Newcastle council says a business case by real estate firm CBRE shows it will save about half a million dollars a year by moving to new offices in Newcastle West.
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Councillors on Tuesday night approved in confidential session an $8.2 million tender for the fit-out of the new office space in Stewart Avenue to Graphite Projects.
The cost of the move has been the subject of debate since councillors approved the change of address in late 2017. Chief executive officer Jeremy Bath said at the time that the "one-off cost" would be $7 million.
Tender documents for the fit-out of the council's section of the new building showed a target budget of $8.5 million for the trades component of the contract.
But the council said in a media statement after Tuesday's meeting that the contract was for $8.2 million.
A $372,000 reimbursement from the owner of the building for carpet would reduce the fit-out costs to "approximately $7.86 million".
The statement quoted Mr Bath saying the move was on budget.
"In October 2017 we estimated the cost of the fit-out at approximately $7 million," he said. "Then 10 months later the elected council resolved to move the chamber to the new building, which we told them would bring the total cost to $7.8 million."
He said the reimbursement meant "the actual cost to council is exactly what we said it would be in July".
Mr Bath said the figures did not include GST.
It is unclear how much the council will spend on other elements of the move not included in the fit-out, including project management, design consultants, engineers, internal staff costs, IT, furniture and removalists.
The council's four independents had lodged a notice of motion calling for an updated business case by next month detailing "all forecast revenue and expenditure associated with the move". But Mr Bath did not include the motion on the agenda, citing a clause in the council code of meeting practice relating to "unlawful" business.
"The implementation of the excluded notice of motion would be unlawful because it would disclose information that would breach commercial in confidence and confidentiality obligations to third parties."
The 15-year lease on the new building contains a confidentiality clause.
The council said the CBRE business case had found the move would benefit ratepayers to the tune of $13.1 million over 25 years, compared with the cost of upgrading existing council buildings.
It did not detail how the savings would be achieved, but Mr Bath said the benefits did not include the sale of the City Administration Centre, which the council has said fetched $16.5 million.
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Michael Parris
Michael Parris reports on politics for the Newcastle Herald. He started at the Herald in 1994 after working in the ABC Newcastle newsroom. Michael spent much of his career as a sub-editor before moving into political reporting in 2017. He was a finalist in the Sports Australia national media awards for his stories about a male-only tennis club in Newcastle. He has covered NSW and federal elections, state and federal budgets and local politics. He has also written extensively about the COVID-19 pandemic with a special focus on data analysis and the effects of lockdowns on the Hunter community.
Michael Parris reports on politics for the Newcastle Herald. He started at the Herald in 1994 after working in the ABC Newcastle newsroom. Michael spent much of his career as a sub-editor before moving into political reporting in 2017. He was a finalist in the Sports Australia national media awards for his stories about a male-only tennis club in Newcastle. He has covered NSW and federal elections, state and federal budgets and local politics. He has also written extensively about the COVID-19 pandemic with a special focus on data analysis and the effects of lockdowns on the Hunter community.
