LGFA vs Local Authority's
Andrew Mitchell made this Official Information request to Department of Internal Affairs
The request was successful.
From: Andrew Mitchell
Dear Department of Internal Affairs,
I note that you have the Local Government Funding Agency under your administration,
As the LGFA constitutes a council-controlled organisation” under the Local Government Act 2002, please supply the following information under the Official Information Act (OIA) and or Local Government Official Information and Meetings Act (LGOIMA):
1. What is the company that the LGFA is registered as under the Companies Register?
2. What are the sources of funds being the guaranteed creditors and or beneficiaries, if any, available to the LGFA that were not available under the previous lending regime, where the LGFA can raise funds?
3. Are the funds hedged using interest rate swaps or derivatives of any nature?
4. How is each Local Authority and or guarantor protected from other defaulting guarantors and or local authorities?
Yours faithfully,
Andrew Mitchell
From: OIA
Department of Internal Affairs
Tēnā koe Andrew
Thank you for your OIA request to the Department of Internal Affairs (included with this email)
As the information you have requested is not held by the Department of Internal Affairs, but is believed to be held by, and more closely related to the functions of the Local Government Funding Agency, we are transferring your request to that agency for response, in accordance with section 14(b) of the Official Information Act 1982 and section 12(b) of the Local Government Official Information and Meetings Act
You can expect to hear from the receiving organisation shortly in regard to your request.
You have the right to seek an investigation and review by the Ombudsman of this decision to transfer. Information about how to make a complaint is available at http://www.ombudsman.parliament.nz/ or Freephone 0800 802 602.
Nāku, nā
Michelle Reed (she/her)
Lead Advisor Official Correspondence | Information Management and Privacy
He Ringa Manaaki | Workplace Services Group
He Pou Aronui | Organisational Capability and Services
Te Tari Taiwhenua | Department of Internal Affairs
Level 3, 45 Pipitea St | PO Box 805, Wellington 6140, New Zealand | http://www.dia.govt.nz/
-----Original Message-----
From: Andrew Mitchell <[FOI #24025 email]>
Sent: 03 September 2023 14:26
To: OIA <[DIA request email]>
Subject: Official Information request - LGFA vs Local Authority's
[You don't often get email from [FOI #24025 email]. Learn why this is important at https://aka.ms/LearnAboutSenderIdentific... ]
Dear Department of Internal Affairs,
I note that you have the Local Government Funding Agency under your administration,
As the LGFA constitutes a council-controlled organisation” under the Local Government Act 2002, please supply the following information under the Official Information Act (OIA) and or Local Government Official Information and Meetings Act (LGOIMA):
1. What is the company that the LGFA is registered as under the Companies Register?
2. What are the sources of funds being the guaranteed creditors and or beneficiaries, if any, available to the LGFA that were not available under the previous lending regime, where the LGFA can raise funds?
3. Are the funds hedged using interest rate swaps or derivatives of any nature?
4. How is each Local Authority and or guarantor protected from other defaulting guarantors and or local authorities?
Yours faithfully,
Andrew Mitchell
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From: Enquiries
Hi Andrew
Thank you for your request for information that was transferred to LGFA
from DIA - please find attached our response.
Regards
LGFA
From: Andrew Mitchell
Dear Enquiries / Mr Mark Butcher, CEO
Thankyou for your response.
In your response, you have stated;
“LGFA cannot seek to recover this amount from other local authorities.”
and
“Local authorities do not provide a guarantee of another local authority's debt.”
Your response also states;
“When LGFA borrows money, its obligations are guaranteed by most of the local authorities who participate in the LGFA borrowing structure (LGFA Guarantee).”
and
“If a guarantor fails to pay its pro-rata share of a demand under the LGFA Guarantee, the Security Trustee will make further demands on the other guarantors for payment of the unpaid amount on a pro-rata basis until the outstanding amounts are paid in full.”
It is worth noting here, that your ‘LGFA An Overview’ document on your website also states;
”…[a] council… [who is a guarantor], [provides] a guarantee [which] will be in favour of the obligations of LGFA. Any call under the guarantee will be allocated across *all the guarantors* on a pro rata basis in relation to their rates revenue.”
Your ‘Amendment and Restatement Deed (Guarantee and Indemnity)’ [document 3756987 v6] it states;
3.4(b)
“…[LGFA] shall deliver a Demand to each Guarantor requiring the Guarantor to pay the proportion of the relevant amount…”
and
3.4(c)
“…if one or more Guarantors fails to pay in full its Relevant Portion of a Relevant Amount… …the [LGFA] may deliver a further Demand to *each Guarantor other than the Defaulting Guarantors requiring that Non-Defaulting Guarantor to pay the proportion of the Shortfall Amount…”
“…for each Non-Defaulting Guarantor , its *Additional Relevant Proportion*…”
and
3.4(d)
“…if one or more Non-Defaulting Guarantors fails to pay in full its Additional Relevant Proportion… …the [LGFA] may deliver a further Demand to each other Non-Defaulting Guarantor… …shall apply to the relevant shortfall amount *and such other Non-Defaulting Guarantors…”
and shall
“…continue to apply until the Relevant Amount has been paid in full to the [LGFA].”
My points and hence the questions are;
1. Your statements made in response to my original OIA seem incorrect; is it not true that whilst a council (Guarantor) may not be directly responsible for a “Defaulting Guarantor's” specific or actual debt, however a council (Guarantor) may receive a Demand as a Non-Defaulting Guarantor, and
2. To clarify my question around a councils protection from other defaulting Guarantors (question 4), and given clause 16.9(d) of the aforementioned deed, is there no limitation to the continuance of the Demand to Non-Defaulting Guarantors, OTHER THAN those specified in clause 3.4 (a) - (d) where the Demand is a proportion of the Relevant Amount based on a pro rata allocation of the rates revenue?
Yours sincerely,
Andrew Mitchell
From: Enquiries
Hi Andrew
Thanks for your further enquiry and we will respond shortly to your question.
Our apologies for not responding formally to your follow up but we acknowledge receipt of your request.
Regards
LGFA
-----Original Message-----
From: Andrew Mitchell <[FOI #24025 email]>
Sent: Sunday, October 8, 2023 6:10 PM
To: Enquiries <[email address]>
Subject: Re: LGOIMA Response - Andrew Mitchell - September 2023
Dear Enquiries / Mr Mark Butcher, CEO
Thankyou for your response.
In your response, you have stated;
“LGFA cannot seek to recover this amount from other local authorities.”
and
“Local authorities do not provide a guarantee of another local authority's debt.”
Your response also states;
“When LGFA borrows money, its obligations are guaranteed by most of the local authorities who participate in the LGFA borrowing structure (LGFA Guarantee).”
and
“If a guarantor fails to pay its pro-rata share of a demand under the LGFA Guarantee, the Security Trustee will make further demands on the other guarantors for payment of the unpaid amount on a pro-rata basis until the outstanding amounts are paid in full.”
It is worth noting here, that your ‘LGFA An Overview’ document on your website also states; ”…[a] council… [who is a guarantor], [provides] a guarantee [which] will be in favour of the obligations of LGFA. Any call under the guarantee will be allocated across *all the guarantors* on a pro rata basis in relation to their rates revenue.”
Your ‘Amendment and Restatement Deed (Guarantee and Indemnity)’ [document 3756987 v6] it states;
3.4(b)
“…[LGFA] shall deliver a Demand to each Guarantor requiring the Guarantor to pay the proportion of the relevant amount…”
and
3.4(c)
“…if one or more Guarantors fails to pay in full its Relevant Portion of a Relevant Amount… …the [LGFA] may deliver a further Demand to *each Guarantor other than the Defaulting Guarantors requiring that Non-Defaulting Guarantor to pay the proportion of the Shortfall Amount…”
“…for each Non-Defaulting Guarantor , its *Additional Relevant Proportion*…”
and
3.4(d)
“…if one or more Non-Defaulting Guarantors fails to pay in full its Additional Relevant Proportion… …the [LGFA] may deliver a further Demand to each other Non-Defaulting Guarantor… …shall apply to the relevant shortfall amount *and such other Non-Defaulting Guarantors…”
and shall
“…continue to apply until the Relevant Amount has been paid in full to the [LGFA].”
My points and hence the questions are;
1. Your statements made in response to my original OIA seem incorrect; is it not true that whilst a council (Guarantor) may not be directly responsible for a “Defaulting Guarantor's” specific or actual debt, however a council (Guarantor) may receive a Demand as a Non-Defaulting Guarantor, and
2. To clarify my question around a councils protection from other defaulting Guarantors (question 4), and given clause 16.9(d) of the aforementioned deed, is there no limitation to the continuance of the Demand to Non-Defaulting Guarantors, OTHER THAN those specified in clause 3.4 (a) - (d) where the Demand is a proportion of the Relevant Amount based on a pro rata allocation of the rates revenue?
Yours sincerely,
Andrew Mitchell
-----Original Message-----
Hi Andrew
Thank you for your request for information that was transferred to LGFA from DIA - please find attached our response.
Regards
LGFA
-------------------------------------------------------------------
Please use this email address for all replies to this request:
[FOI #24025 email]
Disclaimer: This message and any reply that you make will be published on the internet. Our privacy and copyright policies:
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If you find this service useful as an Official Information officer, please ask your web manager to link to us from your organisation's OIA or LGOIMA page.
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From: Enquiries
Hi Andrew,
Please find attached our response to your question
Regards
LGFA
-----Original Message-----
From: Enquiries <[email address]>
Sent: Wednesday, October 18, 2023 3:46 PM
To: Andrew Mitchell <[FOI #24025 email]>; Enquiries <[email address]>
Subject: RE: LGOIMA Response - Andrew Mitchell - September 2023
Hi Andrew
Thanks for your further enquiry and we will respond shortly to your question.
Our apologies for not responding formally to your follow up but we acknowledge receipt of your request.
Regards
LGFA
-----Original Message-----
From: Andrew Mitchell <[FOI #24025 email]>
Sent: Sunday, October 8, 2023 6:10 PM
To: Enquiries <[email address]>
Subject: Re: LGOIMA Response - Andrew Mitchell - September 2023
Dear Enquiries / Mr Mark Butcher, CEO
Thankyou for your response.
In your response, you have stated;
“LGFA cannot seek to recover this amount from other local authorities.”
and
“Local authorities do not provide a guarantee of another local authority's debt.”
Your response also states;
“When LGFA borrows money, its obligations are guaranteed by most of the local authorities who participate in the LGFA borrowing structure (LGFA Guarantee).”
and
“If a guarantor fails to pay its pro-rata share of a demand under the LGFA Guarantee, the Security Trustee will make further demands on the other guarantors for payment of the unpaid amount on a pro-rata basis until the outstanding amounts are paid in full.”
It is worth noting here, that your ‘LGFA An Overview’ document on your website also states; ”…[a] council… [who is a guarantor], [provides] a guarantee [which] will be in favour of the obligations of LGFA. Any call under the guarantee will be allocated across *all the guarantors* on a pro rata basis in relation to their rates revenue.”
Your ‘Amendment and Restatement Deed (Guarantee and Indemnity)’ [document 3756987 v6] it states;
3.4(b)
“…[LGFA] shall deliver a Demand to each Guarantor requiring the Guarantor to pay the proportion of the relevant amount…”
and
3.4(c)
“…if one or more Guarantors fails to pay in full its Relevant Portion of a Relevant Amount… …the [LGFA] may deliver a further Demand to *each Guarantor other than the Defaulting Guarantors requiring that Non-Defaulting Guarantor to pay the proportion of the Shortfall Amount…”
“…for each Non-Defaulting Guarantor , its *Additional Relevant Proportion*…”
and
3.4(d)
“…if one or more Non-Defaulting Guarantors fails to pay in full its Additional Relevant Proportion… …the [LGFA] may deliver a further Demand to each other Non-Defaulting Guarantor… …shall apply to the relevant shortfall amount *and such other Non-Defaulting Guarantors…”
and shall
“…continue to apply until the Relevant Amount has been paid in full to the [LGFA].”
My points and hence the questions are;
1. Your statements made in response to my original OIA seem incorrect; is it not true that whilst a council (Guarantor) may not be directly responsible for a “Defaulting Guarantor's” specific or actual debt, however a council (Guarantor) may receive a Demand as a Non-Defaulting Guarantor, and
2. To clarify my question around a councils protection from other defaulting Guarantors (question 4), and given clause 16.9(d) of the aforementioned deed, is there no limitation to the continuance of the Demand to Non-Defaulting Guarantors, OTHER THAN those specified in clause 3.4 (a) - (d) where the Demand is a proportion of the Relevant Amount based on a pro rata allocation of the rates revenue?
Yours sincerely,
Andrew Mitchell
-----Original Message-----
Hi Andrew
Thank you for your request for information that was transferred to LGFA from DIA - please find attached our response.
Regards
LGFA
-------------------------------------------------------------------
Please use this email address for all replies to this request:
[FOI #24025 email]
Disclaimer: This message and any reply that you make will be published on the internet. Our privacy and copyright policies:
https://fyi.org.nz/help/officers
If you find this service useful as an Official Information officer, please ask your web manager to link to us from your organisation's OIA or LGOIMA page.
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From: Andrew Mitchell
Dear Enquiries,
Does the quoted section from my previous OIA request, following here;
"Your ‘Amendment and Restatement Deed (Guarantee and Indemnity)’ [document 3756987 v6] it states;
3.4(b)
“…[LGFA] shall deliver a Demand to each Guarantor requiring the Guarantor to pay the proportion of the relevant amount…”
and
3.4(c)
“…if one or more Guarantors fails to pay in full its Relevant Portion of a Relevant Amount… …the [LGFA] may deliver a further Demand to *each Guarantor other than the Defaulting Guarantors requiring that Non-Defaulting Guarantor to pay the proportion of the Shortfall Amount…”
...mean that a non-defaulting council (Guarantor) may be required to pay a defaulting council's (Guarantor's) 'relevant portion' of the 'relevant amount' under the terms and conditions of the LGFA loan arrangement?
Yours sincerely,
Andrew Mitchell
From: Enquiries
Thanks Andrew
We acknowldge your request and will reply shortly
-----Original Message-----
From: Andrew Mitchell <[FOI #24025 email]>
Sent: Wednesday, November 8, 2023 11:36 PM
To: Enquiries <[email address]>
Subject: RE: LGOIMA Response - Andrew Mitchell - September 2023
Dear Enquiries,
Does the quoted section from my previous OIA request, following here;
"Your ‘Amendment and Restatement Deed (Guarantee and Indemnity)’ [document 3756987 v6] it states;
3.4(b)
“…[LGFA] shall deliver a Demand to each Guarantor requiring the Guarantor to pay the proportion of the relevant amount…”
and
3.4(c)
“…if one or more Guarantors fails to pay in full its Relevant Portion of a Relevant Amount… …the [LGFA] may deliver a further Demand to *each Guarantor other than the Defaulting Guarantors requiring that Non-Defaulting Guarantor to pay the proportion of the Shortfall Amount…”
...mean that a non-defaulting council (Guarantor) may be required to pay a defaulting council's (Guarantor's) 'relevant portion' of the 'relevant amount' under the terms and conditions of the LGFA loan arrangement?
Yours sincerely,
Andrew Mitchell
-----Original Message-----
Hi Andrew,
Please find attached our response to your question
Regards
LGFA
-------------------------------------------------------------------
Please use this email address for all replies to this request:
[FOI #24025 email]
Disclaimer: This message and any reply that you make will be published on the internet. Our privacy and copyright policies:
https://fyi.org.nz/help/officers
If you find this service useful as an Official Information officer, please ask your web manager to link to us from your organisation's OIA or LGOIMA page.
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From: Enquiries
Hi Andrew
Please see our attached response
Regards
LGFA
-----Original Message-----
From: Andrew Mitchell <[FOI #24025 email]>
Sent: Wednesday, November 8, 2023 11:36 PM
To: Enquiries <[email address]>
Subject: RE: LGOIMA Response - Andrew Mitchell - September 2023
Dear Enquiries,
Does the quoted section from my previous OIA request, following here;
"Your ‘Amendment and Restatement Deed (Guarantee and Indemnity)’ [document 3756987 v6] it states;
3.4(b)
“…[LGFA] shall deliver a Demand to each Guarantor requiring the Guarantor to pay the proportion of the relevant amount…”
and
3.4(c)
“…if one or more Guarantors fails to pay in full its Relevant Portion of a Relevant Amount… …the [LGFA] may deliver a further Demand to *each Guarantor other than the Defaulting Guarantors requiring that Non-Defaulting Guarantor to pay the proportion of the Shortfall Amount…”
...mean that a non-defaulting council (Guarantor) may be required to pay a defaulting council's (Guarantor's) 'relevant portion' of the 'relevant amount' under the terms and conditions of the LGFA loan arrangement?
Yours sincerely,
Andrew Mitchell
-----Original Message-----
Hi Andrew,
Please find attached our response to your question
Regards
LGFA
-------------------------------------------------------------------
Please use this email address for all replies to this request:
[FOI #24025 email]
Disclaimer: This message and any reply that you make will be published on the internet. Our privacy and copyright policies:
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If you find this service useful as an Official Information officer, please ask your web manager to link to us from your organisation's OIA or LGOIMA page.
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From: Andrew Mitchell
Dear Enquiries,
Thankyou. So to clarify, and in layman's terms, a council who has not defaulted may receive a demand to pay (a proportion of a particular amount) towards a loan or loans of a defaulting council?
Yours sincerely,
Andrew Mitchell
From: Enquiries
LGOIMA Response Andrew Mitchell follow up question 2 26 November 2023.pdf
182K
Download
View as HTML
Hi Andrew
Please find our answer to your question
Regards
LGFA
-----Original Message-----
From: Andrew Mitchell <[FOI #24025 email]>
Sent: Tuesday, November 21, 2023 2:47 PM
To: Enquiries <[email address]>
Subject: RE: LGOIMA Response - Andrew Mitchell - September 2023
Dear Enquiries,
Thankyou. So to clarify, and in layman's terms, a council who has not defaulted may receive a demand to pay (a proportion of a particular amount) towards a loan or loans of a defaulting council?
Yours sincerely,
Andrew Mitchell
-----Original Message-----
Hi Andrew
Please see our attached response
Regards
LGFA
-------------------------------------------------------------------
Please use this email address for all replies to this request:
[FOI #24025 email]
Disclaimer: This message and any reply that you make will be published on the internet. Our privacy and copyright policies:
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If you find this service useful as an Official Information officer, please ask your web manager to link to us from your organisation's OIA or LGOIMA page.
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From: Andrew Mitchell
Dear Enquiries,
So to clarify, again, and in layman's terms, a council who has not defaulted may receive a
demand to pay (a proportion of a particular amount) towards a loan or loans of a
defaulting council, notwithstanding that the non-defaulting (or any other) Council does NOT provide a WARRANTY over a defaulting (or any other) Council?
This isn't an issue around a warranty, but rather whether a demand can be placed on a non-defaulting council for rates for a defaulting-council - which is what 3.4(b) and 3.4(c) (previously quoted) seems to state.
Yours sincerely,
Andrew Mitchell
From: Enquiries
Hi Andrew
In response to the below question our response in layman's terms is
A council guarantees the financial obligations of LGFA not the other councils who borrow from LGFA.
If a council guarantor of LGFA does not meet its obligation under the LGFA guarantee, then its obligation is allocated on pro-rata basis amongst the other council guarantors. This is in accordance with the Guarantee and Indemnity Deed.
Regards
Mark Butcher
Chief Executive
-----Original Message-----
From: Andrew Mitchell <[FOI #24025 email]>
Sent: Friday, December 8, 2023 9:21 AM
To: Enquiries <[email address]>
Subject: RE: LGOIMA Response - Andrew Mitchell - September 2023
Dear Enquiries,
So to clarify, again, and in layman's terms, a council who has not defaulted may receive a demand to pay (a proportion of a particular amount) towards a loan or loans of a defaulting council, notwithstanding that the non-defaulting (or any other) Council does NOT provide a WARRANTY over a defaulting (or any other) Council?
This isn't an issue around a warranty, but rather whether a demand can be placed on a non-defaulting council for rates for a defaulting-council - which is what 3.4(b) and 3.4(c) (previously quoted) seems to state.
Yours sincerely,
Andrew Mitchell
-----Original Message-----
Hi Andrew
Please find our answer to your question
Regards
LGFA
-------------------------------------------------------------------
Please use this email address for all replies to this request:
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Disclaimer: This message and any reply that you make will be published on the internet. Our privacy and copyright policies:
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If you find this service useful as an Official Information officer, please ask your web manager to link to us from your organisation's OIA or LGOIMA page.
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Andrew Mitchell left an annotation ()
This response does NOT address any of the issues raised, even with quoted sections and clauses from THEIR own documentation; which is, that the operating rules and guidelines and deed makes it quite clear that a non-defaulting council can be required to pay the debt of a defaulting council;
The ‘Amendment and Restatement Deed (Guarantee and Indemnity)’ [document 3756987 v6] it states;
3.4(b)
“…[LGFA] shall deliver a Demand to each Guarantor requiring the Guarantor to pay the proportion of the relevant amount…”
and
3.4(c)
“…if one or more Guarantors fails to pay in full its Relevant Portion of a Relevant Amount… …the [LGFA] may deliver a further Demand to *each Guarantor other than the Defaulting Guarantors requiring that Non-Defaulting Guarantor to pay the proportion of the Shortfall Amount…”
Link to this