### dunedintv.co.nz May 5, 2015 – 12:27pm
DCC’s financial position better than expected
The Dunedin City Council is finishing the financial year on a high, with an operating surplus of almost $8m. Its finance committee has just analysed the latest accounts, which show the council’s in a better position than expected. It’s received more money through its invested Waipori Fund, and saved on asset maintenance. The council’s got less debt to pay than what was initially budgeted for, and has deferred some work. But it’s received less than expected from the New Zealand Transport Agency for roading projects, and it’s lost some money on the sale of a Dukes Road property. The financial year ends in June.
Ch39 Link
As tabled at the DCC Finance Committee meeting on 4 May 2015:
█ Report – FC – 04/05/2015 (PDF, 1.2 MB)
Financial Result – Nine Months to 31 March 2015
█ Report – FC – 04/05/2015 (PDF, 1.2 MB)
Financial Result – Eight Months to 28 February 2015
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WHERE DID DCC’S $20M “CASH ON HAND” DEMATERIALISE TO ?????
From: Elizabeth Kerr
Sent: Tuesday, 23 September 2014 11:13 p.m.
To: Sandy Graham [DCC Group Manager Corporate Services]
Subject: LGOIMA request
Dear Sandy
Re: Cull warns debt still hurdle for council (ODT 15.9.14)
http://www.odt.co.nz/news/dunedin/315949/cull-warns-debt-still-hurdle-council
Within the news item it says:
“The forecast had included about $22 million in “cash on hand”, but, since Mr McKenzie’s arrival, the decision had been made to slash the amount to about $2 million, he said.
“The cash was instead used to pay for capital projects, avoiding the expected need to borrow for the work, which reduced the council’s need to borrow by $20 million, he said.”
6.5.15 This paragraph goes unexplained in Ms Graham’s reply below;
a further clarification has been sought on WHICH CAPITAL PROJECTS
I would like the DCC to precisely itemise the way(s) in which the city council has spent this $20 million of “cash on hand”, to include the capital projects by name or other reference; the name(s) of the relevant council department(s) and or committee(s) that incurred this expenditure; the dates of expenditure; the spending delegations attributable to which, by name, formal signatories on account; and any other information in legible form that would assist the city council to meet my request in a forthright, full and transparent manner.
I look forward to reply.
Thanks, kind regards
Elizabeth Kerr
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* My LGOIMA request was made on 23 September 2014.
** Dunedin City Council was legally required to reply within 20 working days.
*** Dunedin City Council finally replied on 29 April 2015.
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From: Sandy Graham
Sent: Wednesday, 29 April 2015 1:36 p.m.
To: Elizabeth Kerr
Subject: RE: LGOIMA request [DCC expenditure of $20M cash on hand]
Dear EJK
I do appear to have sent this on Friday. I’m resending. Can you confirm receipt?
Regards
Sandy
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From: Sandy Graham
Sent: Friday, 24 April 2015 1:40 p.m.
To: Elizabeth Kerr
Cc: Carolyn Allan; Grant McKenzie
Subject: RE: LGOIMA request [DCC expenditure of $20M cash on hand]
Dear Elizabeth
We have considered your questions and now provide the following response which we hope finally answers your enquiry. Apologies for the delay in providing this clarification.
First I want to background a couple of things to give context to both the question and our response. In our budget (the Annual Plan), the Council ensures that there is enough money to meet its financial obligations. This means that the Council has budgeted money in order to pay for a liability if and when it falls due over the course of the financial year.
While the budget provides for the necessary money to meet the various financial obligations that fall due over the course of the financial year, it is not financial best practice to have large sums of money sitting in the bank at the same time as the Council has debt. This is because the cost of borrowing is generally at a higher rate than the return on money invested in the bank.
With that background I want to deal with the specific situation referenced in the ODT on 15 September 2014 which forms the basis of your enquiry. For clarification, the article in the ODT on 15 September 2014 referred to a decision to “slash” the amount of cash on hand from $22 million to $2 million. To clarify, the $22 million was a budgeted amount of cash based on the Annual Plan for 2014/15. It was never physically in the bank – it was simply a budgeted figure.
The reference to “slash the amount” to about $2 million simply means that the Council (which had intended to borrow this money following the completion of certain capital expenditure projects) did not borrow it. It wasn’t spent on anything – the debt wasn’t raised. If it did borrow the money, then the Council would’ve had the money sitting in the bank. As outlined above, the current practice is to have a minimal amount of money in the bank but access to money if and when required.
The Council is currently consulting on a draft Financial Strategy which formalises this approach and incorporates it into the budget from 1 July 2015 onwards. I have attached a copy of the draft Financial Strategy for your information.
Regards
Sandy
█ Attachment: Finance-Strategy
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From: Elizabeth Kerr
Sent: Friday, 24 April 2015 1:56 a.m.
To: Sandy Graham
Cc: Carolyn Allan
Subject: Re: LGOIMA request [DCC expenditure of $20M cash on hand]
Dear Sandy
Please can you have the information requested since 23 September 2014 to me within 5 working days. Appreciated.
Regards, Elizabeth
Sent from Windows Mail
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From: Elizabeth Kerr
Sent: Thursday, 9 April 2015 11:49 a.m.
To: Sandy Graham
Cc: Carolyn Allan; Elizabeth Kerr
Subject: Re:RE: LGOIMA request [DCC expenditure of $20M cash on hand]
Dear Sandy and Carolyn
The draft LTP has recently been signed off by the Council and is now available for public consultation.
Further to your last email, Sandy, if you can, please provide timeline for delivery of the information promised to me regarding DCC’s use of the $20M cash on hand, as referred to in the Otago Daily Times on 15 September 2014 (refer correspondence below).
I look forward to your update and following, prompt receipt of the information kindly requested last year.
Best regards, Elizabeth
█ The rest of the oh so tiresome email trail can be found at this thread:
3.11.14 DCC: What happened to $20 million cash on hand? #LGOIMA
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Posted by Elizabeth Kerr
What if? Dunedin... 