Goulburn Mulwaree councillors voted to revoke naming rights after the Veolia Mulwaree Trust withdrew a $2.5 million grant for the Goulburn Performing Arts Centre (PAC).
At a council meeting on October 19 councillor Leah Ferrara moved to rescind naming rights to a theatrette at the PAC initially given in recognition of Veolia's financial contribution to the project.
Mayor Bob Kirk said he didn't know why the trust had withdrawn the money but described the decision as "questionable."
"It is disappointing that this has now been withdrawn," he said.
"We didn't actually get a reason and that creates a whole lot of other questions."
Veolia CEO and managing director Richard Kirkman said $9 million dollars in future host fees would be allocated to the PAC.
The Post asked Mr Kirkman why the trust grant had been withdrawn but did not receive a direct answer. Mr Kirkman said the change would allow the trust to "provide donations to other worthwhile community projects".
"Since 2004 Veolia has contributed over $18 million to community projects in the Goulburn Mulwaree and surrounding regions, through its operational host fees and the Veolia Mulwaree Trust," he said.
"We're proud of the positive impact this has brought to local people, and we're passionate about ensuring we continue to spread these funds across many community initiatives."
The council has undertaken protracted negotiations with Veolia over the past few years about the level of host fees it receives from the company for having the bioreactor on its patch. Under the original agreement 20 per cent of this amount went to the council and 80 per cent to the trust. Recent discussions have been in closed committee.
Asked on September 28 whether the PAC grant was in jeopardy, Mr Kirkman said the trust stood separate to the company and he could not comment.
"It is down to the trust directors to determine each project. Council projects will be funded if they are appropriate," he said.
Former Trust chairman and Veolia CEO Doug Dean gave in-principle approval for a $2 million grant in 2017 but the council understood from subsequent conversations with the trust that it would increase to $2.5 million and was guaranteed. As recently as two months ago, general manager Warwick Bennett told The Post it was not in doubt, despite questions from the Tarago community about its eligibility.
Speaking with The Post on Monday, Cr Kirk said that in about June 2021, the trust verbally advised him that the $2.5 million grant had been approved, with $500,000 to be paid upfront and the remainder in ten $150,000 installments over about two years.
"I told [council general manager] Warwick about this but in between then and now, the trust has changed its mind. People can draw their own conclusions," he said.
"During that time, the council has come out with a position on waste to energy infrastructure in our region. I can't say whether this is the reason [for the grant's refusal] because the trust is independent of Veolia's management.
"...I just don't find it very rational and without explanation, it is very questionable."
The mayor referred to the fact that on September 22 the council decided to "totally oppose" Veolia's proposed $600 million waste to energy plant at the Woodlawn bioreactor. It was part of a wider response to the state's recently released Energy from Waste Infrastructure Plan.
Despite this setback, Mr Kirkman said "more of Veolia's future host fees will be allocated to Tarago - an outcome we're pleased to deliver for the people in closest proximity to our site".
The council was informed of the grant's withdrawal "about one month ago," Cr Kirk said.
In anticipation, it had budgeted for $2.5 million in internal loans to compensate. Now, with a higher than expected return from the $4.34 million sale of Hovell Street residential land, $500,000 of the proceeds will go towards the PAC. It reduces the loan to $2 million.
Cr Kirk said it could be accommodated and wouldn't influence forward projections for the PAC. However it would reduce the amount that could have been spent on other projects.