Council has agreed to loan $370,000 to Twyford Hall Inc (THI) so that the board, which is overseeing the construction of the new theatre, can meet its liabilities.
The theatre is close to being finished after THI received a $7.4m state government grant for its construction but 10 per cent remained until certain milestones were reached. These milestones could not be achieved without further money.
The board was facing the possibility of insolvency and administration something council didn't want to see happen.
In the meantime the THI board has reached an agreement with the state funding body to release $370,000, half of the final unclaimed amount with the final remaining $370,000 available once they are able to occupy the facility.
In addition to the existing liabilities the board estimated it could take a further $500,000 to $1m to finish the work and is attempting to source further funding.
Council's acting CEO Anthony McMahon said it was a complex issue but one which council understood because it had faced similar issues.
"THI has experienced a number of hurdles not dissimilar to some council are experiencing," Mr McMahon said citing difficulties getting Aboriginal heritage paperwork and contractual issues.
"They can't access the final payment of $740,000 because the state is withholding it - the state is giving half but they owe that and unless they find additional funding they could be facing insolvency; then it will come back to council. If we don't support this it will come back to council and if it does we will have the financial burden," Mr McMahon said.
He said that THI had two commercial buildings, one of which was tenanted at $38,000 a year which could provide a revenue source to cover the loan of $370,000 which would be repaid when the final installment was released from the state government.
There are other funds however, that are at risk. THI received almost $200,000 in grant funding to be used for performances at the new theatre and to upgrade audio and lighting in Twyford Hall. These funds have time limits on their availability.
Mayor Russell Fitzpatrick said there was a risk of the committee walking away.
Cr Fitzpatrick said council had similar problems with Aboriginal heritage paperwork, one of the issues which had delayed work at the theatre and effectively put a halt on construction.
"We've had the same problem; look at Towamba Road, it will cost another $200,000," Cr Fitzpatrick said.
All councillors voted for the loan to be given to THI with the exception of Cr Dodds.