On the 12th of October 2020 the Eurobodalla Shire Council announced:
"What a way to start the week! Huge shoutout to Andrew Constance MP who yesterday [October 11th 2020] announced $3 million in NSW Government funding to build mountain bike trails in the forests around Mogo.
NOTE: the funding was actually approved on 13th August 2020
We need to pull this apart:
The $3 million funding came from Growing Local Economies Fund
Launched in August 2017, the Growing Local Economies (GLE) fund was established to "invest in the crucial projects needed to support job creation and economic growth in regional NSW".
"Part of the NSW Government’s $1.7 billion Regional Growth Fund, the $500 million Growing Local Economies fund is designed to unlock growth in regional NSW. It will deliver infrastructure that supports projects of economic significance and that will deliver new regional economic opportunities."
So far... so good - it seems that the Mogo Mountain Bike project ticks the boxes.
then came the notice on the Growing Local Economies website....
"A pause on new applications will start from midnight 14 July 2019. The fund will not be open to new applications from this date until further notice." adding "A pause of the program will also allow time to finalise the assessment of existing applications"
Not to worry though.... a GIPA has revealed that and Expression of Interest was received from Eurobodalla Council on July 1st 2019
Growing Local Economies grant administrators advised "Any applications (EOI or business case) submitted before midnight 14 July 2019 will be assessed under the relevant guidelines."
In the 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.
This means that Eurobodalla Council MUST commit a a minimum financial co-contribution of 25 per cent of the total grant amount - 25% of $3 million is $750,000.
The Guidelines state "The co-contribution for the project must be from sources other than the Restart NSW Fund and must be confirmed".
NOTE that "An exemption from the minimum 25 per cent co-contribution may be granted where a project is located in a disadvantaged area of NSW."
Applicants must submit a case for the exemption with evidence demonstrating the disadvantage.
The starting point for measuring disadvantage for this fund is the Socio-Economic Index for Areas (SEIFA), published by the ABS.
Other considerations may be:
• impact of significant industry decline or business closure
• recovery from a significant natural disaster
• significant recent change in population or community demographics
• other exceptional circumstances"
It is important to remember that the application was lodged on July 1st 2019. This was well before the bushfires and before the financial impact of Covid.
Above: Eurobodalla ranks 56 of 137 NSW LGAs - Eurobodalla scores put it in the middle and by ABS could not present as 'demonstrating disadvantage'. Source
In initial discussions (in June 2019) between Eurobodalla Council and the Office of Regional Development the Office reviewed the proposed Mogo Adventure Hub project against the fund objectives and eligibility criteria and considered, on what they heard, that the project was eligible inviting the Eurobodalla Council to submit an expression of interest and a brief data sheet for assessment.
Under GIPA The Beagle has established that the EOI was submitted on July 1st 2019.
The Beagle has established that Eurobodalla Council, in making application to the fund was required to
• show capacity to improve economic growth and productivity for the state of NSW
• help regional communities capitalise on their strengths or broaden and reposition their industry base
• demonstrate benefits to multiple organisations or businesses
• align with the relevant NSW Government Regional Economic Development Strategy
• have a Benefit to Cost Ratio higher than 1.0 as assessed by the NSW Government
• seek a minimum grant amount of $1 million
• 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
• provide information on how the project will be operated and/or maintained upon completion.
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
Following receipt of the Council's expression of interest the Office of Regional Development asked Council to submit a business case which was provided on the 3rd of March 2020.
Depending on the outcome of step one in the assessment process, all selected organisations including Eurobodalla were be requested to formally submit a business case for consideration.
Eurobodalla Council was required to provide 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.
All applicants 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 "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."
Questions remain around the Mogo Adventure Hub grant.
"How is it that the local Member was able to announce the Grant of $3m before Eurobodalla Councillors had received public submissions on the project and voted to endorse the project?"
"There is no evidence of any commitment being voted on by Council for the $750,000 co-contribution. To accept the Grant there MUST be confirmation of the commitment by Council. If there was a case for the exemption Council MUST have made an application, as required, to provide evidence demonstrating the disadvantage."
The Beagle has requested all documents around the application including the business case that was provided by Council on March 3rd 2020.
Let's look at the timeline around financials and Business Case
NOTE: the $3m funding was actually approved on 13th August 2020. It would be most surprising if the member for Bega was not aware of the success of the application. The Question is "When did Council first hear of the success of the application for funding?"
The Councillors were provided a report on September the 8th, 2020 seeking Council’s endorsement to publicly exhibit the draft Mogo Adventure Trails Hub Master Plan.
The Councillors were told in that report that the draft Plan "is the next step in the process that started with Council identifying the potential for the trails around Mogo to be developed as a premier mountain biking trail network and event precinct"
In regards to the financials the report 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 this 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 requested all documents around the application including the business case that was provided by Council on March 3rd 2020.
