The Dunedin City Council is considering raiding its ''jam
jars'' of money to help accelerate debt repayments.
The idea was raised following a question by Cr Richard
Thomson at the end of a brief meeting of the council's
finance committee yesterday.
Cr Thomson, the committee chairman, asked staff whether they
had considered using the $250,000 set aside for
self-insurance in 2011 in other ways.
The fund had not been added to since then, was of ''marginal
utility'' as insurance, and could be put to better use by
repaying debt, he suggested.
Council group chief financial officer Grant McKenzie said the
council had ''a number of jam jars'' within its balance sheet
- money set aside for a variety of purposes - that could be
He planned to present a report on the issue to the committee
later this year.
''I just think we need to consider those, given our debt
profile,'' he said.
The $250,000 fund was created in 2011, using money that would
have paid the council's insurance premiums, after it was left
with billions of dollars of uninsured infrastructure assets
following the Canterbury earthquakes.
The council had to cover 40% of any repair bill to obtain 60%
support from the Government, and had planned to add to the
$250,000 fund where possible in subsequent years.
That had not happened, meaning - with interest accruing - the
fund had reached just $265,000 by January this year,
prompting questions about its usefulness from Cr Thomson at
The council was instead relying in part on access to a line
of ''pre-arranged debt'', worth $200 million, which was
guaranteed in the event of a major event.
However, a review of existing insurance arrangements was also
under way, and Mr McKenzie flew to London in April for
meetings with 15 representatives from specialist insurance
market Lloyds of London, including All Blacks sponsor AIG.
The trip aimed to secure a better insurance deal for council
and company assets, together worth $3.4 billion, and the
council had until June 30 to renew existing contracts or
accept new ones.