Dear New Zealand Local Government Funding Agency Limited,

Please provide in excel format as follows

List of Current Shareholders
Annual Rates Revenue Only for the Shareholder 2020 - 2023
Total Debt Associated with that shareholder for those years

Can you also provide how you provide money to the shareholders?

In the context of this I am wanting to know how you know where the funding that you are providing the councils is going.

I understand that the LGFA was setup to assist in infrastructure spending. How does the LGFA know that is where the funding is going?

By way of an example WCC currently gets circa $480m rates revenue yet has circa $800m OPEX and another $500m CAPEX. This clearly means WCC are borrowing to fund day to day activities which clearly isn’t sustainable.

What does LGFA do to ensure councils aren’t spending beyond there means and then passing these costs on to the ratepayer because they have no fiscal constraint and the LGFA continues to give them money.

Yours faithfully,

Chris

Dear Enquiries,

Thanks for the response.

The covenants as they are written are being directly put on the ratepayer.

Net debt / total revenue - Total revenue directly relates to ratepayer income. If council increases rates you give them more money

Net interest / total revenue - Oh interest is higher, council approves a rates increase and you give them more money

Net interest / annual rates and liquidity ratio - And yet again you give them money as long as they raise rates.

Rates increases the last few years have been and continue to be double digits with 16% forecast for this year. This in turn means they turn around to the LGFA and say hey, we are still mismanaging finances but we heaped another 10% on our ratepayer so please give us some more money so we can do projects that nobody wants (Cycleways, removal of carparks and Lambton Quay as examples), whilst not funding core services (water).

Surely the operating cost versus the revenue needs to be looked at for the LGFA to actually assess properly the money you are giving them. If I went to the bank and said here is my income, but my expenses are 70% higher they would laugh in my face about giving me any more money.

We are about to be in a position where rates and insurance will exceed rental for buildings in Wellington and our council seems to think this is okay.

So to conclude - when is the tap turned off for Wellington City Council - 16% increase this year? Another 15% increase next year? 20% increase the following year?

When does the LGFA say you are living beyond your means - no more money? One year? Two years? Three years?

Yours sincerely,

Chris McCashin