Submitted on 2012/10/30 at 5:43 pm
DCHL is financially very sick: if it was a horse, you would have to shoot it to put it out of its misery. It is amusing to see how sensitive Dave Cull is to Lee Vandervis stating-the-bloody-obvious, that DCHL doesn’t make enough real money to pay its interest and dividends to the DCC, as well as the subsidies to DVL and DVML.
The DCC are forcing DCHL into more and more debt every year. For the 5 years that I have Annual Reports, DCHL has always paid for its distributions to the DCC by increasing their debt. Not just part of the distributions are borrowed money, but the whole amount each year.
In 2012 they added $50.3 million to their debt (page 37), so you can see that even without being forced to provide distributions of $23.2 million, it already had a severe cash-flow shortage. This negative cash-flow is the result of their own incompetence from spending very large amounts on new investments and expanding their operations. The incompetence comes from the fact that there has been no expansion in profits as a result of this low quality spending. They seem to be followers of the Homer Principle (if something doesn’t work, keep doing it), because not once in the last five years have they earned enough cash to pay for their spending on new stuff. Poor-old Dave and the new-guy, Paul, don’t seem to understand the problem. Let me summarize –
● DCHL is heading towards bankruptcy
● It is going bankrupt because DCC councillors and staff have been using it like a magic money-box where distributions are paid from debt (debt that doesn’t show up on DCC books – because of their choice)
● The LTP shows that they fully intend to continue this foolish practice, despite the DCHL Chairman’s aspirational comments to the contrary and Mayor Cull foaming at the mouth about it
● DCHL has been, and mostly still is, being run by a bunch of fools that need to be kept well away from anything financial or owned by the People Of Dunedin.
### ODT Online Tue, 30 Oct 2012
Mayor sees red over Vandervis questions
By Chris Morris
Sparks flew as Mayor Dave Cull and Cr Lee Vandervis clashed repeatedly over debt and dividends at yesterday’s Dunedin City Council meeting. In what at times resembled a running battle, an angry Mr Cull eventually accused Cr Vandervis of giving in to his “obsession” and threatened to prevent him from speaking. The pair found themselves at loggerheads over reports detailing Dunedin City Holdings Ltd’s latest financial results and the council’s annual report.[…]Cr Vandervis attacked the figures at yesterday’s meeting, claiming the entire $23.2 million – which helped keep council rates increases to a minimum – had been funded from loans.
Related Posts and Comments:
29.10.12 DCC consolidated debt substantially more than $616m…
26.10.12 DCHL borrowed $23 million to bail DCC
26.10.12 DCHL: New directors for Aurora, Delta, City Forests
25.10.12 Dunedin Venues Limited – 2012 Annual Report now 2 months overdue
17.10.12 The only thing up…. (for sale)
17.10.12 DCC on DCHL, subsidiaries and DCTL
12.10.12 DCHL, subsidiaries and DCTL
28.9.12 The End of The Golden Weather?
25.9.12 Cull’s state of denial…
24.9.12 DCC against imposition of local government reforms
11.9.12 Delta Utility Services Ltd
6.9.12 DCC pays out $millions to cover loss making stadium…
30.8.12 DCC seen by Fairfax Business Bureau deputy editor Tim Hunter
7.8.12 DCC, DCHL, debt, democracy (and professional rugby)
26.7.12 Cull’s council thinks $750,000 per annum to DVML…
Posted by Elizabeth Kerr