The Mount Gambier City Council had to more than double the operating budget for Wulanda Recreation and Convention Centre to cater for soaring electricity prices.


A report to be tabled at council’s monthly meeting today advises the original budget was estimated at $540,000 gross operating deficit, which was revised in consultation with centre manager Belgravia Leisure to $1.37m and factored in knowledge gained from the total operational period to date.


City Infrastructure general manager Barbara Cernovskis will submit the report along with an update on the centre’s financial performance and update on operations over the past 12 months.


“As Wulanda has been operating for over 12 months, and now that council has a full financial year of data, the report provides an overview of the centre’s operational and financial performance for the 2023/2024 financial year,” Ms Cernovskis said.


Ms Cernovskis said this was a more comprehensive report to provide the community with a transparent and holistic overview of Wulanda’s operations and financial performance.


“Reporting on council’s various business services is usually undertaken via the Annual Business Plan and Budget, and the Annual Report,” she said.


“At the time of preparation of the 2023/2024 annual budget, the centre had been operational for only a short period of time, approximately 2-4 months.”


Ms Cernovskis said the absence of official information may result in reduced engagement from the community which may lead to misinformation and speculation.


Council has continually been under scrutiny over the construction of Wulanda, particularly the cost of its construction.


“Whilst project completion has been achieved and the defect liability period expired, council is working through a few remaining matters that will formally finalise the project and allow full costs to be reconciled,” Ms Cernovskis said.


“A further report will be provided on construction in due course.”


In the report council has provided further detail on the financial performance including other costs to council, primarily depreciation and interest.


“The original budget was estimated at $540k gross operating deficit,” Ms Cernovskis said.


“This budget was revised in consultation with Belgravia Leisure to $1.37m and factored in knowledge gained from the total operational period to date.”


Belgravia Leisure has a three-year management contract with the City of Mount Gambier.


“Noting, this period was less than a 12-month operating cycle. The main contributor to the increase in revised budget was electricity costs,” Ms Cernovskis said.


“Council has proactively worked to reduce expenses for running the centre and reports a positive variance of $140,000 to the revised budget, reporting an actual gross operating deficit of $1.23m.


“The total depreciation allocation for 2023/2024 was $1.69m, representing the majority of council’s other costs at 84%.


“Other Council costs include insurances, emergency services levy, equipment leases and some minor building maintenance.


“Interest is a normal part of borrowing for large capital projects and was $1.7m for the 2023/24 financial year.”


Ms Cernovskis’ report also highlights interest and electricity.


“Treasury management practices resulted in $98k interest savings from revised budget,” she said.


“The $502k interest savings to original budget is a result of borrowing less than planned. Council reports on treasury management practices via the Audit and Risk Committee.


“A reduction in electricity tariffs, regular maintenance and cleaning of solar panels and operational adjustments to the air movement and temperature control systems has resulted in $77k savings from revised budget.


“Operational efficiencies are continually being trialled to achieve further energy cost reductions where possible.


“An increase of 6.16% on actual gross operating performance from 2023/24 has been budgeted for 2024/25 financial year.


“Total 2024/2025 gross operating budget estimated at $1.3m.


“At the time of preparing the 2024/25 budget Wulanda gross operating deficit was estimated at $1.4m and is now $1.3m due to efficiencies achieved with energy use.”


Meanwhile, Ms Cernovskis said Wulanda well exceeded projected targets for attendances and memberships with 167,991 direct attendances and 1944 memberships – combined from GO Swim, health club and aquatic programs.


“The GO Swim program has proven incredibly popular, peaking during the summer months,” Ms Cernovskis said.


“Wulanda has provided our community with regional standard facilities with the ability to host events and sports that have previously been unable to be held in Mount Gambier.”


Ms Cernovskis reported an economic impact of $1162, 684.


“Wulanda has been transformed into a boxing ring, professional wrestling venue, held dance competitions, fashion parades, swimming carnivals and meets, expos and an array of conferences along with a variety of business events,” she said.


“The universal design of the facilities ensures accessibility for all community members and has allowed for inclusive programs to be developed and delivered.”


The report stated the uptake for the purpose-built consulting suites for allied health professionals with direct access to ancillary facilities including the warm water program pool and gymnasium has been steadily increasing.