Council Investment Fund Performs Strongly
Strong market conditions saw the South Taranaki District Council’s (STDC) Long Term Investment Fund (LTIF) earn almost $20 million in the 2020/21 financial year according to its Annual Report, which was adopted at Monday night's Council meeting (1 November).
STDC chief executive Waid Crockett says the fund’s strong performance was the key driver of the Council’s $26.5 million surplus.
“The LTIF returned $19.96 million which was $11.5 million more than we budgeted. As at 30 June 2021 and, after taking out the annual $5.8 million rate subsidy, the value of the fund increased to $159 million – up from $144.65 million the year before.”
Mr Crockett says each year the Council’s draws on average $5.8 million from the LTIF which provides $3.87 million to subsidise general rates and a further $1.93 million to service loans for specific community projects.
“In this way the LITF has returned more than $112 million back to the South Taranaki Community since it was started in 1997,” he says.
“All revenue over and above the annual drawdown of $5.8 million is returned to the Fund to build it up for those years when it doesn’t perform so well.”
The remaining ($15.8 million) surplus was for revenue received from central government or other organisations for projects that were just starting or about to start (e.g. Te Ramanui o Ruapūtahanga the District’s new Library, Culture and Arts Centre), or for interest rate swaps (gains on derivative contracts) which are purely an accounting entry and have no impact on rates.
Total debt also decreased from $133.99 million to $129.11 million (including $16.91 million of internal borrowing).
South Taranaki District Mayor, Phil Nixon, says the LTIF’s strong result and Council’s prudent financial management means it’s well placed to weather any Covid-19 related economic downturn while keeping rates affordable.
“The fund’s performance gives Council options as we continue to look at ways to minimise the impact of Covid-19 on our community while also undertaking projects that will stimulate sustainable economic growth such as the town centre upgrades and district business park.”
“It’s a very strong result. The Report shows we are fiscally very sound, we’ve upgraded much of our key infrastructure, have high levels of community satisfaction, and have a clear direction for the future,” he says.
A full version of the Council’s 2020/21 Annual Report can be found on the Council’s website www.southtaranaki.com