DCC debt forecast to go under $220m

The Dunedin City Council remains on track to record debt levels lower than $220million, despite its latest financial results showing more than $9million had to be found in two months.

At its recent annual plan deliberations, the council committed to spending an unbudgeted $500,000 on a $1.77 million hockey turf at King's High School, as long as council debt was lower than $220million by the end of the financial year.

Financial results disclosed in the council's finance committee agenda show debt was at $229.678million at April 30.

Council group chief financial officer Grant McKenzie said he remained confident council debt would be low enough by the end of the financial year, at the end of this month, to fund the project.

The proposal would result in a "multipurpose all-weather facility'' being built at King's High School.

It would include lights and stands.

It would be funded by the school, the council and Otago Hockey, with each paying a third of the cost.

The council has also committed to paying $10,000 a year for 10 years towards upkeep once it is completed.

The commitment came after an hour-long debate on the merits of the proposal, with several councillors dissenting because they did not believe it should be funded by council debt.

It was the only project in the annual plan that was subject to the council's debt position.

"Council is still forecasting that debt will be below $220million by the end of the financial year,'' Mr McKenzie said.

"There are a couple of things which improve our financial position in June.''

Among them were dividend payments from Dunedin City Holdings and the Waipori Fund, he said.

Capital expenditure had been lower than forecast and those savings would help with the council's debt position.

The council agreed to a rates increase of 2.97% for the 2016-17 year after councillors took advantage of a $1million underspend from the previous year.

The underspend was allocated to installing lights at University Oval but the project was dropped.

timothy.brown@odt.co.nz

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