DCC not Delta #EpicFail : Wall Street falsehoods and a world class debt

Received from Christchurch Driver [CD]
Tue, 14 Feb 2017 at 9:16 a.m.

Readers 

We are at an interesting time in our local history. Your correspondent like hundreds of others was busy cleaning up yesterday, after what NIWA described as a fairly standard thunderstorm where just 13.6mm of rain fell. 

Also like hundreds of others no doubt, the question in the mind of your correspondent as he dutifully mopped, was : What is the next public asset to be exposed as poorly run, badly maintained and starved of funds ? 

Never before have the executive few lied so comprehensively about the true state of so much degraded public asset. Never before has so much public asset been destroyed by the actions of those few, as Winston might have said. 

Economists your correspondent is familiar with would call this the “tragedy of the commons”. We await the “macro-prudential” responses from Central Government. With the stupefying level of underfunding for DCC drainage and other underground services identified by the Auditor-General, coupled with Aurora Energy’s $1B deferred maintenance and capital work, plus the existing DCC debt, there is around $3B that will need to be extracted from ratepayers and power consumers over the next 30 years (see the Dunedin City Council Infrastructure Strategy). Dunedin has achieved its dream as a world leading small city – of debt per ratepayer. Dunedin will be broke beyond comprehension with the policy of 3% annual rises. The 3% limit is a mirage. Rate rises will be much, much more. Not this year, but quite possibly before the next election; if this council does not address the looming crisis there is the increasing possibility of the removal of the council and appointment of a commissioner. 

It seems that every week brings some fresh disaster or new development that the DCC attempts to cover up. 

Yesterday was a small but telling episode. David Loughrey of the Otago Daily Times kindly confirmed what your correspondent mentioned some months ago, that the DCC had terminated the services of Logic FM because the company would not look the other way while the DCC wilfully failed to fix hundreds of obvious fire rating defects at two of their major assets. 

Mr Kevin Taylor wrote that the council [fired] Logic because the company had been “interpreting code compliance…..beyond that required by the law”. Logic publicly scoffed at this saying – correctly – that the code is “relatively black and white”. 

What actually happened is that as well as the uncompleted fire penetrations, there is a case of simple DCC incompetence, which was only hinted at by infrastructure networks general manager Ruth Stokes in the ODT article. Here are the facts : The Wall Street mall required daily inspections of certain of its building safety systems. The DCC did not want to pay outside consultants to do this work. Fair enough, said Logic, we will train your staff to inspect the systems and they will then sign off a daily inspection sheet, which Logic as the IQP (Independent Qualified Person) need to sight every month. 

wall-street-mall-interior-teamarchitects-co-nz[teamarchitects.co.nz]wall-street-mall-logo-1wall-street-mall-exterior-wallstreetmall-nz-1

Month after month, the monthly reports could not be signed off because no one had completed the daily sign-off sheets. There were offers of more training to the apparently mule-like staff responsible but City Property could not be bothered to do it properly —and thought they could get away with not doing these daily inspections by appointing another more compliant IQP in-house and seeking cover with a further fire report by Beca. 

It is very relevant that after sacking Logic FM, and commissioning the report from Beca, DCC refused to provide a copy of the Beca report to Logic. Logic had asked repeatedly for the report to see what the alleged areas of “over compliance” were. 

It is ‘madeira cake to margarine sandwiches’ that there were no areas of over compliance, and but for Elizabeth Kerr’s LGOIMA request and latterly, the ODT, City Property may well have gotten away with inaccuracies! 

As it is, your correspondent sees only static for Mr Taylor in the DCC crystal ball. He is merely the latest in a line of unlamented DCC property managers, including Robert “Hydraulic” Clark, and Dave McKenzie.

Ruth Stokes also needs to very careful about stepping into this mess – and dissembling to protect Mr Taylor. Stating that “things could have gone a bit better, but they’ve all been addressed” does not fool anyone. Mr Taylor may have have fantasised to Ms Stokes that “all” the fire rating faults were fixed but remember your correspondent advised there were hundreds of faults, not just a few faults in one single wall as has been pretended. There is no way all the faults have been fixed. 

This is what Richard Healey would describe as the Delta dishonest reduction defence…. no, not a 1000 dangerous poles without red tags, but perhaps there are just a few…. and now we learn on that fiasco, that the ‘new’ Delta plan, unannounced to the region’s mayors, is that they can be magically restored to full strength by yet another re-classification.

Chief executive Sue Bidrose started her tenure with a promise of greater transparency and openness (read “honesty”) that was sorely needed. There was some early progress, but the transparency project appears a priority no more.

With the financial storm clouds assembling over the DCC that the chief executive cannot fail to be aware of, some honesty about the actual costs the DCC faces over the next decade is needed. It ranges from the small – just how much will it take to fix Wall Street mall to the $1B existential Aurora problem. The CEO and her staff have been invisible on this critical issue, instead producing reports of risible fantasy such as last year’s effort that valued Delta at over $50M, and Aurora at over $200M. Facing up to an austere decade is the only way that Dr Bidrose and Councillors will avoid having their careers and reputations destroyed by the appointment of a commissioner. 

[ends]

Council Documents:
DCC Infrastructure Strategy
DCC Long Term Plan 2015/16 – 2024/25
Audit Opinion – Independent auditor’s report on Dunedin City Council’s 2015-25 Long‑Term Plan. Author: Ian Lothian, Audit New Zealand on behalf of the Auditor‑General, Dunedin NZ.

ODT Stories:
14.2.17 Councils, Aurora poles apart on ‘removing risk’ definition
13.2.17 Without warrants for years
11.2.17 Aurora affected by pole, staff shortages
8.2.17 Action by Delta decried
29.12.16 Director for $30m pole project
2.12.16 Resignation blow to pole work

Related Posts and Comments:
22.1.17 DCC LGOIMA Response : Wall Street Mall and Town Hall Complex
30.11.16 Delta #EpicPowerFail 7 : Kyle Cameron —The Money or the Bag?

█ For more, enter the terms *delta*, *aurora*, *grady*, *wall street mall*, *richard healey*, *steve thompson*, *dchl*, *epicfail*, *epicpowerfail* or *epic fraud* in the search box at right.

Posted by Elizabeth Kerr

This post is offered in the public interest.

*Images by Parker Warburton Team Architects

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17 Comments

Filed under Aurora Energy, Business, Central Otago, Construction, DCC, Delta, Democracy, Design, Dunedin, Economics, Education, Electricity, Events, Finance, Geography, Health, Infrastructure, LTP/AP, Media, Name, New Zealand, OAG, Ombudsman, People, Perversion, Politics, Project management, Property, Public interest, Queenstown Lakes, Resource management, Site, Structural engineering, Travesty, What stadium

17 responses to “DCC not Delta #EpicFail : Wall Street falsehoods and a world class debt

  1. Elizabeth

    SCENARIO : The Three Mayors
    Mayor Tim Cadogan is appallingly stupid to have “retreated” from his anger to Grader Cameron. Cadogan has been duped by the unworthy stooge Mr Steve Thompson. Lesson 1 – never resile in public, stay testy, demanding and rude when dealing with the Aurora/Delta/DCHL/DCC wind machine.

    Mayor Jim Boult (Queenstown Lakes) appears more sprightly-dubious than his ‘freshly softened’ (pushed shoved) Central Otago counterpart.

    Alas, Mayor Cull is the Aurora/Delta/DCHL dishmop that hasn’t been bleached, or ‘snipped’ from local body politics, yet.

    Tue, 14 Feb 2017
    ODT: Councils, Aurora poles apart on ‘removing risk’ definition
    Central Otago Mayor Tim Cadogan has retreated from an angry letter in which he said his faith in Aurora Energy has been “severely damaged”. Mr Cadogan sent the letter to Aurora and Delta chief executive Grady Cameron yesterday morning after Aurora acknowledged it might not replace the number of compromised poles it promised.

    “This news, and the means by which it was delivered has, I am sorry to say, severely damaged what faith I have held with you and your company,” he said in the letter.

    However, by yesterday evening he retreated from the statements in the letter following “a frank exchange of views” with Aurora and Delta chairman Steve Thompson. Cont/

    Mayor Cull sounds like our Ms Stokes at ODT yesterday.
    DCC Coms is on a roll with ‘policy of platitudes’.

    Cull: “Clearly, when you have got a situation where you need a whole lot of poles and a whole lot of expertise all at one time and when things haven’t been run as well as they could have been … you are going to have challenges.”

    Stokes: “When that happened, there was a divvy-up between Logic and the council. “During that transfer, things could have gone a bit better, but they’ve all been addressed.””

  2. nick

    Once again, CD shines the spotlight most eloquently on the pantomine’s stage that is City Hall. Thanks CD.

    As well as the approaching and distinct possibility of a capable, external and independent commissioner being needed to sort the nonsense that has become the norm, there must also be some serious consideration given to Aurora / Delta’s suitability to be entrusted with operating anything more than a suburban milk delivery run.

    Aurora / Delta has effectively misappropriated hundreds of millions of dollars for more than two decades, and served us up a network that is now hugely compromised in terms of reliability and public/worker safety.

    Since the Stadium / Grady Cameron era began, this misappropriation of Lines Charges has reached unprecedented levels of recklessness, both in terms of appalling governance, grossly mismanaged land deals, poorly overseen property contracting work, exorbitant executive management salary packages, and of course the deliberate and calculated dereliction of duty to adequately maintain the network’s assets. All obscured of course by the appointment of more executive positions, such as the recently departed ‘Capability and Risk’ Manager as one of A/D’s highest paid executives whose job was essentially just what?? At least he appears to have had the sense to realise that his number was up, and leave before being pushed.

    A case could fairly be built around contributory negligence against those entrusted to manage the Lines Network, and the massive costs to now be borne by ratepayers to remedy all those years of wilful neglect. There are grounds for such an action, with the testaments of current and ex Delta staff, along with material exposed in the Deloitte Report, and the earlier state-of-the-network report [2010] commissioned by Grady Cameron himself. Just what that would ultimately achieve is a moot point.

    One gets the impression from the lack of any effective noises from our Councillors that they are bereft of any ideas on how to tackle the multiple crises that have overtaken the operations of DCHL’s ratepayer-owned assets. The complex task is simply beyond them. One almost suspects that they might welcome a Commissioner with open arms to absolve them all of any further embarrassing inaction, and civic irresponsibilties.

    In the meantime, they have approved a duplication of the inept model of governance / management to create the favoured separation of Aurora from Delta. We will just be getting the status quo x 2, with two boards of directors, two tiers of management, and one brand new Head Office entity for Dunedin, which we all know will help overhaul absolutely nothing in the culture of incompetence that has become the hallmark of A/D – just more internationally competitive salaries being paid out to another tranche of high paid executives.

    Even Robbie Burns would have had some succinct words to say about this sorry state of affairs.

    Perhaps though, his stoney-faced stare says quite enough.

  3. Rob Hamlin

    Yes, I can never understand why people do this word-eating. It seems that Delta/Aurora are now offering a mass reclassification rather than a mass replacement, and one can hardly see how this is going to improve safety and reliability in Cadogan’s manor, other than on paper.

    Cadogan has the mandate and duty to act as the customer, and as such his initial position seems reasonable – although one is surprised that he has any faith to damage. Just because his view differs from Delta/Aurora’s mouthpiece does not mean that he is wrong.

    Certainly I got the idea before Xmas that they were going to replace all these completely rotten poles – didn’t you? Can’t recall mass reclassification and repair of ‘ones’ and zeros’ being mentioned. I mean, wasn’t one or the other of these two practices the cause of the whole rotten pole problem anyway? Richard Healey in his comments seemed to think that the upcoming logistic problems were related to a mass replacement of ‘ones’ and ‘zeros’ – Or perhaps it’s just that we’re all stupid or beset by ‘misinformation’ and ‘alternative facts’?

    One also has to perceive some political risk (at least) to Cadogan in publicly accepting this potentially deceptive fudge on behalf of his citizens as well. Let us look at the words:

    “”It appears that my understanding and Aurora’s understanding of what ‘removing the risk of all known condition 0 and 1 poles’ is different. Aurora does not hold that this includes removal and replacement of the poles.”
    Instead, it also included reassessment and repair of poles.”

    The new words in the situation here appear to be ‘THE RISK OF’ in line one. Can’t recall seeing them before with regard to 0 and 1 poles.

    Their insertion modifies the automatic 0 and 1 pole removal position and thus creates a critical issue as to whether reassessment of said poles is automatically followed by replacement, a (satisfactory) repair, or tangible on-site activity of any type. The wording here leaves room for the third option to be applied – Re-enter the algorithm! It is not quite clear whether that crucial last line is made up of Cadogan’s words or those of the ODT. Also, I am not quite sure how one satisfactorily ‘repairs’ a completely rotten pole. Most reputable lines companies don’t bother of course, but……well……perhaps….we’re not…..

    In fact maybe they really are going to do absolutely nothing about many/most/all of these hanging menaces – as some have claimed. Certainly this apparent blanket qualification of intent might represent a major step in that direction. This would be a very surprising outcome, but of course we have been surprised before. In fact I’ve been surprised so much since the Foobar first appeared on the DCC’s horizon that nuffin’ that this mob did would surprise me now.

    Personally, I think that Cadogan and his councillors might find an immediate commissioning of a third party (preferably Australian or further afield) inspection of a representative sample of (say 1,000) Aurora poles and their associated equipment in his area a very good investment and point of reference. This might be especially so if the algorithm has another outing.

    A truly negative outcome of such an inspection might be used as a basis to declare a state of emergency in Central Otago under the CDEM Act. Section 4 of the CDEM Act defines what situations may be used as a basis for this action. I have capitalised the relevant bits:

    emergency means a situation that—

    (a) is THE RESULT OF ANY HAPPENING WHETHER NATURAL OR OTHERWISE, WITHOUT LIMITATION, any explosion, earthquake, eruption, tsunami, land movement, flood, storm, tornado, cyclone, serious fire, leakage or spillage of any dangerous gas or substance, TECHNOLOGICAL FAILURE, infestation, plague, epidemic, failure of or DISRUPTION TO AN emergency service or a LIFELINE UTILITY, or actual or imminent attack or warlike act; and

    (b) causes OR MAY CAUSE LOSS OF LIFE OR INJURY or illness or distress OR IN ANY WAY ENDANGERS THE SAFETY OF THE PUBLIC OR PROPERTY IN NEW ZEALAND or any part of New Zealand; and

    (c) CANNOT BE DEALT WITH BY EMERGENCY SERVICES OR OTHERWISE REQUIRES A SIGNIFICANT AND COORDINATED RESPONSE under this Act

    Having a completely rotten high and low tension electrical supply network, with no remedy in sight, seems to fit these CDEM requirements quite neatly with regard to any technologically advanced and civilised society …. if one had the balls to press the red button.

    However…….

    “pusillanimous”: adjective; showing a lack of courage or determination; timid.

    A word that’s hard to spell but handy.

  4. Gurglars

    Commissioner?

    See:

    Kathy Grant!

  5. nick

    Just a reminder of the reality which appears to be slightly different to the line that Mayor Cadogan is being asked to accept by Aurora.

    Delta crews have just replaced the first 6 poles on their new priority list of dangerous poles in Central Otago. PLUS a further 12 which were adjacent to the 6 which were also found to be rotten too – these extra 12 were not on the list.

    Make up your own minds as to the risks of both the poles out there, and the extent of the true problem facing Delta’s ability to ‘repair’ rotten poles. And their understanding of the real scale of this problem.

    It’s an extremely costly mess!! They will soon find out.

    Time will tell us the true story.

    • Hype O'Thermia

      Nick, Richard Healey predicted that. He said in normal practice when a pole needs replacing the poles on either side are tested when the new pole is put in and VERY often the poles on either side are “unfit for purpose” and need replacing too.
      RH proven correct again – in real life, not spin, not algorithm!
      What does this do to the budget, workload, materials ordered and available? Do the people still left in the office know about this *unforeseen* (!) complication, or has everyone with a clue resigned?

  6. Anonymous

    It would appear that the time is right to not be a Dunedin ratepayer, possibly for the next 10 years or so.

  7. Calvin Oaten

    Oh dear!! It simply gets worser and worser. It’s way past correct grammer Rob, it’s at the stage of acceptance of the ‘pusillanimous’ actions of Jim Harland way back in time when he and that other ‘dipstick’ Malcolm Farry organised and built the Foobar Stadium for the princely sum of ‘not a penny more than $188million’ which in fact turned out to be more like $227million officially. Without the promised private funding in place nor the fact that since completion it has operated with continuous annual losses. This, to the point where it was decided by the accountants and their woolly directors that Aurora should provide a form of extradition by way of “subvention payments” to the tune of some $8million per annum. Simple arithmetic suggests that over the last six odd years this amounts to some $50-odd million, a sum which would have replaced a few poles, cables etc. But no, we had the Highlanders playing rugby, for gratis, on the hallowed turf of the Foobar Stadium.
    It is the fact that the mayors and councils over these times have slept at the desk and condoned the many cunning and sneaky ways at which the show was kept running at a direct ratepayer cost of over $20-25million per annum not counting the “subvention monies” from Aurora to keep the flag flying.
    If this city goes down the gurglar due to these factors then so be it. But let’s not forget the part that the bunch of directors, bureaucrats, mayors and councillors have all played in this “Mickey Mouse” scenario, but rather see them all brought to account.
    Problem, in this day and age, no-one is ever held accountable for any misdemeanour whatsoever, in fact they usually move on to bigger and better “FUBARS”.

  8. Simon

    Anonymous. Make that 100 years. Meanwhile after 9 years. Arise Sir Dave.

  9. Hype O'Thermia

    Calvin, “over the last six odd years this amounts to some $50-odd million, a sum which would have replaced a few poles, cables etc” is only part of the story. Had prudent maintenance been carried on in a timely manner all these rorty years we would be unlikely to have a Fubar – the empty one or the ongoing what’s going to fall down next and cause fire/death one. At price per component at the time – not wait till there’s an emergency and the smart companies have bought up all available stock – far more could have been done with the money that has been squandered. There would have been no need to bring in outside workers, urgently, who don’t know the territory nor understand how dangerous the system has been allowed to become.
    Plea to atheists reading this – please say one for their safety, it won’t hurt and if the believers turn out to be right it may help. Not much else seems to.

  10. Elizabeth

    At Facebook:

    • nick

      Great cartoon Richard. Very timely.

      Centrepiece amongst all the futile perspiration from those doing all the work is King Cameron, still with his crown, and still thinking he is in full control.

      Sadly, this whole thing is a serious tragedy for all concerned – the 200,000 people who live in the Aurora catchment area.

      Will the King abdicate honourably, or will he just sit it out stubbornly for the huge contract severance dollars?

      Never before in the history of DCHL’s affairs has one man been paid so much by so many . . . for helping to bankrupt the City.
      (Apologies again to Winston Churchill.)

      The Battle of Britain was a fast and furious campaign of innovation, bravery and selflessness to save a nation from an evil invasion.
      The Demise of Dunedin is the silent rotting decay of an energy asset, accompanied by selfish motivations, that will cripple the City.

  11. russandbev

    So, the worst kept secret in town is out and so is Grady. What is difficult to understand is why anyone would want to keep him on in any capacity with Aurora until the end of the year. I can only assume that it is some sort of deal that has been done to prevent some form of employment action.

    It is apparent that while heavy Steve Thompson has delivered the message, it is not at all clear how the Boards of Delta, Aurora and DCHL will be cleaned out and replaced by a group that are focused on running a business and not propping up a dying stadium. That won’t happen while Cull and co need the money from the cash cow that is Aurora.

    Meanwhile at the back of things are the various moves to try and get the other cash cow of Chalmers Properties into the DCC coffers. If that doesn’t happen then the DCC cash deficit will be exposed even more than it is now and rates will hurtle skywards. But a Unitary Plan involving Dunedin, North Otago, Clutha, CODC and QLDC will not happen for a mile of reasons.

    Solution? Hard to see, but wouldn’t it be good to see some of those responsible for the mess to be held accountable?

  12. Rob Hamlin

    We become distracted by the stadium subvention payments. We know that Aurora have done very little maintenance for a long time. We also know that a good deal of what little was done was funded by borrowing. It does not produce electricity, it simply distributes it down this network, upon which very little has been spent. As it is a captive monopoly, there are few marketing marketing costs

    And yet we find this statement in the latest Aurora annual report:

    “Revenue increased by $0.6 million to $100.0 million [this year]”

    As the Foobar only consumed 8% of this – then where has the rest of this hundred million gone? Very similar questions can be asked of Aurora for preceding years and other activity centres within the DCC empire.

  13. Calvin Oaten

    Rob, you are right. But how can one dismiss the 8% as being trivial? It is obviously part of what might have been declared profit. The fact that Mayor and council demanded this money for the Foobar Stadium, and got it, tells me that the directors, management and the bureaucracy have all colluded on this, as well as turning a blind eye towards Delta’s doings in the property development field. The fact that this has cost directly over $13million and indirectly, probably double that again is a travesty of bungling and corruption of a first class style. The fact of the matter is that all the toing and froing that’s been going on is no more than a front in an endeavour to disguise the fact that Dunedin is technically bankrupt. The eventual fall guys will, as always, be the ratepayers. Watch then the mantle of “one of the best small cities in the world” begin to show its guilding is nothing but cheap and nasty paint. Watch also the ‘shonky’ people running the business running for the boats.

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