The West Coast Regional’s core debt is about to rise by another $3 million to $27.15 million, as the council continues to draw down loans to fund flood protection.
But the council’s financial advisers say it is well within its debt-to-revenue limits, and on the plus side, the council’s investment portfolio now sits at nearly $15m.
The fund gained $1.28m over the year to the end of June and has since gained another $460,000.
But the country’s economic recovery was not yet entrenched, Mr Phillips said.
Inflation was under control, and with unemployment rising interest rates were likely to fall.
The council’s Bancorp Treasury adviser Miles O’Connor said after travelling around the country recently he felt New Zealand’s so-called economic revival was being pushed out.
"The saying was in 2024, survive until ’25 — now the saying is survive through ’25."
Agriculture was doing well along with tourism in the South, Mr O’Connor said.
"There are more and more visitors to the West Coast, and the further south you go the better it gets. The area showing the greatest recovery is Southland."
But construction was still in the doldrums, there were record levels of people leaving New Zealand, retail was "awful" and there was record youth unemployment especially in Auckland, Mr O’Connor said.
"It’s almost a two-speed economy. South of Christchurch is doing quite well."
It had been expected the OCR would bottom out in November at 3%, but that had changed with the extended slowdown and the markets were now projecting a 25-point OCR cut this week and a low of 2.75% in the new year.
Council chairman Peter Haddock said the council’s rising debt level would probably stir comment, in the leadup to the council elections.
It was important to remember that the debt was planned and budgeted for, he said.
"We are borrowing on behalf of the rating districts for flood protection up and down the Coast."
Chief executive Darryl Lew said the borrowing was significantly driven by investing in flood schemes, endorsed by community consultation.
• Local Democracy Reporting is local body journalism co-funded by RNZ and NZ On Air.
By Lois Williams
