Should the Council consider selling assets to repay debt?
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The council owns a range of assets such as land, buildings, and reserves that aren’t always fully utilised. Many of these assets are passive, meaning they don’t generate much revenue, if any. By selling some of these assets, the council could use the proceeds to pay off debt and cut costs, which could help offset rates in the long run.
Some of these assets are easier to get ready for sale than others, but all of them will require some work by staff. Some are currently classified as reserve land, which means selling them is not simple. They would need to be declassified as reserve land, and further consultation with our community would be required. We would also need to get permission from the Minister of Conservation.
Because this process will take time and resources, the Council is interested in understanding community views on this before consultation on specific reserves is started. For this consultation, we have used the word preferred to indicate the option we have used to do our financial modelling only.
What are the options?
We are asking you which of the following options we should choose.
Option one: The Council should consider selling assets to repay debt.
Option two: The council should not sell any assets. (preferred option)
Pros One-off income source for each asset sale to contribute towards debt repayment.
Eliminates ongoing expenses related to asset upkeep and management.
Allows Council to free up time and resources on asset maintenance.
Land could be re-purposed for residential or industrial development.
Cons
Loss of future potential income from leasable land.
Costs associated with consultation and declassification of reserve status.
Impact on rates and debt
The impact on rates and debt cannot be quantified until the land parcels for sale have been identified and programmed for disposal. Any reduction in debt is not likely to occur until year 3 of the LTP due to the process that needs to be undertaken to revoke reserve status.
Impact on levels of service
The Council will only consider selling assets that are currently underutilised or not utilised at all. In the case of assets that are currently classified as a park, the Council would only consider revoking the park status if the total area needed for parks across the District is not compromised. The Council believe sit currently has enough surplus land to allow asset sales without compromising existing levels of service.
Pros
Preserves future income and potential for capital appreciation.
Retains income from leasing or other uses of assets, contributing to the budget.
Cons
Assets continue to incur maintenance, management, and operational expenses.
Can restrict the council’s ability to invest in higher-priority areas due to financial constraints.
Council continues to own small pieces of underutilised land that serve little purpose.
The council owns a range of assets such as land, buildings, and reserves that aren’t always fully utilised. Many of these assets are passive, meaning they don’t generate much revenue, if any. By selling some of these assets, the council could use the proceeds to pay off debt and cut costs, which could help offset rates in the long run.
Some of these assets are easier to get ready for sale than others, but all of them will require some work by staff. Some are currently classified as reserve land, which means selling them is not simple. They would need to be declassified as reserve land, and further consultation with our community would be required. We would also need to get permission from the Minister of Conservation.
Because this process will take time and resources, the Council is interested in understanding community views on this before consultation on specific reserves is started. For this consultation, we have used the word preferred to indicate the option we have used to do our financial modelling only.
What are the options?
We are asking you which of the following options we should choose.
Option one: The Council should consider selling assets to repay debt.
Option two: The council should not sell any assets. (preferred option)
Pros One-off income source for each asset sale to contribute towards debt repayment.
Eliminates ongoing expenses related to asset upkeep and management.
Allows Council to free up time and resources on asset maintenance.
Land could be re-purposed for residential or industrial development.
Cons
Loss of future potential income from leasable land.
Costs associated with consultation and declassification of reserve status.
Impact on rates and debt
The impact on rates and debt cannot be quantified until the land parcels for sale have been identified and programmed for disposal. Any reduction in debt is not likely to occur until year 3 of the LTP due to the process that needs to be undertaken to revoke reserve status.
Impact on levels of service
The Council will only consider selling assets that are currently underutilised or not utilised at all. In the case of assets that are currently classified as a park, the Council would only consider revoking the park status if the total area needed for parks across the District is not compromised. The Council believe sit currently has enough surplus land to allow asset sales without compromising existing levels of service.
Pros
Preserves future income and potential for capital appreciation.
Retains income from leasing or other uses of assets, contributing to the budget.
Cons
Assets continue to incur maintenance, management, and operational expenses.
Can restrict the council’s ability to invest in higher-priority areas due to financial constraints.
Council continues to own small pieces of underutilised land that serve little purpose.
