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NZ Local Government FundingChanges to Funding PoliciesMasterton District Council could save up to $200,000 a year over the next ten years if it becomes a shareholder in a new agency being set up by the Government and participating councils. The proposed NZ Local Government Funding Agency will enable member local authorities to borrow money more cheaply and the Council proposes investing $100,000 to join as an establishment shareholder. The Council expects to receive dividends on this investment. Manager Finance, David Paris says that the new agency is timely for the Masterton District as the large projects that are underway are requiring significant loan funding. The new Agency’s presence in the market as a lender to Councils will bring down the interest costs on those loans. The Council will need to amend its Treasury Management Policies in order to take up this opportunity and is seeking public views on whether it should do so. As a shareholder in the agency the Council will have to guarantee the obligations of the Agency. The likelihood of the guarantee being called on is extremely low as no NZ local authority has ever defaulted on a loan and the Agency will hold substantial cash reserves and committed facilities. The Council is also looking to make a policy change to increase the limit of short term deposit investments held by any one bank from $3 million to $4 million. This will give the Council more flexibility to make the most of the competitive bank deposit market without significantly increasing risk. The Council is seeking the community’s views on the proposal to invest in the NZ Local Government Funding Agency and the two proposed changes to its Treasury Management Policies. Submissions on the proposals will close on 19 September at 4.00 pm. The full Statement of Proposal (including an audit report), a Summary of the Proposal and a submission form can be found below and are also available at the Council building and the District Library or by contacting the Masterton District Council on phone 06 370 6300 or email admin@mstn.govt.nz Full Statement of Proposal 251kb .pdf file Summary of the Proposal 116kb .pdf file Audit Report 145kb .pdf file |
