Moyne Shire councillor James Purcell has objected to the council's decision to spend an extra $80,000 to wind up the Corangamite Regional Library Corporation.
Cr Purcell said the "unexpected" additional costs should be paid by Warrnambool City and Colac-Otway Shire councils, whose departure in mid-2021 led to the liquidation of the CRLC, but CRLC chair Ruth Gstrein has spoken to The Standard to explain the reasoning behind the decision.
The issue flared up at Moyne Shire's June meeting, where Cr Purcell spoke against a council motion to set aside $80,000 in the budget to complete the CRLC liquidation. Corangamite Shire Council had also agreed to pay $80,000 to help pay off the roughly $160,000 debt.
Cr Purcell told The Standard the two councils were footing a bill that wasn't legally their responsibility.
"I don't know where these new costs have come from, but in the original agreement it said if anyone wanted to leave the CLRC they had to pay all of the costs," he said.
"Warrnambool and Colac-Otway should absolutely 100 per cent be paying these costs."
Cr Purcell said he didn't know why his fellow councillors had taken such a laissez-faire attitude to the extra spending.
"I honestly don't understand it. It's a lot of money coming out of our budget and it's not our debt," he said.
But Cr Gstrein, who has been on the CRLC board since 2011 and is also Corangamite Shire mayor, said Cr Purcell's account wasn't quite correct.
She explained the $160,000 was a combination of liquidation costs and operating expenses, but the vast majority of it was operating expenses incurred since July 2021, after the other two councils pulled out of the CRLC.
"We found there was an operating loss of $140,000 since June 30 2021, so that's the cost of keeping the CRLC running after the other two councils left," she said.
Cr Gstrein said there were also extra, unexpected liquidation costs, but they amounted to about $11,400 each for Corangamite and Moyne.
"We settled in good faith in 2021. Could we have gone back to Warrnambool and Colac-Otway for those unexpected liquidation costs? Maybe, but It's only 11,400 each," she said.
"I would say that in hindsight it would have been ideal to wind the corporation up all at once, rather than carrying it on this year, but to be honest we weren't in a position to continue with the library services while making that transition."
Cr Gstrein said in early 2021, when Corangamite and Moyne were weighing up whether to try to transition immediately to a new shared services model, council resources were spread exhaustingly thin by the pandemic and it would have been too big of a task in such a short time.
"We've now had more than 12 months to work on this new model, which has given us a chance to really look at the best operating option," she said.
Cr Gstrein said the CRLC had also tried to cut costs in other areas to reduce the final financial burden before the switch to the new model on July 1. "What the corporation has also done is look at our own expenses, reducing our capital expenses by $106,000 to offset those losses."
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