Debt at $40m and climbing

Reducing Waitomo’s $40m debt is John Robertson’s main priority as the experienced politician leads into his first term as mayor of the district.

Robertson said Waitomo’s debt was the highest of any rural council in New Zealand. It sat at

$40m on June 2019 and was forecast to rise to $44m by June 2020.

Still, it was lower than the

$48m forecast in the council’s long term plan, which included provision for $1.5m to build a new sports facility on land at Te Kuiti High School.

Robertson said the debt had doubled over the past 15 years as it was used to fund infrastructure works, particularly water and wastewater, and to invest in the council’s company, Inframax Construction.

It had also been used to fund community facilities such as the Te Kuiti Rail building project. My view is that we need to adopt a plan to reduce debt over time, my thinking is by around $2m per year.

‘‘The risk of carrying so much debt is an interest rise risk. A 1 per cent rise in interest rates is equivalent in Waitomo to a 2 per cent rise in rates.’’

Robertson said he would get a first look at the council’s finances this month, which would help determine where savings could be made for the 2020-21 budget.

The rates increase for the 2019-20 financial year was 2.4 per cent. The first-term Waitomo mayor said he would aim for a zero rates increase for the 2020-21 year.

Robertson lives in Piopio and is a former MP and former mayor for Papakura. In 2012 he was appointed to lead a group of commissioners to sort out governance issues at Kaipara District Council.

The commissioners set up a debt reduction plan for Kaipara, which was twice the population size of Waitomo and carried twice the debt, $80m.

Robertson planned to use this experience to bring spending in Waitomo under control, a theme he used during his election campaign in 2019 when he defeated incumbent Brian Hanna.

‘‘I have come in as mayor saying that rating levels have maxed out and we have to live within the rating level that was set by the council last year. So this is very much a scene-setting year for us.’’

Robertson was mindful Waitomo’s population, 9500 people, would remain static or decline moderately, as forecast by Statistics New Zealand.

‘‘Our property rating base is constant but you always like to enjoy a slight growth in population, and then a slight growth in the rating base’’.