Feedback sought on NRC joining the Local Govt Funding Agency

Ratepayers will pay less in targeted rates if the Northland Regional Council joins the Local Government Funding Agency. Photo / Supplied

Northlanders will pay less in targeted rates if the Northland Regional Council's proposal to join the Local Government Funding Authority gets the green light.

Property owners in flood-prone areas paying the flood infrastructure rate will be among the beneficiaries of the proposal presently going through public feedback.

NRC wants to tap into more borrowing at low-interest rates to fund key infrastructure, including flood remedial works in places such as Kaeo. That feedback is being sought through NRC's Long Term Plan.

The Whangarei District Council is the only territorial authority in Northland that is a member of LGFA. As a non-member, NRC can only borrow up to $20 million from the LGFA at an interest rate between six and seven per cent. If it becomes a member, NRC can borrow about $64m at four per cent.

NRC chairman Bill Shepherd said apart from funding flood remedial work, cheaper loans would also help in other areas such as lending money to the Northland Rescue Helicopter.

In August last year, NRC said it was considering lending Northland Emergency Services Trust (Nest) $9.8m using access to better interest rates through LGFA.

Such an arrangement will save Nest about $200,000 a year in interest repayments. The proposed loan will have no impact on rates.

Mr Shepherd said there were obvious benefits of obtaining cheaper loans.

"A capital sum has to be put up front at present to get work done. In the past, we have used council reserves or money from commercial enterprises like banks, which get returns of seven to eight per cent on those loans.

"With LGFA, the returns are only four per cent and so the community will benefit through a reduction in targeted rates," he said.

Mr Shepherd said since NRC did not do a lot of borrowing in the past, it did not join LGFA, but its work has now expanded.

In its long-term plan, NRC is proposing all ratepayers in the region chip in financially for flood remedial work rather than those who directly benefit from it.

If the proposal gets the green light, an average ratepayer will fork out about $67 annually, or $1.30 more a week.

Those wishing to make submissions should do so online on nrc.govt.nz/ltp2018 before 4pm on April 17.