Ratepayers down $2m
After 17 years, a Matamata-Piako District Council investment in overseas shares ultimately cost ratepayers almost $2 million.
The council’s draft Long Term Plan said an original investment of $12.05 million saw a return of $10.35m when the shares were sold in October.
In 1997/98 Te Aroha-based electricity company Power New Zealand (formerly Valley Power and Thames Valley Electric Power Board) was wound up and the council given $24 million to invest.
The council internally borrowed $11.95 million and invested $12.05 million into overseas shares.
Annual income of about $600,000 from internal interest and $390,000 from dividends on the overseas investments was used to subsidise rates.
In its draft plan the council said the value of the overseas shares had some ‘‘significant ups and downs,’’ causing unease for ratepayers.
The total fund remains at about $24 million, with $19 million internally borrowed and $5 million in the bank.
The council said it expects to generate interest of $1.15 million annually.