Kiama Municipal Council has deferred funding for decommissioning work on Jerrara Dam as part of its draft 2013-14 budget now on public exhibition.
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Kiama councillors endorsed the $61 million budget at an extraordinary meeting on Tuesday night.
The 58-year-old dam was transferred into council ownership in 1975 when it was no longer needed as a water supply.
However, during last year's council election campaign potential uses for the dam and surrounding area were promoted.
Ideas ranged from decommissioning the dam and using the site for a concert venue, through to keeping the dam and using it for a fishing, wildlife and environmental park.
Kiama Mayor Brian Petschler said the early cost estimate to decommission the dam was $1.3 million over two years.
"The council has decided to defer this year's allocation of $650,000 - there are still questions over what we do with the dam, whether we raise it, lower it or take it out ... the money would roll over into next year anyway," Cr Petschler said.
Whatever decision was made, the $1.3 million would still be set aside for some form of work or project at the dam, he said.
"Councillors and the community have put together ideas for the Jerrara Dam area, that's the whole area, not just the dam wall itself.
"All those ideas will be compiled and decisions made before we do any work on the site."
Council general manager Michael Forsyth said a draft report on the dam's decommissioning had been compiled, but had yet to be presented to councillors.
Meantime, the council plans to push ahead with its $130,000 plans for CCTV cameras in Terralong Street despite recent controversy over council-owned CCTV cameras.
This year's budget includes $85,000 to be spent on air-conditioning for Gerringong Town Hall and $57,500 for a roundabout and crossing at the intersection of Manning and Bonaira streets.
Kiama’s proposed capital works 2013-14
• Jamberoo cycleway works: $200,000
• Kiama CCTV installation: $130,000
• Gerringong Town Hall ducted air-conditioning: $85,000
• Manning Street and Bonaira Street roundabout and pedestrian crossing: $57,500
• Coronation Park playground shade structure: $65,000
• Kiama memorial Arch stabilisation: $45,000
• Kiama Harbour Scout Hall public toilets: $65,000
