Surf club receives interest-free loan
Gosford Council will give Killcare Surf Life Saving Club a $120,000 interest-free loan to fund the fitout of extensions to the new clubhouse building.
According to a council report, a request was received by council in March from Killcare Surf Life Saving Club for a $120,000 grant.
Club secretary Mr Michael Sheehan told the council that a sponsor had contributed $120,000 to finance extensions to the deck and bar area of the club in the original design.
Mr Sheehan asked for a grant from council to assist with the fit-out.
He stated that council had already invoiced the club $67,000 for extensions to the new building.
Mr Sheehan stated it was in council's interest to ensure the club was "a successful and profitable business".
"Operation of the new surf club with sub-leasable areas and function facilities will be an entirely new venture," Mr Sheehan stated.
"To ensure that it becomes a viable business necessitates an extensive and costly fit-out.
"Additionally we need to retain our cash reserves to fund the fit-out along with other unforeseen costs, plus maintain a level of fluidity to accommodate the day-to-day running costs."
Mr Sheehan said the club had developed a business plan to ensure its goals of success and profit were achieved.
Director of city services Mr Stephen Glen recommended that a loan be made to the club to be repaid to council with interest over 15 years.
However, council resolved to make the loan interest-free and to be repaid within 10 years.
Council also resolved not to advance the loan until the club lease had been endorsed by the Department of Lands.
"Council is currently awaiting approval from the Department of Lands regarding the lease of the Killcare Surf Life Saving Club building," a staff report to council stated.
"Advice is expected to be received by mid-June 2009.
"A loan should not be advanced until the lease is registered or, at the very least, until such time that the lease is endorsed by the Minister for Lands."
The surf club will be required to provide council with audited financial reports throughout the term of the loan to provide evidence that the club will be able to repay the loan.
The $120,000 loan will be taken from council's Property Development Reserve and the interest forgone will be repaid to the reserve from the council's General Fund.
Council agenda CIT.29, 23 Jun 2009