A PROPOSAL to use $5.35M of capital works funds rather than take out a loan for the building of the new Shepparton Art Museum (SAM) was approved by council last week, bringing the new estimate for the project to $39.9M.
Two cost reviews during the detailed design phase have revealed that to build to the current budget would result in the new SAM building having limited functionality and requiring further future investment to be operational.
According to the adopted motion, council’s contribution increase to $5.35M in upfront capital would be partially offset by an estimated $4.23M savings in loan interest expense.
To fund the increase, additional measures to potentially offset the financial risk will be explored such as selected grants for components of the project and changes to the SAM Foundation Capital Works/Trust contribution breakdown.
The tender for construction is expected to go out in August 2018 and contingency has been built into the $39.9M project budget to allow for variations.