Southland District Councilors agreed to expand bank lending facilities after forecasts indicated that additional cash flow, beyond the current loan of $ 5 million, was needed for the June payment cycle. 2021.

The extension of Westpac bank’s lending facilities was raised at a plenary council meeting on Wednesday.

The board’s chief financial officer, Anne Robson, told elected members that the board potentially needs $ 3 million for June, on top of its current facility of $ 5 million per month.

The extension was proposed in the short term to allow the board to meet its cash flow needs and to work through a long-term borrowing strategy to allow the completion of a membership application with the funding agency of the local government.

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Council staff proposed that the loan facility be extended up to an additional $ 20 million for six months, but it was not expected that the full amount or the full term would be needed, Robson told councilors.

The LGFA membership application was progressing well and she hoped to get approval by mid-June, Robson said.

The agency specializes in financing local communities on more favorable terms than if they raised debt directly.

Seventy-one councils across the country are participating and approximately $ 12 billion has been borrowed by local authorities since its inception in 2011.

When the advisers agreed to join the agency, Robson told them that she should talk to them about a borrowing strategy and that she would consider discussing it at an upcoming finance committee meeting and insurance, then full advice.

The Westpac facility expansion was “just to get us through the period for [membership and strategy] are ongoing, ”she said.

The facility would cost around 2.1 percent, “so that’s in line with our current borrowing, so it’s not outside of what we were budgeting for anyway,” Robson said.

The Council would seek to minimize the use of this facility as soon as possible, she said.

Currently, the board had the necessary safety stock from Westpac to borrow up to an additional $ 20 million, for a total borrowing potential of $ 25 million, Robson said.