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No further action on hydrotherapy pool project

A peer review undertaken on the proposed development of the New England Regional Hydrotherapy Centre has exposed a considerable risk to Armidale Regional Council’s reputation and its financial capacity to construct and operate the proposed centre.

At the Council Meeting held yesterday, Wednesday 25 November 2020 the Interim Administrator decided that no further action be taken in relation to the hydrotherapy centre project.

Earlier this year a Council decision was made to ‘proceed to open tender for design, build and operate’ the New England Hydrotherapy Pool Centre. Since the closure of the Armidale Hospital Hydrotherapy Pool Council has explored a number of options to provide a hydrotherapy centre and successfully secured NSW Stronger Country Communities funding of $1.46 million and $2.3 million from the Federal Government’s Building Better Region Fund.

Further due diligence was undertaken and Council engaged Otium Planning Group to undertake a peer review of capital and operating costs previously prepared for the purpose of seeking funding. The subsequent review of the project has highlighted a number of issues including under valued probable cost estimates only allowing for around half of what the reviewer would estimate for the use at feasibility and planning stage; lack of a full business case making it impossible to accurately estimate operating costs and the reviewers have also noted that the majority of regional hydrotherapy pools they are aware of run at a substantial operating loss, while the business model for the proposed New England Regional Hydrotherapy Centre is projecting an operating surplus.

Acting General Manager John Rayner says the peer review has exposed considerable financial risk to council if the hydrotherapy project is allowed to continue.

“As beneficial as this project would be to the community to have access to a modern hydrotherapy pool centre, unfortunately at this time the financial risk is just too great,” said Mr Rayner

“Moving forward with this development would be contrary to the Local Government Minister’s recent announcement of a proposed Performance Improvement Order placed on the Council when the governing body returns on December 12.

“Our first priority and that of the local Government Minister Shelley Hancock is to address the Council’s financial and governance issues and set in place a solid rebuilding phase for Council.”

The Interim Administrator has also recommended that Council make representation to the local Federal and State Members and funding authorities and negotiate the possible re-allocation of grants from the Hydrotherapy Pool Centre to the Guyra Long Day Care Centre project and other projects.

ARC Hydrotherapy Pool Opportunity Review by Otium Planning (PDF 2.6MB)

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