Grant Council continues river shack project push

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Grant Council continues river shack project push

Grant District Council will continue to pursue the Glenelg River Shacks Community Wastewater Management Scheme (CWMS) Project with a formal funding application to the Local Government Association (LGA) of SA.


At council’s meeting last week, elected members supported recommendations put forward by Environmental Health and Regulatory Services manager Aaron Price.


In his report tabled for discussion, Mr Price recommended council proceed with lodging a formal funding application with the intent to construct, own and operate CWMS servicing the shacks.


It was also resolved that council authorise the LGA to proceed with the funding of a detailed design specification for the project.


“The LGA process would usually include an application to the LGA CWMS Program to fund a concept design, however in this case council has already completed one,” Mr Price said.


A stakeholder meeting was held in September last year, reviewing the latest concept design work performed by HDS Australia Pty Ltd on CWMS connections for the Donovans, Reed Bed and Dry Creek locations.


Regulatory agencies including the Environment Protection Authority (EPA), SA Health, and the Department for Environment and Water (DEW) all participated in the meeting.


“Since the stakeholder meeting, Council Staff have engaged with the Local Government Association (LGA), navigating the requirements for lodging a funding application,” Mr Price said.


“The completion of the concept design is not committing council to construction of the CWMS, however, electing to proceed is committing to construction via the LGA program, and an agreement will be entered into for detailed design and construction should the project progress to these stages.”


In addition, Mr Price said it was important to note that if the concept design construction and operating costs are estimated to fall outside of the LGA’s forecasted budget for capital projects for when council expects construction to commence, the LGA will advise council of the likelihood of detailed design and construction funding.


“Due to the nature of CWMS capital projects and the subsidy funding, construction funding can only be guaranteed when detailed design costings and construction tenders are received,” he said.


“If council elects to proceed to construction, detailed design will be undertaken and after which funding for the project will be reassessed.


“Progression to construction will be contingent on the LGA CWMS Program having adequate subsidy funding in reserve to progress the project to construction and the priority of the project against other applications.


“Should council complete the detailed design with LGA financial support and choose not to proceed with the project, there is likely to be the expectation that those funds are repaid.


“For the CWMS Management Committee to formally consider an application at their next meeting and make recommendations to the LGA Board, the LGA require a letter from council by the end of January 2025, outlining the resolution to proceed with the project application.


“Current indications are the proposed wastewater solution for the Glenelg River Shacks will cost approximately $2m.


“This has been previously modelled in Council’s Long Term Financial Plan, with project costs identified at that time being approximately $1.5m.


“The project costs are envisaged to be shared 50/50 between the LGA CWMS Program and council with a separate rate raised to the shack owners for their co-contribution over 10 years.


“Council has the option to either pay 50% of the project costs from cash reserves or loan borrowings.


“Currently the approximate amount repayable to council by the shack owners for the capital costs of the proposed project range from $30k-$35k.”


Once the final costings are provided it is proposed an elected member workshop would be held to discuss the options to fund council’s contribution and the process of collecting the co-contribution from the shack owners.


“Typically, detailed design costs would fall in the vicinity of between $100k-$120k which would be covered by a 100% grant from the CWMS Management Committee,” Mr Price said.


“As stated previously, if council withdrew support for the project prior to signing any final commitment the costs are usually passed on to council.”


Mr Price said once the LGA has received the detailed design project costs, a procurement process would then be undertaken for a market approach to obtain tenders for the construction of the scheme.


“If the final costings fall within the funding capability of the Community Wastewater Innovative Fund, then the LGA would proceed with co-funding the project,” he said.


“If the costs were too prohibitive, the LGA funding would be withdrawn, then a decision would be required by council whether to proceed or not.”


Mr Price also highlighted the financial risk to council.


“Until a tender process is undertaken, by the LGA on council’s behalf, to identify costs of undertaking the project, the current financial risk to council is the potential cost recovery of the work completed to the tender stage,” he said.


“If council was fully funding the project we would need to pay for the detailed design costs anyway.”


Under the Local Government Act 1999, the prudential issues of Section 48 must be considered in detail by council.


“The project costs, contributable to council, are within the stated $4m and with the shack owner’s co-contribution covering council’s share of the capital costs, the risks are considered satisfactory to proceed with the lodging of a formal funding application,” Mr Price said.


The LGA’s Community Wastewater Management Scheme Program primary purpose of providing subsidy funding to councils to construct new CWMS and to provide equity between wastewater customers connected to SA Water and council.


The program is funded by the State Government and is managed by the LGA through the CWMS Management Committee (CMC), whose role is to monitor the activities of the Program and provide advice to the LGA Board of Directors.


Cr Megan Dukalskis questioned how it is envisaged shack owners would repay council.


In response chief executive Darryl Whicker made a number of suggestions, however a decision would become more clearer once council knows its financial position.


“A separate rate, spread over a 10-year period, is possibly one of the easiest ways. Those who would be able to pay in advance, we would not rule out as an option, or incorporate in a community loan,” he said.


“Once we know all the funding from the LGA in front of us then we can have those discussions along the way.”


Environmental Services director Leith McEvoy said this was a unique project with council working with shack owners and government agencies over a number of years.


Initial concept designs for Donovans and Reed Bed shacks were developed in May 2022.


“We are now taking the next step after a number of years and is in the direction council has been heading towards for some time with the shack owners,” Mr McEvoy said.

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