Council cuts loans for sports clubs

Total exposure of Super City’s 18 loans and acting as guarantor on 10 loans is $52.9m

Sports clubs are the latest to be affected by Auckland Council’s spending crackdown, with councillors voting to scrap loans and rates postponements for cash-strapped organisations.

The council has 18 loans to sports organisations and acted as guarantor for 10 loans, which all up are worth $52.9 million.

The biggest sport-related loan is for Eden Park, with the council acting as guarantor for a $40m loan from ASB Bank to the Eden Park Trust, in addition to loaning the park $6.5m for the upgrade in time for the 2011 Rugby World Cup.

Auckland Council treasurer John Bishop said the guarantee for the $40m loan was extended in March last year.

The policy change will not impact on the status of the Eden Park Trust loan, or any other approved loans.

Council also has 83 rates remission agreements worth $320,000 for the 2016/17 financial year, and two rates postponement agreements worth $800,000 in total.

But at a meeting of the environment and community committee this month, the governing body recommended ditching loans as well as rates postponements and remissions, believing they did not fit with the council’s investment principles and may not provide long-term financial sustainability.

Committee chair Penny Hulse said the recommendation is part of a draft sports facilities investment plan, which will now go out for consultation with a report due back in June.

“We looked at rates remissions and loans and the conclusion we came to was that they are inequitable across the region and to be fair, we are better to support sports organisations and clubs via our grants schemes.

“Rates remissions have been applied differently around the region via the old councils and some very successful clubs are on this remission process and they could well afford to pay, some struggling clubs do not have this luxury,” she said.

The rates remission and postponement schemes are remnants from legacy councils before the Super City amalgamation.

Badminton Waitakere took out a loan from ASB with a ratepayers’ guarantee for $500,000 in October last year, and executive director Paul Shirley told the Herald the club were “very happy to get it”.

Shirley is worried that without loans clubs like his will be “up the creek without a paddle”.

“If you’re a minor sport in this country you’re not getting inundated with offers of money.”

Eden Park chief executive Guy Ngata did not want to comment on the council’s recommendation.

Councillor Dick Quax, an Olympic silver medallist, voted against the stopping of rates remissions and postponements. He said without the scheme, the Pakuranga Golf Club in his Howick ward would “go under”.

“The problem is the club is zoned residential,” he said.

Earlier this year mayor Phil Goff revealed a crackdown on travel, hospitality and gifts after Ateed reported a 43 per cent jump in travel costs to more than $900,000 over two years. Nature — Jamie Morton

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