recreation centre was funded by a short-term interest-only loan which is due to expire on March 23 when repayment of the full $4.5 million debt falls due.
Cr McKeown opposed replacing it with a new 20-year loan to pay off the whole amount over the next 20 years.
Shire Deputy President Beth Ruthven said the new loan was planned with a tentative interest rate of four per cent, which Ms Haslehurst said had yet to be negotiated with the State Treasury.
Cr McKeown said that even with a zero per cent interest, the new loan would cost the shire at least $54,000 over the next three months instead of $8750 in interest-only repayments under the current loan.
“There is no long-term loan mentioned in the shire’s long-term financial plan, and it’s not in the budget for this financial year,” Cr McKeown said.
“We’ve just seen the figures for November and we don’t know the final situation following rec centre capital allocations.
“I don’t know yet what we have to do to get these books balanced because we haven’t yet done a mid-year budget review.
“By converting to a long-term loan now – when we have to put bread and butter on the table – we will actually be monetarily worse off.
“It will reduce the cash flow to the shire over the next three months.
“We’re not going to pay off this loan for 20 years so if it lasts an extra three months in 2041 I’m prepared to wear that to get this year’s books balanced.
“Maybe we do have to extend the short-term loan until June but let’s make an informed decision after the budget review instead of an ad-hoc decision that doesn’t conform to the current budget.
“In two meetings from now we can make a soundly based assessment of what we should do,” Cr McKeown said.
Councillors voted 2-4 to reject the proposed new $4.5 million long-term loan and agreed 6-0 instead to defer a decision until after next month’s mid-year budget review.
The council also agreed to seek State Treasury approval to extend the current interest-free loan until June 30.
Ms Haslehurst said later that the actual cost of building the new sports and recreation centre was still being assessed, and that first-year operating costs were also still being assessed.
An $8000 weekly water bill to establish the new grassed playing field and gardens had been lowered by reducing watering to twice a week.
