Council general manager Warwick Bennett said the project team was negotiating with five companies participating in a 'value engineering process.'

The aim is to reduce the price closer to the $12.1 million budget. The process commenced after initial tenders were "significantly above" this price, Mr Bennett said late last year.

"We've had a series of workshops with all five organisations that have expressed interest and we're getting some really positive feedback," he said.

One idea among the 15 to 20 options put forward is to lighten the main structure, thereby reducing the need for more complex foundations.

Mr Bennett said companies had taken this into account in initial tenders to reduce the risk of damaging the 1887 original building, to which they were adding.

The builders are further investigating this possibility.

Moreover, the council is now proposing to undertake demolition of the rear 1930s addition, where the performance area will be built, in order to reduce the cost. This had also initially added to tenderers' prices.

They had also factored in the risk of finding artefacts and bushranger Thomas Whitton's grave, thought to be in the vicinity.

Mr Bennett said all of this might not reduce the cost to $12.1m but the council had received $4m more in grants for the project than expected, giving it some flexibility.

These extra contributions had come from the Veolia Mulwaree Trust and the State Government.

More workshops are planned with the companies in March, with a report expected to go to councillors in April.

The GM hoped demolition could start in April/May, ready for a July start to construction. The project is estimated to take 15 months.

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