Ratepayers asked to bail out North Sydney Olympic Pool redevelopment

North Sydney Council is facing significant financial challenges and is currently in an unsustainable financial position, the Council has said in an appeal to ratepayers to back a special rate variation (SRV).

The main issue is the increased costs of the North Sydney Olympic Pool redevelopment, combined with reductions in other sources of revenue, and rising infrastructure backlogs.

The Council says it requires an immediate response to ensure long-term financial sustainability and maintain services.

The Council had said the pool would cost $58 million when plans were approved in 2020, with a completion date in 2022.

The Sydney Morning Herald reported that a November project update valued the construction contract at $91.47 million, but the council would need to find an additional $17.2 million as the forecast cost had risen again, and is now projected to total $122.2 million.

The North Sydney Sun reported that the additional funding is to cover escalating costs which include structural steelwork delays, unresolved variations and new fit-out requirements for commercial spaces.

The new completion forecast date is May 2025.

The Council is asking for feedback on four options that vary from a 65 per cent increase to a 111 per cent increase over three years. One of the problems with the redevelopment was the steel roof framing over the 25-metre indoor pool which had to be reassembled.

Mayor Zoe Baker was reported in the Sydney Morning Herald as saying the rising cost to redevelop the 88-year old heritage pool was a crisis point for the council’s finances, and Council was considering every option including cutting costs and selling council assets.

She points to the former council’s decision to sign the contract for the redevelopment before the designs were finalised as the cause of many of the cost blowouts and delays.

The North Sydney Sun reported that part of the cost increases might be recoverable through legal proceedings. However, the council acknowledged that the process could take significant time and recommended ensuring adequate cash flow to avoid further delays.

In 2024, Council also resolved to develop a comprehensive governance strategy aimed at preventing future financial missteps, such as those experienced during the North Sydney Olympic Pool project. This strategy is designed to guide decision-making processes and mitigate the risks associated with major infrastructure projects and investments.

Council has also recently completed a review of its Asset Management Strategy, assessing the condition of assets as well as the renewal and maintenance requirements. This review has provided Council with a clearer understanding of the costs involved in maintaining assets at their current levels, as well as the additional funding needed to improve the condition of deteriorating assets.

Consultation closes Friday 10 January 2025.

IMAGE: The North Sydney Olympic Pool before the commencement of the redevelopment. (Image: SPLASH!)