We can only assume that the ‘net’ figure of $150 million is the $225 million borrowed from the LGFA less $75 million held by the council on deposit somewhere.  The sentence “Council does lend money to banks” indicates that it is not with a bank.  So, back on deposit with the LGFA then? And if so, at what interest rate?  It won’t be more than the average 4.58% quoted that the KCDC is paying.

When this issue was raised on the Kapiti Coast Group FB page a couple of months ago, a defender of the council said it made sense to borrow long term when interest rates are at their historic low.  However, this Treasury forecast (pdf) says there is more likely to be economic fall-off by 2020 and accordingly more potential for interest rate drops than increases.


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