ORC's first stadium payment to be made from reserves

The Otago Regional Council's first payment towards the Forsyth Barr Stadium will come from its reserves, as its borrowing arrangements have not yet been finalised.

In its long-term funding plan, the council outlined that it would borrow the full $37.5 million it would contribute to the stadium, to be repaid over 15 years, at a fixed interest rate of 8%.

A report to tomorrow's finance and corporate committee said while staff were working towards establishing a borrowing facility, it would not be in place before the first payment of $5 million was due on August 1.

It was intended the payment would be made from reserves in the "interim" and that the borrowing arrangements would be finalised before the second payment, of $2.5 million, was due next March.

Chief executive Graeme Martin said when contacted yesterday, the council never intended to make the first payment from borrowings, as it had the ability to make it from reserves.

Overall, the council intends paying $17.5 million next financial year - a $7.5 million payment on July 1 and two payments of $5 million each on September 1 and November 1.

The final $10 million payment would be made on July 1, 2011.

The borrowings would be repaid by a targeted rate on regional ratepayers and dividends from Port Otago, which is 100% owned by the council.

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