Taupō District Council is working on a way to ringfence the Taupō Electricity Limited (TEL) Fund so other councils can't access the cash if amalgamation goes ahead.
The TEL fund originated from the sale of council-owned Taupō Electricity Limited and Taupō Generation Limited in 1995 and is used to fund community projects, offset council debt and mitigate unexpected events.
The fund is professionally managed on behalf of the council and the community, and its current value is $86 million.
Although Taupō District Council has not submitted a Head Start amalgamation proposal, the district has been included in the proposed Western Unitary Authority against its wishes.
The Western Unitary Authority would see Taupō amalgamating with South Waikato, Waipā, Waikato and Hamilton City.
If the Government accepts that proposal, it could open up the TEL Fund to be used by the other towns and cities covered by the authority, Taupō District mayor John Funnell said.
However, he said other districts operated funds similar to the TEL Fund and had protected their assets in a way that wouldn’t be affected by the local government reform.
His council was now looking to do so as well.
“Other communities have ring-fenced and safeguarded their equivalent assets for future generations, and it’s only fair that Taupō is allowed to do that too,” Funnell said.
Funnell said the TEL Fund’s capital was currently with a third-party company that invested the funds on the council’s behalf.
“My understanding is everyone is quite happy where the funds are at the moment,” he said.
The council held a closed workshop last month to receive legal advice on how it could affirm and protect the TEL Fund for its intended purpose.
Public consultations may be on the cards in the future, Funnell said.
Models in neighbouring districts that protect assets from local government reform include South Waikato District Council’s South Waikato Investment Fund Trust (Swift).
The origins of Swift are similar to those of the Taupō Electricity Limited (TEL) Fund.
In 1994, South Waikato District Council received shares from Power Co, the majority of which were sold in 1998 for $21.6 million and invested according to the council’s investment policy, it says on the Swift website.
“Council resolved to move $20 million to the South Waikato Investment Fund Trust, which was established in December 2014,” it reads on the website.
“The trust was tasked with managing the investment fund, and approving funding for economic development proposals.”
Swift is a community-owned intergenerational trust whose funding is focused on education, employment, economic development, and community connection.
Local Democracy Reporting asked Funnell if he would consider following a model like Swift.
He wouldn’t be drawn into details, saying the investigations had only just begun.
“It’s [sic] getting advice on how we can best make sure it’s there for Taupō residents in the future.”
