Council forced to top up projects

The trust that runs the Theatre Royal has been given an additional $600,000 loan from the council, bringing its total debt to the council to $2.1m.

Nelson Historic Theatre Trust already owed $1.5m to the Nelson City Council.

The council’s Audit, Risk and Finance subcommittee yesterday agreed to take on the additional $632,256 loan yesterday.

In a report to the subcommittee on February 13 the group manager of community services Chris Ward said the trust had insignificant income to make payments on the $1.5m loan to the council, and was asking the council also take on an extra $632,256 loan it had to the Nelson Building Society.

The trust has only been paying interest to the council at $40,000 a year on the $1.5m loan. Taking on the extra debt would increase interest payments to the council to $60,000 a year.

The committee debated the issue at length, and the decision to take on the extra loan was eventually granted eight to four.

Councillor Mel Courtney said the proposal was like ‘‘moving the furniture’’.

‘‘I don’t think this achieves anything. It’s going to cost us $30,000 to take the loan on and add it to their existing debt.

‘‘We’re just shifting the chairs on the deck,’’ he said.

‘‘The trust has not been able to afford any repayments on capital, and that’s been nine years.

‘‘What makes people around the table think that they’ll be able to going forward?’’

Courtney said he ‘‘couldn’t see that changing’’, despite the theatre keeping up with interest payments.

Councillor Mike Rutledge ‘‘reluctantly’’ supported it, but said the trust should ‘‘front up to situations they put themselves in’’.

Rutledge calculated that it would take 35 years to repay the debt, and this was a ‘‘generous’’ support from the council.

Councillor Matt Lawrey said the money ‘‘should have been a grant in the first place’’.

‘‘It seems like we’re punishing them [the trust] for the decision of a former council, and I don’t think we should keep punishing them,’’ he said.

Mayor Rachel Reese quashed this suggestion, saying the effect on rates would be beyond the pale.

‘‘We could just write off this loan, but it would absolutely affect rates and it could put the changes into the double digits.’’

More funds Greenmeadows

The cornerstone Stoke project, Greenmeadows Centre, was also granted over half a million dollars yesterday after going over budget.

The project not only went through the whole of its funding, for but it has also gone through its allotted contingency fund.

The $6.4 million project has been controversial with strong support from Stoke sports and community groups but others have questioned the site and cost.

Yesterday the council approved up to $590,000 to the project in ‘‘unbudgeted capital’’, with a few caveats that certain ‘‘additional funding items’’ may not be approved.

Much of the decision-making was not made public due to commercial reasons.

Council CEO Pat Doherty said the meeting would be private ‘‘because people will be asking questions about whose fault was this, and who is to blame, which then may lead to questions about cost recovery’’.

Keeping the meeting closed to the public would allow the council to keep any potentially commercially sensitive information private.

Reese said members of the council were ‘‘feeling rather frustrated’’ by the late request for further funding.

‘‘This was a cornerstone of Stoke development that the community has been asking for and at this very late stage of the process members are frustrated to be here,’’ she said.

Council manager of capital projects Shane Davies said he was ‘‘disappointed’’ to be asking for more at this point.