Shellharbour City Council staff say the contentious $57 million city hub project is affordable - and "comfortably so".
Tomorrow night Shellharbour councillors will be presented with a financial update on the city hub, a project to be funded by a mix of developer contributions, assets sales and loans.
The initial city-hub business case estimated that $35.1 million of the $57 million required for the project would come from assets sales.
A review at the time by NSW Treasury Corp also noted that the maximum the council would be able to borrow for the project was $16.3 million.
However, in the report, which is to be presented tomorrow night, council corporate policy director Lee Furness said the T-Corp review was based on 2010-11 figures and the council's borrowing capacity "is likely to have improved since that time" following the approval of the special rate variation.
In June IPART approved Shellharbour council's application for a cumulative rate increase of 43 per cent over the next four years.
In the report, a variety of scenarios are put forward.
One is "a worst case" one, in which the council receives 20 per cent less than expected from asset sales.
However, even in this scenario, the amount that would need to be borrowed is $17 million, based on an interest rate of 6 per cent and term of 20 years, he said.
Ms Furness said there had been concerns about how the city hub would affect current and future expenditure levels.
However, the scenarios demonstrate that even if property sales fell short of the target by 20 per cent, the increase in loan funding and annual repayments, when expressed as a percentage of annual income, would be "modest".
Shellharbour Mayor Marianne Saliba said the report would give comfort to those who had concerns about financing the project.
Cr Saliba said the financial scenarios put forward so far had been "very conservative".
The proposed city hub will include a city library, a museum, an auditorium, council administration offices, council chambers and a city square.