Queenstown Lakes District Council (QLDC) staff will look into options for applying for a revenue-to-net-debt ratio of up to 350 percent in order to help critical infrastructure.

Under the current policy by the Local Government Funding Agency (LGFA), which QLDC secures most of its debt from, QLDC is able to borrow up to 285 percent of its revenue.

However, LGFA voted in November to allow high-growth councils to apply for up to 350 percent of their revenue.

QLDC has been informed by the LGFA it is expected to qualify as a high-growth council.

Some councillors were wary of progressing the possibility of higher revenue-to-debt-ratio when it was discussed at last week’s full council meeting (Thursday December 12).

Deputy mayor Quentin Smith asked about the impact on rates and councillor Niki Gladding questioned whether the council was “match fit” to take on more debt.

QLDC chief executive Mike Theelen said the agenda item was “just signalling we are looking into it”.

Councillors were not making any decisions on additional debt at that time, he said.

A QLDC report said additional debt could provide “extra headroom”.

If QLDC was approved, it would be on the basis that “investment in growth will provide an additional revenue stream that will support the additional debt”, the report said.

Local government minister Simeon Brown also said the revenue-to-net-debt ratio could help fast-growing councils fund greater investment in critical infrastructure.

“The LGFA is the lowest cost provider of financing available to councils, and this arrangement means that councils have additional financial capability to fund infrastructure, roads, and other core infrastructure in their cities and regions,” Simeon said.

Councillors agreed QLDC staff could investigate the possibility further.

PHOTO: Wānaka App