NPDC increases borrowing cap in wake of pandemic

The cap for the council to borrow money has increased to $260 million for the next year in the wake of the coronavirus pandemic.

At Tuesday’s full meeting of New Plymouth District Council, there was a debate on making the borrowing cap for the 2020/21 financial year $260m, up from the $216m originally approved in early March.

Mayor Neil Holdom said he was not 100 per cent comfortable with the move, even though they did need some extra capacity.

‘‘We have not just lifted the lid on this policy – it’s blown the lid off,’’ he said.

Councillor Harry Duynhoven questioned the wisdom of the extra borrowing. ‘‘Not, could we actually do so under the rules we have, but would it be prudent to borrow that money in terms of the ability to pay it back?’’

Councillor David Bublitz told councillors the policy change was just to give them some more head room, and councillor Marie Pearce also supported it.

‘‘Covid-19 has placed us in an interesting position where we will need borrowing. Otherwise it comes from rates,’’ she said.

NPDC business services manager Alison Trustrum-Rainey said the benchmark was considered prudent as it was still 135 per cent of their revenue – well below the accepted 250 per cent set by the Local Government

Funding Agency.

Any further borrowing has to be approved by councillors before it actually goes ahead. But if a project is under $500,000, a delegated officer can approve it. The mayor, councillor Gordon Brown, councillor Murray Chong and councillor Dinnie Moeahu voted against the move, but it was passed.