### ch9.co.nz June 21, 2012 – 5:51pm
Council to vote on rates increase
Twelve months’ work planning, listening, debating, and budgeting is almost over. On Monday, the Dunedin City Council will vote to set a 4.9% rates increase in its annual plan, a percentage even lower than promised. But within the same agenda is almost $60 million of debt the city plans to draw down this year.
Video
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Meeting of Dunedin City Council
Monday 25 June 2012 at 2:00 PM
Council Chamber, Municipal Chambers
Agenda – Council – 25/06/2012 (PDF, 97.8 KB)
Reports – Council – 25/06/2012 (PDF, 1.8 MB)
Items to be made public and have been authorised for release under LGOIMA
Report – Council – 25/06/2012 (PDF, 136.6 KB)
Memo of items to be made public and have been authorised for release under LGOIMA
Report – Council – 25/06/2012 (PDF, 154.4 KB)
Adoption of the Long Term Plan 2012/13 – 2021/22
Report – Council – 25/06/2012 (PDF, 11.8 MB)
Adoption of the Long Term Plan 2012/13 – 2021/22 – Attachment
Report – Council – 25/06/2012 (PDF, 659.1 KB)
Setting of Rates for 2012/13 Financial Year
Report – Council – 25/06/2012 (PDF, 134.2 KB)
Security for Borrowings
Report – Council – 25/06/2012 (PDF, 70.1 KB)
Proposed District Plan Change 13: Hazardous Substances – Rescindment of Resolution
Report – Council – 25/06/2012 (PDF, 42.4 KB)
Statement of Intent for Dunedin Venues Limited and Dunedin Venues Management Limited
Report – Council – 25/06/2012 (PDF, 5.6 MB)
Operative Waste Management and Minimisation Plan Review
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Posted by Elizabeth Kerr
What if? Dunedin... 
### ODT Online Fri, 22 Jun 2012
Rates hike to be ratified
By Debbie Porteous
The Dunedin City Council will next week adopt its long-term plan, including a rates rise of 4.9% next year, and approve an increase in the city’s debt of $59.5 million in 2012-13. Under the long-term budget to be ratified by the council next Monday, changes to city rates for next year include new rating categories for Forsyth Barr Stadium.
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### ODT Online Tue, 26 Jun 2012
Plan, rates rise adopted
By Debbie Porteous
A 4.9% rates increase was confirmed at a Dunedin City Council meeting yesterday. The council adopted its long-term plan 2012-13 to 2021-22 and confirmed rates for the next financial year, after a consultation process that attracted nearly 1000 people wanting to have their say on the future of the city.
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One thing that seems to have escaped comment on this thread is the fact that the City has chosen to ‘self insure’ its major infrastructure assets both above and below ground.
What exactly does this mean? Well, when you insure something with a specialist insurance company, you are paying them to take the risk of the assets that you are insuring being destroyed or significantly damaged. Be it a motor car or Pamela Anderson’s boobs.
The reason why most people use an insurance company is that the asset being insured represents a sum that they would find difficult or inconvenient to meet either by their regular income or by liquidating assets. An insurance company works by making sure that the risks that it carries on its books are well diversified and that each source of risk is individually insignificant relative to the assets that it has on hand, which are also usually well diversified both geographically and in their nature. This is usually further protected by a process called reinsurance in which insurance companies cross insure each others’ risks. This usually requires the resources of a substantial organisation to achieve, and even then they can slip up. The destruction of AMI’s independent status was as a direct outcome of insufficient diversification of its risk portfolio, which was over-concentrated in a single city that was prone to individual catastrophic events.
Insurance companies obviously charge for this service, and that charge includes an often hefty profit margin. For this reason some companies, whose operations cause them incidentally to have risk and asset portfolios that resemble that of an insurance company, may choose to ‘self insure’. A good example is a major international car rental company. Such a company has a massive fleet of cars operating in dozens of countries. Over the entire fleet in a year, the number of prangs and wipeouts and their total cost can be predicted to very fine margins due the arbitrage of driver incompetence. Unless one of their drivers mows down the President of the USA (or pops one of Pamela Anderson’s boobs), the company is unlikely to face a catastrophic bill, and can thus manage its own risk and pocket the profits that would have otherwise gone to an insurance company.
However, self-insurance only makes sense for a very small minority of organisations. The DCC actually sits at the opposite end of the continuum to a major car rental company with regards to the wisdom of pursuing this option. It has no significant liquid reserves, and its assets (which either create no revenue, or are heavily mortgaged) are highly concentrated in a single area, which is most definitely prone to catastrophic events that could destroy the value and functionality of most of them. The DCC thus could not source the funds to cover the destruction of these supposedly ‘self-insured’ assets.
In such a situation the DCC would have to turn to the ratepayers. However, the ratepayers’ own assets, income and lives would also be devastated by the same event. They would be unable to pay. The DCC might then plead with the government. The government would be perfectly entitled to take a very hard line in response to such behaviour that had put the DCC in such a position. I do not know what EQC’s position would be. However, if the DCC is not paying insurance premiums on these assets, then presumably they are not paying EQC levies either, because that’s when the clip my ticket – this position may bite too. Help would thus be partial and subject to stringent conditions.
This City is therefore not self-insured – it is uninsured if the recently reported comments made by the auditor are true. The Auditor declined to describe the Council’s actions as reckless at the meeting with the Council. I struggle to see how this position is sustainable in this instance.
Related posts and comments on Dunedin City Council insurance:
7.7.11 More than $1 billion of infrastructure assets NOT insured
16.7.11 Major Dunedin City Council infrastructure assets NOT INSURED
25.7.12 DCC Finance, Strategy and Development Committee – meeting postponed
30.11.12 amalgamation, Anyone?
14.6.12 Audit NZ true but pale in delivery?
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5.1.12 ODT Editorial: The rising costs of insurance
Further earthquakes in Christchurch this week, following the pre-Christmas shakes, will not have given residents confidence their new year will be much improved on the previous 16 months. As the damage continues to homes and businesses in our Southern neighbour, the costs also increase for owners and their insurers. An estimate last week indicated that Christchurch’s February 2011 earthquake could cost $1.3 billion more than initially estimated. And as the costs incurred rise inexorably so, too, will the cost of insurance. More than $US108 billion ($NZ139 billion) of global losses last year have stretched the resources of insurance companies worldwide.
### ODT Online Wed, 27 Jun 2012
Home heating scheme to start
By Debbie Porteous
Up to 500 Dunedin properties could be made warmer in the next 12 months, if a new scheme initiated by the Dunedin City Council attracts enough takers. From Monday, Dunedin homeowners and landlords will be able to apply for financial assistance from the council for up to $5000 as part of a $2.5 million year-long trial to help homeowners and landlords retrofit insulation and fit “clean” heating systems, such as wood burners, pellet burners or heat pumps. The loans will carry an interest rate of 7% and be paid back to the council through 10 years via a targeted rate on the property. The new scheme was ratified in the city’s budget for 2012-13, and adopted by the council on Monday as part of its 10-year long-term plan.
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### ODT Online Wed, 27 Jun 2012
Water lifelines strategy earns national award
A 100-year strategy for the replacement of some of Dunedin’s critical water pipelines has won a national award. The Dunedin city raw water lifelines strategy won the national NAMS innovation in asset management planning award at the Ingenium (public asset engineering association) Excellence Awards on Saturday. A collaboration between MWH, a global engineering company, and the Dunedin City Council, the $110 million pipeline project involves 120km of critical pipeline supplying 60% of the city’s water from two catchments.
Read more
### ODT Online Mon, 15 Oct 2012
Eco-housing scheme might be abandoned
By Chris Morris
The fate of the Dunedin City Council’s eco-housing retrofit scheme will be back in councillors’ hands this week when they decide whether to proceed with a modified scheme or axe it. A staff report to be considered at tomorrow’s planning and environment committee meeting recommended councillors proceed with a modified scheme, based on one adopted by the Greater Wellington Regional Council. However, faced with additional liabilities and risks, councillors could instead decide not to proceed with the scheme, the report noted.
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Note:
The report to the Planning and Environment Committee meeting isn’t available online or mentioned as an item in the meeting agenda. DCC Link
### ODT Online Thu, 18 Oct 2012
Insulation scheme gets approval
By Debbie Porteous
Better late than never was the sentiment expressed by Dunedin city councillors yesterday as they approved a modified scheme for ratepayers to borrow money from the council to retro-install insulation or heating.[…]In a report considered by the council’s finance, strategy and development committee yesterday, council energy manager Neville Auton said staff felt councillors needed to consider any necessary changes before going any further. The problems mainly concerned risk and liability implications for the council that had been discovered. Staff proposed they could largely be addressed by the council directly contracting service providers to undertake the work and securing the Energy Efficiency and Conservation Authority (EECA) subsidy on behalf of the applicant ratepayer.
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Can’t you self-insure if you put into a no-touch fund (something safe rather than going for high returns) the amount of all the insurance premiums, when they are almost unaffordable? It’s not perfect by any means, but if you’re lucky by the time something really bad happens a few years’ premiums have been amassed. I take it that our “self-insuring” council is SAVING not spending the premiums it’s not paying to insurance firms – yes?
Gods forbid the DCC decides to “invest” the insurance premiums it’s not paying. That would be the lossiest of lose-lose schemes – and one that would appeal to, for instance, a property manager…….
I think that you want to self insure you need to put aside money to cover your potential losses – just putting your premiums in an invested pool is not enough short term because it means you are not covered while the pool is growing. Ideally you move slowly divesting your self slowly from your existing insurers as you build the pool. As Rob points out just saying “we’re big enough to cover any disaster” is a mistake when the real test needs to include diversity of investment – in particular investing in yourself is not being diverse.
So how much does DVML pay the DCC every year for insurance? Are they now insuring some or all of the ORFU’s operations? (what happens if one of the temporary stands collapses for example?)
Were the DCC putting money aside to self insure, then there should be a sum of money/liquid equity somewhere outside of Dunedin that is equivalent to the replacement cost of the self insured assets within Dunedin. Can anybody see that in the DCC/DCHL books? The DCC’s Dunedin prperty portfolio cannot be used in this role unless it is itelf insured with the backing of out of town assets.
Mike; If one of the temporary stands at the stadium collapsed, it would be no different to one of Pamela Anderson’s boobs collapsing. The world would carry on, and the lawyers would crawl all over the situation (including the boobs) looking for the main chance. But seriously, Rob has a point, which obviously has eluded our ‘cerebrally challenged’ council and senior staff. But hey! why worry about things that may not happen. In my experience that is usually when they do. Australia is looking more and more attractive by the day.
True, self-insurance by putting premiums aside is high risk. Also it depends on how many different policies there are, e.g. household – fire, theft house and contents; life insurance; income protection; health; car caravan and boat all separate policies…. it’s unlikely all the bad stuff would happen at the same time, and often it’s not worth claiming on the insurance because of excess and losing no-claims bonus. For the city it’s a different scale but the more items and the more categories the safer a bet it becomes. It’s still a gamble, especially in the early years.
To me, looking at the chronic lack of common sense including refusal to live within our means and addiction to “visions”, the greatest danger is not a major outside event like an earthquake but the decision to empty all the saved premium funds to “invest” in something as hare-brained as the stadium. There’s never a shortage of loony schemes hatched by management and embraced by certain councillors and members of the public with eyesight distorted by ($)-($) glasses.
Mr (“you’ll have to do it yourselves”) Toitu Cull, is not the council, is not the community. He wants to make the stadium work while denying something that’s been talked about for years while the council made up its mind whether it owned the wharf or not. He seems to find all sorts of funding for ‘his pet PPP projects’ while numerous worthwhile small infrastructure projects in the community get upended and starved. Opportunity costs. This is the city mayor you’ve got.
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### ODT Online Fri, 29 Jun 2012
Call to restore Aramoana wharf
By Brenda Harwood
It may be hard to get to and in need of repair, but Pilot’s Wharf at the Aramoana spit could be a boon for tourism, supporters say. However, the future of the historic wooden jetty is in jeopardy, with a Dunedin City Council-commissioned engineer’s report saying the structure has reached the end of its useful life. Aramoana League secretary John Davis has been crusading for the retention of Pilot’s Wharf at Aramoana for years, including submitting to the council’s Long Term Plan process.
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Related to domestic tourism, and the Otago Harbour and Peninsula trails… What will be the effect on the community of Portobello if the aquarium moves? As usual ODT has failed to go beyond a press release in attempting a rounded view. There are pros and cons for a shift of location, not all tied to people access… rather, tied to the ecology of the harbour itself and scientific monitoring.
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### ODT Online Sat, 30 Jun 2012
Earthquake-risk aquarium to be demolished
By Vaughan Elder
The University of Otago will demolish the aquarium at Portobello in Dunedin and build a replacement. The decision to demolish the 1960s building comes after it was closed to the public earlier this month because it was found to meet less than 15% of the new-building standard for earthquake strength. It previously operated seven days a week and attracted about 20,000 visitors a year.
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### scoop.co.nz 6 July 2012
Gordon Campbell: On Private Sector Delivery As An Inter-Generational Scam
Public private partnerships (PPPs) are still being envisaged by the Key government as its favoured method for financing new schools, motorways etc, but the experience in Britain with such schemes continues to be really disturbing. Over there, they call them PFIs (or public finance initiatives) and the Guardian newspaper has just published some pretty compelling evidence that PFIs offer poor value for money, and will saddle subsequent generations with a mountain of debt. More>>
The following was posted to What if? earlier. Here it is again, as a reminder of the ‘PPP’ CST/DCC mess.
Click to access nzpi-15may-2012small.pdf
NBR NZ Property Investor (15 May 2012), article by Chris Hutching:
[excerpt, page 2]
“In a type of private-public partnership, the city council paid fees to the Carisbrook Stadium Trust and associated project delivery team for administration and marketing services. Initial projections were for total costs of $3.7 million. In the end $5.4 million was spent.
This amount was typical of the items that made up the overall cost overruns.
“No regard appears to have been taken of the level of payments, that is, ‘was the amount within the budget or not?’” PwC says.
Another significant cost overrun involved catering facilities that the former council decided would be a good addition.
“… over and above the $2.4 million approved, an additional $3.7 million was spent on the upgraded catering facilities, making for a net total [after deducting the caterer’s contribution] of $6.1 million. No formal authority from the council was obtained for this additional $3.7 million of spending,” the PwC report says.
More overruns were incurred over a facility shared with Otago University and a major $18 million interest cost was overlooked.”
### http://werewolf.co.nz August 1, 2012 | ISSUE 33
R.I.P. Time For PPPs
Britain sends a message to its former colony
By Gordon Campbell
As we patiently await republican status for New Zealand, the Mother Country can still offer a few cautionary gems of advice. Only a couple of weeks ago, Auckland Chamber of Commerce CEO Michael Barnett was publicly wondering why on earth Mayor Len Brown hasn’t put public private partnerships on the short list of ways to fund Auckland’s transport projects, which could run to $10 billion for big ticket items such as the inner-city rail loop and a third harbour crossing. Regional fuel taxes, road tolls and parking levies were still live options… but not PPPs, apparently. Barnett professed himself mystified. Reportedly, he couldn’t understand why the PPP idea had been dropped. In Britain, the answer would be a little more obvious, since PPPs are no longer flavour of the month. Why? Because there have been too many examples of central and local government being suckered into public finance deals that have ended up saddling them with such unacceptable levels of debt and poor private sector performance that the state has been left with no option but to step in, pay out the contracts and do the job itself – which in the end, it would have been cheaper for it to do from the outset.
Read more
### ODT Online Mon, 13 Oct 2014
Vision to recycle wharf
By Debbie Porteous
[…] Efforts by the Aramoana League to restore the 105-year-old 22m-long wharf continue on a new track after it acknowledged little of the structure could be retained, given its state of deterioration. The league is now working on a project to build a 10m wharf, using as much of the existing material as possible.
Read more
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To be tabled at the DCC Community and Environment Committee meeting today:
Report – CEC – 13/10/2014 (PDF, 4.5 MB)
The Aramoana League’s Draft Proposal to Restore the Former Aramoana Pilots Wharf
### ODT Online Tue, 14 Oct 2014
DCC backs restoring Aramoana wharf
By Debbie Porteous
The Dunedin City Council has indicated its support for a community project to restore the Aramoana wharf. It has also agreed to pay for an archaeological assessment of the wharf so the project can move on to the next stage, and a heritage impact assessment, if necessary, after that.
Read more
Just a few dollars for the archaeological assessment says Dave Cull and 13 of his councillors. This so the project can move on to the next stage. That, I believe will be the raising of the $100,000 expected to cost for the reinstatement of the Aramoana wharf. What? That is not a wharf, it is a jetty, which has no practical use ever since the days when it served as an embarkation point for harbour pilots to meet incoming ships, and to service the light at the end of the spit. I venture to suggest that 98% of our population are unaware of its existence. The fundraising will founder, the DCC money spent will be wasted, lest it comes up with the shortfall and completes the job. Then what? Nobody will use it except the very odd curious ‘boatie’. Another dopey waste of money which the council doesn’t have. Dave Cull just doesn’t get it, the town is broke. The thirteen are no better, only Cr Vandervis has the sense to know a ‘purple pig’ when he sees it.
### dunedintv.co.nz October 14, 2014 – 7:00pm
Aramoana wharf restoration gets a vote of support
It’s good news for the Aramoana League, which has long fought for the restoration of the Aramoana wharf. The Dunedin City Council’s community and environment committee has voted to support the project. That means the council will likely spend several thousand dollars on wharf assessments, and take over its future maintenance.
Video
DISGUSTING DCC STAFF MANOEUVRE
Today the bastards started ripping down the historic Aramoana wharf. DCC BS of the worst kind.
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Thu, 15 Dec 2016
ODT: Trust disappointed over wharf demolition
The demolition of the Aramoana wharf starts today to the “disappointment and surprise” of the trust aiming to restore it. Dunedin City Council recreation planning and facilities manager Jendi Paterson said the first part of the work involved separating the main portion of the wharf structure and walkway from the beach. “We are doing this to ensure there is every chance the walkway can be salvaged as per the wishes of the [Aramoana Pilot Wharf Restoration Charitable Trust].” Cont/
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### dunedintv.co.nz June 9, 2015 – 6:43pm
Historic wharf to be restored
A forgotten civic asset is due to be restored, thanks to the gumption of a local community group. The Aramoana League has support from the city council to revive a recreational wharf. And that’ll ensure a historic link is maintained.
Video
Hampered by the weather….
Fri, 16 Dec 2016
ODT: Wharf demolition delayed
Nature granted the Aramoana wharf a day’s reprieve from demolition. Dunedin City Council parks and recreation acting group manager Tom Dyer said demolition work on the wharf was put off yesterday and contractors hoped to start today. “High winds prevented the barge, which is needed as a base for the removal operation, from being installed alongside the wharf.” Cont/
Sat, 17 Dec 2016
ODT: Tow-boat turned back
A Dunedin City Council contractor has been replaced after a botched attempt to get a digger to Aramoana wharf. Maritime NZ Southern compliance manager Michael Vredenburg said concerns were raised when an uncertified vessel was used in an attempt to tow a barge carrying a digger to Aramoana wharf on Thursday. […] DCC staff are working with alternative contractors that have the appropriate Maritime New Zealand certification. Cont/
Channel 39 Published on Dec 15, 2016
Wharf demolition delayed
The restoration of the Aramoana Pilot Wharf was delayed yesterday after a barge ran aground in Waipuna bay.
Isn’t there rather a lot of rushed pre-earthquake demolition going on? It’s like a version of moral panic, subset real estate. What I mean is there seems to be an overactive risk aversion reaction to what’s happened in Christchurch and now places that have been sitting around for a long long time are being bowled quicker than you can say knife.
Knife and shiny new car parks (tarseal) are ‘good urban design’ according to people like [council leader] Stuart McLauchlan and t’mafia friends.
Will comment on this tomorrow by post.
They knew that building was in trouble before the chch quake its concrete was built with salt water and the rebar compromised
My bigger fear is what replaces some of these old shops once they are demolished. I hate to see badly designed,characterless buildings replace them.I’d prefer to see colonial style replicas with bull nose verandahs and recessed door ways etc.I know some people don’t like faux stuff, but some of the alternatives can be soul destroying to look at.
The Brocklebank building in South Dunedin seems to be really on its knees now and I notice the second hand shop further down towards Cargill Corner, on the other side, has a worrying lean on it.
An old friend of mine who owned the building next to the Golden Centre wanted to replace it, as it was, in a word, knackered. He enquired as to what would be required and was told to go ahead and present his proposals. He briefed his architect who produced a design which was costed, tendered, and presented for a building consent. Then the fun started. The Department didn’t seem to know what they wanted, just what they didn’t. In the end they agreed to the plan which replicated the front facade and left him to it with the rest. It involved three redraws, ending up with essentially the first, cost an additional $140,000. Result, a two shop complex which essentially replicated what was before. So it is easy to see why development in this city is so protracted and costly. The poor Brocklebanks are caught up in the nonsense. Mr McLeod, photographed in the final ‘City Talk’ fulminating on the righteous duties of his 18 building control officers gives one no confidence either. I particularly noted his gleeful comment that “the days when a DIY home-owner could do their own building work, unless they claim a special exemption or are supervised by an LBP, are long gone.” The smile on his face says it all. In his dreams.
Calvin, reread your letter to the editor (ODT 28.6.12, page 16), ‘More questions for mayor on stadium debt payments’, with reply from the Mayor. Dave Cull has fed you the full party line. But why does the city have ratepayers crying in gutters that are never swept? Why are gratings clogged by subvention payments, council IOU’s, rubbishy words on orange stick-its about savings and efficiencies, handwritten budgets hiding spending on pet projects, and lastly, Graham McKerracher’s drycleaning chits. The stormwater can’t possibly get through. Somebody please explain.
Elizabeth; in essence Dave Cull’s response (his second) to my queries leaves more questions as you say. For instance, the dividend to DCC from DCHL last year was $18.088m. In the draft plan it was reduced to $12.95m, subsequently by another $2.5m to finish at $10.450m. This of course cannot include the $8 odd m in subvention payments to DVL to allow for the stadium debt servicing. If this is added back it means that DCHL is up for about $18.5m. This is the same as previously. Question: Can DCHL do this without substantial borrowing? I think not, as they have indicated they will borrow for this year but that is it. What happens then? Cull goes on to say, “Faced with projected rates rise of 11.9% for the 2012-13 year, and the $2.5m lower dividend council reduced the rise to 5% with no extra borrowing. In doing so, council has achieved lower spending, a lower rates rise, less debt and greater operating efficiencies. Council intends to maintain that.” Now, the original increase of 11.9% was obviously before the Draft Plan was written, as the rise shown there was 4.9%. Assuming the total reduction was 7% this would have required savings of $5.47m plus the reduction in dividend (as that appears to have come post Draft Plan as it shows at the $12.95m) of $2.5m to equal $7.97m. If they had achieved that, why then the need to borrow an additional $42m? Particularly, when he said “with no extra borrowing”. Elizabeth, it is my guess that a large part of this will go towards future ‘capitalising’ of interest, and covering DVL’s arse after DCHL is unable to. It is hard to believe it is for capital projects (except for some cost increases in those projects) as it has all been factored in previous plans.
Then there is the classic: It is stated, and was heralded by Cull, and published in the ‘City Talk’ that the rates for the next three years will be 5%, 4% and 3%. Fair dinkum, that is what the public will understand. But, in the final Annual Plan signed off just last week it shows increases of 4.9%, 7.6% and 5.54% respectively. Lies, Elizabeth, lies, all in order to give the ‘warm fuzzies’ to the plebs. All on the hope that he can turn it around before the next round. Sorry, but this administration and elected councillors (except MacTavish, Vandervis and Thomson – although I wonder about him) are part and parcel to a grand conspiracy of deception which has been going on for the last decade or more. A totally dopey, untrustworthy lot.
That about covers it, thanks Calvin. The stormwater is now pooling on the road and heading to flood private properties.
[And Athol’s still playing in his hot bathtub with a fricking rubber duck.]
Elizabeth; are you sure you have your vowels correctly placed?
Never be sure of anything, Calvin.