A construction start for the Multisports Stadium has been pushed out until the beginning of next year following a cost blowout in Yarrawonga’s other major project, the Library, Events and Performance Precinct.
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Council will fork out an extra $3.6m to pay for cost blowouts in the library precinct project and is keen to make sure the same problem doesn’t arise in the more expensive Yarrawonga Multisports Stadium project.
But council remains committed to complete stages 1 of both projects.
The library precinct’s challenges – which include design issues – mean the first stage won’t be delivered until November 2025 after initially being meant to finish in November this year.
Stage 1 of the library precinct includes a new library adjacent to the existing town hall building as well as a gallery/floor space, meetings rooms, and a café/commercial kitchen.
“We are now focused on the delivery of Stage 1,” council chief executive Matthew Morgan said.
As for future stages, council will shortly appoint community members to the Town Hall Future Use Advisory Group, which will work with council over the coming year on defining the future use of the town hall building and subsequent improvements and upgrades.
The blowout has taken the cost of the library precinct project to $11.27m although council is hoping all of that extra $3.6m won’t be needed.
To avoid a similar fate for the stadium project council commissioned a prudential review to look at the finances – a process unnecessary in local government in Victoria but compulsory in local government in South Australia.
The review highlighted a suite of risks over the projects costs and has developed a new plan forward which council has agreed to.
It means council will conduct some consultation with stakeholders – such as the Yarrawonga Basketball Association and others – over coming weeks and will aim to put a new tender out for construction, or both design and construction, in June.
The budgeted cost of Stage 1 – a two-court stadium – is $14.5m but cost pressures mean that figure could be closer to $20m.
The prudential review not only cast doubt on the Multisports Stadium construction costs, but also on the annual forecasts for running and staffing the stadium.
Mr Morgan said inflation had affected cost forecasts as well as problems in design.
But despite the problems highlighted by the review, council is committed to Stage 1 and is aiming for a start early next year.
“We’d hope to see construction starting by early 2025 on the Multisports Stadium,” Mr Morgan told The Yarrawonga Chronicle.
The remaining stages of the project, two more courts for Stage 2 and a lap pool in Stage 3, remain uncosted and unfunded and the likelihood will remain so until Stage 1 is sorted.
The council and community will then decide on whether those stages can proceed but it looks likely that, if they go ahead at all within council’s 10-year long term financial plan, it will be toward the end of that window than the start.
Mr Morgan said the prudential review would give the council confidence to proceed and to ensure public money as well as private donations were used well.
“We know the Yarrawonga community has been waiting for this project to commence, however it is vitally important that we get this right,” he said.
“We are dealing with public and community funds and we need to avoid the issue that we’ve experienced on other major projects which have led to significant construction delays and cost escalations.”
The stadium project recently received a $250,000 donation from the Yarrawonga Holiday Park Committee of Management. The Yarrawonga Mulwala Basketball Association has also donated $250,000 as council and stakeholders aim for a community contribution target of $750,000 over a five-year period. (The project has also received a Federal Government grant of $3.3m, $7m from the Victorian Government’s Community Sports and Infrastructure Loan Scheme - capped at a 2.5 per cent interest rate - and $2m from the Local Sports Infrastructure Fund.)
The extra library precinct money will be taken from council’s accumulated cash reserves, which currently sits at $55.36m but are expected to decrease in coming years as asset renewal works have fallen behind in various areas around the shire.
“Once we account for and deliver the backlog of approved capital works in the coming 12-18 months and we boost our asset renewal ratio to 100 per cent we anticipate that this reserve will drop down to approximately $20.3m of which only $1.61m is unrestricted cash by 2028,” Mr Morgan said.
The chief executive said all shire projects would now be under the microscope in the wake of the library precinct cost blowout.
“Managing the expenditure on the major projects is critical … it’s vital we implement additional budget control measures on all major projects,” he said.
Moira Administrator John Tanner, AM, emphasised that council was and will be fully transparent to the community about the two projects.
Meanwhile, council has added to its expertise in delivering major projects by appointing a new major project delivery chief, Thomas Lyle, who began this week.
Council said Mr Lyle would bring a “depth of experience to the management of large and complex construction projects”.
Mr Lyle has been involved in public projects including the $50m Shepparton Art Museum as well as several large private projects, including the construction of several abattoirs.