Election Year : The following opinion is offered in the public interest. -Eds
Updated post
Thu, 25 Feb 2015 at 5:22 p.m.
### radionz.co.nz Thu, 25 Feb 2016
Morning Report with Susie Ferguson & Guyon Espiner
Will Dunedin council’s Delta get paid for stalled subdivision? Link
8:44 AM. Critics of a council-owned company owed millions of dollars from a housing subdivision say the public has been kept in the dark.
Reporting by Otago correspondent Ian Telfer
Audio | Download: Ogg MP3 (3′ 48″)
Image: Supplied
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Received from Christchurch Driver [CD]
Thu, 25 Feb 2016 at 9:39 a.m.
Mayor Cull on Morning Report today demonstrated a minimal grasp of commercial reality. He claimed that Delta’s position could not be disclosed because there were “negotiations” with “a third party” (a buyer).
Memo to Mr Cull : A mortgagee sale is the first secured party saying – we have had enough – make us an offer. The amount owed on the other securities is of ZERO interest to the buyer except for the situation outlined below.
What IS of great interest to the buyer, and what Mr Cull DID disclose is that there was only a single party involved. Doh !!!! The “third party” now knows that there there is no competition and the price just went down.
The only time further ranking securities amounts would affect the sale price is when there is a chance that the sale might fetch MORE than the amount of the total debt. Mayor Cull was certainly not saying that, and we can be sure if there was any remote possibility that the Delta core debt of $11.3M with the additional $3.3M being all recovered he would be shouting that from the rooftops.
Mayor Cull confirmed again that there was nothing “dodgy”, or “illegal”, it was just a bad debt and there was no finance element to the deal.
Mayor Cull can then, after the sale process is concluded, reassure ratepayers that he is correct with a full report on the fiasco.
By his own words today he is obligated to do so.
Note : This correspondent was peripherally involved in a forced sale process of a recently completed project of a similar size to Noble (Yaldhurst) Subdivision. It had none of the planning or legal issues that plague Noble’s Yaldhurst. Debt was in excess of $20M and the forced sale process yielded a sale for less than a quarter of that.
[ends]
![Yaldhurst Village location map [villagelife.co.nz]](https://dunedinstadium.files.wordpress.com/2015/12/yaldhurst-village-location-map-villagelife-co-nz.jpg)
[villagelife.co.nz]
Image: Supplied
New Zealand Companies register: Delta Utility Services Limited (453486)
█ Directors: David John Frow (appointed 25 Oct 2012), Trevor John Kempton (01 Nov 2013), Stuart James McLauchlan (01 Jun 2007), Ian Murray Parton (25 Oct 2012)
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Related Posts and Comments:
● 24.2.16 Delta #EpicFail —Noble Subdivision: Cameron, Crombie & McKenzie
● 23.2.16 DCC: DCHL half year result to 31 December 2015
19.2.16 Delta: Update on Yaldhurst subdivision debt recovery
15.2.16 Delta / DCHL not broadcasting position on subdivision mortgagee tender
30.1.16 DCC Rates: LOCAL CONTEXT not Stats —Delta and Hippopotamuses
● 29.1.16 Delta #EpicFail —Yaldhurst Subdivision ● Some forensics
● 21.1.16 Delta #EpicFail —Yaldhurst Subdivision
21.1.16 DCC LTAP 2016/17 budget discussion #ultrahelpfulhints
10.1.16 Infrastructure ‘open to facile misinterpretation’…. or local ignore
15.12.15 Noble property subdivision aka Yaldhurst Village | Mortgagee Tender
21.9.15 DCC: Not shite (?) hitting the fan but DVL
20.7.15 Noble property subdivision —DELTA #LGOIMA
1.4.15 Christchurch subdivisions: Heat gone?
24.3.15 Noble property subdivision —DELTA
23.3.15 Noble property subdivision: “Denials suggest that we have not learned.”
17.3.15 DCC —Delta, Jacks Point Luggate II…. Noble property subdivision
● 20.3.14 Delta: Report from Office of the Auditor-General
█ For more, enter the term *delta* in the search box at right.
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Posted by Elizabeth Kerr
What if? Dunedin... 
Reminder: What we knew about a year ago……….
### Stuff.co.nz Last updated 05:00, March 21 2015
Delta owed millions over stalled village
By Alan Wood
Dunedin’s Delta Utility Services, owed millions on infrastructure work it did on a Christchurch subdivision at Yaldhurst, hopes some of the debt will be repaid.
But work at the Noble Village subdivision remains stalled, making it unlikely it will be repaid any time soon.
Delta, which does contracting work such as drainlaying and civil engineering, reports into Dunedin City Holdings Ltd, a commercial arm of Dunedin City Council. DCHL chairman Graham Crombie wouldn’t disclose a total owed to Delta, but acknowledged it was in the millions of dollars.
Crombie said Delta was in line to get paid for contracting work done, given it held a “security” over Noble land and sections.
[…] Noble Village Investments lists Gordon Stewart, of Wellington, as its sole director and owner. He was, until February 2012, a director of Apple Fields which has been managing the village development. He could not be contacted for comment.
Southpac Property Investments has been a funder of the Yaldhurst development, according to a recent District Court judgment. In the judgment, Judge Emma Smith said a dispute arising in 2006 between [landowner] parties in the subdivision, still “continues” in a High and Court of Appeal process.
Caveats against the whole of the land under development had the effect of bringing the Yaldhurst subdivision project to somewhat of a halt. The caveats in essence meant it was impossible to raise finance to advance the subdivision, she said.
Mark Schroeder, a director of Apple Fields, said his company still had a development and management role agreement with Noble Investments on the subdivision and he hoped that role would reignite and Delta would eventually get paid. “The whole thing’s gone into lockdown because of disputes with some of the neighbours, and the council out there..”
There were existing pre-sales at Noble Village, Schroeder said. “The intention is to carry this through.”
Crombie said the subdivision could lead to some bad debts, particularly if the sections didn’t sell at a good price, but DCHL was confident a significant portion of the amount owed would be recovered. “It’s a timing scenario.”
He understood that issues holding up the development, including work with Christchurch City Council and the NZ Transport Agency and neighbour’s concerns, were being worked through, with Delta still involved.
Riccarton-Wigram Community board chairman Mike Mora said the spine road into the Noble subdivision was too narrow and not built to roading standards and other roads in the subdivision had not been built to an agreed design. It was an issue that went back to the developer rather than the construction team.
Mora said another issue for the developer to handle was work on stormwater infrastructure. It is understood the developer has lodged a variation to the subdivison’s resource consents with Christchurch City Council. That is being worked through to ensure the road layout in particular meets safety requirements. Council officers will not accept roads for vesting in the council until it does.
Stuff Link
“Crombie said the subdivision could lead to some bad debts, particularly if the sections didn’t sell at a good price, but DCHL was confident a significant portion of the amount owed would be recovered.”
Confident optimistic people are popular. We humans seem to be hard-wired to trust them, indeed we seem to instinctively take people at face value unless/until there is evidence to the contrary. Who noticed the US tennis player’s criticism of Lydia Ko for over-modesty, not talking herself up which in US terms appears to be desirable but in NZ is regarded as unattractive boastfulness. Most of us express our confidence rather quietly, an example being the (often misunderstood) expression “She’ll be right.” It wasn’t slapdash, when I was young. It was like, “This [repair] will last as long as the car / be plenty good enough to get you home safely” and the response was expected to be similarly low-key, no whooping, no kissing. Thanks mate, really appreciate that.
Skeptics who identify publicly as such are seen as killjoys, anti-everything. Asking questions which don’t have cosy answers. Naysayers, quoting known facts and figures – analysing them what’s more – and holding them up against the confident optimists’ predictions.
On a rainy day what’s better than a rainbow, and a confident optimist declaring that the end of it has been located? Yes! Invest in the required digger, the secure gold storage bunker with our (coincidentally!) firm’s security system but wait there’s more … jobs for security staff too! Nobody wants to hear a skeptic point out that most rational investment for rainy days is a small-scale umbrella repair shop….
….located somewhere that’s not South Dunedin.
Interesting: “the spine road into the Noble subdivision was too narrow and not built to roading standards and other roads in the subdivision had not been built to an agreed design. It was an issue that went back to the developer rather than the construction team.”
In my limited and very small scale experience, trades and contractors are well up on the regs and standards. “Can’t do that, sorry, it’s got to be X-wider, Y-stronger, Z-from the boundary.”
Delta knew the issues…. still risked DCC funds.
Why?
Why-why-why-why-why-why-why?
Closely associated question – why is mandatory random drug testing confined to machinery operators and ordinary wage-earners, when high-level decision makers can so easily create so much damage in society?
Much too hard to answer, Hype O’Thermia.
Gamesmanship and power egos and greed and….
….too easy to secure borrowings against the misuse of ratepayer funds.
It’s all to do with OPM (other people’s money) if there was any personal ‘skin in the game’ from Delta executive staff the outcome here would almost certainly be different. Rarefied salaries like those here should be attached to performance standards. But our elected caretakers would find that uncomfortable, and for the same reason, it’s OPM!!!
### dunedintv.co.nz Wed, 24 Feb 2016
Contractor faults spark cost recovery by Delta
A council-owned infrastructure company is seeking to recover thousands of dollars in costs after a string of electrical incidents. Delta has reported a series of problems involving contractors from around the city, that have caused damage to the electricity network. And staff are calling for businesses to become more safety conscious for the sake of workers and the public.
Ch39 Video
DUDsney World, pay through the nose to be taken for a ride.
### radionz.co.nz Updated at 11:25 am today
RNZ News
Dunedin council company still waiting for payment over subdivision
A Dunedin City councillor says the public has been kept in the dark for too long about a council company owed millions of dollars from a subdivision.
Details are emerging of the $13 million owed to Delta for its work on roads and sewerage at the stalled Yaldhurst Village subdivision in Christchurch.
Councillor Hilary Calvert said it was time the public was told the full story of Delta’s Yaldhurst saga, and who was responsible.
She said after a year of questions, it was still not clear whether the company had lost $13 million or $24 million and what it had been doing about it.
But Dunedin mayor Dave Cull said nothing dodgy or illegal had happened, just complicated proceedings to get Delta paid.
Mr Cull said the case was at a very sensitive stage, and councillors stirring up the story were undermining their own company’s efforts to get the money back.
RNZ Link
Following on from what Diane Yeldon said at another thread:
Grant McKenzie didn’t give Cr Calvert a straight answer about whether Delta held a first or second mortgage or not. He said they held a first mortgage. Then he added “one of them”. To which Cr Calvert replied that it was either a first or a second and the first got paid first. And Grant McKenzie said something about people being ahead of them. He doesn’t give straight answers. Does he not know? Is he hiding something? Or has he been told by someone else not to give straight answers? What I would like to know is who is ahead in the queue for recovering money. And whether the people/businesses who are ahead have any connections with Delta. Incestuous connections. In case a group of people altogether have been playing ‘tails I win, heads you lose” – with the Dunedin ratepayers as guarantors. Delta may be going to lose but I would like to know if someone is going to win. And if so, who they are. Cont/
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Council meeting 22 Feb 2015
[NB. The following excerpt has DRAFT status Only before the meeting video is released; taken from quick pen notes – not solid verbatim. I missed the first part of the meeting.]
Agenda item 16
DCHL Group of Companies Financials for the Six
Months Ended 31 December 2015
DCHL chairman Graham Crombie and DCC/DCHL GCFO Grant McKenzie have made themselves available to answer questions from the Mayor and Councillors.
Cr Hilary Calvert:
… [Thanks] the team for ever increasing transparency and better books to us. But, rather awkward… we have a report to Councillors behind closed doors, [as well as the reports tabled] which does or doesn’t help….
Mayor Dave Cull interjects:
Be clear about what you insinuate.
Cr Calvert:
If what we’re being told in a non-public briefing is the same as the published [DCHL] reports…. why not questions in a more public venue?….[but] when we see something a little different….
Noted: GCFO has a foot in each camp [DCC/ DCHL]
Cr Calvert:
….Councillors’ interactions with CCOs is through Mr Crombie, he needs to get more up to speed – Grant [McKenzie] could do this for Mr Crombie, to be up to speed.
Mayor Cull points out the GCFO is responsible “to us”.
Cr Calvert: [Noble]
1. What is the relationship between Gold Band and Delta ?
Mr McKenzie:
No relationship – only thing in common is the overdue debt. Both are fellow creditors.
Cr Calvert: [Noble]
2. Has Delta got any role with respect to the [Yaldhurst] land purchase, via the mortgagee sale, tenders closed last Friday ?
Cr Kate Wilson: Point of Order
Question not relevant to accounts for the last six months.
Mayor Cull: Point of Order
[….] the six months to 31 December 2015.
Cr Wilson:
Questions [are] restricted to what’s happening on our agenda.
Cr Calvert: [Noble]
Who is owed, and how much to Delta ? In what order ?
Mr McKenzie:
That information is not available. Gold Band and Delta both have first mortgages.
….
Mayor Cull:
The questions are largely rhetorical.
Cr Calvert: [Noble]
These accounts have money that’s owed to us.
Mayor Cull: Point of Order
Make the next question pertinent.
Cr Calvert: [Noble]
Are we owed the $13M on top of the $11M that’s owed ?
Mr Crombie:
Delta’s debt is the $13.3M as shown in the financial statements [this figure via] independent assessors – a valuer and an auditor have assessed it as the amount. […] The collectable amount is $13.3M …is recoverable. The $24M owed is brought back to $13.3M
Cr Calvert: [Noble]
Is any of the money, does it include any other money back into Delta, the first mortgage taken last year to secure debt ?
….
Cr Lee Vandervis:
Re ODT 18/3/15, Mr Crombie – (this relates to 2013 to keep Cr Wilson at bay) – can you put a figure on the penalty interest, ie on unpaid accounts, the effect on DCC ?
Delta bought $1.5M of Gold Band mortgage prior to 31 December 2015….
Mayor Cull:
Move on. You [Mr Crombie] are not required to answer.
Cr Vandervis:
Another question. Avanti Finance had $1.5M of mortgage bought by Delta prior to 31 December 2015.
Prior to 31 December 2015 was ex Delta director Mike Coburn employed as a consultant ?
[No answers. Shut down by Mayor Cull.]
Cr Vandervis: No point in being here.
….
After further time, 16.1 was moved, seconded and the vote carried.
Cr Vandervis abstained from voting – for the reason, to be recorded: “Cannot get my very specific questions answered in this forum or any other.”
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Topically on politicians, and neighbourly
ClarkeAndDawe Published on Feb 24, 2016
Clarke and Dawe – Various Things are on the Table
“Scott Morrison, Federal Treasurer.” Originally aired on ABC TV: 25/02/2016
Something off about Dave and Kate. They don’t seem to cope with the political manipulations like several of their more cunning colleagues. It’s like they’ve been prepared ahead of schedule but still running the scenario through their heads when confronted with it.
I must not forget. I must not forget. Oh crap – it’s happening now…
POINT OF ORDER!!!
The DCC video of the full council meeting held on Monday 22 February 2016 has been uploaded to YouTube – thus the above notes can be moved into full transcription and properly ordered/corrected.
Meanwhile you can watch the meeting for yourselves at
█ https://www.youtube.com/watch?v=YVNWBuAIiBE
Mayor Cull’s awfully keen on “moving on” isn’t he? Nothing to see here…..
http://www.urbandictionary.com/define.php?term=nothing+to+see+here
Short for “nothing to see here, move along folks”. A ironic or sarcastic phrase uttered by a person who feels that he/she has detected a hidden, usually unpleasant or sinister, deeper meaning of a story or event that the reporter or authority on that event wishes to conceal possibly to avoid upsetting the general public.
From the police phrase, “nothing to see here move along”. which is often said to a crowd of people that have collected at the scene of an accident or crime and who the officer wishes to disperse without communicating the cause of the crime or accident.
The phrase is found in political commentary often on weblogs on hot button events like terrorism and political corruption.
ODT 26.2.16 (page 10)
NBR business journalist Tim Hunter got stuck into Delta issues today – providing a general overview on concerns he has with Delta’s position. Suspect we will hear more in future weeks.
The opinion piece is behind the pay wall – I bought a print copy today, but aware that copyright pertains so not able to re-publish in full here. reading copies are available at Dunedin Public Libraries if you can’t afford a subscription or the shop price.
Here’s a taste:
The National Business Review
February 26, 2016
Page 2 Comment – Hunter’s Corner
Tim Hunter
How council company handed millions to shaky developer
The risks of local authority over-reach are again on display in Dunedin
Excerpt (closing):
The timing, size and nature of the security deals between Delta and Noble imply the council company was advancing millions of dollars in credit to Noble to finance the work.
Delta’s accounts say one counterparty defaulted on two principal sums of $6.35m and $5m, as well as other financial commitments, although it held security in the form of mortgage and general security agreements.
The implication is that Delta is owed the eyewatering sum of $11.3m by one single customer, plus interest and penalties, with the only hope of recovery being from the exercise of its security over property in the subdivision, which may or may not be worth enough to cover it. Tenders closed on a mortgagee sale on February l2.
If so, Hunter’s Corner is amazed that a council-owned company would take on work on such terms and hopes it will in future remember that ratepayers unwillingly carry the can for its cock-ups.
It should also be a reminder that councils would do well to kill off their commercial risks.
█ For NBR Print and NBR ONLINE subscriptions, visit: http://www.nbr.co.nz/subscribe
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Another NBR article appeared on Monday, 22 February
Dunedin’s Delta runs gauntlet again by Chris Hutching