Ben Hill is a reporter for The New Zealand Herald

Auckland Council set to scrap loans and rates relief for sports clubs

Sports clubs are the latest affected by Auckland Council's spending crackdown, with the  biggest sport-related loan to Eden Park, for which council is guarantor for a $40 million loan from ASB.
Sports clubs are the latest affected by Auckland Council's spending crackdown, with the biggest sport-related loan to Eden Park, for which council is guarantor for a $40 million loan from ASB.

Sports clubs are the latest to be affected by Auckland Council's spending crackdown, with councillors voting to scrap loans and rates postponements for cash-strapped organisations.

Currently the council has 18 loans to sports organisations and acted as guarantor for 10 loans, which all up are worth $52.9 million.

The biggest sport-related loan is for Eden Park, with the council acting as guarantor for a $40 million loan from ASB Bank to the Eden Park Trust, in addition to loaning the park $6.5 million, due to the upgrade in time for the 2011 Rugby World Cup.

Auckland Council treasurer John Bishop said the guarantee for the $40 million loan for the was extended in March last year.

The policy change will not impact on the status of the Eden Park Trust loan, or any other currently approved loans.

Council also has 83 rates remission agreements worth $320,000 for the 2016/17 financial year, and two rates postponement agreements worth $800,000 in total.

But at a meeting of the environment and community committee this month, the governing body recommended ditching loans as well as rates postponements and remissions, believing they did not fit with the council's investment principles and may not provide long-term financial sustainability.

Committee chair Penny Hulse said the recommendation is part of a draft sports facilities investment plan, which will now go out for consultation with a report due back in June.

"We looked at rates remissions and loans and the conclusion we came to was that they are inequitable across the region and to be fair, we are better to support sports organisations and clubs via our grants schemes," she said.

"Rates remissions have been applied differently around the region via the old councils and some very successful clubs are on this remission process and they could well afford to pay, some struggling clubs do not have this luxury."

The rates remission and postponement schemes are remnants from legacy councils before the Super City amalgamation.

Badminton Waitakere took out a loan from ASB with a ratepayers guarantee for $500,000 in October last year, and executive director Paul Shirley told the Herald the club were "very happy to get it".

Shirley is worried that without loans clubs like his will be "up the creek without a paddle".

"If the council won't loan money as a last resort, what's going to happen to these clubs... it's bloody hard yards.

"If you're a minor sport in this country you're not getting inundated with offers of money."

Eden Park chief executive Guy Ngata told the Herald he did not want to comment on the council's recommendation, saying "council make the decisions they make".

He said whether sports organisations would be affected should the recommendation be enforced would be "up to the sporting organisation really".

"We continue to have a positive relationship with the council," he said.

Councillor Dick Quax, an Olympic silver medalist, voted against the stopping of rates remissions and postponements.

He told the Herald without the scheme, the Pakuranga Golf Club in his Howick ward would "go under".

"The problem is the club is zoned residential. If they were to pay full rates, it would put the club under, it wouldn't be viable."

He voted in favour of stopping loans and loan guarantees saying his sporting background did not have any bearing over his decision.

"I have to put that aside and think of the wider community. It becomes irrelevant if I'm a former athlete myself.

"[Some existing loans] have no chance of ever being repaid. Council has now got it right in terms of those loans."

"I try to act in the best interests of the wider community."

Earlier this year mayor Phil Goff revealed details about a crackdown on travel, hospitality and gifts after the council's promotion agency Ateed reported a 43 per cent jump in travel costs to more than $900,000 over two years.

- NZ Herald

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