Shire of Katanning councillors voice reservations over Katanning Country Club loan as council goes to public

A proposal for the Shire of Katanning to loan the Katanning Country Club $250,000 to complete its function centre renovations will be put out for public comment. All councillors approved a motion to have Shire chief executive Julian Murphy publicly advertise the Shire’s intention to borrow $250,000 for the KCC redevelopment at a meeting held on May 26. However, some councillors expressed concerns about the loan proposal, which is set to come to a head at next month’s council meeting. The loan, which the KCC plans to pay back in estimated annual instalments of $30,000 over 10 years, could be sourced from WA Treasury Corporation. In her report to councillors, Shire corporate and community executive manager Denise Gobbart said information provided by the KCC indicated the total cost of the redevelopment, including the relocation of the bowling club, was expected to be $2.55 million. However, with the $250,000 loan included as a funding source, the club will only have $2.38m in funds. “From the figures provided there is a funding shortfall of $168,437,” Ms Gobbart said. “Clarification is being sought from the KCC to identify how this is funded.” According to the report, as of May 19, the KCC currently owes the Shire of Katanning $257,000. Information provided to the council also indicates the club was the victim of digital fraud last year which saw it lose more than $141,000. About $50,500 has been recovered by Digital Fraud NSW, while the KCC was set to receive a $12,500 goodwill payment from the Commonwealth Bank in March. The $141,000 is included in the amount owing to the council. “(It) has caused much grief to all concerned,” a KCC representative wrote to the council. “(Payment) was delayed while we try to recover as much of the lost funds as possible. “This has been an extremely taxing process and remains unresolved.” The confusion surrounding the club’s financial position was one of the reasons behind councillors agreeing unanimously to suspend standing orders to ask more questions of council staff at last week’s meeting. Deputy Shire president John Goodheart expressed concern the council was seeing a shortfall of $168,000. “I do recall when the KCC was at our last meeting, they said it was all covered,” he said. Ms Gobbart said the figures provided to council were inclusive of GST. She said she had asked the club to provide figures exclusive of GST, which had not been provided at the time of the meeting. Ms Gobbart said it was expected the shortfall would be $60,000 on finalised figures. Cr Adrian Edwards expressed his concerns about alternatives to the council granting the loan. “Are we not so far into it now that if we say no then the country club can’t continue?”, Mr Edwards said. Ms Gobbart said she believed the KCC would be able to take out a mortgage if the council did not approve the loan. Cr Serena Sandwell said she felt like there was “no other option” but for the council to support the loan request. Cr Kirsty D’Aprile agreed that the project was “at the point of no return”, but said the council needed to be fully aware of the risks before approving the request. “I think it is wise of us to understand fully their financial position and all of their finance options as well,” she said. Ms D’Aprile asked council staff for clarification on the breakdown elected members had received, and whether it included all of the KCC’s debts. Mr Murphy said the club’s financial situation could be fully evaluated during the required advertising period. “It’s important that we know the full extent of their situation and what they’re thinking and I think that we’ve got some handle on that, but not 100 per cent because we are receiving it in drips and drabs,” Mr Murphy said. After standing orders resumed, the council voted 7-0 to approve the public notification of the loan plan and investigate options for securing the loan. The final vote on the approval of the loan is set to occur at the July council meeting.