A new business plan has been created for the Stratford District Council owned farm, prompting discussion at a recent policy and services committee meeting.
A report on the plan was received by councillors during last Tuesday's meeting before the business plan was adopted.
The council owes $2.5 million on the Flint Rd property which is share-milked by Aaron and Fiona Riddick.
The council plans to reduce this debt by around $500,000 through subdividing and selling off a small farmlet that includes a two storey home on the property.
The farm business plan was written by council's corporate services director, Tiffany Radich, and among other things, clarifies the objectives of the farm and intentions for profits.
The profits from the original farm have traditionally been used to fund the maintenance and development of the Stratford aerodrome and the balance contributed towards subsiding rates.
The council took on the $2.5m debt as part of the purchase of the neighbouring 53 hectares in 2015 which increased the overall size of the farm.
Since then, loan interest has been serviced and improvements made to the property, but no capital debt repayments have been made yet.
The business plan states this has had an effect on farm profitability, with interest costs eroding profits and therefore debt repayments would start this financial year.
While voting on the plan's adoption, a division was called, with all councillors present except for Rick Coplestone voting in favour. Rick told the Stratford Press he was uncertain about aspects of the report and needed more information.
Although voting in favour of the plan, councillor Kelvin Squire questioned the economic return on the farm and whether the council did the right thing by purchasing it. "From a ratepayers perspective ... it's not a good investment."
Mayor Neil Volzke disputed this statement and said the community had been asked during a previous long term plan process whether it wanted council to sell the farm and the response was an "emphatic no".
He says when council took the opportunity and bought the neighbouring farm it was about creating economies of scale and making the unit more economic.
Neil says during the initial years, the return for rate mitigation would be a little less than before but over time the interest costs would decrease and give council scope to increase the rate of debt repayment and rates subsidy.
"It will get to a point where we are debt free and ratepayers will enjoy a significant subsidy on their rates.
"We are locked into it — the community said they want us to keep the farm. Right now the returns are at the lower end but in the future it will get better. As an investment we will get benefits from it for many years to come ... I stand by our decision to have bought the farm."
Rick says while council was in debt, the best bet would be to lease it out as it would be consistent income and would insure council wasn't at the mercy of the market
"When it's freehold perhaps you can go back — I do think we need some security."
He says selling the farm was not an option. "It's pretty much part of Stratford's identity too ... I would like to see the debt clear as soon as possible."
Tiffany says ownership of the farm at Flint Rd is supported by elected members, and is seen as an investment into the economic wellbeing of the district, and a demonstration of council's investment in the rural sector and commitment to the rural community.
"Council also supports the aerodrome and being effective in its role in providing a buffer zone to protect the continued operations of the Stratford Aerodrome. The plan was the first to be presented to current elected members and the intention is that it will be updated on an annual basis with previous year actuals and with any significant changes."
Council farm timeline
* The portion of the farm to the north and west of the aerodrome was purchased by council in two transactions in 1934 and 1935 for £7000 for the purpose of establishing the aerodrome, and providing a buffer of land around it.
* In 1969 the adjoining farm to the south (37 hectares) was purchased.
* In 2015 the neighbouring Campbell farm (53 hectares) was purchased for $2.8 million. Additional Fonterra shares were purchased for $240,000. The council part funded this purchase by borrowing $2.5 million and an internal loan of $65,000.
* In conjunction with the 2015 purchase, a north-eastern section (7 hectares of the original 1934 piece) was subdivided off and sold.