In 2015, the Waitaki District Council granted the trust a loan of up to $8million to build the recently completed $22million Stage 1 of Observatory Village Lifecare in Oamaru. When it opens on August 8, due to the closure of rest homes Rendell on Reed and Takaro Lodge, the 41-bed care facility and retirement village will be full.
The council yesterday issued a statement saying a decision next week in favour of the new loan could allow the trust to immediately start building Stage 2.
Waitaki Mayor Gary Kircher, a council-appointed trustee who will not participate in next week’s debate or vote on the decision, said after some in the community questioned a February decision to fund the planning for Stage 2 — through a $93,000 donation to the trust from a bequest and an interest-free loan of up to $157,000 — "there will be some who might be concerned about this".
"But this still comes back to [the trust] trying to look after the community as best it can. There is a need for more beds. There’s no-one else who has put their hand up to say they are creating more. And if they were to do so, it wouldn’t be the number and the speed with which Observatory Village can.
"And fundamentally, the underlying thing is that it is a community-owned trust and the profits — once the debt is paid off — the profits will come back to the community, which at the moment looks to be in excess of $1million a year."
Despite a decision yesterday to make the decision at a public meeting, next week’s extraordinary council meeting remained listed as public excluded on the council’s website and council chief financial officer Paul Hope’s report to council, referred to in the council statement, was not publicly available.
Mr Hope told the Otago Daily Times the loans, including compounded interest, were expected to be paid off in 10 years.
"The projections from the trust is that it [the trust’s outstanding debt] won’t ever get to $12million because they will start repaying one [loan] as the other goes up, just because of the cash flow of the operation," he said.
Southern District Health Board acting executive director of planning and funding Liz Disney said that at the start of August there would be 117 hospital-level care beds in Oamaru and despite the opening of Observatory Village Lifecare by September there would be 106.
