South Taranaki District Council says debt not a problem

Ross Dunlop says the council debt is not a problem. Photo / File

South Taranaki's mayor has quashed concerns about the district council's level of debt, saying the money could be paid off tomorrow if needed.

The Taxpayers Union has released a "league table" of councils' debt per ratepayer levels and it has South Taranaki District Council as the second highest behind the Kapiti Coast District Council.

According to the tables South Taranaki District Council has $8787 in debt per ratepayer, but the mayor, Ross Dunlop, said that wasn't a problem.

"If you just look at the debt side of our council, yes it is obviously one of the higher ones.

"But we've also got, to counter that, $140 million in the bank. So we could pay off that debt tomorrow if we wanted to."

Dunlop said the council was borrowing to pay for projects that were needed.

"What we've been doing is investing in our communities. Upgrading water supplies, sporting facilities, wastewater plants, things like that. Things that communities need. We've been funding that through loan.

"The money in the bank we invest at a much higher return," Dunlop said.

"For example our investment fund returned 10 per cent and our cost of debt was under 5 per cent. So a 5 per cent advantage to our ratepayers.

"That's not the norm. Long term it's probably only going to be a 1 or 2 per cent advantage but it's still worthwhile."

The mayor said it was important to look beyond the headline figures.

"I've got no problem with the scrutiny. We're actually in the lower third of average rates per resident. I think it's good that people are scrutinising us and asking questions but I think quite often there's more facts behind some of the headlines.

"We have a Standard & Poor's rating. We were actually upgraded last year from A+ to AA- which is a good rating. That gives us comfort that we've had a reputable outside authority, Standard & Poors came in and looked at our books and said, 'hey, you're doing the right thing'."

The tables showed Whanganui District Council had $6556 in debt per ratepayer and Rangitikei District Council, placed in the "rural council" table, had $725 of debt per ratepayer.

The tables also showed the various councils' average rates as well. Whanganui's were the ninth highest (of 27) district councils with average rates of $2464 per ratepayer. South Taranaki had the seventh lowest average rates at $2103.

The Rangitikei District Council had the fifth highest (of 22 available) average rates of the rural councils at $2420 per ratepayer.