Ratepayers benefit from investment
JUST over $1500 for every man, woman and child living on the Tweed: That is the amount of money currently being invested by Tweed Shire Council.
But Tweed mayor Warren Polglase says rather than being a sign the council is hoarding funds, it is good management - earning interest which will keep rates down.
Cr Polglase said his only disappointment is that interest rates aren't as high as they used to be, providing the council with an extra windfall.
Figures released by the council's financial services chief Troy Green show the council currently has more than $132 million in investment accounts. Census figures from 2006 meanwhile indicate the Tweed's population should now be just below 85,000 people.
As of August 31 the Council had $132,395,396 invested with a net return of $495,750 for that month, equal to 4.49 per cent.
Just over half the money, 55 per cent, was invested in term deposits while 22 per cent was in the hands of fund managers.
Nearly $50 million came from fees charged to developers.
More than $34 million came from water and sewerage charges paid by ratepayers.
The investments now avoid controversial funds such as Collaterised Debt Obligations which previously incorporated the notorious United State sub-prime housing loans that cost other councils millions of dollars during last year's global financial meltdown.
Cr Polglase said smart investments were helping keep rates and debt down.
“We don't run a deficit budget at all,” Cr Polglase said.
“We will never run a deficit budget while I'm around.”
Cr Polglase said only a few years ago the council had been earning “seven and eight per cent or higher”.
“Now we are earning threes and fours. That's a concern for us,” he said.
However Mr Green said the interest earned did not directly keep rates down.
“The interest is used to fund infrastructure and community facilities and we borrow funds to meet the difference,” he said. “It does stop the ratepayers from having to subsidise that infrastructure.”