Agreement to write off fire loan

A LOAN of nearly $300,000 looks likely to be written off the Waitaki District Council’s books.

The council’s $285,145 loan to Fire and Emergency New Zealand (Fenz) was never going to be repaid and should be forgiven, the council’s Finance, Audit and Risk Committee agreed this week.

Only Cr Jim Hopkins voted against the recommendation.

Council finance and corporate development group manager Paul Hope’s report to the committee, recommending writing off the $285,145 Otago Rural Fire Establishment loan included an attached letter from Fenz chief executive Rhys Jones, who says it is the organisation’s understanding that all Otago fire authority loans would be written off by the region’s councils.

It was reported in January Fenz owed $1,162,591 to Otago’s five councils — Waitaki, Clutha, Central Otago and QueenstownLakes districts and the Dunedin City Council.

Waitaki Mayor Gary Kircher said the loans represented equipment, including some equipment that was determined to be notfitforpurpose when the now subsumed regional rural fire force took over from local ones.

‘‘People need to get over the concept that this is actual cash,’’ Mr Kircher said.

Mr Jones’ letter states that when the organisation was formed in July last year it took on Otago Rural Fire Authority assets, rights and liabilities — and that when the Otago fire authority was established in 2014 through the merger of six rural fire authorities, the Otago Mayoral Forum decided loans would be the easiest way to recognise the transfer of assets — but the loans were never intended to be repaid.

It was agreed that resources paid for by communities would stay within and be used by the communities that paid for them.

Mr Kircher agreed the loans were never meant to be paid back.

‘‘What’s been ratepayer money that’s gone into buying those assets to serve the community in emergencies, fires, etc, as long as that equipment continues to be there . . . is still there to service our community that paid for it, I’m more than happy that we just get on with life and know we’ve got a great bunch of volunteers throughout the district looking after us,’’ Mr Kircher said.

Mr Hope also noted the council had two unused fire depreciation reserves — equipment ($207,038) and buildings ($245,402) — which would have been used to pay for the replacement of assets for the Otago fire authority.

Now Fenz is responsible for the maintenance and replacement of its assets, he has recommended those funds be used to write off the loan with the remainder being transferred to general reserves.

Cr Jim Hopkins said he was ‘‘astonished at how superficial the justification’’ supplied by Mr Jones was. Fenz had not indicated it had sought a legal opinion, and Cr Hopkins argued for the council to indicate it did not see eyetoeye with the agency and would like to speak to Mr Jones before councillors ‘‘kiss goodbye to the thick end of $300,000’’.