Parking the Debt?

Parking the Debt

This week Hamish spoke at a submission hearing on the Council long-term plan about the current and projected Marlborough District Council debt. The Marlborough Express reported on this, do you have thoughts and opinions? Let us know.

18 thoughts on “Parking the Debt?

  1. The proposed debt is eye watering and large one off projects such as the proposed library and Flaxboune water scheme that are not essential should be parked.

    • My eyes watered also. At the risk of attempting to tell how to suck eggs, debt facilitates progress in both the private and public sectors, but in saying this both need a budgeted point at which the debt will either be paid of or reduced to a point where it is small enough to avoid crippling or slowing growth or future services and facilities serving the wider community to be continually provided. What we need to see is the point.

  2. A the risk of getting my head shot off I was disappointed at Hamish’s submission and John Leggatts response was a good explanation of the facts. The Chamber has had all of this explained to them several times and to carry on with misleading statements isn’t appropriate and discredits the Chamber as it seem they can not grasp the real position. I agree excessive debt is a problem but the focus should be on net debt not gross and what the real impact is.

    • This is an interesting view, the Chamber as you point out has had MDC debt explained but this explanation was not agreed on as it is not the full picture. By enlarge the public are unaware of the debt situation and that is a concern. What the Chamber is saying is that the consolidated debt of Marlborough, that is MDC and it’s 100% owned subsidiaries (MDC Holdings, Port Marlborough and all) is heading towards $200, million. That is a debt on average per rate payer of $7,500 or $4,500 per head and at 5% (with out paying any principle) is just shy of $10 million a year. The people of Marlborough will decide if they comfortable with that level of debt. They will also form their own opinion on the 40% projected rate rise of rates over the next ten years.

      • Now this is what the community needed to see at the outset; a strategy explained. But why are the rates going up if the investment is paying for itself? A concise description like this would also assist an overall picture to be provided and how are we protected from the cost of insufficient revenue to cover the debt if this occurs?

  3. Council have had an objective of revitalising the CBD retail area, in particular, Queen Street.
    I understand (in fact I know) that an Australasian retailer had been looking for approx. 1500m2 of retail space in Blenheim.
    In June and July 2014 the Directors of the company visited Blenheim three times as we negotiated lease terms with APL.
    Australian retailer wanted to do their own fit-out and exterior branding. They would have been ready for business about mid-November 2014.
    When the negotiated lease was presented to Council for consideration, they, in their wisdom, decided that the Primary Health Organisation was the preferred tenant.
    I can only assume that,APL, as property manager for Council, also negotiated the lease with the PHO.
    While the PHO may have 70-80 people working from the property, I wonder how many will have the will to spend money with the retailers in the Blenheim CBD. I imagine that not many of their clients will contribute to the retail spend.
    I wonder if Council were working for the retailers of Blenheim, or for the PHO.

    • While appreciating your comments and the merit they have, there is a need to differentiate between the interests of a land lord and the interests of a Council in this matter. Despite there being an ultimate connection through share holding I expect, the decisions re tenancy will have been made on the basis of being a land lord focussed on making the property a viable asset rather than the alternative. The argument I think needs to be directed towards how this separation is managed and the often conflicting perspectives this presents an organisation like a Council.

  4. Melva and I totally support Hamish’s position on debt, we had both put in our submissions with the exact same idea that the Library project should be put on the back burner while important water reticulation in Seddon and other areas be made top priority.

  5. Hubris from Council and the Bureaucracy – when they can’t see that saddling less than 25,000 ratepayers with $200,000,000 of debt is untenable.

    Off with their heads I say

  6. Lets fix the important things first like water. I believe we should not be building librarys and other things if our debts are as high as reported, we do not need them. The rate payers have to be able to pay there rates without huge increases to pay of debt on unnecessary items.

  7. I missed Hamishes presentation but sat in for 2 part days on the hearings .

    I supported the Chambers submission 100% until the core services are in place we can not afford the luxury items.

    Adding vibrancy and life back into the centre of Blenheim isn’t about throwing money at it, why don’t people visit or shop now.

    Keep the pressure on the MD. Kind wish M

    • Adding vibrancy back into the town is also not achieved by moving part of it out of the town centre and leaving another vacant property in the town centre. We have a library now, it provides a focus for people to come to town. If we feel we need to spend more money to enliven the town centre perhaps it should be on something else that will attract people there.

  8. Well done Hamish.

    The conflicts of interest and priorities of the MDC do need close scrutiny as they do not reflect openness and transparency.

    The booming escalation of the big ticket projects highlight the fact that they are both unwise and unsustainable.

    I’m sure we can do better in Marlborough

  9. Unfortunately the MDC has not followed it’s own plans. It has paid significant amounts of money to consultants to upgrade/beautify our town centre, & then disregarded 90% of what they said to do. It’s like asking your lawyer or accountant for their professional opinion, paying them for it, & then telling them you’ll do your own thing anyway.
    The council has quite rightly identified we have an at best static population, but have got no idea how to address it (or are not brave enough to). They ummm & arrrr over spending money to assist with Economic Development that will have a long term gain for the province, but are very quick to rubber stamp borrowing for the big ticket items like the Library.

  10. What concerns me is the greater than 40% rate increase that MDC is forecasting over the next 10 years. If you visit Statistics New Zealand website you will see the figures for usage are dropping (as you would expect) for libraries. Isn’t this just going to end up as a massive white elephant? Much like the car parking building?

  11. With and debt it is always the ability to repay. Marlborough has twice the national aveage aof +65’s (largely on fixed incomes) projected to double according to Councils own figures. We have zero new population growth over 7 years of the last census, no new industry to speak of, below the national average wage rates and our youth grow up and leave. Further debt under these circumstances is suicide in any community and Council seem set on leaving a legacy no-one with be able to afford. It is the macro picture that needs looking at to determine the economic environment under with any increase in debt can be afforded. Currently, it cannot!

  12. Perhaps the real question everyone should be asking is “how is the debt going to be repaid?”

    Interesting and disappointing that rates increase was higher than indicated in the long term plan, how could they get that wrong?

    Especially when major expenditure was deferred.

Leave a Reply

Your email address will not be published. Required fields are marked *