QLDC debt increases $120 million over the last 12 months

by Peter Newport - Jun 21, 2024

The current debt level of the Queenstown Lakes District Council has increased to $612 million. That's $120 million more than the council's $492 million debt at the same time last year.

This debt level is very close to the borrowing limit of the council which is set at 290 percent of net debt/total revenue. But that ratio decreases by five percent each year until it reaches 280 percent in the 2026 financial year. 

The latest data means that QLDC debt sits at 264 percent of net debt/total revenue. The council gives itself a 'green light' rating in the balance sheet meaning that things are, in the council's view, "well within the borrowing limit".

The debt level is dramatically more than in previous years. Council borrowing listed as a current liability has increased to $95 million (March 2024) from $31 million in March 2023. Borrowing listed as a non-current liability has increased to $516 million from $460 million over the same period.

Notes in the council's financial statements refer to $120 million being a debt increase "to fund the capital programme".

Crux has reported extensively on project blowouts such as Lakeview and state one of the arterial road, but QLDC is also facing huge cost increases from a leaky building settlement of more than $100 million, plus the cost of fixing drinking water contamination following last year's cryptosporidium outbreak.

The council's assumption of $163 million of income from a local bed tax continues to look very uncertain.

 

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