Local Govt | National News Video | Parliament Headlines | Politics Headlines | Search


Feedback sought on Council joining Funding Agency

15 August 2011

Feedback sought on Council joining Funding Agency

The South Taranaki District Council is seeking public feedback on a proposal to join the newly established Local Government Funding Agency (LGFA).

Chief Executive, Craig Stevenson, says the Council is proposing to join the LGFA because it will enable significant savings to be made on the cost of its debt.

“The LGFA is being established by a group of Councils and Central Government so we can 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.

The Government will have a maximum shareholding of 20% with Councils holding the remaining shares. The LGFA will be recognised in legislation and will be categorised as a Council Controlled Trading Organisation.

“Due to its size, economies of scale, higher credit rating and regulatory advantage we expect the LGFA will be able to borrow money at a low enough rate, lower than what a Council could negotiate on its own, for the LGFA Scheme to be attractive,” he says.

Mr Stevenson says the LGFA will also provide Councils with greater certainty of access to funding, and more favorable terms and conditions, including access to longer funding terms. All Councils will be able to borrow from the LGFA, but different benefits will apply depending on a Council’s level of participation.

“Financial modeling done by the Council indicates that interest savings of 0.5% may be available by joining the LGFA as a Principal Shareholding Local Authority (PSLA),” says Mr Stevenson. “The Council currently has borrowings of approximately $100 million which means savings could potentially be around $500,000 per annum. That is a considerable saving for our ratepayers,” he says.

In the proposal released for public consultation the Council is considering four options but has signaled that it prefers the option of joining the LGFA Scheme as a Principal Shareholding Local Authority (PSLA).

“To be a PSLA the Council is required to invest $100,000 capital in the LGFA and also to be a guarantor of the LGFA, says Mr Stevenson. “But we believe the savings made in getting cheaper loans will substantially outweigh the costs associated with joining the LGFA.”

To join up to the LGFA the Council needs to amend its Investment and Liability Management Policies, and is seeking feedback on that amendment as part of the consultation.

Full and Summary copies of the Council’s proposal to join the LGFA can be found at any LibraryPlus centre or the Council’s administration building on Albion Street in Hawera, on the Council website www.southtaranaki.com or by phoning 0800 111 323.

The consultation period runs from 16 August to 16 September 2011 and a special hearing will be held on Friday 23 September for submitters. The Council will make its final decision by 5 October 2011.


© Scoop Media

Parliament Headlines | Politics Headlines | Regional Headlines

Gordon Campbell: On Whether We’re Punching Above Our Weight, And Should We Care?

According to Pierre De Coubertin, founder of the modern Olympic Games, the Olympic ideal was not about “winning, but fighting well. Life is not conquering, but fighting well.” True to that ideal, young people from all over the world do still congregate together once every four years to compete peacefully against each other... More>>


Finance: Finance Minister And RBNZ Governor Agree To Update MOU On Macro-prudential Policy

Finance Minister Grant Robertson and Reserve Bank Governor Adrian Orr have updated the Memorandum of Understanding (MoU) on macro-prudential policy to further protect the financial system and support the Government’s housing objectives... More>>

Government: Offers Formal Apology For Dawn Raids
Prime Minister Jacinda Ardern has today formally apologised to Pacific communities impacted by the Dawn Raids in the 1970s.

Between 1974 and 1976, a series of rigorous immigration policies were carried out that resulted in targeted raids on the homes of Pacific families... More>>

Government: Bill Introduced To Protect Against Conversion Practices

Legislation has been introduced to Parliament to protect against practices intended to change or suppress someone’s sexual orientation, gender identity, or gender expression... More>>


Human Rights Commission: Successive Governments Responsible For Massive Breaches Of The Right To A Decent Home

Te Kahu Tika Tangata / Human Rights Commission has today launched Framework Guidelines on the Right to a Decent Home in Aotearoa and announced that it will hold a national inquiry into housing... More>>

NZUS Council: Welcomes Nomination Of Senator Tom Udall As US Ambassador To NZ

The NZUS Council welcomes the nomination of Senator Tom Udall to the role of US Ambassador to New Zealand and Samoa, NZUS Council executive director Jordan Small said... More>>

BusinessNZ: Visa Extensions Welcomed
BusinessNZ has welcomed the extension of some critical skill visa durations and changes to immigration systems to speed processing. Chief Executive Kirk Hope says move acknowledges advocacy by the hospitality sector, the BusinessNZ Network and others, and comes not a moment too soon.... More>>




InfoPages News Channels