Council borrowed $4.6 million for financial year

Chairman Charles Sturt (centre) led the operations and monitoring committee meeting. Photo/Stephen Parker

Rotorua Lakes Council borrowed $4.6 million in the past financial year, citing operational costs driven by the museum closure, storm repairs and the transition to the new waste management services.

At a Rotorua Lakes Council Operations and Monitoring Committee meeting yesterday chief financial officer Thomas Colle presented the financial performance report for the 11 months to the end of May.

Mr Colle said the capital expenditure forecast for the end of the year was $34.5m, $4.9m over-budget, mostly down to the timing of the library hub and acquisition of the museum off-site storage facility.

He said the council had had a high completion rate of projects and had "significantly" invested into infrastructure, including $7.5m into transport, $1.6m into open spaces, and $3.6m into wastewater.

"The big issue for us this year is we've tried to do a lot and we've succeeded in doing a lot, however it has come at a cost with regards to borrowing $4.6m."

However, Mr Colle said debt repayment of $1.5m by Rotorua Airport meant the net borrowing result for the year was $3.1m.

This was below the $6m borrowings which had been estimated in the Long Term Plan for the first two years, Mr Colle said.

"It's disappointing we've had to borrow this year but when you compare it to the Long Term Plan where we thought it would be at this time of year we're much better off."

Mr Colle said from an operational perspective, at the end of May, the council was $2m behind budget.

"The forecast to be $2.3m at the end of the year, was driven again by the Rotorua Museum closure, waste management and reinstatement costs from the storms in February and March."

A report in the meeting agenda stated the council had a "keen interest" in a number of commercial and residential properties that were no longer required and they would be sold to help repay the debt.

When asked by the Rotorua Daily Post the council was unable to give a list of those properties.

Mr Colle said the council had a number of residential properties earmarked for sale and was reviewing some of its commercial properties with a view to putting them on the market.

"All council property sales are approved through the Strategy, Policy and Finance Committee."

During the meeting committee chairman Charles Sturt asked if the council's capital spend was too ambitious.

Mr Colle replied it wasn't, with the council working towards the infrastructure level required, and accepted, by the community.

The presentation of the operational report for May to June brought up discussion of community housing and short-term rentals such as AirBnB.

Councillor Merepeka Raukawa-Tait asked, following the announcement on Wednesday by MP Todd McClay of a possible Special Housing Accord for Rotorua, who the council was speaking to about freeing up land.

Group manager for strategy and partnerships Jean-Paul Gaston said they would identify potential areas.

"We need to look at the availability of housing and identify new areas for the community and urban environment, and we will have to report to MBIE."

Councillor Raj Kumar asked why the concerns of residents around short-term rentals hadn't been addressed.

Mr Gaston reminded those who were having issues with renters to lodge a noise complaint and said the council was talking to other councils about short-term accommodation in residential areas, with a view to taking the information to the policy committee.

Mr Sturt said the council was there to listen to people's concerns and "they would need to get the debate under way as soon as possible".

Rotorua District Residents and Ratepayers Association chairwoman Glenys Searancke told the Rotorua Daily Post she was concerned about the debt.

"I'm very disappointed with the $2m overrun, let's hope it doesn't continue."