Really, we haven’t heard much lately from the DCHL chairman about the dwindling source of funds to the city council…. counting down to June 30 perhaps, with lawn mowing to look forward to in Spring. But what of an associate commissioner’s five-year term at the Commerce Commission.
A few things are not being said in ‘above Board’ fashion.
Around a billion dollars to retrieve Aurora, is it worth it and how?
beg, borrow and ‘TAX’ ratepayers method ?? When Otago power consumers have already paid their line charges to cover network upgrades and renewals that never happened. Look at this winding garden path, so much leafy cover and fat plums for the picking, but —WHERE did the money go and WHICH ENTITIES AND WHICH INDIVIDUALS are responsible for wrongful application of lines monies to other unrelated activities.
Thankfully, in this situation, a raft of New Zealand legislation (laws) and statutory regulation applies.
DCC’s budget resilience, helped by accelerated debt repayments and reduced debt-servicing costs, meant the council had “some room to move”….“we are already in a constrained situation and we’ve got some buffer in the system”.
Friday, 2 June 2017
DCHL dividends to council in doubt
By Chris Morris
The Dunedin City Council expects dividends from its companies to “flatline” as Aurora grapples with the $720million cost of rebuilding its electricity network. But Dunedin Mayor Dave Cull says improvements in the health of the rest of the council’s books means it is up for the financial challenge. His comments came after council chief executive Dr Sue Bidrose, speaking at this week’s council meeting, said the council faced fresh uncertainty over future dividends. […] The money helped ease the pressure for rates rises […] The change reflected the need to get DCHL’s books in order — after years of borrowing to pay dividends — and reinvest in Aurora’s network […] speaking this week, Dr Bidrose said the projected dividends were at risk because of Aurora’s investment plan. “We will be reviewing that, in light of the high level of asset maintenance required by Aurora. It seems it would be a fair assumption it will be at least longer before that dividend payment recommences,” Dr Bidrose said.
█ For more, enter the terms *aurora*, *delta*, *crombie*, *thompson*, *grady*, *luggate*, *jacks point*, *dchl*, *auditor-general*, *noble* or *yaldhurst* in the search box at right.
Posted by Elizabeth Kerr
This post is offered in the public interest.
16 responses to “#Aurora —“What was that?!” Huh? What?! [a council mutters, suddenly]”
The buck stops where??
Ultimately, the responsibility for this mess lies with the management and directors of the failed Aurora Energy company.
Failed, because although new Chairman Thompson likes to talk it up as an ‘exciting time of asset renewal’, the reality is that the company is broke.
Responsibility of directors? A little reminder . . .
Directors’ key responsibilities. Some relevant statutory excerpts.
“The Companies Act 1993 imposes a number of obligations on companies and their directors. Directors are responsible for managing the company’s day-to-day business. In doing so, directors owe duties to the company, to its shareholders, and to others dealing with the company.”
No mention in this particular statute of obligations for Aurora to subsidise the Otago Rugby Football Union, or indeed to even subsidise Dunedin ratepayers. The Polson era of directors knew what was going on with Aurora’s misappropriated millions. And the Parton era also knew all about Stadium subvention payments to help prop up that edifice from day 1.
“Directors must not carry on the business in a manner likely to create a substantial risk of serious loss to the company’s creditors (“reckless trading”).” Hello Jacks Point and Luggate and director Coburn’s baleout courtesy of Delta during the GFC property meltdown phase. Hello Yaldhurst and the extraordinary ceding of mortgage security after tens of millions of ‘Delta’ monies were recklessly first thrown at it.
As for the responsibilities of management, after ‘winning’ Deloitte’s Top Energy Exec of the Year in 2014, and being inducted into their Hall of Fame, Grady Cameron probably thought he had reached the pinnacle of his career. Why was he not aware of the need to act promptly over the seriously neglected state of his network, especially as it was so obviously apparent to those under him? Why had his salary more than doubled during this time of gross dereliction of duty?
So many questions with so many obvious answers, and so little lack of accountability from those in well paid positions of responsibility, most of whom have quietly shuffled offstage.
Aurora and Delta should both have Constitutions.
Alongside these, Aurora and Delta directors need to be taken to task for their collective part in this extraordinary mess. They have served the people of Otago in a woeful manner. Their legacy is a disgrace.
Thanks Nick – well put. Will be considering this and that over the long weekend, along with others I’m sure.
Tourism and regional business development needs a safe and secure supply of electricity, however, bailing out DCC/Aurora isn’t likely through Mr Joyce’s ‘infrastructural benevolence’ to local councils. *cough
Fri, 2 Jun 2017
ODT: Councils’ funding proposals
By Dene Mackenzie
Finance Minister Steven Joyce is considering options for cash-strapped local councils wanting to invest in infrastructure in their regions. The Otago Chamber of Commerce chief executive Dougal McGowan this week suggested the Government should consider options for attracting investment into Otago, particularly around infrastructure supporting tourism. Mr McGowan suggested the use of private-public partnerships (PPPs) as a way of attracting cash into the region. Mr Joyce told the Otago Daily Times yesterday he was interested in using PPPs for infrastructure as a way to help councils that were short of money for such investment. Cont/
Talk about chickens coming home to roost.
All so predictable.
My suggestion is to communicate with the Commerce Commission asap. I’m sure that most people can think of a number of areas of concern that are of direct interest to the CC.
I support your call russandbev. As many concerned voices as possible, as concisely as possible.
We need to provide the contact details for the Commerce Commission here. Will post these shortly.
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Arcade Fire – Everything Now (Official Video)
From the upcoming album ‘Everything Now’
Directed by: The Sacred Egg
interest.co.nz on BlackRock Investment Management
http://www.interest.co.nz/kiwisaver/manager-profile/117 via the Manager’s website:
See Friday’s NBR (page 8)
Article: ‘US strategist says real worry is debt, not productivity’ by Nathan Smith.
Blackrock Global chief investment officer fixed income Rick Rieder visits New Zealand…. “It used to be that financial and households had too much debt. But now it’s about government debt.”
Talking about deferred maintenance and snail-like renewals: Note the concisely correct comment at this DCC Facebook page:
[comment reproduced here in case it gets wiped]
Jimmy Jones What about the Dunedin city watermain renewals which have been under-funded for many years and the new Annual Plan that shows that you plan to continue to renew pipes etc at a much slower rate than they deteriorate. This same infrastructure neglect is what you have planned for the sewerage and stormwater systems also. This seems to be the same policy that created the Aurora asset renewals crisis. Your decision to under-fund the South Dunedin stormwater system is why it has a very low level of service and this was the primary reason for the severity of the 2015 flooding. Are you idiots, because you don’t understand that low capital expenditure causes low levels of service, or are you being arseholes, because you intend to cause low levels of service? Haven’t we already seen more burst watermains, more sewerage overflows and an unacceptably high flooding risk from low stormwater performance? Audit NZ has warned you about this for the 2015 LTP, but the renewals backlog continues to grow and you continue to degrade our water infrastructure. What will it take to force you to do your job?
Like 1 · 27 May at 10:24
So how are they going to service the Stadium debt, and prop up DVML, without the money from the council companies?
Easy Mike. Like putting up charges for the tip, parking, resource consents, building inspections. All those hidden charges that you don’t see on the plumber, builders and other subbies bills that have been passed on to you. Of course there are those other council budgets like transportation, stormwater and waterpipe renewal, where the slight of hand moves budget funds around. Go back and look at past annual plans, and you will see money allocated for such projects that have not been carried out. Ever wondered where the money was actually spent. Could be the answer to your question.
Chris, despite the collapsing fortunes at the council, you might’ve seen the boast in reply to Brian Miller in Friday’s letters to the editor:
ODT 2.6.17 (page 6)
A good example of slight of hand and a lot of rambling, but not much about the question of inflated rates and charges having a flow on effect of increasing housing costs.
Chris – but kill off all the disreputable and corrupt property valuers first who fuel the market for their clipping the ticket on property sales, the financing of new developments and adaptive reuse projects, at the same time inflating lease and rent values. A complete racket with little ethics apparent – yet again, the GOBS continue driving the riches for themselves with the usual indecent haste. There used to be just two fair old school valuer practioners at Dunedin. Now I suspect there are none. FTA.
Of course, in recent memory are the valuations rendered for the (Farry) stadium land acquisitions and the re-routing of the harbourside arterial round the blessed stadium; as well as that for the stadium itself by Mr Dunckley. Symptomatic instances of extreme greed to the benefit of the persons formerly named throughout this website. I wonder if the sums earned went to fitting out a new runner boat ex West Coast. Florida comes to mind, rather than St Kilda.