Big savings for ratepayers in South Taranaki
13 March 2013
Big savings for ratepayers
The South Taranaki District Council’s decision to join the Local Government Funding Agency (LGFA) has proven to be a good one which will save around $700,000 in loan repayments over the next five years.
Chief executive, Craig Stevenson, says the Council joined the newly established Local Government Funding Agency (LGFA) as a Principal Shareholding Local Authority in late 2011.
“The LGFA was established by a group of Councils and Central Government so we could use our collective bargaining power to borrow money at lower interest margins than we would otherwise be able to do on our own,” says Mr Stevenson.
Over the last 6 months the Council has locked in savings of $140,000 per year in lower costs of borrowing thanks to the LGFA and Council’s Standard and Poors A+ credit rating. That’s around $700,000 in savings over the next five years.
“Our Council took a courageous decision to become a Principal Shareholding Local Authority and paid the initial joining fee of $100,000 because it believed the potential savings from cheaper loan finance would substantially outweigh that initial cost. That is exactly what has happened,” he says.
Since 1 January 2013 the LGFA has issued more than $1.5bn in loans to the Local Government sector.