DCC living beyond its means [all spending and debt not declared]

Mr Cull said he was not alarmed by the level of debt, and believed the issues Dunedin faced could be addressed. “Headroom” created by lower debt levels was important.

### ODT Online Tue, 17 Jan 2012
As debt peaks, Cull talks of asset sales
By David Loughrey
Dunedin Mayor Dave Cull has raised the prospect of asset sales to deal with the city’s debt, as the amount owed hit a historic peak this financial year. The figure reached a grand total of $327.4 million this financial year which ends on June 31, just over 10 times what the city owed in 1999.

“The council could not stop developing the city, fixing things, or thinking about new things.”

Read more

Posted by Elizabeth Kerr


Filed under CST, DCC, DCHL, DVL, DVML, Economics, Politics, Project management

72 responses to “DCC living beyond its means [all spending and debt not declared]

  1. Elizabeth

    Comment at ODT Online:

    Total ratepayer debt?
    Submitted by fmr ca on Tue, 17/01/2012 – 8:25am.
    Shouldn’t we be looking at total consolidated debt across the 100% ratepayer-owned entities? Transferring the Stadium debt to DVL (which will require significant ongoing ratepayer support just to operate, in addition to servicing the debt) does not mean that the debt disappears. Such obfuscation won’t get rid of the problem.
    Read more

    • Elizabeth

      Money well spent:

      ### ODT Online Tue, 17 Jan 2012
      Roofing and insulation upgrades for flats
      By Matthew Haggart
      Roofing and insulation contractors have started work on the next stage of a forecast $5 million makeover of Dunedin City Council flats. A block of 50 units in Victoria Rd in St Kilda is the first of the DCC-administered residences to have contractors begin the installation of insulation and new roofs.
      Read more


      Money that should’ve been spent on infrastructure upgrades (stormwater drains et al) for residential South Dunedin:

      ### ODT Online Sun, 15 Jan 2012
      South Dunedin, steaming ahead?
      By Mark Price
      Will some street alterations, and new seating and planting, be enough to pull the down-at-heel South Dunedin commercial centre out of the doldrums? Mark Price takes a look.

      Council urban design special projects manager Emma O’Neill says the council is not simply “throwing money at the problem […] It’s not as simple as putting some furniture in and some nice new planting in …” Ms O’Neill refers to a list of “actions” that encompass the seats and planting but also festivals, cycle facilities, marketing plans and dealing with vacant shops and parking issues.

      Read more

  2. Hype O'Thermia

    Great, so now a load of tiddling around with South Dunedin organised and carried out by paid staff is expected to make the locals (and the rest of us?) flock there to spend the discretionary cents in our budgets. Why not lose events and decor managers and free up the rules so volunteers can make South Dunedin the low-rent area where stuff happens, buskers, performance artists, sculptors and painters negotiating with building owners to put their creations on show, a jumping somewhat anarchic environment where it may be a bit shabby but it’s never dull or generic? Let the people get on with it, keep rules for genuine safety & excessive noise restrictions only, better still act when someone complains, don’t take the route of vast compliances ahead of anything being allowed to happen. And before anyone whines about OSH or anything else, there are more than enough dangers and annoyances (broken glass, dumped garbage, loud and unsafe cars etc) to which blind eyes are turned already. There’s a HUGE precedent for ignoring real problems. South Dunedin isn’t full of losers. Let them get on with what THEY know will work.

    • Elizabeth

      Hey. Having $700,000+ jingling around in DCC’s back pocket for South Dunedin main street’s prettification, is a burning hole.

  3. Hype O'Thermia

    Oh. Yeah. Gotta spend it, can’t use it to pay off debt. I know the feeling. Woo-hoo, gotta go, there’s a shoe shop somewhere in town waiting for me & my plastic!

  4. Anonymous

    Voodoo economics. Inflation will deflate the debt bubble? Showing the reduction of DCC-specific debt by an accounting entry and ignoring the consolidated total liability? Borrowing to make repayments on the debt? Imposing excessive dividend requirements on council-owned companies which are also responsible for repayments on the consolidated debt? The only thing these clowns haven’t thought of yet is public-issue junk bonds to pay for it all.

  5. Anonymous

    The ODT team has posted a serious question on its polls. Suggest the link is emailed broadly to family and friends to give Cr Syd Brown something else to ignore. Better to do it sooner though before Farry’s Soldiers are commissioned to skew it in favour of their big, pretty stadium.


  6. Phil

    I must have missed something with regard to the roof and insulation upgrade. In late 2007, City Property reported that all asbestos clad roof claddings had been replaced, and that all uninsulated units had been fitted with ceiling insulation. There were two exceptions to this. The first were those units that City Property intended to sell off. These blocks had low occupancy levels, but were still occupied. The other excluded group were those units which had a skillion roof system (the sloping ceiling is fixed directly to the roof frame. These were virtually impossible to insulate (or to confirm insulation) without taking the roof off first. At the time, it was stated that 90% of all housing units had ceiling insulation confirmed. Which left 100 units with either no insulation, or with the insulation status unknown (I see that 173 have now been quoted). The programme up to that point allowed for work on about 50 units a year. 4 years have passed since that release. Continuing under the existing scheme, it should have all been completed by now. Unless the existing in-house funding for the scheme had been diverted elsewhere, but I can’t imagine why (cough, cough). Anyway, good to see priorities being chanelled in at least one right direction.

    • Elizabeth

      ### ODT Online Wed, 18 Jan 2012
      Asset sales
      By Rob Hamlin
      So Mr Cull is thinking about selling assets. Well knock me down with a feather. But wait a minute, in order to sell an asset you need to actually own it. While most people say that they ‘own’ their own home, a sizeable proportion actually only own part of it. The rest belongs to the bank, and it is usually impossible to sell the house without their creditor’s permission. Mr Cull is likely to find himself in the same position with his proposed flog-off. Many of us have tried to acquire an understanding of the exact status of DCHL’s assets, but we have been actively frustrated in these efforts. We are not even allowed to know who DCHL is borrowing money off – and as to the exact terms of such borrowings….Well deary me, that’s just too commercially sensitive.
      Read more

      Note: Rob moves his attention to the city’s water and sewerage assets, you’re advised to read his full comment.

  7. Phil

    My money is on them selling Community Housing. Up until now they’ve been scared off by public opinion every time they tried. Desperate times.

    • Elizabeth

      The council has spent much of the past decade, or more, on a sometimes necessary, sometimes aspirational spending programme.

      ### ODT Online Thu, 19 Jan 2012
      Cuts trim rates rise to 4.7%
      By David Loughrey
      Dunedin ratepayers burdened by a decade of hefty rate increases could finally be in for some relief, with the city council’s budget heralding a softening of the annual increases in homeowners’ pockets. Councillors will enter the annual budget round on Monday with good news, after last year calling for a reduction in rate rises. They called for increases of no more than 5% in the 2012-13 financial year, 4% the following year, and 3% the next. Council chief executive Paul Orders and his staff have bettered that in their pre-draft annual plan, cutting next year’s rise from 11.9% to a proposed 4.7%, then uninflated figures of 3.3% the next year, and 1.5% in 2014-15. That situation does not, of course, come without some pain.
      Read more


      In other news…
      “The Dunedin City Council has a financial mountain to climb to fix the city’s ageing water infrastructure, amid warnings old pipes at risk of failure could be a threat to public safety. […] The funding spike was part of a looming $820 million bill faced by the council during the next 50 years, needed to replace more than 50% of the city’s entire water network requiring renewal by 2060.”


      Key dates (via ODT)

      Jan 23: Councillors’ workshop for 2012-13 pre-draft plan (non-public).

      Jan 24-25 (and Jan 26-27 if needed): Pre-draft plan public meetings.

      Feb 27: Council meeting to approve draft plan for consultation.

      March 10: Public consultation begins.

      April 11: Submissions close at 5pm.

      May 2-4: Public hearings on draft plan submissions.

      May 9-16: Public council deliberations on draft plan.

      June 18: Council meeting to adopt annual/long-term plan and confirm rates.

      July 1: 2012-13 annual plan active.


      ### ODT Online Thu, 19 Jan 2012
      Roads, sports fields eyed as council seeks savings
      By David Loughrey
      Multimillion-dollar spending cuts to stem runaway rates increases could result in the end of new road sealing, and the end of plans to upgrade the city’s sports fields for at least the next decade. Those are two major areas of spending cut after guidelines set for the Dunedin City Council’s annual budget stated no new capital expenditure programmes could be included unless they were “urgent or externally funded”.
      Read more


      More figures are available at page 13 of print and digital editions of the newspaper.

      Reality check needed… water pipes anyone?

      ### ODT Online Thu, 19 Jan 2012
      Warehouse precinct back on agenda
      By Chris Morris
      Plans to breathe new life into Dunedin’s heritage warehouse precinct, involving major changes to the city’s one-way street network, are among new and unfunded items back before Dunedin city councillors next week.

      Dunedin City Council staff have estimated they need $700,000 over two years, beginning in 2012-13, to carry out investigation and design work associated with the project, followed by an estimated $5 million for construction.

      Read more

      • Elizabeth

        Unnaturally quiet at ODT Online, only a sprinkling of comments so far on DCC budget and rates… still no debt management plan for public view. DCHL is quiet. Mr and Cr Hudson is still in the house. What’s really going on, especially when your water is up for grabs and the pipes are stuffed? That and one thousand other questions to the death fortress.

  8. Calvin Oaten

    Elizabeth, I think the quiet is because the people are gobsmacked. The announcement of a rate increase of just 4.7% is just so unbelievable. Notice the councillors are pleased because that is what they have been asking for. WHAT??? The hypocrisy is staggering. Isn’t it councillors who, year after year voted approval of all the outrageous spending which has brought the city to this financial impasse? Yes, the same useless sods, as the debt continued to spiral year on year, all they could do was genuflect to the “grand poobahs” Harland and Chin. Harland and Chin are gone. The crook Guest has gone, Richard Walls exited stage left, leaving the dregs. Now they think Paul Orders will save all their necks. Fat chance, face it, the horse has bolted, even a couple of ‘lackeys’ have left. It’s pretty much the same old same old, resorting to financial games of “hide the thimble”, buying time until they can graciously exit. Even outsiders like Malcolm Farry are trying to desperately paper over the cracks. It just won’t work. Like the EU, it is game set and match, and the people lose. It’s not just the pipes that are stuffed.

    • Elizabeth

      Calvin, the councillors believe in magic! And asset sales, and a little crimping – ‘there is no depression in Dunedin’, suddenly. None of them have accountancy or economics skills; this is playschool we’re seeing. Selling city water assets will be the point of removal of all obligations to the citizens that council might think it owes. I doubt the ‘county grader’ will have much traction left by then, either (oh wait, we no longer own one). Time for ratepayers and residents to ‘stick it’ to councillors through the media and the annual plan consultation process. But here we return to the sheep population problem.

  9. Calvin Oaten

    Elizabeth, as Rob Hamlin so succinctly pointed out, there can be no asset sales except that there would be a comparative debt reduction at the banks’ behest. As Rob says, we don’t own any assets, the banks do. So where is the relief they seek coming from? Where else? The poor old bloody ratepayer. Watch for it, if not direct from rates then charges and loss of services. Debt can only be removed by either paying it back or defaulting. It can’t be fixed with more debt. Know anyone who could be interested in a near new stadium?

    • Elizabeth

      Calvin, I thought we’d just change the rules / parliamentary acts to sell off things like our reserves, cemeteries and green space – and as Phil indicates, the social housing (being in somewhat ragged state, worth a few peanuts maybe – why not expose the disadvantaged to full market rents if WINZ will pick up the tab? splutter #$%^&), and there’s the council office furniture, stationery and such. Must be worth something collectively.

      Oh yeah, I did read Rob’s opinion piece and wondered what’s left that ISN’T leveraged (couldn’t quite put my finger on the council asset register or debt ledger!!??) – how would we ever find out the ‘numerical truth’ inside the death fortress? Water is our gold?

      Well, I’ve given up and dream sweet dreams of Harland-like escape… like most others, no doubt, I will succumb to numb-brained complacency and bid our leaders free agency to resolve the crisis, er, successfully! (are those air tickets in my back pocket)

      • Elizabeth

        Pfffft. That was a little fantasy. I share with others the need to open the council books with a can opener asap, or our work is not done. How long can councillors fend this off.

  10. Anonymous

    Calvin, people are gobsmacked. Also quite a few pissed at the messenger for once again watering down council news and making it appear like we are grateful for an increase of 4.7 percent. The point is, if you’re already against the line financially, with little or no hope of extra income then it is not “relief” but more hardship. Dunedin needs Cr Syd Brown to retire before further financial harm is inflicted on ratepayers. But it is unlikely we will see that happen with Mayor Dave Cull supporting this stadium councillor on a committee with such influence.

  11. What bothers me is WHY they have to fend it off. The closet where they hide all their nefarious dealings must be a place of nightmares – they’ve expended so much energy pretending the skeletons do not exist, the damned things might just come alive and walk out on their own. Monsters might be the stuff of fantasy but debt is an evil that thrives on being ignored.

  12. Phil

    I see that DCC is currently advertising for a “Manager: Communications & Marketing”. Don’t tell me that they finally managed to wedge Rodders out through the doors. Or is it simply a new job title to score a pay increase.

  13. Hype O'Thermia

    Even if it’s not a Rodders replacement…….. do we need one? Like, really NEED one? City Talk is an insult to trees. The DCC carefully avoids meaningful communication, and “marketing” is advertising things like how super wheelie bins are or whatever new cost-you-more “improvements” they’ve foisted on us.

  14. Phil

    Agreed. The majority of press reports come directly from the department or group manager concerned, without going through Rodney. Typically they are sourced over the phone. That leaves City Talk, which is again a collection of writings from staff members. There is the in-house “Staff Zone”, a 4 side gem which comes out once a month and includes a quiz. That probably justifies a full time position with company car and dedicated parking spot.

  15. Phil

    And I see the Water and Waste department needs a “Quality Assurance Coordinator”. A What ?, I hear you ask. After reading through the blurb it turns out that they want to hire a contracts supervisor. What was wrong with saying that ? Maybe you get paid more as a Coordinator. Like being a Systems Architect instead of a computer programmer.

  16. Hype O'Thermia

    It’s a nonsense title. Quality Assurance manager, enforcer, supervisor perhaps. Though why quality should need anything more than the normal supervision/management to make sure that normal acceptable standards were being met, I can’t imagine. Is good-quality performance of tasks not a basic requirement any more?
    Now add Coordinator to the other 2 words – wtf is that supposed to mean? Snow be buggered, Dunedin has as many ways of saying overpaid.

  17. Phil

    Ah ha, Elizabeth. It may well be Debs’ role rebranded. I immediately through of Rodney when I saw the following dutues: ” Support and advice on communications and media issues; Staff Information sharing, advice and training; Strong relationships built with local and national media to facilitate honest and robust debate with media interests; Excellent media networks built nationally and locally; Provision of high quality, accurate, reliable and timely public information / consultation for informed discussion and understanding of Council activities”.

    But then I see it also includes managing staff and budgeting for
    Communications and Marketing team. Possibly a combining of the 2 roles ?

    • Elizabeth

      Does sound like two rolled into one, probably right Phil. Rodders retiring (?), Debs to private enterprise… someone supposedly is needed to fully implement DCC’s new marketing and communications strategy etc. if only it included video recording of standing committee meetings, for public release.

      • Elizabeth

        Bizarre. No recognition whatsoever of the DCC’s perilous financial state by Cr Acklin who is “not prepared to see everything be binned just because there’s a bit of a blip in the rates”. Time to resign.

        ### ODT Online Fri, 20 Jan 2012
        Councillors at odds over spending cuts
        By Chris Morris
        A push to slash spending on Logan Park and other Dunedin projects has been criticised and Dunedin City Council spending cuts have emerged as an early battleground for budget debates beginning next week. Council community development committee chairman Cr Bill Acklin criticised the proposed cuts yesterday, vowing to fight them at a workshop and public meetings to be held next week.
        Read more


        ### ODT Online Fri, 20 Jan 2012
        Debate heating up
        By Chris Morris and David Loughrey
        The debate has already started, and more major issues are on the horizon, as Dunedin city councillors begin considering the financial future of the city. An agenda for next week’s 2012-13 pre-draft budget plan meetings, released yesterday, highlights a raft of major concerns about Dunedin’s stadium debt, how stadium officials will pay the venue’s rates bill to the council, and the distorting influence of the venue’s value on city rates.
        Read more



      • Elizabeth

        3 hours ago…

        @DnCityCouncil New manager appointed for DCC Communications and Marketing department – http://bit.ly/zGlmWk

        [Link goes to DCC Media Release]

        • Elizabeth

          {Comment moved here for relevance. -Eds}

          Hype O’Thermia
          Submitted on 2012/03/19 at 10:10 am

          Sorry, can’t find a thread to put this in. Please could someone explain how to find appropriate topics to put things in that aren’t a direct response to the recent posts?

          Council centralises PR team at head office
          “The Dunedin City Council has created a new central communications unit with a potential multimillion-dollar budget, and appointed a new manager to head the team, in a drive to sharpen its public image….
          “…the changes were expected to deliver savings of about $250,000 a year, compared to the combined budgets of communications work across the organisation, she said….
          “…Long-serving council communications co-ordinator Rodney Bryant would remain, and with his job description unchanged, but in future would report to Mr McKerracher, Dr Bidrose said.”

          {All you can do is use the search box at the home page and hope like hell your search is broad enough to land you at some possibbly useful old posts. Unfortunately due to editorial control of the website, tied to the limitations of the WordPress template, only the backroom crew have access to the powerful Dashboard search engines that can pull up relevant posts and comments. -Eds}

  18. Hype O'Thermia

    “…also experienced at mushroom cultivation….”

  19. Like being a Systems Architect instead of a computer programmer.
    While I generally share your cynicism about daft titles, the role of systems architect is a very important one, and is emphatically *not* a programmer. Done well, it should lead to a lean and efficient IT back-end, reducing unnecessary duplication and reducing lots of incompatible ad-hoc IT fiefdoms. Done well of course….

  20. Hype O'Thermia

    It would be interesting to see how many people would be prepared to see Cr Acklin “binned just because there’s a bit of a blip* in the rates”.
    *Blip: Ack-speak for ongoing councillogenic catastrophe.

  21. Hype O'Thermia

    Don’t miss Rob Hamlin (odt online) on the Logan Park refurbishment. Make sure you’re sitting down with a cup of strong sweet tea at the ready – it’s a shocker.

    {Link: http://www.odt.co.nz/news/dunedin/194995/councillors-odds-over-spending-cuts#comment-26788 We believe the architect for the redevelopment was Architectural Ecology of Dunedin. -Eds}

  22. amanda kennedy

    Funny reading in the Oddity how Cr Wilson’s argument against all the cost cutting is shutup and pretend that we are all happy little bumpkins and that it is ‘…alright here!’ in little Dunedin. Greater Dunedin seem to be hoping if they can sing the happy happy song about our city that people will move here and that is how they will get us all out of the massive debt her fellow councillors Acklin, Hudson and co. put us in. Dream on Cr Wilson.

    • Elizabeth

      Yep Amanda – so hard to be progressive when deeply in debt, there’s really no gloss that can cover it. To pretend there is and hike the rates by 4.7% (or MORE) is a surefire way to lose votes. Greater Dunedin has done its dash unless it gets honest, and by now it’s probably too late.

  23. It seems few examples of rugby-related excess make it into the Oddity news or, given enough public disapproval, is given some light coverage to please its faithful subscribers. It falls to others to raise awareness and inspire the tree killer to act like a newspaper. Cr Acklin is going to find it hard to rely on short memories this time. But he is likely to be a convenient fall guy. It is the other stadium councillors, the often quiet but dangerous ones who remain entrenched at the Dunedin City Council constituents should worry about at the next election.

  24. Hype O'Thermia

    I wonder if the new freedom to post strong comments is the Sun’s way of allowing a safety valve. How many people read the comments, I wonder? The letters to the ed in the dead-tree version tend to be fairly pale by comparison. Does anyone else send some of the best online posts to people who don’t bother much with the Sun, online or tree?

  25. Anonymous

    I’ve regularly wondered how and where they spend enormous amounts of public funds on rugby. Rob Hamlin’s post is a brilliant piece of writing and has been widely distributed. The excess does not surprise anybody but it is an example that will acquire a lot of interest. It is also a news tip handed to the ODT on a low-cost platter. So where is the paper’s enthusiasm for a bit of investigative reporting? They should have been down there and making an public-interest story out of it for today – a photo of the long bench and a question to councillors on why so much was spent is as easy as it gets. It could have done it to look less like a professional rugby magazine for a change.

    • Elizabeth

      Interesting that urban design consultants Urbanismplus stated to a public meeting last year that improvements to the Octagon should be last amongst long-term projects for the central city – contrary to what council staff are recommending here.

      The work was estimated to cost $13,145,911, most of it coming from the council, and although earlier budgets had pencilled in funding worth about $6 million, more funding would be required to meet costs.

      Funding does not come from “council”, it comes from ratepayers’ pockets. The central city plan should be ditched, now. The New Zealand economy is flatlining, Dunedin City Council is not immune… it’s already in recession. Someone tell the staff.

      ### ODT Online Sat, 21 Jan 2012
      Council staff push for central city improvements
      By Chris Morris
      Details of a $13 million plan to upgrade the middle of Dunedin, with improvements to the Octagon, George St and other parts of the central city, will run the gauntlet of city councillors in cost-cutting mode next week. And despite concern over the city’s tight fiscal position, Dunedin City Council staff have recommended the work begin later this year, rather than be delayed for three years as part of a drive to ease the pressure on rates.
      Read more

      • Elizabeth

        In November, the working party concluded more than a year of work by recommending a new Mosgiel swimming complex be built to address overcrowding at the Moana pool complex in Dunedin.

        ### ODT Online Sat, 21 Jan 2012
        Chairman still favours new swimming complex at Mosgiel
        By Chris Morris
        An $11.5 million swimming complex at Mosgiel remains the priority project for the chairman of the Dunedin City Council’s aquatic facilities working party, despite a staff report that seems to step back from the idea.
        Read more

  26. Hype O'Thermia

    “In November, the working party concluded more than a year of work by recommending a new Mosgiel swimming complex…” – more than a year of work! We have been paying how-many individuals, working parties, consultants to prepare plans to spend non-existent money on things that WOULD HAVE been (in a very few cases) better value for the city than the Fubar Stadium … but seeing we’ve got the Fubar & Associated Long-Term Debt Stadium “to put Dunedin on the map*” and I’m not at all happy.
    * marked “Here be dragooned ratepayers”

  27. amanda kennedy

    Yes, anonymous. Some very quiet councillors who are responsible for the city’s present economic woes. Interesting how Julian Smith’s newspaper is not holding them accountable for this. That explains why Hudson, Acklin, Bezett, Noone, Brown and the other fiscal muppets on council were returned to council right there. Whatever has happened to Chairman of Absolutely Everything on Council, Cr Hudson? He has gone very quiet indeed. Has he been removed from his very profitable chairmanships? With this fiscal dunderhead councillor in charge of so much it is not surprising fellow stadium councillor Acklins feels he can stil push to waste even more money.

    {Mr/Cr Hudson remains in place and has recently commented (as deputy chair of DCC Community Development Committee) on the Otago Museum director’s salary, see D Scene exposes museum director’s salary -Eds}

  28. Anonymous

    Chairman of Absolutely Everything on Council, Cr Hudson? Brilliant. He is probably cooking up the next lease buy out. Meanwhile what is Cr Syd Brown up to in his backyard? How is he getting on with his pipes? His rezoning? Maybe ODT reporter Mark Price could do a follow up. Maybe this time he could seek comment from Cr Brown on what he has developed for Mosgiel’s interests during that 12-year tortuous path to get his subdivision sorted. It would be nice to have Cr Brown comment instead of his mouthpiece Cr Weatherall. Cr Brown should speak up more for his ward instead of leaving it to others his constituents cannot vote against.

  29. Hype O'Thermia

    Nice to see Cr Brown’s subdivision hasn’t faded into obscurity in the collective memory.

  30. Anonymous

    Elizabeth, not sure how councillors could be so unsure about his salary when he was leasing a $281,000 car because it would not be a “good look” to ride a “push-bike”. For a $310,000 salary, most people would probably be happy to ride a bike and live with the imagined social stigma.

    Story: http://www.odt.co.nz/news/dunedin/137504/warning-over-future-funding-museum
    Poll: http://www.odt.co.nz/polls/137561/should-otago-museum-boss-shimrath-paul-use-push-bike-instead-281000-audi

    • Elizabeth

      Yeah, great point Anonymous. We noted that incredible ‘news story’ here at the time – rather convenient for councillors to forget [surprise!] the problem until D Scene pushes some more through the LGOIMA, huh!

      Sorry your comment automatically went to moderation due to the two urls it contains; unfortunately the WordPress template prevails over the site authors. Sigh.

  31. Hype O'Thermia

    The Sun’s online comments are running hot. A couple of Fubar supporters have come forth, perhaps stung by comments regarding the invisibility of them compared with how energetic they were earlier, attacking the “naysayers, rugby haters and anti-progress” majority.

  32. Peter

    Poor Fubar supporters. They continue to weakly justify what can’t be justified because the stadium numbers stubbornly continue to not add up. That’s why the likes of Malcolm are left to talk to outside media – usually dumb, under-resourced radio stations that employ hacks to pump out crap music, news sound bites that sound good, and play endless adverts to keep financially afloat.

  33. Calvin Oaten

    Herein is a copy of comments I made to Dave Cull and Paul Orders. Needless to say, no reply received.

    From: Calvin Oaten
    Date: 17 January 2012 11:14:45 AM NZDT
    To: Dave Cull
    Cc: porders@dcc.govt.nz

    Subject: Fwd: Dunedin City Properties

    Hello Dave,
    I was interested to read your comments re the sale of assets in the ODT this morning. I can understand exactly why you are contemplating something along those lines as the city’s debt situation is at an intolerable state. However, I am not sure where you see the opportunity lies to address the position. Firstly, if you consider DCC controlled assets which would attract interest, it always seems to come back to water and sewage disposal. Two easily monitored and rated, an attraction to the corporate world. Unfortunately, it seems from experiences elsewhere that the people always get shafted, both by cost and service. Further, in our case, it would seem that, if the “three waters” report is correct, then a vast sum of money needs to be spent over the next few decades in order to bring the systems up to standard. This, obviously would indicate a very heavily discounted realisation in the event of a sale here. Further, no assurance that the necessary upgrades would happen. This could mean substandard service for the people, or serious cost increases to “profitably” upgrade.

    Other avenues are the sale of DCHL assets. Problem here is that DCHL is so heavily indebted in its own right, that by the time the debt relevant to the asset was repaid then the capital released would be of little help. A bind, anyway you look at it. This of course is the result of years of the DCC exploiting DCHL for funds to conceal the truth of the reckless spending from the ratepayers. As they say, the chickens are coming home to roost. But Dave, you must have seen this coming with the Stadium and the Town Hall/Conference Centre, not to mention the OSM. None of these projects can or will be self-funding by any criteria. In fact, they will be a constant drain in the order of $20 million plus per annum. You know that, and so do a lot of others.

    One other avenue for raising funds could be the sale of non strategic property investments. Even seemingly good returning assets are a luxury the DCC can no longer afford to indulge in. I have done some work on this over the last six months or so, and find that there could be reasonably substantial sums released here. Depending of course on the indebtedness of the properties. I have no way of knowing this, but you would. I outline below the outcome of my research for your perusal. It should be noted that exiting all but essential properties could result in the closing down of the property department with its cost savings to the DCC.

    I have now had a good look at the property portfolio as finally obtained from the DCC’s Robert Clark. Reluctantly released, I would have to say. I am excluding three properties from the list as they are probably not practical to cash up. They are the Civic Centre retail premises, the Dunedin Railway Station (iconic) and the Tarpits 45 Hillside Rd (there is a story here). The balance are as given. I have totaled the rent revenues and capitalised them at 7% and 8% to arrive at a market zone. You might not agree with this, but one has to start somewhere. The Wall St Mall is rather interesting, in as much as it shows a return of 10.75% against a value of $32.5 million. I talked to Tony Clear months ago about this and he was aware of the low value which he said was crap, but enabled the fictitiously high return. He believes that in real time the mall is a bloody great loss. Anyway, here goes.

    Description – Rental Income (Cap 7%) (Cap 8%)

    Wall St – $3,467,000 ($43,287,000) ($49,471,400)
    Rosebank Rd, Auckland – $424,000 (5,300,000) ($6,063,000)
    Great King St – $971,400 (12,142,000) (13,877,140)
    Heriot Dr, Wellington – $876,300 (10,953,700) (12,185,700)
    Timaru St – $223,300 (2,791,250) (3,190,000)
    414 Moray Pl – $608,000 (7,600,000) (8,685,700)
    55 Ward St – $63,150 (790,000) (902,100)
    61 Ward St – $31,600 (395,000) (451,000)
    Treffers Rd, Christchurch – $416,400 (5,205,000) (5,949,000)
    54 Moray Pl – $490,600 (6,132,500) (7,009,000)
    658 Princes St – $199,200 (2,490,000) (2,846,000)
    101 Milners Rd, Taieri – $47,400 (592,000) (677,140)
    301 Moray Pl – $94,200 (1,177,500) (1,345,700)
    164 Moray Pl – $26,300* (328,750) (375,700) *This is the verger’s cottage valued at $1,100,000. Obviously a question here.
    3 Midland St – $118,400 (1,480,000) (1,691,400)
    Athenaeum Octagon – $72,800 (910,000) (1,040,000)
    Victoria Rd (Ice Rink) – $210,800 (2,635,000) (3,011,400)
    Fortune Theatre – $41,000 (572,500) (585,700)
    Crawford St – $75,529 (942,110) (1,079,000)
    Frederick St – $206,008 (2,575,100) (2,943,000)
    Dowling St – $213,855 (2,673,200) (3,055,000)
    Filleul St – $250,987 (3,137,300) (3,585,500)
    Thomas Burns St – $55,557 (694,460) (793,700)

    TOTALS – $9,184,633 (114,807,910) (131,209,042)

    Note: There is also a 49% interest in the Penrose Building with Clear Construction Ltd. Valued at $4,000,000.

    Now if these buildings are unencumbered (unlikely) then a cautious approach would say that they are collectively worth $115,000,000. So we could look at selling and using proceeds to lower the stadium debt. {Letter continues with loss of formatting. -Eds}

    {Received today, revised figures to supplement text above. -Eds}


    A. Portfolio Freehold – Rental Income
    Gross $9,184,633
    Less Overheads est. $600,000
    Less Tax est. 20% = $1,716,926
    $6,867,707 Net Return

    B. If Portfolio mortgaged 30%
    Gross $9,184,633
    Debt Interest at 7% = $2,415,000
    Bal $6,769,633
    Less Overheads est. $600,000 = $6,169,633
    Less Tax est. 20% = $1,233,966
    $4,936,367 Net Return

    C. If Portfolio mortgaged 60%
    Gross $9,184,633
    Debt Interest at 7% = $4,830,000
    Bal $4,354,633
    Less Overheads est. $600,000 = $3,754,633
    Less Tax est. 20% = $750,926
    $3,003,707 Net Return

    DVL debt of $160,000,000
    Interest at 7% = $11,200,000 per annum (pa)

    Freehold Property sold at $115,000,000
    Therefore, $160M – $115M = $45,000,000
    Interest at 7% = $3,150,000

    Therefore, savings $11,200,000
    Less $3,150,000
    Net $8,050,000
    Less loss of Income A $6,867,707
    $1,182,293 Net Savings

    If Portfolio mortgaged 30%
    Savings $11,200,000 – $3,150,000
    Net $8,050,000
    Less loss of Income B $4,936,367
    $3,113,633 Net Savings

    If Portfolio mortgaged 60%
    Savings $11,200,000 – $3,150,000
    Net $8,050,000
    Less loss of Income C $3,003,707
    $5,046,293 Net Savings

    Relative to the Stadium’s debt the ratepayers can be better off by as little as $1,182,293 pa and as much as $5,046,293 pa. Over twenty years this would be from $23, 645,860 to $100,926,000 if there was no property debt.

    Disclaimer. These figures are hypothetical only as the full costs of the properties and the full costs of the stadium are not known. They serve as an approximate guide only.

  34. Anonymous

    I fully support the liquidation of the DCC Property Portfolio. The level of public ownership of property is a constraint on private investment. As pointed out above, the funds released would clear much of the stadium debt in one go, rather than the “offset of rates” trickle that is the case currently.

  35. Hype O'Thermia

    I heard on the radio in the last news bulletin that the Dunedin Ratepayers Assn advocates selling assets since they produce such a small profit. I wonder if producing a small profit isn’t – I’m being fanciful here – a way to make sales of assets look desirable.

    The trouble is that, as with the ones the government wants to sell out from under its owners (us), nobody wants to buy the ones that have ongoing costs and don’t produce a profit, so schools and public hospitals with full emergency facilities and bridges and rural roads are not going to have buyers lining up and bidding the price up. They will be looking at assets that already produce a nice profit, where “good management” ie cutting services, reducing repairs and maintenance, and putting the price to consumers up, will work in their favour. It’s that old deja vu thing, looks like Snow White’s evil fairy godmother and smells like rat.

    • Elizabeth

      Luckily, the Dunedin Ratepayers Association has little sway or grunt these days – it isn’t a large representative membership.

  36. Hype O'Thermia

    No, but if they’re convinced then others WITH sway like shrewd council financial geniuses Collins and Acklin might also be convinced that there is One True Answer (C).

  37. Calvin Oaten

    Asset sales, other than the investment properties are not an option. As Rob Hamlin has pointed out, all the DCC’s assets as well as DCHL’s are so heavily leveraged that the only beneficiary would be the bank. No relief for the ratepayer.

    {See reference link to Rob Hamlin’s opinion piece further up this thread. -Eds}

  38. Phil

    There were some interesting properties which popped up on the list supplied by Robert Clark. And a few interesting properties which didn’t. Just to put a few faces to names:

    Heriot Drive from memory is a Bunnings Warehouse site in Porirua. That was a property swap deal for the former woolstores building on Strathallen Street with Bunnings. On the surface it was quite a good deal, as the woolstores building was in a pretty sorry state. But there’s also been quite a lot of money spent in Porirua as a result of not very diligent due diligence.

    Treffers Road is an industrial warehouse property on the way in to Christchurch. From memory its prime tenant is NZ VanLines (or similar). It’s probably a good earner but does incur significant ongoing maintenance costs.

    Moray Place and Gt King Street are the car park buildings. They were orgininally on DCC Parking section’s book, but were transferred a few years back to City Property. For some weird reason City Property now owns them, leases them back to DCC Parking section, who in turn leases the operation to Wilsons (I think). Lower Moray Place and Gt King Street also have commercial tenants, while the YMCA car park building has a residential body corporate which includes City Property as board members.

    Princes Street is the CitiBus depot and the former Sport Otago offices. If ever there was a case for demolition, one need look no further.

    Ward Street houses two small workshops/stores and a medical waste depot. Same rules apply as per CitiBus.

    The Athenaeum is a cock up. It connects to the Regent Theatre at street level. It was offered for purchase at the time of the Regent Theatre development, but was declined. By Athol, from memory. The result was half a million dollars spent building new toilets in the basement of the Regent Theatre. And then they ended up buying the Athenaeum after all. It’s in a very sad state, but is rather quirky.

    Midland Street is the Water department yard. City Property did also own the industrial property backing on to it, but may have since sold it.

    What interests me are the properties not shown on the list. What happened to the big rural (subsequently re-zoned as industrial) properties on Dukes Road North ? There’s also a significant number of properties which have been purchased and maintained by City Property on behalf of other departments. A number of student flats on Harbour Terrace/Butts Road, flood prone properties on Sommerville Street, a number of properties surrounding the Green Island landfill site for starters.

    The Delta yard on Halsey Street seems to be missing, as are the old Electricity department buildings on Bachop Street. The Ice Sports arena has been included, but not the Edgar Centre (which has commericial tenants).

    The Penroses building hides under Golden Block Investments, which is administered by City Property. They have a few other such companies, which is possibly why the supplied list is lacking in a few properties.

    Lastly, about 10% (around 100) of the Community Housing units are leased out to private and central government healthcare agencies on long-term leases. These are primarily the units in hill suburbs which are not highly sought after by pensioners. Those complexes should really be listed as being commercial enterprises.

  39. Calvin Oaten

    Thanks Phil, I can tell you it was like drawing teeth to get the info I did get. I always suspected it was short. Almost pushed it to the Ombudsmen, but settled for what I did get in order to do the work and hopefully, make the point. Nonetheless, the more the merrier I say, it only enhances my argument. For the DCC to be in the property investment business when it is so heavily indebted is, in my opinion scandalous. It is just a small bureaucracy playing “Bob Jones” with the citizens’ treasure. The sort of actions which might just marginally be acceptable if we had a producing oil well in the upper harbour.

  40. Calvin Oaten

    Does this mean that ‘Old Rodders’ gets the heave ho? The catering accounts will reduce dramatically. Double gain here.

  41. Hype O'Thermia

    Tough luck, Calvin. But he’s going to have to report to the more highly paid (I’m sure) chieftain. Report what, I wonder? Calorie intake?

  42. Calvin Oaten

    There just ain’t no justice, particularly when one thinks of all those starving Ethiopians.

  43. Anonymous

    The public is becoming informed and that sort of information cannot be tolerated by the Stakeholders. This council is already broken. Stadium Councillors are lapdogs. The media has gone soft. What’s left is history and alternative resources that inform. I suspect this Ministry of Truth offering will be dedicated to rewriting the past, flooding print and online media with goodwill messages and a little black-ops where discrediting is required.

    • Elizabeth

      “What a funny coincidence.” -Michael Hope

      ### ODT Online Tue, 20 Mar 2012
      DCC weighs plan to sell crematorium
      By Chris Morris
      The Dunedin City Council could be eyeing the possible disposal of another ratepayer-owned asset by offloading the Andersons Bay Crematorium to a private operator. The Otago Daily Times understands the council is considering selling the crematorium, and private operator Hope and Sons yesterday indicated it would be a willing buyer if the council decided to act.

      Hope and Sons had planned its own crematorium in South Dunedin, but early last year shelved an appeal against decisions by the DCC and Otago Regional Council not to grant consents for it. The decision to shelve any appeal coincided with an approach by the DCC, which “came to us thinking we would be a good purchaser” for the Andersons Bay Crematorium. -Michael Hope

      Read more

      • Elizabeth

        I’m liking Michael Hope’s pragmatic response to the dunderheads at DCC. He is a businessman many times over – what are they.
        The Hopes know their business, they are immensely liked.
        Does DCC. Is DCC. pffff

        Sat, 9 Jul 2016
        ODT: Question over crematorium competition
        The Dunedin City Council is facing tough choices over the future of its crematorium after competition from a new private operator. A report tabled at last month’s community and environment committee meeting said cremations at the council’s Andersons Bay facility had dropped off “significantly” since Hope and Sons Ltd opened its own in Mosgiel last November.

        • Hype O'Thermia

          Why doesn’t the DCC appoint a Cremation Education and Support Coordinator heading a small team of social sciences and MBA graduates? Isn’t that how it goes?
          Are you dying, or considering dying soon? Are you getting less than the Living Wage therefore by definition undeserving of life? Come to our community Death Encouragement centre. Let us arrange your booking….

  44. Hype O'Thermia

    Da Inta Webthing is making it harder to polish local turds & present them as diamonds.
    Thank goodness.
    It’s not a one-news-medium town any more.

  45. Calvin Oaten

    Elizabeth; ironic that you should post this under the thread, ‘DCC living beyond its means.’ Appropriate perhaps?

  46. Anonymous

    DCC still very strong on the negotiating front, I see.

  47. Gurglars

    The DCC staff attend annual conferences on “how to screw the ratepayers further”. From this will come local taxes (see Lawrence Yule). What has come is Agenda 21, Cycleways, Stadium, traffic lights, fewer car parks etc etc.

    But the real doozy is still to come.

    Here is a picture of what the DCC traffic employee will be wearing next year after the next annual “conference”.

    Imagine the cost of outfitting all these pussies with this garb!


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