Dunedin City Council – Media release
DCC Appoints Treasury Manager
This item was published on 10 Sep 2014
Richard Davey has been appointed to the new position of Dunedin City Council Treasury Manager. Mr Davey, who is originally from Dunedin, has had more than 21 years of banking experience in New Zealand and Australia. His experience centres on dealing with corporate treasuries and solving their risk management and funding issues.
As Treasury Manager, Mr Davey will oversee Dunedin City Treasury Ltd – a DCC-owned company provides funding and financial services to other companies in the Dunedin City Holdings Ltd group. Mr Davey will report to Group Chief Financial Officer Grant McKenzie.
Mr McKenzie says, “We are delighted to announce Mr Davey’s appointment. His extensive skills and experience mean he will be a welcome addition to the DCC’s financial team.”
Mr Davey says, “I am very pleased to be part of the DCC’s financial team, especially given the diverse treasury operations and exposures the group has. It’s also pleasing to be able to live in Dunedin and progress my career further with the Council.”
Mr Davey was most recently Director Corporate and Institutional Markets with the National Australia Bank in Melbourne. He has a Bachelor of Commerce and a Postgraduate Diploma in Commerce from the University of Otago.
The new Treasury Manager role was created following the retirement of Dunedin City Treasury Ltd Chief Executive John Knight, who left last month. Mr Davey starts in his new role on Monday, 15 September.
Contact Group Chief Financial Officer on 03 477 4000.
DCC Link
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### dunedintv.co.nz September 11, 2014 – 5:56pm
DCC in a better financial position
The Dunedin City Council is in a better financial position than it had forecast for the financial year just finished. An interim result for the council during the last twelve months was presented to councillors this week. And while there are things to be celebrated, it’s not all good news on the council’s books.
Video
█ Report – FIN – 08/09/2014 (PDF, 2.3 MB)
Interim Financial Result – 12 Months to 31 June 2014█ Report – FIN – 08/09/2014 (PDF, 668.6 KB)
Financial Result – 1 Month to 31 July 2014█ Report – FIN – 08/09/2014 (PDF, 391.2 KB)
Waipori Fund Quarterly Report to June 2014
Related Posts and Comments:
23.8.14 DCC public finance forum 12.8.14 (ten slides)
14.10.13 DCC: New chief financial officer
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Posted by Elizabeth Kerr
*Image: odt.co.nz (tweaked by whatifdunedin) – Richard Davey
What if? Dunedin... 
This guy is well qualified.
The question (as Treasury Manager)
Is he successful at making profits?
Has he sold any interest swaps?
Can he unravel the enormous potential liabilities?
With the expected rise in US interest rates, can he minimise the damage?
Interest rate swaps for dummies:
http://www.moneycrashers.com/interest-rate-swaps-explained-example-definition/
A month ago I said
(October 2, 2014 at 3:27 pm) that the annual reports of DCHL’s subsidiary companies were now available, but not Dunedin City Treasury (DCTL). The good news is that DCTL’s annual report is finally available. The DCHL annual reports are here » http://www.dunedin.govt.nz/your-council/dunedin-city-holdings, but to find DCTL’s you have to click on the “Dunedin City Treasury Ltd” link (LHS) and on that page the pdf is right at the bottom (RHS).
There is nothing special about the report except that it exceeded the legal deadline and they put it in an obscure place. The interesting thing is that DCTL (which acts like a bank) now has zero employees. Mr Knight used to be the sole employee, but his replacement (Richard Davey) is now employed by the DCC and works under Group Financial Officer Grant McKenzie. The question is: who signs the cheques and the loan documents.
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Quick links. -Eds
Dunedin City Treasury Ltd
Dunedin City Treasury Annual Report 2014 (PDF, 708.0 KB)
For the Year Ended 30 June 2014
The other problem with DCTL having no staff is that the arrangement is now quite incestuous. Grant McKenzie is the ultimate decision-maker of DCTL (as the superior of Richard Davey) and Grant is also the one that applies to DCTL for DCC loans. That means that Grant McKenzie has a serious conflict of interest as both loan applicant and loan provider. Previously DCTL had a degree of independence from the DCC and the really dodgy loans could be declined – although none ever seemed to be declined. You could argue that with Mr Knight, the degree of independent decision-making was limited, but now the independence is completely gone. I see this as a power-grab by Sue Bidrose and a way to make sure that no matter how reckless it is to borrow more money, there will be no impediments and no independent scrutiny. This incestuous arrangement contravenes the recommendations of the Larsen Report.
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{Link added. -Eds}
There is a lot to be said for having one ultimate decision maker. Particularly if you are that one. It means that there are no checks and balances, just expedience. We know that the city’s consolidated debt stands at around ($620m), depending where you are standing. We also know that there is in place, with a consortium of banks, drawing rights up to ($850m). We also know that there are a multitude of loss making ventures in the DCC’s portfolio, the stadium being one glaring example. We know that we have a profligate mayor and most councillors, who show no sign of cutting back on spending. If there were independent directors overseeing the activities of DCTL were it still semi-independent within the DCHL grouping, then it is just possible (but highly unlikely) that those directors might impose restrictions of prudence upon the borrowing limits. That of course would be likely to make life difficult for the DCC administration and elected members to carry out their lies, humbugs and general decimation of the city’s treasure. All round, it makes a great deal of sense to have the structure as it now is.
Remarkable, nearly fifty pages of impenetrable, repetitive gibberish. Now compare it with the Annual Report of ANZ International, a roughly equivalent (in purpose but not scale) organisation that funds ANZ Bank, with $20 billion plus under management over several countries – it’s under a third of the length and by comparison made of pure crystal:
http://www.anz.co.nz/resources/2/7/27f35ae1-8119-4f5d-a094-ad798c1d3aae/ANZNIL-AR-Sep13.pdf?MOD=AJPERES&CACHEID=27f35ae1-8119-4f5d-a094-ad798c1d3aae
Complex financial reports are usually that way for a reason, but it’s rarely a good one.
Here’s an interesting tidbit from the ODT today:
http://www.odt.co.nz/news/business/322930/st-kilda-investors-left-absorb-476m-shortfall
The most interesting passages are:
“There are 336 investors, who have received distributions of $2.25 million to date with a remaining debt as at the date of this report of $4.76 million,” Mr Gower said.
The distribution of $2.25 million, on about $7 million owed, represents a return to investors of just 32c in the dollar, falling short of even the bottom end of earlier payout estimates.
St Kilda was headed by Dunedin businessman John Farry, as chairman, and its loan book carried total lending of $9.6 million in 2008, which was largely secured by second mortgages over property to New Zealand borrowers….
At the outset of the receivership, BDO had estimated a possible pay-out range of 45c-80c in the dollar, but expectations were repeatedly downgraded and by mid-2010 the range had been slashed to just 35c-36c in the dollar.”
Three questions are immediate. Money does not disappear, so one has to ask:
Who now has this $4.76 million that these small investors used to own but now do not, and exactly how did it come to pass that the money lent to these persons by the controllers of this company was subsequently either only collectible with difficulty/expense or eventually entirely uncollectible from them?
The second question leads on from the first. Why was the receiver’s initial payout estimate so much higher than the final figure that was arrived at by ‘repeated downgrades’? What surprises and departures from the receiver’s presumably normal practice based expectations based on the company’s (presumably) audited accounts that were current upon on entering receivership led to these ‘repeated downgrades’.
The third question leads on from the second. Why was the company placed into receivership so very quickly when conditions turned against it, and why did the subsequent receivership take so long to arrive at such a reduced payout?
There are plenty of other questions, but these will do for a start.
“336 investors, who have received distributions of $2.25 million to date with a remaining debt as at the date of this report of $4.76 million” …. “St Kilda was headed by Dunedin businessman John Farry, as chairman”.
And “…a return to investors of just 32c in the dollar” or to put it another way, a loss of 68c in the dollar they invested.
Where’s a bucket when you need one to piss in?
John, have you seen it anywhere?
Previous mentions of St Kilda Finance and related at this website:
https://dunedinstadium.wordpress.com/2011/11/14/odt-150th-birthday-bash/#comment-20986
https://dunedinstadium.wordpress.com/2012/11/20/dunedin-city-council-vs-anzide-properties-decision-the-road-has-no-legal-basis/#comment-29378
https://dunedinstadium.wordpress.com/2013/06/08/dcc-electoral-candidates-2013/#comment-38856