DCC debt —Cr Vandervis

Email received.

From: Lee Vandervis
To: Elizabeth Kerr
Sent: Wednesday, December 05, 2012 10:12 PM
Subject: DScene opinion.

I thought my DScene Debt Update was not bad for a 400 word limit, but despite coming within the limit [382 words], the Editor cut the Mayoral criticism out of my opinion, and more importantly my solutions to worsening debt, without noting abridgement! {See comment. -Eds}

Dunedin Debt Denial

At last week’s DCC Finance, Strategy and Development meeting where the last quarter’s financial results were presented, Cr MacTavish asked “Are we doing things differently?”

The DCC net debt chart [attached] shows the past ten years of the same massive debt spending, with future projections hoping for small annual reductions.

These future debt reductions are currently vain hopes.

Despite the earnest efforts of our new CEO to reduce ridiculously high DCC operational costs, unplanned extra debt keeps arriving.

DCHL’s planned annual funding profit of $23 million turned out to be a $5 million loss, DVL lost $4 million, DVML lost $3 million, the Milburn Wood Processing Plant suffered a $3 million write-down, the Chinese Garden continues to lose half a million annually, Toitu Settlers losses will dwarf this, another half million at least has been lost due to the Anzac Avenue site access dispute, the expected $5 million ‘saving’ from Town Hall cutbacks has evaporated, the budgeted Carisbrook sale ‘profit’ of $4 million still hasn’t eventuated, and $3 million of unearned dividend has been spent from the Waipori Fund.

Then there are some less obvious reservoirs of mounting debt.

Development Contributions income has stalled for another year, our lines company Aurora has apparently failed to keep up lines maintenance of a rumoured $40 million in recent years, and our unseen drainage system maintenance/renewals backlog may dwarf the Aurora maintenance bill.

In short, we have bought a new Stadium and much else without being able to pay for it.

Standard and Poor’s threaten an interest-increasing downgrade especially if the Jacks Point/Luggate debacle blows up, and the fuse has already been lit.

To answer Cr MacTavish’s question, we are not yet doing things differently.

The direction of this Council remains unsustainable. Soothing talk by our Mayor Cull of ‘no drop in service levels’, ‘no slash and burn staff cuts’, ‘no witch hunt’ of directors, ‘no heads will roll’, means that the same heads will continue to inflate Dunedin’s debt disaster.

We must do things differently and cut service levels, staff numbers, consultant use, habitual tenders, outside directorships and bring our DCC owned companies’ governance back in-house where we can know what they are doing. [cut out by DScene Editor without noting abridgement]

In a rapidly changing world, it is only by doing things differently that Dunedin can reach its wonderful and sustainable potential.

[ends]

DScene 5.12.12 Debt-laden council needs to change tack #bookmark

Posted by Elizabeth Kerr

2 Comments

Filed under Business, Construction, DCC, DCHL, DVL, DVML, Economics, Geography, Heritage, Media, Name, People, Politics, Project management, Property, Site, Sport, Stadiums, Town planning, Urban design

2 responses to “DCC debt —Cr Vandervis

  1. Mike Houlahan

    Further to Lee’s posting… the cut was not made by the editor, it was made by the sub editor who placed the story on the page. I have apologised to Lee for this, and instructed sub editors to refer any future cuts in opinion pieces directly to me. FYI, D Scene is not subbed here in Dunedin, but by the Fairfax sub-editing hub.
    MIke Houlahan, editor, D Scene

  2. Hype O'Thermia

    Thanks for the explanation, Mike. You’ll be putting an “omitted in error” piece in next week’s D Scene, I expect. The paragraph will stand pretty much by itself with a very small addition to explain the context.

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