The profits from Warrnambool's saleyard are expected to grow on the back of a $2.56 million investment in upgrading the facility, the city council says.
The money has been set aside in the council's draft budget but former Moyne councillor Colin Ryan has questioned whether the city can afford it.
But the council's corporate services director Peter Utri said that clearly the allocation in the budget meant "we can afford it because it's the choice that council's made and where it wishes to put its funding".
Mr Utri said the council had given clear direction, by forecasting money in the budget, of its support for the yards.
"The yards run at an operating surplus and with improvements it would be anticipated that surplus would grow into the future," he said.
Upgrades could mean optimising the size of the yards and extending the new roof at the facility.
Mr Ryan, who was involved in discussions about the saleyards future when he was a Moyne Shire councillor, said in a letter to the editor the landscape was different than a decade ago when its closure would have been problematic because there was no alternative.
But as the business development manager for the rival Western Victoria Livestock Exchange at Mortlake, Mr Ryan said the "supposed losses" to the Warrnambool economy should the saleyards close had been "grossly overstated".
"Given Warrnambool City Council's troubling financial position...why would ratepayers endorse any proposal to spend any money at all on the WCC yards when they are not needed," he said.
Mr Utri said the current group of councillors was the third cohort who had decided to retain the yards.
He said the Warrnambool facility had shown it was still viable post the opening of the Mortlake facility.
"Mortlake's fascination with the Warrnambool yards is quite amazing given the fact there are other competitors in the market, but clearly we seem to be the biggest threat to Mortlake's yards," Mr Utri said.
He said Camperdown had about 40,000 cattle through its much older facility, which has no pipeline for investment, and there was "not a word said about it".
"The constant fascination is because there's a glimmer that keeps being there for the competitors. That's fine. That's the commercial world," Mr Utri said.
He said that while the council makes a decision to stay in the yards, it would operate commercially and viably.
"And if that means an investment and upgrade, it means an investment and upgrade to ensure that we get an ongoing operating surplus which contributes to council's general revenue," he said.
Warrnambool Stock Agents Association president Jack Kelly said the facility was very well supported and was gaining momentum.
"We are very happy where we are and we're really looking forward to the next phase," Mr Kelly said.
"Warrnambool Livestock Centre is a very viable and vibrant centre and I can assure you once we get the roof over this other part it's supported very strongly by all around this area."
Mr Kelly said he had had met with the councillors and they were very much in favour of the saleyards in Warrnambool.
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Mr Ryan said refurbishment quotes for the Warrnambool saleyards ran into the millions and he didn't think the council could afford to do anything but close the yards.
"With developers looking over the fence at the prime real estate that the yards occupy, that if sold, would go a long way to paying for upgrades of many other urgent projects on the council's books," he said.
The council said it would invest in a redesign of the South-West Victorian Livestock Exchange to ensure it met all required standards and best practice in customer and livestock care and $2.56 million had been set aside in its draft budget.
A new roof worth almost $500,000 has recently been installed at the saleyards, and has returned a profit for the council over the past few years.
Worksafe was called in to investigate the site when a concrete walkway collapsed under a dozen people in October during a cattle sale, and a report has recommended a number of improvements.
Cr Ben Blain raised the issue of the saleyards at last week's council meeting and said it was "a very important opportunity" for Warrnambool.
"Hopefully it will be something we will be making a decision on in the near future," he said.
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