Tag Archives: Debt

Stadium: Liability Cull warns ratepayers could pay more to DVML

Dave Cull 1.1### ODT Online Wed, 8 Oct 2014
Ratepayers ‘inevitably’ pay losses
By Chris Morris
Dunedin Mayor Dave Cull says the future funding model for Forsyth Barr Stadium will be more transparent to put an end to a “money-go-round” draining the council’s coffers. But it was still too soon to say whether ratepayers would end up carrying more of the cost, before the public release of the review’s findings next month, he said. Mr Cull was commenting after appearing to suggest, in the council’s latest newsletter, that a funding increase could be possible for Dunedin Venues Management Ltd.
Read more

FYI Dunedin 22 (October 2014) 1Mayor’s Desk 03 Oct 2014
The Council has started planning for the 2015 budget. Next year is also a Long Term Plan (LTP) year. The LTP is a 10 year plan that is refreshed every three years. In addition, the Government has imposed new and urgent requirements on councils around certain important policies. The three work streams are interconnected so there is a huge amount to consider and decide on. The extra work wouldn’t be so demanding if the 2015 budget weren’t already challenging.
While the Council has a financial strategy limiting rates increases to 3%, we face reducing dividend streams from our Council companies, probable higher requirements to get the Forsyth Barr Stadium on to a sustainable footing, greater government regulatory requirements and on going Council reviews. These place considerable demands on resources.
We also need to continue to implement our key strategies. For instance, the Economic Development Strategy aimed at job and business creation, the cycleway network addressing safety and transport options, debt reduction and heritage building enhancement. Our strategic framework is the interconnected road map to the future of our city. Without it Dunedin goes backwards. So savings will be made, tough choices taken and development momentum maintained at the same time. The 2015 budget will be a delicate balancing act.
Contact DCC on 03 477 4000. DCC Link

FYI Issue 22 October 2014 (PDF, 458.3 KB)

Back issues of FYI Dunedin

Comment by Calvin Oaten
Submitted on 2014/10/05 at 12:39 pm

“FYI DUNEDIN” The latest FYI landed in my letterbox on Friday. Reading from the ‘Mayor’s Desk’ I was taken by Dave’s verbose message. The Council has started planning for the budget. “The work would be demanding if the 2015 budget weren’t already challenging.”

He says: “While the Council has a financial strategy limiting rates increases to 3%, we are facing reducing dividend streams from our Council companies, probable higher requirements to get the Forsyth Barr Stadium on to a sustainable [there’s that word] footing, greater government regulatory requirements and on going Council reviews. These place considerable demands on resources….”

Does he read that stuff? Indeed, did ‘HE’ write it or some muppet in the PR department? A real ‘Churchillian’ rally to the flag entreaty. Nowhere does he address the solution to the main points of the strategies. Are there any real solutions? I don’t know. But I will make some guesses. As I see it, three things are possible.

First, and ideally, there is a massive rush of blood to the head and Dave and all councillors do the right thing and call a halt on all plans, projects and lock the cheque book in the top drawer till future finances allow it to come out again. ‘Fugetaboutit’ it is not in his genome to know anything about prudence.

Second, there will be a massive shift in the rates quotient, on the plea of: ‘jeez’ times have got really tough, and the business cycle has turned against DCHL’s enterprises and the dividend stream is going to be much less than expected. So, it’s shoulders to the wheel and all must do their bit for the good of the city. We must not let it go backwards. Not a hint of reducing the department’s demands and dreams.

Third, a massive change of plan on the debt reduction front. It currently sits north of ($610 million) and we know that the city entered into a ‘multi note facility’ up to but not exceeding ($850 million). So there is around $240 million of freeboard available. Just a silent, unobtrusive drift upwards could be justified, again to tide us over till better times return.

Realistically, there is not one major programme which could not be deferred till the ship is brought back into balance. “Without it Dunedin goes backwards.” News for you Dave, Dunedin is going backwards now! and all your nonsense is accelerating the process.

“STOP!” You already are stuck with the one big “Tar Baby”, in the FB Stadium. If you think you can get that onto a ‘sustainable’ (that word again) footing without pouring vast additional capital into it then you are dreaming. Patronage is the proof in the pudding. It never has reached anything like a feasible level, and is actually in decline at the principal activity, rugby. It is being intravenously dripped to the maximum by around $8 million pa by Aurora now, and we are served notice that this could be in jeopardy due to DCHL’s situation. You have already upped the ratepayers’ input to $2m pa to supposedly shorten the payback period. The rent to DVL is heavily subsidised due to DVML’s inability to generate enough to pay out of revenue. If you look at the DVL reports it is treading water furiously. It has reduced its stadium debt from $146.6 million over four years to $138.586 million, and at the same time brought forward a ($13.656m) deficit. To me that looks like $5.642m backwards. That is notwithstanding capital call ups of the $2 million from the shareholder for the attempt to shorten the loan period. The directors of DVL have comfort in the knowledge that when DVL was established it was capitalised on the basis of 245,000,000 $1 shares, of which to date only 79,688,931 have been called and fully paid up. So you can see that 165,311,069 shares are still available to be called. Dave, you just don’t seem to realise the predicament which the ratepayers (shareholders) are in. That you believe that the FB Stadium can ever crawl out of the financial swamp is tantamount to your understanding of the position.

So, I wonder just how many good folk will be taken in by your ‘glib’ summary as outlined in the FYI bulletin? My guess, not many.

Posted by Elizabeth Kerr

27 Comments

Filed under Business, DCC, Democracy, Disinformation, DVL, DVML, Economics, Hot air, Media, Name, New Zealand, People, Politics, Project management, Property, Site, Sport, Stadiums, Stupidity, What stadium

DCTL: New treasury manager

Dunedin City Council – Media release
DCC Appoints Treasury Manager

This item was published on 10 Sep 2014

Richard Davey has been appointed to the new position of Dunedin City Council Treasury Manager. Mr Davey, who is originally from Dunedin, has had more than 21 years of banking experience in New Zealand and Australia. His experience centres on dealing with corporate treasuries and solving their risk management and funding issues.

As Treasury Manager, Mr Davey will oversee Dunedin City Treasury Ltd – a DCC-owned company provides funding and financial services to other companies in the Dunedin City Holdings Ltd group. Mr Davey will report to Group Chief Financial Officer Grant McKenzie.

Mr McKenzie says, “We are delighted to announce Mr Davey’s appointment. His extensive skills and experience mean he will be a welcome addition to the DCC’s financial team.”

Mr Davey says, “I am very pleased to be part of the DCC’s financial team, especially given the diverse treasury operations and exposures the group has. It’s also pleasing to be able to live in Dunedin and progress my career further with the Council.”

Mr Davey was most recently Director Corporate and Institutional Markets with the National Australia Bank in Melbourne. He has a Bachelor of Commerce and a Postgraduate Diploma in Commerce from the University of Otago.

The new Treasury Manager role was created following the retirement of Dunedin City Treasury Ltd Chief Executive John Knight, who left last month. Mr Davey starts in his new role on Monday, 15 September.

Contact Group Chief Financial Officer on 03 477 4000.
DCC Link

****

### dunedintv.co.nz September 11, 2014 – 5:56pm
DCC in a better financial position
The Dunedin City Council is in a better financial position than it had forecast for the financial year just finished. An interim result for the council during the last twelve months was presented to councillors this week. And while there are things to be celebrated, it’s not all good news on the council’s books.
Video

Report – FIN – 08/09/2014 (PDF, 2.3 MB)
Interim Financial Result – 12 Months to 31 June 2014

Report – FIN – 08/09/2014 (PDF, 668.6 KB)
Financial Result – 1 Month to 31 July 2014

Report – FIN – 08/09/2014 (PDF, 391.2 KB)
Waipori Fund Quarterly Report to June 2014

Related Posts and Comments:
23.8.14 DCC public finance forum 12.8.14 (ten slides)
14.10.13 DCC: New chief financial officer

Posted by Elizabeth Kerr

*Image: odt.co.nz (tweaked by whatifdunedin) – Richard Davey

2 Comments

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Mangawhai, Kaipara —we hear ya!

Received from our northern friends (html email partially rebuilt here).
Wednesday, 29 January 2014 4:10 p.m.

MRRA 1aGetting the Validation Bill ready for Parliament

● The new Mangawhai Ratepayers and Residents Association (MRRA) website can be viewed here.
● “When Government Goes Bad” – see the MRRA video on YouTube.

The KAIPARA VALIDATION BILLMRRA 3

KAIPARA’S PROBLEMSMRRA 4Parliament “solves” the problems of Kaipara with the Validation Bill

LATEST NEWS
OAG report: Summary
OAG report: Full Report* (click the sections on the left)
*Link to download report (PDF, 2.6 MB; 423 pages) is broken at OAG website.

A MESSAGE FROM THE MRRA
3 February 2014
The day that JUSTICE finally comes to Kaipara

Come to the Court Case in Whangarei 3-7 February
The High Court is located at 105-109 Bank Street Whangarei
The hearing commences at 10 AM.
You have paid for this, so come and watch it play out. Those who came last time were glued to their seats for the whole day. Watching our justice system in action when the matter is one you are involved in is a riveting experience.
[Six days at court] might be needed but we won’t know until Feb 3rd. The hearing should play out as follows: Administrative stuff first, then MRRA puts its case (possibly all of Monday and some of Tuesday), then KDC puts its case Tuesday and all of Wednesday. Then MRRA replies, which will take part of Friday. The judge will then sum up and indicate what he is going to do, and perhaps reserve his decision which he would then hand down in writing some time later.
The Judge has instructed that a second courtroom be made available with closed-circuit TV to accommodate the large number expected to attend this hearing.
In an earlier decision the Judge said that this judicial review raises important legal questions of wide public interest.
It may be one of the most important cases in connection with Local Government that has ever gone to trial in New Zealand. The issues at stake are of fundamental significance to everyone who lives in this country. This is not a tiff over rates. This is a test of what power elected and appointed officials really have to take money from ratepayers and taxpayers and use it in any way they choose. The Government and the Kaipara District Council (KDC) both say that councils must have the power to take any amount of money they want, for any purpose whatsoever, and the ratepayer has no say at all in the process.
If you think that’s OK, then we have not reached you. If you think it is not OK but nothing can be done about it, please be assured that something can be done — and it is in the High Court where that will happen. Eventually, the people will call a halt to the madness.

COUNCIL INCOMPETENCE 29.01.14
Frank Newman comments here on the Dunedin City Council’s fancy $230 million covered stadium that “will forever be a black hole that eats ratepayer money”.
There will be no easy fix for Dunedin’s ratepayers. Their elected representatives of the day were reckless and ratepayers will be punished for a very long time because they (as a society) elected a reckless bunch of people to make decisions on their behalf.
I do not know of the Dunedin Councillors complied with the law and consulted with ratepayers but Kaipara ratepayers find themselves in a very similar situation.
The debt for EcoCare is completely unmanageable for a small council such as the KDC but the Commissioners and the Banks have so far delayed the inevitable day of judgement by mesmerising ratepayers with promises of only three percent rate increases over the next ten years.
How can that happen, you might ask, when there is such a massive debt to pay? The answer is that it can’t. But to levy high rates now and charge extra capital payments per household right across the district would result in a massive rate strike and civil disobedience and the collapse of the KDC.
To prevent that, the Commissioners and the Banks have made promises of minimal rate rises that cannot be substantiated and are so dishonest that they border on the criminal. They are nothing more than a confidence trick and the reality is that, sooner or later, ratepayers across the district will be billed for the principal of the debt. Generations of Kaipara ratepayers will pay for the EcoCare folly just as generations of Dunedin ratepayers will pay for their Stadium folly.
The only difference is that the MRRA has challenged the validity of the Kaipara debt in the High Court and is asking that Court for a ruling that ratepayers are not responsible for an illegal debt that was secretly entered into by the Councillors.
Never before have ratepayers made such a challenge and no doubt many ratepayers across the country will be awaiting the outcome.
If Councils can operate outside the law with utter impunity, with all the watchdogs sound asleep, and the ratepayers have to pay all the bills, then we have been conned into being the peasants at the bottom of a 21st Century feudal system.
That is not a good place to be but unless we get behind the MRRA and support its action, then that is where we will end up.

[ends]

****

LAST WORD from What if? Dunedin…
Will DCC’s stadium review be enough? Answer: NO
We’re staying busy —can’t blog it.

Related Posts and Comments:
3.12.13 LGNZ: OAG report on Kaipara
12.11.13 Northland council amalgamation
29.6.13 Audit NZ and OAG clean bill of health —Suspicious!
21.4.13 Councils “in stchook” —finance & policy analyst Larry.N.Mitchell
19.3.12 Local government reform
21.2.12 Kaipara this time

Posted by Elizabeth Kerr

9 Comments

Filed under Business, Democracy, Economics, Geography, Inspiration, Media, Name, New Zealand, People, Politics, Project management, What stadium

DCC Annual Report 2012/2013

The annual report is now available at the DCC website and below.
It is provided by sections in .PDF format.

Standard & Poor’s
Standard & Poor’s Financial Services LLC, provides independent financial information, analytical services, and credit ratings to the world’s financial markets. For more information go to Standard & Poor’s.

S&P Full Analysis Dunedin City Council (PDF, 321 KB)

Annual Report Documents
Annual Report 2012/13 Full version (PDF, 1.2 MB)
Organisational and Financial Management Report, Significant Activities Report and Council NZIFRS Financial Statements

Annual Report 2012/13 Section 1 (PDF, 399.4 KB)
Organisational and Financial Management Report

Annual Report 2012/13 Section 2 (PDF, 448.8 KB)
Significant Activities Report

Annual Report 2012/13 Section 3 (PDF, 361.1 KB)
Council NZIFRS & Financial Statements

Annual Report 2012/13 Appendix (PDF, 172.6 KB)
Community Outcome Monitoring, Supplementary Information

Annual Report 2012/13 Summary (PDF, 531.8 KB)
Dunedin City Council Annual Report Summary

OPEN MEETING ABOUT DCC FINANCES
When: Wednesday 27 November 5:30pm-7:00pm
Where: Meeting Room One, Municipal Chambers
ALL WELCOME – hosted by DCC Finance Committee

Related Posts:
23.11.13 DCC: Finance Committee [public forum] 27 November
17.11.13 DCC Finance Committee: Public meeting 27 November [INVITE]

Posted by Elizabeth Kerr

36 Comments

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Northland council amalgamation

### radionz.co.nz Tuesday 12 November  -  12:20 pm NZT
(Updated 38 minutes ago)
RNZ News
Single council for Northland proposed
The Local Government Commission has recommended a single unitary council for the whole of Northland.
The commission at Waitangi on Tuesday revealed its draft proposal for reorganising local government in the region. It proposes one council and one mayor for Northland and a second tier of community boards.
A new nine-member council, to be based in Whangarei, would replace Far North District Council, Whangarei District Council, Kaipara District Council and Northland Regional Council.
The commission also proposes a special council committee to represent Northland’s large Maori population.
RNZ Link

Northland RC boundary map (400) 1

Related Posts and Comments:
29.6.13 Audit NZ and OAG clean bill of health —Suspicious!
21.4.13 Councils “in stchook” —finance & policy analyst Larry.N.Mitchell
19.3.12 Local government reform
21.2.12 Kaipara this time

Posted by Elizabet Kerr

2 Comments

Filed under Business, Democracy, Economics, Geography, Media, New Zealand, People, Politics, Project management, Stupidity

DVML works media/DCC to spend more ratepayer money

Dunedin Venues Management Ltd (DVML) has been testing the stadium sound system since February, and has discovered it is only working at 20% of what is needed.

Queries about the sound system were only some of a barrage of questions from Dunedin city councillors before they adopted the annual reports of DVML and Dunedin Venues Ltd this week.

### ODT Online Sat, 12 Oct 2013
Stadium PA fix up to $800,000
By Debbie Porteous
Permanently fixing problems with Forsyth Barr Stadium’s public address system would cost between $500,000 and $800,000.
DVML chief executive Darren Burden said the cost did not include permanently fixing sound issues with the wider auditorium, such as those experienced at concerts. They would continue to be addressed by temporary measures installed by promoters.
He said DVML had been working with acoustic engineers and sound system experts, including the company that installed the system. There were problems with the transmission of sound from microphones on the pitch to the sound box that delivered sound to speakers around the stadium.
The solutions, which ranged in price depending on what standard of sound delivery was wanted, involved improving the sound transmission from the field and installing more speakers around the stadium.
The cost of fixing it had to be dealt with internally by DVML.
Read more

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Darren Burden, DVML [odt.co.nz]Head in the Sand Award?
Cr Richard Thomson said he appreciated Mr Burden (pictured) might wonder why he bothered when faced with such a barrage of questions from councillors. ”But it is really important for the city that this delivers as much revenue as possible.” (via ODT)

Comment at ODT Online:

Who is accountable?
Submitted by russandbev on Sat, 12/10/2013 – 9:06am.

Just another example of the difference between reality and hype. Ratepayers have been assured since the building of this rugby stadium that the PA system was state of the art. Indeed, the hype from the Carisbrook Stadium Trust before the build indicated that it was even better than that. Now ratepayers are told that it will cost the best part of a million to get right for the most basic of requirements, and that the costs of running the stadium will rise. Who is being held accountable? Not those responsible for this ongoing shambles, but only the ratepayers.

Related Posts and Comments:
7.10.13 DCC councillors, no idea of annual cost of owning and operating…
4.10.13 DVML . . . | ‘Make the stadium work’ losses continue
20.8.13 DVML foists invoices on DCC
20.6.13 Stadium: DVML, DVL miserable losers! #grandtheftdebt
30.12.12 To DVML Board, from Ian Tayor [sic]
11.12.12 Stadium: DCC runs amok with $750K annual subsidy to DVML
2.11.12 Stadium financials: Calvin Oaten on DVML, DVL and DCHL
2.11.12 Stadium financials: JimmyJones v Peter Hutchison (DVML)…
19.10.12 LGOIMA request: Breakdown of DVML recruitment costs [emails]
19.10.12 Weak boys, Cull and Burden on rugby stadium
11.10.12 Darren Burden plays LGOIMA game like Davies #DVML #PsychoAnswer

For more, enter the terms *dvml*, *darren burden* or *stadium* in the search box at right.

Posted by Elizabeth Kerr

5 Comments

Filed under Architecture, Business, Concerts, Construction, CST, DCC, DCHL, Design, Disinformation, DVL, DVML, Economics, Events, Media, Name, New Zealand, ORFU, People, Politics, Project management, Property, Site, Sport, Stadiums, Stupidity, What stadium

DCC councillors, no idea annual cost of owning, operating FB Stadium

Updated 2013/10/08 at 10:47 am.

DCC departing councillors [ODT Files 8.10.13] 1Platitudes — and much more, including seriously remiss untruths about the ‘value’ of councillor contributions — flew at yesterday’s city council meeting. Dunedin City Council members farewelled five long-serving councillors at their final meeting: Neil Collins, Syd Brown,
Bill Acklin, Fliss Butcher and Colin Weatherall.

Councillors said Cr Brown was a fair-minded and trusted member, a consistently hard worker who made a ”very substantial” contribution, especially on financial issues and as a strong advocate for Mosgiel, in his 15 years on council. ”He is a wise old owl. When he speaks, I listen and know we all do,” Cr Collins said.

Read more at ODT Online.

——————

Comment received.

JimmyJones
Submitted on 2013/10/07 at 6:31 pm

The average DCC councillor still has no idea of the annual cost of owning and operating the FB Stadium. They have been misled by the way the annual reports are arranged and they get confused because there are two stadium companies with similar names, as well as an interest cost to the DCC for the loan to buy the shares to buy the stadium.

Jim Harland, Paul Orders and their staff have been asked many times to disclose the total financial impact of the stadium. Mr Orders eventually promised to do this at an annual plan public meeting, but it hasn’t happened.

The annual reports of the stadium companies (DVL & DVML) to be approved today by our hapless councillors, have enough info to calculate a good estimate of the total cost.

These figures are from the annual reports page 6 (DVL) and page 9 (DVML). Remember that in these reports the term “subvention payment” means “subsidy” and has the effect of disguising the size of the companies’ losses. The city’s renters and ratepayers end up paying for both the disclosed losses and the subsidies so we need to add them together to get the total impact.

Total Stadium Impact:
Item:___Disclosed Loss_____Subsidy_______Total Loss
DVL:______$4.8 million______$7.3 million_______$12.1 million
DVML:_____$1.0 million______$0.6 million_______$1.5 million
Cost of interest on debt for DVL shares:________$5.1 million
Cost of rates subsidy for DVML (approx):_______$2.0 million
Total Ratepayer Impact (approx):_______$20.7 million

The DCC held stadium debt is $78 million and I have chosen the interest rate to be 6.5%. There might be some other costs that I haven’t thought of. The actual interest rates paid by DVL seems unrealistically low to me at 5.87%. Most DCC projects are charged 7.00%, so DVL’s low interest rate could amount to a secret subsidy of $1.6 million.

Anyway, $20.7 million per year is a lot of money and citizens and councillors need to know what is going on. We have heard DCC mayors and councillors promise financial transparency, but it seems that some of them have wanted to keep this figure quiet.

[ends]

Posted by Elizabeth Kerr

*Image: odt.co.nz – departing city councillors who brought you the stadium, one way or the other . . .

19 Comments

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