DCC —It took way too long

Received from Russell Garbutt
Fri, 15 March 2013 at 7:49 AM

Well, it seems to have taken a while to happen, but happen it nevertheless has. Until the full wording of the joint statement issued by Paul Orders and Athol Stephens can be studied a little more closely, one can only assume that Mr Stephens has left the Council’s employ in a manner rather similar to that when Jim Harland suddenly found a desire to cease being the DCC CEO on the election of a new Mayor.

While Mr Stephens is quoted as being proud of what he has achieved and rates his time with others in the DCC as being a time of “great progress in the city, that had left the city with a ‘magnificent collection of modern community assets”, others may care to describe his time over recent years in more critical terms. There is no doubt whatsoever that Mr Stephens has, in his role of Chief Financial Officer, fostered, encouraged, or stood by, when financial prudence simply flew out the window. The current level of debt alone is a measure of the financial performance of the City, and while Councillors have the final say in the governance of the City, Mr Stephens occupied a central, crucial role in setting out strategies that resulted in this astronomical growth in debt levels. I don’t think we have yet seen the full extent of the financial dealings that has been carried out behind the scenes. Money has been spent far faster than it has been earned and that money has had to come from somewhere. Whether it has been by the issuing of guaranteed bonds offered at extraordinary rates to still anonymous investors, or by dabbling in the murky, wide-boy areas of interest rate swap derivatives, all this activity has been overseen by Mr Stephens. He has also had a role in overseeing, by his previous membership of a number of Boards of City owned entities, the troubling and frankly stupid practice of borrowing to pay dividends.

It is also illuminating that once again Cr Syd Brown rises to offer the mandatory words of praise. Cr Brown was a major figure in the governance of the Council overseen by Mayor Chin, that was the body ultimately responsible for the financial stupidity that has resulted in “a magnificent collection of modern community assets”. While many would argue convincingly that most of that last Council – indeed most of the current Council – wouldn’t have a clue what was in the papers and reports that was set before them, a small few knew exactly what was happening. Indeed, as I’ve often said before, it took about 20 people in this City to determine to build the new rugby stadium against every indicator that it would be, and remain, a financial disaster, and against the wishes of the wider community. Mr Stephens was one of those 20, as was Cr Brown.

[ends]

### ODT Online Fri, 15 Mar 2013
Council head in quick exit
By Debbie Porteous
Dunedin City Council senior finance manager Athol Stephens has quit and will clear his desk today after the shock announcement yesterday of his departure.
Read more

Posted by Elizabeth Kerr

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44 Comments

Filed under CST, DCC, DCHL, DVL, DVML, Economics, Name, ORFU, People, Politics, Project management, Property, Site, Sport, Stadiums

44 responses to “DCC —It took way too long

  1. Hype O'Thermia

    Alt headline: Athol Embraces Green Technology
    ‘E’s on ‘is bike.

    Paul Orders doesn’t strike me as a man who can’t answer a straight question:
    “Asked if Mr Stephens had resigned, or been offered redundancy, he reiterated that Mr Stephens had simply ”notified his wish to leave”.”
    ….so I think we can take it he’s answered it, to the limits of prudence.
    Of course Stephens will get redundancy, does anyone except the low-paid NOT get a big handout, no matter what they did?

    Hint for school leavers – become incompetent and/or bent, don’t train for jobs that don’t give you an office and a car, aim for the golden handshake not the regular payday. Salary is only a stepping stone.

  2. Hype O'Thermia

    Gotta love this, from Syd – ‘He was well respected by council staff as a firm but fair head, who would leave a ”huge gap” to fill.’
    Referring to monstrous debt no doubt.

  3. Anonymous

    Clark and Avery next

  4. Hype O'Thermia

    They may be a tad circumspect but there’s no doubting their message which is coming through loud and strong. I’m surprised at their number, speed of delivery, and not-actionable bluntness .

  5. Calvin Oaten

    For me personally, I liked the guy. He just made a wrong decision several years back. When the Harland/Chin clique decided to embark on the immense expenditure programme including the Stadium, the Town Hall Convention Centre, the Otago Settlers Museum, the ‘Harbourside Dream’ (luckily cut off at the knees), Logan Park Development etc, it became patently obvious that this was a road to financial perdition. I remember at a meeting in the Pioneer Women’s Hall, around about 2006/7 when the Draft Plan was being discussed, Athol Stephens was presenting the council’s case. I asked him if he was comfortable with the projected debt which was to peak at around $170m. He said that it was right up at city limits, but with careful management could be handled. Now we look at some $270m (excluding DVL’s $146.6m) and with DCHL a consolidated figure of $620m (as at 30/6/12).
    Now if way back, Athol had stood up and told Harland and Chin that the programme was economic madness and he could not, and would not condone or expedite it, he would have either saved the city or lost his job then. But either way, it would have been with honour. This way it is a sad outcome for someone who made a bad blunder. Will the incumbent mayor and his acolytes take heed? We will see. Doesn’t look good so far.

  6. Hype O'Thermia

    There have always been “personable and charming” people in prisons too. These days the well-dressed p-and-c get home detention in their well-appointed, personability-and-charm-paid homes rather oftener than less attractive chaps.

  7. Anonymous

    Funny!

    ### ODT Online Fri, 15/03/2013 – 12:05pm.
    Comment by ej kerr on We are…
    …forever in his debt.

  8. JimmyJones

    Calvin, as I said over the page: “Athol Stephens would have been the very first person to be aware of the full extent of the financial stupidity of Peter Chin’s stadium. It would have been his job to explain this foolishness to Chin and the others. Mr Stephens might have been the very first anti-stadium protester. In time it became his job to promote the decision to build it and then more recently to hide the huge ongoing costs of running it.”. So I am saying that I have no doubt that he would have warned them that they were making a very bad mistake, but then followed orders anyway, and ended-up the chief co-ordinator of stadium misinformation. It is extremely disappointing that Harland and Chin put themselves before the City and didn’t heed Athol’s warning.

  9. Rob Hamlin

    The revolving door between senior government and ‘big biz’, especially the financial sector has been often commented on around the World. It became established early on in the Reagan/Thatcher revolution, and has now pretty much become routine with certain individuals who were close to public financial decisions of interest to certain private industries moving on with their lives, supported by fat directorships that pay lots for not much governance input and engagements on the ‘lecture circuit’ for astronomical fees.

    This is in some cases justified by the value of their connections with government. However, be that as it may, in many cases these individuals have neither the identifiable skills that justify their positions on the boards, nor the erudition to make for lectures that audiences would pay big money to see. They are neither Warren Buffet not Richard Dawkins – but the fees are about the same.

    Given this perceived gap between remuneration levels and capacity on the basis of skill, experience and expertise to deliver at that level, there have been persistent questions raised about whether these large sums represent rewards for services that are being currently rendered or that have already been fully delivered. Questions they remain however, as proof or even usable evidence of the latter would be virtually impossible to acquire.

    Mr Stephens says in McPravda today that: “he was proud of what he had achieved, but he now wanted ‘to progress a long-held plan of pursuing governance and other roles outside [the council’s] employment’.

    Indeed – I, for one, will take a very close interest in the development of Mr Stephens’ governance career as it is reported in the Companies Register. I might even pay a modest sum to go to one of his lectures if it promised the offer of some useful and direct responses to one or more of the many questions that have been asked of him over the years.

  10. Anonymous

    Interesting to note the Council head in quick exit story continues to lead at ODT even with the usual Facebook-like reporting and YouTube regurgitation. Want to bet one of the subs is thinking of adding another 500,000 hits to nude rugby video to bump it?

  11. Am I the only one wondering what this will cost to pay him out? And it will. Never mind the hidden cost for the other shit.

    {We’re all wondering about the price he created, and the price he is – regardless, it’s cheaper to have him out of the system. -Eds}

  12. Phil

    Being the Master of Money Spinning wasn’t all bad. Athol was able to spin (or so he thought) in order to fool the appropriate people when it came to the stadium, as clearly instructed to do by Jimbo and the mayor of the day. However, he was equally adept at spotting spin coming at him from other DCC departments under his control (remembering that he didn’t have all departments reporting to him). A certain former City Property manager hated that about Athol. A few pet projects managed to get by him, but quite a few were shot down as well.

  13. Anonymous

    Ah, nope, not rugby. It’s Jing Song fronting the hotel proposal. That’ll keep the ODT busy keeping its readers distracted so Dave and the Stadium Councillors can get on with getting on killing Dunedin for more Queenstown interests.

  14. Anonymous

    ### ODT Online Sat, 16 Mar 2013
    Interim DCC finance team details soon
    By Debbie Porteous
    An interim leadership arrangement for the Dunedin City Council’s finance team is expected to be announced early next week, following the departure this week of the general manager of finance and resources. It seems Athol Stephens was a casualty of the council’s continued cost-cutting drive led by chief executive Paul Orders, although the full story behind the senior manager’s departure is still unclear.
    Read more
    http://www.odt.co.nz/news/dunedin/249704/interim-dcc-finance-team-details-soon

    • Mr Stephens’ departure seems to have happened in a rush, with Plan B not immediately in place.

      “Mr Orders said yesterday the stadium did not play a part in Mr Stephens’ decision.”

      “Mr Stephens is the third top-tier manager to depart, with another two accepting voluntary redundancy, since Mr Orders’ arrival in 2011. It is understood one of those managers, who had been there for 10 years, received a $214,845 severance payment, and the other, with six years’ service, $167,527. Mr Stephens was with the council for 17 years.”

      “Councillors spoken to yesterday had mixed feelings about Mr Stephens’ departure.”
      I bet.

      http://www.odt.co.nz/news/dunedin/249704/interim-dcc-finance-team-details-soon

  15. Russell Garbutt

    Calvin, I also found Athol to be pleasant to talk to, but I also remember very well that public put-down inflicted on him by Harland many years ago. I can well imagine that that experience would have made him less likely to kick over the traces and whether or not he decided to adopt a position of just following the leader in later years until it was too late to demonstrate financial prudence, or whether he actually believed in the actions taken to put us in this mess, will probably be difficult to find out.

    But as I said in my original piece, the buck finally stops with the Councillors who are supposed to be able to separate wheat from chaff and to set policies and directions. It doesn’t take too long to figure out which Councillors are sharp enough to be able to understand what is going on, and which are either incompetent or lazy. To me, the biggest indicator of a lack of financial clarity was the unholy mess after the “sale” of Carisbrook. While Dave Cull was talking about a possible $100k loss on day one while everyone else knew that the loss was in the millions. Where was Athol in all this?

    • Russell, maybe the CFO wanted the Mayor to stumble on Carisbrook. Funnier things have happened / been achieved.

      We await the written memoirs (AS). The CFO had a great sense of humour mixed with cynicism. I always found that reassuring in council meetings – councillor inanity spoofed from the benches.

  16. chirpbird

    ODT did not post my online comment about this story. I said: “Dunedin voters will wait with bated breath to hear about the re-election – or otherwise- of pro “magnificent community assets” councillor Syd Brown since only the residents of Taieri Mosgiel Ward can vote on it.
    Is this fair? No. The vast majority of Dunedin voters are still disenfranchised by this vestige of the ward system.”

  17. Maurice Prendergast

    Many years ago – about the time that it was first mooted that Council get involved in upgrading another party’s property (Carisbrook) I travelled to a Community Board meeting in Middlemarch with one of the Governance Officers. I have always held the view that if you want to ‘plumb the depths’ of somebody’s mind, go for a ride in a car with them. A curiosity about riding in a car with someone, is that people seem to ‘drop their inhibitions’. They will commonly talk about things that they would otherwise never mention in any other environment. This car ride yielded just such an experience. The Governance officer’s conversation went like this ……… “Athol Stephens is my boss; I could not wish for a more dedicated, honourable, and totally professional boss. But I worry about him – he is just too talented and as such Jim sees him as a threat. Jim is progressively removing responsibilities from his portfolio – he’s ‘dumbing down’ Athol’s status and attempting to stampede him into resignation. The strategy being that the ‘progressive removal of stars’ from Athol’s CV will panic him into moving on before his CV shows a series of hits that would not be conducive to re-employment.”

    Not too long after this, I found myself travelling by car the same route, only this time in the company of (both) Athol and a Governance Support Officer. Once again that car ride had the affect of loosening some tongues and the issue was raised of the spectacularly bizarre proposal that $8K (I think) had been introduced to the Annual Plan under the nebulous caption: ‘Review of Carisbrook’. This I opined (with some conviction) was state of the art madness. Council had absolutely no obligation to consider any involvement with a private institution – especially the ORFU which was rumoured to be dysfunctionally inept and teetering on the edge of insolvency.

    As I recall I was absolutely stunned by Athol’s response which (roughly was) “I think you need to get over it Maurice – since Helen Clarke introduced to rating legislation the Power of General Competence, you will find that every Local Authority will now get involved in funding extraneous activities which hitherto were forbidden under the old Act, “But’ I reminded him, ” the new act only allowed such activity to be ‘considered’ – it was not mandated”

    But Athol’s body language told me that he had already surrendered. When the ‘scenario of duress’ disclosed to me earlier by his Governance Officer was factored into this issue, it seemed that Athol had a serious decision to make as to whether he should stay or go. I believe his inherent decency motivated him to resist the grand Carisbrook plan – but this did not gel with the less principled individuals around him. He faced losing his job and having to disrupt his family. He had the option of getting on the bandwagon or getting off the bandwagon and being run over by it. It is my belief that a thoroughly honourable man was faced with either selling his soul or walking into the wilderness. Helen Clark’s 2002 legislation that allowed Local Authorities to play fast and loose with any project they liked – the Power of General Competence Act 2002 was (I believe) the release valve that enabled Athol to acquiesce to a practice that was totally alien to his instincts. In my view all audit trails [lead] to that silent assassin who deserted the sinking ship a couple of years ago. This is simply my take – as one who was right at the coalface at the time. Until someone can show otherwise, I continue to hold the view that Athol Stephens is an honourable man who became contaminated by a pincer movement that was orchestrated by gangsters.

    • At the point you (as CFO) may want to sink your soul, against your best business ethics, there is always another job to be found elsewhere if you’re talented. There are no excuses for becoming part of the ugly problem.

      There is no point joining the corrupt and the inept in their plans.

      We don’t know why he left suddenly – any number of reasons exist, inside and outside the establishment. Perhaps it wasn’t his choice, perhaps it was. He appears to be protected from public disclosure, for now.

  18. Calvin Oaten

    Maurice, you have summed the whole thing up superbly. No doubt, but Athol sold his soul on the alter of expediency. The black prince Harland’s prints are all over it. It is almost like a chapter out of “Blackadder” except for the consequences. But he was the victim of a whole cast of miscreants, not least of which is your mayor Chin, crooked lawyer Guest, and the rest of the dopey councillors, and of course that master of all “cock ups” Malcolm Farry. Maurice, there’s a book there to be written. You are an erudite person with the facts and time on your hands, so why not do it?

  19. Whippet

    “There is always another job to be found elsewhere if you’re talented.”
    Tell me just where are these so called jobs for the talented, that are not already under the control of the corrupted already ? Hospital Board, ORC, ORFU, Racing Clubs? Depends on the Talent required. Honesty or Dishonesty.

  20. Mike

    So at some point Malcolm came in and said “I have a cunning plan ….”?

  21. Whippet

    Chirpbird. Din’t ya no that the Mosgiel ward was only kept on to keep Syd in the council. There would be no way that he would have got back in if he had to stand in a city wide ward. Us city slickers would have put a stop to him. Have a look at who has benefited in Mosgiel from his term on council all these years. Big new extensive storm water drains put in for who’s benefit? Subdivision of rural land to residential, for who’s benefit? All the while the rest of Mosgiel has been neglected, and used for a collection of rates to spend on other vanity projects in Dunedin.

  22. Robert Hamlin

    Maurice may be right. I have known many people who have gone over to the ‘dark side’. Many have been personal friends. Often they do so with the best of intentions. They say, “Well I’ll play the game for a while, and after a couple of years, once I’ve got up the tree a bit, then I’ll reveal my true self and things will be different.”

    Regrettably within a matter of months of making this decision every single one of these individuals, without exception has been personally unrecognisable, and no longer appears to have the capacity for true friendship – even if you would want to be a friend anyway. The moral compass, and any trace of what they once were as a sovereign individual has gone. They are well and truly part of the problem that they initially sought to eliminate – I have never seen a recovery.

    It appears that the first drink from the poisoned chalice of compromised morals seems to be fatal. It makes all the other subsequent sips, swigs and gulps from the same vessel more or less compulsory as the network of personal contacts and secret mutual obligations infest the minds of the people concerned like a repulsive network of fungal hyphae and destroy whatever it was within them that made them worthwhile individuals.

    People with this syndrome also appear to be highly infectious, a bit like werewolves, and packs of these creatures will certainly attempt to ‘bite’ uninfected individuals who they feel may be useful to them. Were Stephens and that supposedly reforming and open Greater Dunedin crowd so bitten? I will leave you with Maurice’s conversation with regard to Athol. The others? Well, given their swift change after the election, possibly fairly promptly once they were clearly of interest to the pack. Has Orders been bitten – Don’t know.

    You seem to have a pretty clear choice these days – to be your own person and not ‘get on’, or to accept that first ‘bite’, make the necessary compromises that now appear to be essential for the purposes of ‘getting on’, and then accept the personal invoice that swiftly be delivered. I have been offered the poison chalice on many occasions. As I value my own personality, and have been able to see the werewolf behind the smiling charm, my answer has always been ‘No!!’

  23. Peter

    A spot on commentary, Rob, about the human condition when people ‘sup with the devil’, in order to reform them, but only turn toxic themselves. These kind of ‘reforming’ people are easily misled and are charmed by those who have other agendas. The ‘devils’ kill them with kindness, praising them up, until they have outlived their usefulness ie. The point where they have been fooled into agreeing with something that has a ‘positive’ spin off…..or so they believe. For example, those dark characters in the rugby world have played a majority of the wider council, including Greater Dunedin, for fools and got what they have wanted without any real insight from the council as to the true financial state of their books. (Even though we are bankrolling them.)
    I understand Catherine Rich is being talked about as a replacement for Dave Cull and given that she is a more liberal Nat, for ‘Labour Dunedin’, and her previous high profile, she could be well placed for a coup. If I was Dave Cull, I’d be watching my back with his new friends. Not that I personally care, one way or another, if it was a contest between him and Catherine Rich. They both seem very close, politically, and it wouldn’t make much difference who was Mayor.

  24. Hype O'Thermia

    Robert, the way you describe it, it’s like descriptions of what happens when people “try, just now and then” drugs but get addicted. What’s the addiction to – acceptance, salary, career?
    As for the idea of competent people leaving and finding another more honest position – sorry, Elizabeth, it’s not that easy. Employment is pyramid-shaped, not a ladder with equal-width rungs. For every competent person on level 2 who could easily do the work on the next or 2-steps up there are half the number of vacancies. The higher the fewer. So quit, close down your kids’ opportunities, and compete with school leavers for the burger-flipper jobs?

    • Hype, we’re talking about Athol. He’s clever, personable and highly skilled. People will find him a job whether or not he might decide to retire early from CFO/CEO-type work – or, he may start his own business, buy into partnership etc etc. He has a lot of available choices, they don’t have to be convenient ones.

      These guys never fall flat. He so isn’t your average punter.
      And lucky for him he’s not Farry.

  25. Calvin Oaten

    Somehow I can’t quite see Athol flipping burgers. Still, there’s a first for everything I suppose.

  26. Peter

    You get directorships, Calvin. Past history is no impediment. For example, let’s see Jen Shipley get a new one with the demise of Mainzeal. Onwards and upwards.

  27. Hype O'Thermia

    Yes, Elizabeth, but you’re talking about Athol now, 2013. Had he walked earlier, when he saw how shonky things were, had he refused to take part in the Grand Follies, he would have (back then) had a whole different reputation and a whole different set of “friends” prepared to find a nice job on the same level for him. A reputation for being strictly prudent rather than accommodating is not always a recommendation, know what I mean?

  28. Peter

    I agree, Hype. The price is eventually paid ‘going along with the guys’ when they are bad. A wise man makes a speedy exit, if he can’t fight it, and keeps his honour intact. I personally feel nothing for him.

  29. Hype O'Thermia

    I’m not so sure. It’s easy to be black and white about other people’s choices, not so easy when one is in a position where the choices have to be made, at that time and without the benefit of full knowledge of what the future will bring. By staying could one make the system work properly, put a brake on dodginess and folly? By compromising on one point can one get reciprocity for one’s own efforts to clean the Augean stables up, one hoss-biscuit at a time?

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