Daily Archives: August 16, 2010

Dunedin City Council security for borrowings

Read: how to finance a stadium for a rainy day.

This was tabled today at the meeting of the Dunedin City Council:

Report – Council – 16/08/2010 (PDF, 322.5 kb, new window)
Security for Borrowings

You will note the recommendations in the report:

1
That the report be received.

2
That the Council approves the setting of a rate of $0.000291 in the dollar (plus GST at the prevailing rate) on the capital value of Dunedin City as security for the borrowing of up to $50,137,200 from Dunedin City Treasury Ltd. That borrowings made under this resolution be repaid to the Lender in equal quarterly instalments of interest and principal over 20 years.

3
That the Council grant to the Chief Executive authority to drawdown debt in tranches, as and when required, up to a limit of $50,137,200.

4
That the Council approves the setting of a rate of $0.000246 in the dollar (plus GST at the prevailing rate) on the capital value of Dunedin City as security for the borrowing of up to $42,339,500 from Dunedin City Treasury Ltd. That borrowings made under this resolution be repaid to the Lender when the Forsyth Barr Stadium is transferred into a Council-owned Company.

5
That the Council grant to the Chief Executive authority to drawdown debt, for the purpose of the new stadium, as and when required, up to a limit of $149,000,000.

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Think what you will of this, folks, and let the good debate flow.

It is considered that the resolutions were voted through without Councillors understanding the meaning or import. WHY are we not surprised.

Let’s refer back to Ian Pillans’ letter, with our bolding added:

### ODT Monday 9 August 2010 (page 8)
Letters to the editor
Ratepayers the rock for council debt
By Ian Pillans, Dunedin
….The simple truth is that this council is recklessly spendthrift and the city’s finances depend on continued borrowing against its assets…. Its access to funds is not, as Cr Walls suggests, the result of a respected record of loan repayment but solely because it can borrow to dangerous levels on the personal guarantees of its ratepayers….

The full letter is available in print and digital editions of the newspaper.

Post by Elizabeth Kerr

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