Council chief financial officer Mike Fermor told the operations and performance committee many councils were in the same situation.
“One reason for it is through the Three Waters reforms, where a large part of our core debt was going to transfer to another entity.
“That’s now over, so we’re left with this core debt, and [we are] trying to manage it.”
The council fixed the rate on a floating debt last November to achieve compliance, and Fermor said it was likely to do so again.
Councillor Kate Joblin asked whether auditors would be worried by the non-compliance and if the council’s credit rating would be impacted.
Fermor said there would be no impact.
Auditors would want the committee to be fully informed - “As we are doing here now” - and for the council to have a strategy in place, he said.
Speaking to the Chronicle, he said the swap would quickly bring the council back into balance.
“Our priority is to achieve the lowest interest rates possible across all our portfolios to minimise costs to the ratepayer.”
As of January 31, the council’s gross debt stood at $157m - above the forecast $152m.
Mike Tweed is an assistant news director and multi-media journalist at the Whanganui Chronicle. Since starting in March 2020, he has dabbled in everything from sport to music. At present, his focus is local government, primarily Whanganui District Council.
