Wyndham council has amassed a $70 million debt to fund capital works projects across the city.
Earlier this month, the council voted to borrow $15 million over a 10-year fixed-interest bond to be issued through the Local Government Funding Vehicle (LGFV), a public sector short-term financing program that allows Victorian councils to aggregate their borrowings.
The borrowing model is considered to be the best-practice alternative to bank loans because it gives councils access to savings on interest.
It’s the third time Wyndham council has borrowed money through the LGFV.
It took out $40 million in November, 2014 (which will mature in 2021), and a further $15 million in June, 2016 (maturing 2026). The average interest rate on the current $55 million borrowed is 4.31 per cent.
Councillor Kim McAliney said she fully backed the move.
“The borrowing will fund the council’s capital works program, including projects that will be delivered under the Wyndham West DCP (Development Contribution Plan),” Cr McAliney said.
The borrowing follows the release of council’s draft 2018-19 budget, which includes a $145.9 million capital works program, of which $37.1 million has been allocated to roads.
