Letters to Editor
Matter of interest
Waipa District Council’s reply to my letter to the Cambridge News re their “arbitrage” loss is an example of obfuscation – bureaucratic nonsense.
In August 2024 WDC announced their “arbitrage deal” would make a $384,000 profit.
They deny their deal was speculation and now claim in their reply to my letter “…had the bonus of offering a modest financial benefit…”. WDC did not need to borrow in August 2024, so it was speculation. As there were indications the OCR would drop further the WDC’s deal was also extremely foolish as it was likely to cost the ratepayers. And it has.
From April 14 2025 to April 20 2029 (4 years and 6 days) WDC will pay $9,378,383 in interest (4.67%) to the LGFA. If WDC had taken the loan out April this year when required at the then LGFA rate of 4.41%, the interest for the period would have been $8,856,246. The original $384,000 term deposit interest earned reduces the $9,3787,383 to net $8,994,383. WDC pays $138,137 more than it needed to.
My real concern here is that no councillor queried this proposal when they were advised of it.
If WDC can get a chartered accountant to confirm they will make a net profit out of this “arbitrage” deal using LGFA interest rates for the loan period and the Term Deposit interest received, I will pay $500 to Hospice.
Peter Clapham
Cambridge
Letters to Editor
