There is a very strong smell coming from the $3 million grant that Council received for the Mogo Adventure Hub from the Growing Local Economies (GLE) fund, announced by Andrew Constance on 12th of October 2020. To bring you up to running speed: July 1st 2019: Eurobodalla Council lodged an expression of interest to the Growing Local Economies (GLE) fund. July 14th 2019 : A pause on new applications started at midnight July 14th 2019 December 18th 2019: Council was advised of the success of their Expression of Interest and invited to submit a full business case. March 3rd 2020: the Business Case documents were lodged In the Growing Local Economies (GLE) fund Guidelines it states "All projects MUST have a minimum financial co-contribution of 25 per cent of the total grant amount. The co-contribution for the project must be from sources other than the Restart NSW Fund and MUST be confirmed. In a GIPA to Council the following was asked "Please advise me of when the councillors confirmed their commitment to paying a 25% co-contribution (in this case $750,000) prior to making the application. Please provide any documentation that records that confirmed commitment." Council responded on March 15th 2021 saying : "Our intent and proposal is to meet this requirement through other grant funding sources. Council is actively seeking additional grant funding for the co-contribution as is normal business practice." This response clearly indicates that Council have NOT confirmed the commitment as required by the grant. To make such a commitment would require a report to Councillors that would seek their commitment of the 25% co-contribution of the $3 million grant that is $750,000. Such a commitment has not been made yet the $3 million grant has now been approved. On March 3rd 2020 it is clear that the Business Case DID NOT provide evidence of Council commitment and staff would not have been able to make such a commitment without Councillor approval of an unbudgeted outlay of $750,000. In their response to the GIPA request of (15th March 2012) to Eurobodalla Council asking "Please provide any documentation that records that confirmed commitment", Council provided no evidence at all saying instead "Council is actively seeking additional grant funding for the co-contribution as is normal business practice". It appears that the $3 million Growing Local Economies (GLE) fund grant was approved without the minimum financial co-contribution of 25 per cent of the total grant amount confirmed. August 13th 2020: the $3 million grant was approved October 12th 2020: the $3 million grant announced by Andrew Constance. October 22nd 2020: Council received formal notification of success of the application via an emailed letter from the funding body. Under GIPA the Council was requested to provide a copy of the formal notice of Council's success in their application that included the date of that advice. They failed to do so. On February the 22nd, 2021 The Beagle requested, under an informal GIPA, the business case submitted to the Growing Local Economies (GLE) fund on March 3rd 2020 On March 15th 2021 Council responded to the request saying: "Council is unable to release the business case while we’re still actively seeking funding.
Council has submitted applications for further funding under other grant programs and the
business case forms the basis of these application at this time. This will be the case for at
least the next 6 months whilst these grant applications are still active."
The Business Case Eurobodalla Council was required to provide (and is withheld for reasons of Commercial in Confidence) demanded significantly more detail regarding their project, including information on their ability to carry out the project in the appropriate time frame and the competitiveness of the proposal against factors such as value for money, sustainability and the level of contingency/risk.
As will all applicants the Business Case guidelines said that Eurobodalla Council MUST demonstrate within their business case that proposed projects are financially viable in the future, taking into account net life cycle cost impacts and allowing for ongoing operating and maintenance costs.
The Guidelines Fact Sheet states "Project applications must include construction, operating and maintenance costs, noting that regular operating and maintenance costs will not be covered by this fund. The construction cost estimates should be supported by estimations or quotes, and include all margins and overheads, project and construction management costs, and an appropriate amount of contingency for the project stage and risks."
"As the fund is part of Restart NSW, projects will need to meet the requirements of the Restart NSW Fund Act 2011 including being for the purpose of improving economic growth and productivity in the state. Projects must demonstrate a Cost Benefit Ratio above 1.0.
"The CBR is calculated by dividing the proposed total cash benefit of a project by the proposed total cash cost of the project.
Council said at the time of the $3m grant announcement (12th of October 2020)."The trails have potential to attract 45,000 visitors in first year of operation, that's roughly $11.8 million injected into the local economy."
The Guidelines are very clear that the Growing Local Economies Fund will not support projects that do not involve building infrastructure, such as dredging or earthworks as the sole activity.
In regards to the financials a report to Council on September 8th 2020 told Councillors "Cost estimates for the construction and maintenance of the track network will be developed once the proposed track locations are confirmed".
Yet the Guidelines Fact Sheet clearly states
"Project applications MUST include construction, operating and maintenance costs, noting that regular operating and maintenance costs will not be covered by this fund.
The construction cost estimates should be supported by estimations or quotes, and include all margins and overheads, project and construction management costs, and an appropriate amount of contingency for the project stage and risks."
From the September 8th 2020 report to Council it appears that Council staff, in September 2020, DID NOT KNOW construction, operating and maintenance costs as were required in the Business case.
It is therefore understandable why The Beagle has formally requested all documents around the application, including the business case, that was provided by Council on March 3rd 2020.
The questions now are:
"How did this grant application gain approval if it offered NO formally endorsed commitment by Eurobodalla Councillors to a co-contribution of $750,000 being 25% of the $3 million grant?"
"How did this grant application gain approval if it DID NOT, as MUST required, include construction, operating and maintenance costs with construction cost estimates supported by estimations or quotes, that includes all margins and overheads, project and construction management costs, and an appropriate amount of contingency for the project stage and risks?"
"How did this grant application gain approval given that the Guidelines are very clear that the Growing Local Economies Fund will not support projects that do not involve building infrastructure, such as dredging or earthworks as the sole activity"
