Senior officials at a Wimmera sports club are hoping the remaining debt they owe for the construction of a $1.2 million clubhouse can be forgiven - or a new arrangement can be reached - now the COVID-19 pandemic has all but wiped out their revenue for 2020.
Kaniva-Leeor United Football Netball Club, which plays in the cross-border Kowree Naracoorte Tatiara Football League, has been the major shareholder and user of Kaniva Community Hub since it opened in August 2017.
The club still owes $160,000 to West Wimmera Shire Council, the project manager, but expects to be unable to repay its regular $10,000 installment in the second half of the year.
Council chief executive David Leahy said the club signed a Memorandum of Understanding to pick up the costs above the initial estimate. He said the municipality would work out the "best possible solution" for sporting clubs as part of its budget process.
The building cost a total of $1.229 million once power and water upgrades and the internal fit out was complete, $350,000 more than the amount the council initially budgeted to build the Budjik Street hub.
Club President Jason Gordon said unforeseen costs had caused the budget increase, and the club could not make money with the 2020 season delayed until at least May 31.
"We had to install a fire service, and a lift so people with disabilities could access level two," he said.
"Then there were things like disabled change rooms that doubled as umpires change rooms. We applied for an $86,000 government grant to do that and that didn't come through.
"We need to have umpires change rooms to open the facilities - that's the law of the land. Fortunately the builder did it for half price.
"The council paid for (the total cost of the project), and they decided they were at fault for $150,000 worth of overspend.
"We entered into an agreement that we would pay zero interest for two years and$10,000 every six months to address the $200,000 of outstanding debt. We are at the end of that agreement now, and we couldn't come to an agreement last year over what the actual debt level is going forward.
"The council could say this is your debt, you owe us the money... and we have to go and find it. When football is not being played and our business is football, how would they like us to raise this next $10,000?"
Club treasurer Michael Hodges said the council had not made the club aware of the overall bill before the project began.
"We never saw the $1.2 million budget, only the $565,400 tender put out to build the basic exterior in 2016," he said.
"When the shire sourced funding they got a $495,000 grant from the state government, the footy club put in $100,000, the netball and hockey clubs $10,000 and the show society a bit more.
"The shire put in some money to install a lift and water services on top of their initial $50,000, and the community raised another $50,000, leaving $200,000 for us to pay back. Had we had known the club would be liable for so much of the cost we wouldn't have got this proposal past our members."
The club and Kaniva Neighbourhood House have created tax-deductible donation schemes, and run sheep races at the Kaniva Agricultural Show, to fundraise to meet its debt obligations in recent years.
Mr Hodges said the club would have to dip into its finances. he said it could meet the next debt repayment but not the one following.
"The debt isn't a drain on the club just yet. It was borderline (whether the club would have money for upcoming loans) before the coronavirus. Now it's going to be extremely tough," he said. "Sponsorship is not going well, we haven't had any gate fees, no bar or food takings, and every event booked in for the hub has had to be cancelled.
"Some farmers have said to the committee they pay money in rates, why should they pay more to the shire? Shouldn't it come out of the council budget?"
Mr Gordon said even if the virus weren't a problem, the club couldn't undertake any further projects with the debt "hanging over its head".
"We have been in discussion with AFL Victoria about having AFL-standard lights at Kaniva for night footy and cricket, with the increasing popularity women's football I've been working with people to try and get a big-ticket event like a pre-season game," he said.
"If the debt stays with my club for seven or eight years, I'm worried we won't see it out. And who will maintain and use the facility if we go?
"Someone needs to man up and say 'We can't hold the club in debt for this forever'. I don't know what we would do if the council said we had to borrow money at commercial rates."
Mr Gordon said the club was grateful to have a "great community facility", and appreciative of the work local tradespeople had done on the project.
West Wimmera Shire Mayor Bruce Meyer, of Kaniva, is the only councillor to have served in the previous council, which approved the project in 2016.
He said the council knew the it wasn't fully funded when construction began.
"It was all done with quotes and we also had an estimate of the fit out, so we knew roughly what the cost would be before it started," he said.
"The football club had a steering committee that was working through the project and to the best of my knowledge they knew, but there were costs added in on top of that that came unexpectedly.
"Councillors are very divided on this issue as to whether the council should be paying back the money. What I think should have happened was that this project should have received drought funding money when we got some from the federal government a few years ago."
Mr Meyer said the council didn't borrow money to pay for the project when it went over budget, instead taking the money out of general funds.
"Council officers are to meet with the football club and there have to be negotiations on current payments required. With the virus and stuff, those discussions have probably been delayed," he said.
Chief executive David Leahy echoed Cr Meyer's sentiments about the revenue difficulties sports clubs were facing.
"We haven't been approached by any particular club for assistance of any sort at the moment, but I'm guessing that's because they are in a heavy hibernation at the moment," he said.
"We will be looking to pursue some form of discussion around whether council can afford to support sporting clubs or prop them up financially, and also discussing some of the outstanding sums of money.
"(In addition to signing the MOU), the club was involved in the project steering committee to approve any variations in the project as well. There was also a signed written agreement the club entered into for the ($200,000) balance to be paid off over time, after the completion of the contract."
The Mail-Times has contacted Deputy Mayor Jodie Pretlove and Member for Western Victoria Jaala Pulford for comment.
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