DCC Statement of Public Debt Summary as at 31 December 2011

Comment received.

Calvin Oaten
Submitted on 2012/02/26 at 12:43 pm

I looked up the DCC site, and just happened to feel like looking at the Finance, Strategy and Development 31 December 2011 report. Of particular interest is the Public Debt Summary Statement.

Stadium balance $148.404m. Interest paid $4.222m. Now if DVL is to assume $110m of this debt, it is official, the balance of $38.40m stays on the DCC’s books. A dollar to a doughnut this is the private funding underwrite.

The total debt of the DCC is $344.819m. Not sure what DCHL’s debt will be at 31 December but at 30 June last, it was $4.316m short term and $534.220m long, for a total of $538.54m. All up, it would seem that at New Year’s Eve we citizens are shouldering a total of $883.336m. Feel good? Split that among 54,000 ratepayers and this amounts to $16,358 per person! Still feel good? We ought to, as this earns us the title of champion most highly rated citizens in New Zealand, by a country mile. Where is the medal?

Investment and miscellaneous property debt (excluding property operational but including Carisbrook) carries debt of $33.869m. Here is a portfolio the DCC could do without. Investments like this are for organisations having a debt/equity ratio much much healthier than the DCC’s. Sold up, this portfolio could remove that debt and release the equity for further debt reduction. I recently did an exercise on this aspect and emailed it to Dave Cull copied to Paul Orders. Response? Zilch!

Interesting also, is that of the total debt of $344.819m, that pertaining to all Transport Network, Public Health, City Development, Museums (including OSM, and Chinese Garden), Sport Recreation & Leisure (excluding all things stadium), and Corporate Support add up to $140.881m. So, it can readily be seen just what a tremendous burden the stadium is upon the city.

Report – FSD – 09/02/2012 (PDF, 660.0 KB)
Financial Result – 6 Months to 31 December 2011

See Attachment 7 – Statement of Public Debt as at 31 December 2011 Summary Sheet

Posted by Elizabeth Kerr

7 Comments

Filed under DCC, Economics, Politics, Project management, Stadiums

7 responses to “DCC Statement of Public Debt Summary as at 31 December 2011

  1. Elizabeth

    Listener – Tackling our rising rates by Jane Clifton
    February 25, 2012 | Issue 3746
    http://www.listener.co.nz/current-affairs/tackling-our-rising-rates/

    Russell Garbutt has had a letter published in the latest Listener – after Jane’s lead article on rates rises. Look out for it.
    See Russell’s comments about the letter to What if? here.

    ### rnz.co.nz Monday 5 March 2012
    Nine To Noon with Kathryn Ryan
    09:05 Soaring debt of the country’s councils
    The level of councils’ debt quadrupled over the past decade to nearly $8 billion. The figure has alarmed groups like Federated Farmers which says its out of hand and reform of local government is needed. Larry Mitchell, an independent finance and policy consultant in local government; and Michael Reid, manager of governance for Local Government NZ.
    Audio | Download: Ogg Vorbis MP3 | Embed

    See related thread – Kaipara this time

  2. amanda kennedy

    “…”Debt is an internationally accepted way of spreading costs over future generations and ensuring the present generation doesn’t pay more than its share,” said LGNZ principal advisor Dr Michael Reid. There’s Cr Hudson’s ‘Intergenerational debt” explained to us by an ‘expert’. His reasoning of why it is OK to burden our children and grandchildren with debt so that the children and grandchildren of ‘stakeholders’ can live nice and comfy. Debt for the masses, profit for the few. The result of the trickle down con; hello increasing income inequality in Dunedin.

  3. amanda kennedy

    Now which bunny was it that has been pushing the stadium debt on the city but who has also made a tidy little sum of millions out of it?

  4. Peter

    The trouble with ‘DR’ Michael Reid’s ‘logic’ is that the theory doesn’t match the reality. The present generation spends foolish money now, for itself, and rationalises the whole thing away by claiming future generations will also benefit. There is no obligation to spend public money wisely, not only by this generation, but also for the following generation(s). Future generations are left paying off our debts and face their own debt servicing for any capital items they instigate – good and bad. What a merry go round!
    All goes to show how dumb some so-called academics can be.

  5. Hype O'Thermia

    Peter hit the nail on the head: “There is no obligation to spend public money wisely” and then claim that intergenerational debt makes sense.
    It is self-interested/feckless/corrupt to spend public money unwisely even if it was saved up ahead of time, not that any council would do that nowadays, they are living in a plastic-minded* age.

    * “Just put it on the plastic.”

  6. Peter

    Also, Hype, this attitude is symptomatic of a degradation of human values. We were brought up with the attitude of leaving the world a better place for our children and grandchildren. Right down to most families there was the desire to ‘leave something for the children’ no matter how small the inheritance may be. Now you hear more often than not the opposite – ‘no sense leaving money in the bank when I’m dead’. While it certainly doesn’t make sense to be skint on this earth if you don’t need to be, there is something more honourable about leaving some legacy for those who follow you.
    Too many of our councillors – with Richard Walls, a key exponent – cling to the more selfish view.

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