DCC meeting, Monday 7 October Annual reports

Meeting of the Dunedin City Council
Monday 7 October 2013 at 1.00 PM
Council Chamber, Municipal Chambers

Agenda – Council – 07/10/2013 (PDF, 73.5 KB)

Report – Council – 07/10/2013 (PDF, 42.4 KB)
Annual Reports of Dunedin City Holdings Ltd and Group Companies. The individual reports can be found at: www.dunedin.govt.nz/dchl

Report – Council – 07/10/2013 (PDF, 41.7 KB)
Annual Reports from Dunedin Venues Management Ltd and Dunedin Venues Ltd 2013. The individual reports can be found at: www.dunedin.govt.nz/dvml and www.dunedin.govt.nz/dvl

Report – Council – 07/10/2013 (PDF, 70.8 KB)
Delegations during the Election Period

Report – Council – 07/10/2013 (PDF, 112.6 KB)
Otago Rural Fire District Proposal

Report – Council – 07/10/2013 (PDF, 2.2 MB)
Approval and Adoption of Annual Report

DCC 41 staff copy

### ODT Online Sat, 5 Oct 2013
Staff numbers down, wage bill unchanged
By Debbie Porteous
The Dunedin City Council now has 41 staff earning more than $100,000, but spending on key management personnel is less than it was two years ago, chief executive Paul Orders says.
The council’s annual report for the year to June 30 showed that while the total number of council employees had declined, the council’s total annual wage and salary bill remained about the same. The report was published yesterday and will be considered at a full council meeting on Monday.
Mr Orders said overall the report revealed a series of positive trends. While staff numbers were reducing, service levels were being maintained.
Read more

● The DCC annual report shows a small operating surplus of about $8 million.
● It confirms the council’s consolidated debt – spread across the Forsyth Barr Stadium, the council and its companies – rose to $623 million, up from $616 million at the end of the 2011-12 financial year.
● The report notes 2012-13 was the last year of capital expenditure on a number of large debt-funded capital projects and upgrades.
● Core council debt is expected to continue to rise from $225 million at June 30 to peak at $272 million in 2015-16, before beginning a gradual decline.

Related Post and Comments:
26.9.13 DCC: Council consolidated debt $623 million

Posted by Elizabeth Kerr

10 Comments

Filed under Business, DCC, DCHL, Delta, Democracy, DVL, DVML, Economics, Politics, Project management, Property, Site, Sport, Stadiums, What stadium

10 responses to “DCC meeting, Monday 7 October Annual reports

  1. ### ODT Online Sun, 6 Oct 2013
    City’s economy the overriding concern
    By Chris Morris
    Is Dunedin’s economy circling the drain? Or is it poised at the dawn of a new era, tapping into the riches of China, tourism and investment in renewable energy technology? Reporter Chris Morris asks Dunedin’s mayoral candidates.
    Most of the contenders have identified the city’s economy as a serious concern, while criticising incumbent Mayor Dave Cull and his council for failing to do enough to protect or create jobs.
    And the promises to do better are flowing, including pledges to sell the stadium, extend the Dunedin airport runway and roll out the red carpet for oil companies- all in the name of economic development.
    Read more

  2. This editorial is all over the place, ending on a falsely positive note.

    ### ODT Online Mon, 7 Oct 2013
    Editorial: Profits and DCC companies
    It has, without doubt, been a good year for the Dunedin City Council-owned companies. And that is good news for the city. But while acknowledging that fact, it is important not to get carried away with the figures promoted when the holding company and the other company results were released last week.

    Highlighted is the group posting a $20.5 million profit (after tax), compared with a loss of $5.1 million the year before. Underlying performance, while still positive, is not so spectacular. Excluding forest revaluation, carbon credit revenue, asset impairments and subvention payments, the group’s net profits for the last financial year were up $4.4 million on the previous year to $11.5 million.

    The company boards have been restructured, and this and new governance leadership has been given much credit for the turnaround. Although there would appear to be improvements, these can be overstated in the aftermath of change.
    Read more

  3. The ODT editorial makes the bold claim that “council companies are no longer borrowing to pay dividends”. This appears to be the case only for the financial year 2013 (FY2913). There is no good reason to expect any improvement in the forecasts for the current period (FY2014) and subsequent ones. The latest company forecasts are a profit of $4.19 million for FY2014 and $1.58 million for FY2015 (from the Statement Of Intent).
    DCHL reports a $20.5 million profit and acknowledges that one-off factors have contributed to this ($14.3 million from carbon credits & forest revaluation & an accidental tax credit). It is important to note that the reason for the modest improvement in underlying profit has not been revealed. I can see that there has been a drop in payments to employees and contractors (down by $11.9 million). Because this cost reduction has not been explained, I think we should assume that it is temporary. DCHL’s problems of excessive debt and low profits should be a high priority for the new Mayor and CEO. Dave Cull’s efforts so far seem rather cosmetic.

  4. Mike

    Next time someone tries to tell you the stadium’s making money from rugby check out DVML’s report:

    Cash Flows in from Operating Activities: $7.916M
    (of which) Receipts from customers: $7.292M

    Cash Flows out from Operating Activities: $9.794M
    (of which) Payments to suppliers and employees: $9.502M

    Interestingly in 2012 they were cash flow positive ($1.3m, this year they lost $1.9m – all this before paying the rent)

    ah but you say: “it’s not just a rugby stadium”

    Total attendance: 272,332
    Sport: 205,511
    Entertainment: 62,823
    Community: 3,998

    They also borrowed ~$2.1m
    Cisco Capital: $1.3m
    Aurora: $.66m
    DVL: $.2m

  5. The average DCC councillor still has no idea of the annual cost of owning and operating the FB Stadium. They have been misled by the way the annual reports are arranged and they get confused because there are two stadium companies with similar names, as well as an interest cost to the DCC for the loan to buy the shares to buy the stadium.
    Jim Harland, Paul Orders and their staff have been asked many times to disclose the total financial impact of the stadium. Mr Orders eventually promised to do this at an annual plan public meeting, but it hasn’t happened. The annual reports of the stadium companies (DVL & DVML) to be approved today by our hapless councillors, have enough info to calculate a good estimate of the total cost. These figures are from the annual reports page 6 (DVL) and page 9 (DVML). Remember that in these reports the term “subvention payment” means “subsidy” and has the effect of disguising the size of the companies’ losses. The city’s renters and ratepayers end up paying for both the disclosed losses and the subsidies so we need to add them together to get the total impact.

    Total Stadium Impact:
    Item:____Disclosed Loss_____Subsidy_______Total Loss
    DVL:_____$4.8 million_____$7.3 million_____$12.1 million
    DVML:____$1.0 million_____$0.6 million_____$1.5 million
    Cost of interest on debt for DVL shares:______$5.1 million
    Cost of rates subsidy for DVML (approx):______$2.0 million
    Total Ratepayer Impact (approx):______$20.7 million

    The DCC held stadium debt is $78 million and I have chosen the interest rate to be 6.5%. There might be some other costs that I haven’t thought of. The actual interest rates paid by DVL seems unrealistically low to me at 5.87%. Most DCC projects are charged 7.00%, so DVL’s low interest rate could amount to a secret subsidy of $1.6 million.
    Anyway, $20.7 million per year is a lot of money and citizens and councillors need to know what is going on. We have heard DCC mayors and councillors promise financial transparency, but it seems that some of them have wanted to keep this figure quiet.

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