unGreater Dunedin blisters on #CouncilConsolidatedDebt #DCC

SHOCK HORROR NEW IDEA
‘Next council should consider placing higher priority on asset maintenance and renewal.’

richard-thomson-odt-files-tweaked-by-whatifdunedin-bw### ODT Online Tue, 6 Sep 2016
Time for debt rethink, councillor says
By Vaughan Elder
A departing Dunedin city councillor has called for a fresh look at how quickly the city pays off debt as the council continues to eclipse repayment targets. In the wake of the council’s better than expected debt position, Cr Thomson said the new council should look at rethinking its financial strategy and discuss what an “appropriate level of debt would look like”.
Read more

“[Thomson] said the council had outperformed its debt targets for a range of reasons….”

Not the Cull council – rather, the assiduous work of former DCC/DCHL GCFO Grant McKenzie and his disciplined finance staff.

No politicians can take credit.

Especially not ex Greater Dunedin moonbeams such as Cull, Staynes, Thomson and their young swaddling ‘babe in the woods’.

N O T E S

1. Health Board car park. “How could Swann drive a Lamborghini into the DHB’s car park and: “Park it next to the District Health Board Corollas,” without any questions being asked?” Link

2. Citifleet and Citipark. Considerably more than +152 council fleet vehicles “missed” from DCC in a much longer timeframe than ten years (2003-13).

3. Delta Utility Services Ltd – staff vehicles. [Today] See numbers of Delta vehicles everywhere you shouldn’t, inside and outside work hours, not in connection with programmed work or emergency.
Why ? Pray to god, why is DCC governance MIA ?

Undisciplined lowlights treating Public Funds like chickenfeed.

Spendthrift mayor Cull and the motley majority of councillors (Greater Dunedin crackpots, as well as in their ghoulish afterglow…. with support from greenies Hawkins and Peat, and doughboy Benson-Pope), who in shambolic attendance to ‘governance’ have enormous trouble with accountability, prudence and transparency – sold Ratepayers down the “Swannee” again very recently in deciding a deal for Delta.

Without an ounce of diligence, councillors (except Crs Vandervis and Calvert – Cr Hall removed himself from the vote for some reason) accepted to rush the Delta decision for no reason, thanks to Cull, Thomson and Crombie, on Monday, 1 August 2016 – in so doing Cull’s council lost Ratepayers a further +$25million. No conscience.

If Cull is returned as mayor in 2016, Thomson’s replacement as chair of the Finance Committee is rumoured to favour Mike Lord (if indeed he himself is returned).

Note: Mike Lord sensibly left Greater Dunedin earlier than some.

Cr Thomson was inspired to make his parting comments after Cr Jinty MacTavish said the council should look at the possibility of reinvesting the money from asset sales into parks and recreation as opposed to automatically repaying debt.

“This is an excellent result and I think council can take considerable pride [from it],” Mr Cull said.

Did I mention the replacement cost of metal BTF tanks at Tahuna.
Another post….

Posted by Elizabeth Kerr

Election Year. This post is offered in the public interest.

*Image: odt.co.nz – Richard Thomson, tweaked by whatifdunedin

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14 Comments

Filed under DCC, Dunedin, Economics, Finance, Hot air, Media, Name, OAG, Ombudsman, People, Politics, Public interest, Travesty, What stadium

14 responses to “unGreater Dunedin blisters on #CouncilConsolidatedDebt #DCC

  1. Hi Elizabeth,

    DCC Finance Committee chairman Richard Thomson¹s parting insight – “the new council should look at rethinking its financial strategy and discuss what an Œappropriate level of debt would look like.” Well, finally after 6 years of trying to get him and others interested in discussing the appropriate level of debt [it can¹t be more debt] Thomson is leaving with it maxed out at double what they began with.

    Cheers, Lee

  2. Selling assets plus taking money from a bank account to improve a debt target is hardly pat yourself on the back material.

    Cr Richard Thomson and Delta who he was batting for was requested by the caveators at Noble subdivision Christchurch to allow them to redeem the first mortgage and transfer it to the Council. This would have enabled Delta to register other agreements for first mortgages and the second mortgage into first ranking mortgagees to the extent of $25m odd.

    Instead Cr Thomson had the Council vote to invest all but $0.9m of the $5.7m FIRST mortgage sale proceeds legally due to it back into the development and to “secure” this FIRST mortgage “cash in the hand” by only a SECOND mortgage.

    That means the $12.5m SECOND mortgage voted for “secures” this $4.8m ($5.7m – $0.9m) FIRST mortgage cash dividend reinvestment and only $7.7m of the over $25m Delta infrastructure debt.
    ($7.7m + $4.8m = $12.5m)

    In a 2 minute decision on 1 August Cr Thomson and Cull’s Council wrote off millions due and increased the DCC debt by potentially as much as the $30m he is boasting about.

    • Hype O'Thermia

      Wow and a portion of LOL – impressive wisdom from Cr Thomson now it’s too late for him to have to put it into action.
      All those years for “Oooh look, there’s a shiny thing promoted by a Nigerian Field Marshall, let’s hand over a tea-chest of high denomination banknotes!”
      Suddenly he’s aware of debt and drains. Did he get a knock on the head one night on his way through the Octagon?

  3. Elizabeth

    Copied from another thread; relevance. -Eds

    Calvin Oaten
    September 6, 2016 at 3:31 pm

    The grand moustache wearing, retiring (thankfully) Finance Committee chair Richard Thomson, in his valedictory at his last meeting raved on about the importance of a rethink on future council’s approach to debt. The raving fool, it was him who has ignored that aspect during his terms on council. He gives himself helpings of praise and hand clapping for the fact that the DCC’s debt at the end of June was just $217.25million. $30.6million below budget and well below the target of $230million by 2021.
    Does this financial genius think he understands the subject or is it that he’s so infatuated with his narcissistic image that he conveniently ignores the truth?
    It’s an established fact that the DCC’s debt peaked at $360million at the completion of the Stadium. That’s when it was decided on the use of smoke and mirrors to disappear $140million of that debt. Yes folks, that was when this nincompoop and his Greater Dunedin compatriots and mayor in their wisdom decided to disestablish DVL from the DCC and let it stand alone together with the Stadium debt component of $140million. It was subsequently absorbed into the DCHL group together with its debt. So the debt was neither repaid nor extinguished, simply transferred to DCHL leaving the DCC/DCHL Group debt unchanged.
    The result is in one swoop the DCC’s debt reduced to $220million, plus or minus a few fiddly bits of other wasteful endeavours. Since then the debt has been added to and extracted from over five or six years to end up pretty much where it was all the time.
    I suppose if he was deluded enough to believe (and he is) then I guess he can claim a reduction of $2.75million over those years. The man’s a genius alright and his tenure as chair, then deputy-commissioner of the SDHB confirms that. Perhaps that is what he means by a “rethink”. He might have, over those years thought about the crap that he and his fellow ‘nincompoops’ frittered untold $millions on subsidising the Stadium, the Otago Settlers Museum, and the Dunedin Town Hall Redevelopment (which holds a dozen events per year if its lucky, well short of its break-even budgeted of 36 events per year). We shan’t even mention the put down and torn up South Dunedin Cycleways that less than 1% of the population uses.
    Result: the consolidated debt still hovers north of $600million.
    Thank God he’s going, closely followed by Jinty MacTavish and, hopefully, Dave Cull.

  4. Calvin Oaten

    I would like to add a rider. The transferring of $140million of debt from the DCC’s accounts to the DCC/DCHL Group debt had a twofold purpose (far too deep for Thomson and Co) and was the brain child of Athol Stephens. It not only fooled the citizens it fooled the councillors as well it seems.
    It was done to exploit an old statute on the IRD books which says: it is OK for allied groups of companies to transfer surpluses from one to offset deficits of another. These are termed ‘subvention payments’ which are tax free transfers. Hence we see the obscene practice of some $7-8million of ‘subvention’ transfers per annum from profitable Auroa to ‘basket cases DVL and DVML. Year after year I might add. Not possible if DVL/DVML were left in the DCC’s stable as originally.
    I wonder if Thomson and Co appreciate the fact that those profits would have come, albeit tax paid, in the form of $5.2million dividends to the DCC’s coffers. Imagine the effect on the DCC’s debt if that had happened over the years.
    The nincompoops are too thick to see it and the public simply neither know nor understand. That in essence is why the Stadium is such a malignant cancer on this city.

  5. Rob Hamlin

    We have no idea what this City’s debt is, and neither do Thomson et al. The long term debt commitment that this city holds via its derivative multi option variable rate note facility (MOVRNF) is impossible to quantify – even closely, as we appear to have swapped a short term (within one Mayor/councillor’s term) interest saving for a long term higher risk. (We have no idea how long we are locked into this risky MOVRNF arrangement, but it may well be decades). Like Calvin, I doubt is the overall debt (as of today – tomorrow it may well be different) has declined much, if at all.

    As a ratepayer your direct personal and individual MOVRNF liability can, however be exactly quantified. It is $850,000,000/50,000. That is the on-call capital commitment that this cashless (worthless?) council has committed itself to, to guarantee the MOVRNF divided by the the number of DCC ratepayers who can instantly be called upon to supply said cash compulsorily – That’s about $17,000 a head. Any of you pensioner ‘What If’ contributors out there got that kind of cash instantly to hand?

    No worries; if you’re a ratepayer then you are also a property owner! You may therefore be cashless, but you are not worthless. I have no doubt that the banking sector whose members brought you the MOVRNF will step in with a nicely tailored personal reverse equity scheme that will allow you and your heirs to repay your debt to them at a rate of interest that will represent a much better return (to them) than the MOVRNF ever did. It may be so nicely tailored that one might be given cause to think that they may have had it set up in advance. The bank partners to the MOVRNF do get to decide when to get to pull the on-call-capital trigger after all – that’s why it’s called on call capital. It may well be very hard for you to negotiate terms in this particular sellers’ market.

    You may of course join a class action to have the deal and your personal $17,000 that arises from it declared illegal. Perhaps on the basis that you were never informed/consulted before the DCC committed you to this massive and on-call personal liability. It does seem a lot more important to most individual ratepayers than most of what they advertise/consult on before a decision is made doesn’t it? This thus seems a fair basis of legal complaint.

    The Kaipara mob took much the same line, and they eventually won. The Powers-That-Bes’ response was to retrospectively change the law so that then they lost:

    http://www.kaiparaconcerns.co.nz/323352/
    It is worth noting the comment on the above site that the bill went through submissions and committee pretty much unchanged in a very short period of time – and only New Zealand First and Hone Harawera voted against this legislation at its third and final reading. Take note all potential Labour and Green voters! This unusual level of National/Labour/ACT/Green/Maori Party/Dunne ‘screw you pleb’ unanimity may well explain why Peters subsequently got the nod in Northland and may well indicate that Hone Harawera may rightly fancy his chances in Te Tai Tokerau next year.

    Oh yes, and they do go after the plebs for the money after its all been ‘retro-righted’:

    http://www.nzherald.co.nz/northern-advocate/news/article.cfm?c_id=1503450&objectid=11474592

    It thus seems likely that the same terminal ‘smart bomb’ would be used against ratepayers here here if all other means failed, given that there’s a lot more plebs’ (that’s us) money at stake (up for grabs) by stakeholders (those in the arrangement who are not plebs).

    Retrospective law changes strike at the very heart of how our type of society is run, and are rightly either explicitly illegal or shunned by most reputable governments; yet they seem to be becoming more common here. They are just such a convenient establishment anti-pleb weapon. A bit like discharges without conviction/permanent name suppression for offences against plebs that are now commonly used by the the well-connected – They are only used of course if there really is too much public evidence simply to claim that there isn’t enough evidence to lay charges – Spotlighting anyone?

    Don’t worry be happy.

  6. Tussock

    Mike Lord Chair of the Finance committee. Why not ? Moved to have the council’s cash handout to the Mosgiel pool trust increased from $30,000 to $80,000. Showed his loyalty by riding on the coat tails of the Greater Dunedin mob to get a seat on council, and when the going got tuff did what rats do to sinking ships.

  7. Gurglars

    The council is claiming debt reduction is a good thing when achieved by selling assets such as unwanted land or property.

    On the surface any debt reduction is of advantage to ratepayers. Swapping notional debt for unwanted properties that do not earn income makes sense.

    Questions should be asked why the properties were ever purchased, why they were not sold many years ago.

    However the ODT editor today, who seems to have had an IQ increase recently, suggests that new elected councillors should be very careful about pet projects and pork barreling from here in.

    My perspective and no doubt others is the disappointing fact that more debt reduction has not come from reducing the budgets of various frivolous departments, overstaffing and ridiculous salaries.

    Until the DCC reduces these factors ratepayers should be very cautious about announcements from Cull and Co, and watch carefully for council rethink on debt reduction, a philosophy Richard (The Blind) Thomson espouses. A rethink can only be getting back to spendthrift mode rather than a pruning of fancy fripperies which is the ratepayers hope and expectation.

  8. Elizabeth

    Received from Douglas Field
    Thu, 8 Sep 2016 at 11:53 a.m.

    chicken-come-home

  9. Elizabeth

    Thu, 8 Sep 2016
    ODT Editorial: A prudent city council
    OPINION Dunedin ratepayers have reasons to smile as council debt falls much faster than expected. Debt at the end of June dropped to $217 million, $30 million below budget and well below the target of $230 million by 2021.
    But Dunedin ratepayers also have reason to grimace. The $217million is still a huge figure. And when council company debt, including that for the stadium, Delta and Aurora, is added in ”group” debt jumps to $561 million.

    Careful consideration of the attitudes of prospective councillors is required to ensure progress made in the past few years is not sabotaged.

  10. Elizabeth

    Received from Calvin Oaten
    Fri, 9 Sep 2016 at 6:57 p.m.

    [ODT made the decision not to publish]

    On 08/09/2016 4:29 PM, Calvin Oaten wrote:
    Retiring Cr Richard Thomson in his valedictory as chair of the [DCC] Finance Committee lauded the fact that the DCC’s debt as at June was at $217million. This was $30m below budget and well below the targeted $230m by 2021. Mayor Cull dwells on the success story.

    But is this really correct? It is a well documented fact that due to debt spending on major projects such as the Stadium, the Otago Settlers Museum and the Dunedin Town Hall Redevelopment Project, the DCC’s debt had peaked at $360m. This was at the time considered to be excessive and means to reduce it were investigated. One solution was to remove Dunedin Venues Ltd (DVL), the Stadium owning company, and Dunedin Venues Management Ltd (DVML), the Stadium operating company, from
    the DCC and bring them into the DCHL group of companies. This had the effect of removing DVL’s $140m Stadium debt from the DCC and lodging it with DCHL.

    This reduced the DCC’s debt to $220m in one move. But it was simply moved to the DCC/DCHL consolidated debt which rose to $623m. This we are lead to believe is now at $561m. Since then the city has in a manner committed to carry out much needed repairs to the St Clair sea wall, build and extend a complex of cycleways, [and] build a parking building to replace 280-odd lost parks on street, making way for cyclists. Repair and upgrade the South Dunedin stormwater systems and probably fund a Mosgiel aquatic centre, all basically debt funded.

    One of the reasons for transferring DVL to the DCHL group was to take advantage of an Inland Revenue statute. This says that in a group of companies it is permissible to transfer surpluses from a profitable unit to a loss making unit on a tax free basis. These transfers are called ‘subvention payments’. As a result, Aurora Energy Ltd, on an annual basis transfers around $7-8m to DVL and DVML, both loss making enterprises. If these funds were paid after tax as dividends to the DCC it would amount to around $5.2m per annum. This could result in debt reduction but for the Stadium’s losses.

    All in all, if one looks at the overall picture, it is difficult to believe the figures postulated by Cr Thomson and I suspect the real ‘consolidated’ debt is still north of $600m. Don’t expect any acknowledgement of this during the election campaign.

    Calvin Oaten
    The Gardens

  11. Hype O'Thermia

    Calvin, “it is difficult to believe the figures postulated by Cr Thomson.”
    Are you suggesting someone actually does?

  12. Gurglars

    Robbing Peter to pay Paul.

    (And I don’t mean Pope and I do mean Robbing)

    Robbing in the sense of devious, misleading and callous disregard for reality in an endeavour to be re-elected.

    A question.

    Why would one spend large sums to be mayor unless one expected to recover that “investment”?

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