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| April 2001 |
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Money from Orion to benefit city for years to come City residents could benefit from the "Orion funds" for many years to come. Orion, a Christchurch City Council-owned company that came out of Southpower in the Government’s electrical-industry shake-up, will pay $175 million to the Council from the sale of North Island gas network assets it acquired in the mid-1990s. The annual budget-plan has set aside $100 million for the reduction of projected long-term debt. This will have the effect of keeping rates down overall. The other $75 million will go into a Capital Endowment Fund that will be applied to providing for economic, business and civic development projects that will enhance the city or region. The capital will be protected and only interest on the fund will be used for these projects. The operation of the fund will be reported on each year in the Financial Plan and Annual Report of the Council. With a proportion of the income reinvested each year to protect against inflation, this fund will produce steadily rising revenue that can be applied to a range of projects, subject to the consultation processes of the annual plan each year. It is also recommended that at least 50 per cent of any future unbudgeted special dividends should be paid into the fund. The capital of the fund will remain intact so that it can benefit not only the current generation, but future generations as well. The projects funded will benefit the community and not be a charge on rates. Legal restraints upon the Council are different to those applying to electricity trusts that were able to distribute funds to its customers. |
