Risks of Council Debt

Yet another great post from Calvin Oaten on ODT online, on the risks of Council debt
I think that the biggest risk facing the heavily-indebted Dunedin City Council is rising interest rates. When the projected cost of the Stadium blew out by $20 million, the Council conveniently reduced the interest rate it expected to pay on the loans from 9% to 7%, saying that there would then be $20 million less interest to pay. But, because of the massive borrowing presently required by Governments around the world, long-term interest rates are rising steadily. Dunedin ratepayers have good reason to be worried.