The Daylesford Cinema Group will redouble its fundraising efforts after the Hepburn Shire Council this week refused to grant $50,000 to the growing cinema fund for sound and projection equipment.

At this week’s meeting of Council, a motion put by Mayor, Cr Tony Clark to grant $50,000 to the Daylesford Cinema Group towards the purchase of a projector and sound equipment was narrowly defeated. The motion proposed that the funds be drawn from the staff accommodation and Birch Ward facilities reserve established from the proceeds of The Rex sale.

The proposed grant would have been contingent on several conditions: a written funding agreement with protections such as council ownership of the equipment if the cinema ceased trading within five years, and a joint communication strategy between council and the cinema group.

Council was split on the issue. Councillors Clark, Brian Hood and Tim Drylie supported the motion while Crs Lesley Hewitt, Don Henderson, Pat Hockey and Shirley Cornish were opposed.

Supporters of the motion, including Cr Clark and Cr Hood, argued the proposed funding represented a timely and community-led cultural investment. They pointed to the broad community support, the volunteer efforts behind the cinema, and the anticipated benefits: improved amenity for local residents and community groups, increased visitor activity and local tourism, and revitalisation of a space for arts and gathering.

Cr Hood noted the funds would come from a reserve established after the sale of the former cinema site at The Rex, a reserve originally intended to support community facilities including a cinema. He argued that allocating from this reserve would not impact the council’s operating budget, and with conditions in place, would protect ratepayer money by securing the investment against tangible assets.

Opponents, however, raised concerns about financial prudence, competing priorities, and the long-term viability of investing in equipment for a non-council facility. Some pointed out that using reserve funds for the cinema could limit capacity for other projects, such as upgrading sound equipment or improving acoustics at the Town Hall.

Others criticized the risk involved in funding depreciating equipment for a privately-owned building. As the council’s CEO Bradley Thomas stated,  ICT-projector equipment typically depreciates about 10% to 20% per year. The request was, in his view, unusual in both scale and nature.

Councillors also questioned whether the Cinema Group’s business plan was sufficiently robust given the Shire’s broader financial pressures. Some argued that reserve funds remained public money and needed to be deployed where “maximum benefit” could be ensured, especially in light of other commitments, such as maintenance of existing assets or community infrastructure.

A subsequent motion introduced by Cr Hood that included more stringent safeguards in an attempt to reassure opponents of the original motion was also defeated by the same margin.

It should be noted that Council has provided substantial financial support for the cinema. Although the Cinema structure has benefited from a fit out funded by The Block, the cinema shell itself was constructed by Council during the ill-fated renovations of the building in 2019 with a budget of $105,000. Council also compensated the Cinema Society $6,000 for the loss of their screen which could not be moved when the old cinema was closed. Council provided the Society with a $5,000 community grant for computer equipment earlier this year.

For the Phoenix Cinema and its supporters, the fight isn’t over but this week’s decision makes clear that, at least for now, the project must rely on community goodwill and private fundraising rather than additional public grant support. A spokesperson for the Daylesford Cinema Group said  it will “redouble its fundraising” in light of the decision against the grant.

Donations to the cinema are tax deductible and may be made through the Australian Cultural Fund.