The bill for Southland’s new museum could balloon by as much as $19.5 million amid rising costs and a struggle for funding.

On Tuesday, councillors will discuss how best to proceed with Te Unua Museum of Southland under growing pressures.

A public consultation has also been recommended, which could delay opening by up to nine months.

In a report to councillors prepared by multiple council managers, the redevelopment of the Southland Museum and Art Gallery was said to have been the subject of local community discussion for the past 10 years.

The city has been without a permanent museum since April 2018, when the old facility was closed for safety reasons.

A figure of $57.1 million was put forward by the Museum Governance Group to strengthen the existing building, but public consultation showed the public favoured a new build.

It was resolved in July 2022 a total of $65.5 million needed to be budgeted for the new build.

Tuesday’s meeting will see three options presented to councillors, as the organisation grapples with how best to proceed.

The first is that the build continues under its current design with a max increased spend of $19.5million, necessitating a total budget of $76.8 million.

The second option is to reduce the scope of the project, which would still increase costs by up to $14 million, making for a total budget of $71.3 million.

The third option is to pause the project and stay within the current working budget of $63.9 million at a cost that is yet to be assessed, but with a maximum budget shortfall of $6.6 million.

The report said the three options included council guaranteeing external funding it had not been able to secure.

“We are continuing to engage on third party funding opportunities however, the ability to achieve the $6.6 million to support the capital build of Te Unua will be a challenge,” it said.

For any option to proceed, it was recommended a public consultation be undertaken.

The council’s project team confirmed that after “stress testing” the project since April, it was not possible to deliver the work on budget without reconsidering the Museum Governance Group’s requirements.

All existing contracts for the build had termination clauses allowing the council to stop work at any point, the report said.

It also said that after the 2022 local election, councillors had given clear direction to staff that the museum was a priority project.

Last year, a number of challenges facing the project were noted such as cost inflation and post-Covid 19 impacts, which included resourcing, cost of living and supply chain issues.

Next steps include progressing consultation documents and a plan, depending on what councillor’s decide at Tuesday’s meeting.

LDR is local body journalism co-funded by RNZ and NZ On Air