Ratepayers opposing irrigation loan

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‘We’re not against irrigation; we are only against the loan,” president of the president of Concerned Citizens and Ratepayers president, Warren Crawford said at a meeting on Monday evening.

He was referring to a loan the Waitaki District Council has given to the North Otago Irrigation Company (NOIC) which is due to be paid off in January 2016 and that totals $12.7m.

However, NOIC has asked council for an extension to the loan through to June 30, 2022, and has applied for an additonal loan of $9.3m from council.

Last month council agreed in principle to NOIC’s request but is negotiating with the company before making a final decision. Yesterday council chief executive Michael Ross said the loan would be discussed at its next meeting on September 17.

“I think there will be a huge hole in dairying, farms will drop in value because of the drop of Fonterra payments and farmers will not be able to pay for irrigation,” Mr Crawford said at Monday’s meeting which was addressed by former Waitaki Mayor Alex Familton who gave a run-down on the background to the initial loan dating back to May 2005.

“I’m still looking at the information; I believe the scheme will prosper; it has a cash flow and good assets,” Mr Familton said.

“There is a very positive side to the loan. It’s been estimated there are about 272 new employees directly in dairying and outside activities have also come in because of the loan. That has been tremendously valuable.

“Bear in mind that each time a farm gets irrigated, its value goes up. That increase in the value of farms increases the rate share they pay. We want to get more ratepayers over a wider group of business activities. That has been positive,”‘ Mr Familton said.

Ron Sim said he was concerned about security.

“If we come to the end of January 2016 and that loan isn’t repaid – that’s effectively a loan in default.”

Mr Sim and others at the meeting said the council money should be kept in a depreciation fund for infrastructure and for any unforeseen event – not lent to companies.

“We’re not against irrigation; we’re against a local body lending money,” Mr Sim said.

“It’s private enterprise activities. These guys may or may not do alright. It’s their responsibility to take the risk and not to put it on council.”

Waitaki deputy mayor Hugh Perkins said risk could not be eliminated entirely.

“But in comparison to what was given for stage 1 (in the irrigation scheme), stage 2 is less risky.

“In stage 1 we didn’t know how many farmers would opt in. In stage 2, we’ve seen 2500 farmers pay up to $6000 to get NOIC water. The demand is proven.”

Mr Sim said with dairy prices down, the risk was considerable.

“I don’t mind if the banks underwrite it but you are using ratepayers’ money as a form of credit..

“It’s galling me council is even considering it at the moment. Someone else should be taking the risk.

“I don’t want the ratepayers of this town and district put at any disadvantage. If this fails, you guys will be run out of town. I do not want to see ordinary people become losers – if farmers make good money, so be it.

“I think you need to look at how you can reduce rates. We’ve got people living on other people’s money. Let’s get back to the ordinary people,” Mr Sim said.

By CHRIS TOBIN