City of Ballarat council has cancelled a $10 million state government loan following a review of its finances.
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Ballarat had only received two per cent of the loan - which was announced back in October 2018 - when the decision was taken to switch to a commercial lender.
The funding came under the umbrella of the Community Sports Infrastructure Loan Scheme, launched by the Daniel Andrews government in the lead-up to the state elections. The plan was designed to fast-track upgrades and new facilities for community sporting facilities across Victoria.
The state government announced Moorabool Shire had successfully applied for a $1.6 million loan for its sporting facilities at the same time. While Moorabool council has now used much of the loan to upgrade lighting to sporting facilities in Ballan, Gordon, Wallace, Bungaree and Dunnstown, Ballarat had only drawn down $200,000 of the total by March this year.
Following a review of council finances as the COVID-19 measures came into force, officers at the City of Ballarat opted to pay that amount back and make alternative arrangements to borrow $10 million commercially.
The council's director of business services Glenn Kallio said the decision was made "to counter predicted, imminent shortfalls".
Mr Kallio said the terms of the state government loan meant funds were only payable to council once money had been spent on projects. He explained that under the new commercial arrangement, council would be able to "increase its cash reserves in the medium-term and ...have funds up front in advance of expenditure."
The state government loan was discussed locally last year, with then-mayor Samantha McIntosh noting delays in its delivery last May. Council officers also raised the matter in July.
Last August, councillors voted to allow the council to seek back-up quotes from commercial lenders in case the state loan was not obtained.
Shortly afterwards, The Courier was informed the loan had come good and the council was able to fast-track upgrades to its sporting facilities - although only that small portion of borrowing was ever taken up.
Interest rates have fallen significantly since the loan was first agreed. When the announcement was made, the state treasurer Tim Pallas appeared in the Ballarat region to publicise the loan and other pre-election grant promises. A press release described it as a "win for grassroots sports in Ballarat and Moorabool."
On Friday, a state government spokesperson confirmed council had notified them of their intention to cancel the loan in April. The Courier also inquired whether any other loans under the same scheme had also been cancelled but has had no response.
Meanwhile, the City of Ballarat confirmed a new tender to design a major $5.1 million upgrade of sporting facilities at Victoria Park would be funded entirely through council. The state loan was originally planned to help fund the project.
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The full scheme of fast-tracked works to allow sporting upgrades, particularly geared towards encouraging female participation, is going ahead as planned.
Other projects include two new soccer pitches for Buninyong, along with LED lighting and female friendly changerooms at the same venue, and an upgrade to Learmonth Football Netball Club. Originally 17 projects at 12 sporting clubs were earmarked for early upgrades.
Council officers originally applied for the loan from the $100 million pot Community Sports Infrastructure Loan Scheme back in August 2018 - although some councillors expressed reservations about taking on further debt.
On Saturday, Cr Mark Harris described the state's loan scheme as a "paper tiger", saying it ended up being "useless" to council. "We got a better rate and more flexibility elsewhere," he said.
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