Council company to buy Raetihi depot

Ruapehu Bulletin, Volume 11, Issue 508, 19 October 1993, Page 1

Council company to buy Raetihi depot

The council' s depot in Raetihi looks set to be sold to its construction company, along with council depots in Taumarunui. The most controversial item on the agenda at last Friday's meeting of the Ruapehu District Council concerned the sale of land to Ruapehu Construction Limited (RCL). The proposal being considered was that it should sell the depots

(land and buildings) and nursery in Taumarunui and Raetihi. Two of these properties are in T aumarunui whi le the third is the former County depot in Raetihi on the corner of George Street and State Highway 4 (the Parapara Road) opposite what was Timmos timberyard. At their meeting on 17 September Council had ap-

proved the adoption of the Establishment Plan which would authorise it to sell the land to RCL after the public had been given notice pursuant to Section 230(2) of the Local Government Act 1974. In opening the discussion Mayor Workman said he was aware some concern had been expressed in several quarters about this proposed sale since Council' s

last meeting. He said if Council was divided on the issue and the proposed sale was not fully supported by councillors it would "send out the wrong signal". Corporate services director Chris Ryan reminded councillors that they had at their last meeting discussed the plan to dispose of the properties; had adopted in principle the plan to sell, and decided to advertise the intention to sell after due process, such as obtaining public response. Cr Eddie Turley questioned whether Council had gone about it in the right way. "Should we not have reversed the process by first seeking public opinion before advertising our intention to sell and then waiting for the-public and our ratepayers to re-act or object? I know that some members of the public are very concerned about the sale of what they see as local assets". Wise after "I know it is easy to be wiser after the event and we all learn from experience but the proposed sale of this land makes me feel uneasy ," he said. Cr John Compton said that he too was not very happy about it. "Not all the information about this proposed saies was before us when we made the decision last month ... what if RCL falls over or goes down the

tubes?" Cr Joe Murphy also said he was uneasy about it and opposed the sale. Cr Weston Kirton also questioned the process of first making the decision instead of first consulting the public and ratepayers. "We wouldn't have had to go very far to ascertain that there would be widespread fear and objection to the proposed sale ... whether that was justified or not." Mayor Workman assured councillors that the issue had not been handled any differently from any other sale of Council property. CrTurley agreedbut said it was a question of scale, size and value and asked if the system could not be improved. Cr Kirton said previously such issues would go to a working party, then community boards and then to full Council so "why not in this case when we are concerned with a major transfer of land and assets?" Mr Ryan assured Council that the normal process had been followed strictly in every detail and, to date, there had been no formal objections though it was now obvious that there had been some informal objections. Lease Cr Compton asked: "Why not lease these properties to RCL rather than sell? At least that way Council would be protected if P lease tuni to P2

Depot sale

From Page 1 RCL fell over". Mr Ryan said council would be safeguarded in the event of RCL going under by having first call on the land and, without ownership, RCL would be "hugely disadvantaged" when trying to secure a loan. Cr Ellen Gould said she was "alarmed" that councillors were now questioning decisions they had made only a month before. "This is a very critical time for this company (RCL) and we should give them our full support at this stage of their development. Not being 100 per cent supportive really concerns me", she said. Cr Graeme Cosford (who was overseas in September) agreed that it was a very serious matter. "We shouldn't be disadvantaging the company but at the same time there must be some advantages to the Council." He listed a few advantages and disadvantages to both Council and company. These included both the sale and lease options. • Disadvantages to Council if sold: loss of control of asset and its use; risk

of disposal of property by company at a later date. • Advantages to council if retained and leased: fixed return on market rental; land could be used as collateral by Council to secure a loan (though this was unlikely). • Disadvantages to RCL if land not owned: limited power to borrow as plant and equipment would be their only security items. • Advantages to RCL if land is owned: allows company to do what it likes with land including an option to borrow for development. Cr Cosford said they should pay a market price, or a market rental, as otherwise they would be given an unfair advantage over other contractors. After an adjournment during which councillors discussed the issue in more detail, Mr Ryan said Council would always be involved in any negotiations with third parties and Council would be protected by a caveat which would be written in to any condition of sale. With only one objection (from Cr Murphy who asked that his vote be recorded) Council decided to continue with the process.