Profligate behaviour : MYTH paraded as fact…… just like Aurora Energy’s propaganda campaign

Council infrastructure and networks committee chairwoman Cr Kate Wilson said last night the project would go ahead “regardless”. There was funding for three years, she said, and the fourth year’s funding would be part of next year’s long-term plan, and the one after that. The project was needed for safety reasons to prevent vehicles driving into the harbour and climate change making the road undriveable. (ODT) *Emphasis by whatifdunedin

Yeah right.

### ODT Online Fri, 26 May 2017
Botched cycleway estimate short by $13m
By David Loughrey
A bungled Dunedin City Council cost estimate to complete safety improvements and a cycle/walkway on Otago Peninsula has left the project more than $13 million short. The council announced yesterday an estimate for the project on Portobello Rd and Harington Point Rd that includes a cycle/walkway from Taiaroa Head to the city had risen from $20 million to $49 million. The earlier estimate, drawn up  in 2011, did not include parts of the cycleway to be built, land that had to be bought and a contingency fund to cover unforeseen expenses. […] Despite the cost rise, the council will start construction this year, with a shared cycle/walkway design.
Read more

****

Powerlines at sunset [garp.com]

Meanwhile WE will be paying for our Otago power network TWICE, at a crippling cost to business and residential power consumers well into the future —thanks to Dunedin City Council’s unsatisfactory governance of the companies Aurora Energy / Delta Utility Services and Dunedin City Holdings and, above all, the Council’s unfettered use of public funds to realise the dream of the Tartan Mafia and Professional Rugby to build the now frequently empty and under-utilised Forsyth Barr Stadium. (three concerts by Ed Sheeran in highly doubtful acoustic conditions inside ‘the roof’ does not a Christmas make).

All this because the Council conveniently fails to ensure it covers the infrastructural basics (in this instance: the safe, secure and continuous supply of electricity) – affordably – for the static if bearly stable City of Dunedin, and the sparcely populated Otago region in the mode of fast pumping growth. (There are simply too few permanent ratepayers to uphold ‘big bloated dreams’ and money siphoning on the rates take).

The Council did not ensure that Aurora Energy / Delta Utility Services were sufficiently well structured to Avoid profligate spending, making subvention payments to the stadium companies, or borrowing to pay dividends to the Council. (Probably the least of it).

There have been YEARS of dangerous neglect, embellishing the lack of repair and upgrade to the Community of Otago’s electricity network.

The Council is not well enough controlled (corporate and financial oversight) in order to Avoid its own profligate spending —so to protect, support and upgrade Otago’s power network as the solid basis for regional economic development and SAFE living —with CERTAINTY and SECURITY OF SUPPLY.

Instead, The People will now be plunged into further debt by the circus wheel of local body politicians and the morally thin and rather malevolent boards of directors (masters of spin) controlling the companies.

It’s time the People of Dunedin and Otago took control of their power infrastructure. Resolving, if they will, to adopt a different ownership and delivery model – one option is to form a democratically elected Community Power Trust to own and oversee the network; this is a sound regional model that is proven to work in other jurisdictions, with all due care.

WE have to Safeguard our future.
Not leave decision-making to unvetted members of the Tartan Mafia.
Especially not those in thrall to the likes of Gordon Stewart and his ilk (a vague reference to Delta’s speculative dealings at Yaldhurst, Christchurch – Delta is presently in a discovery process via an action brought to the Christchurch High Court by Caveators claiming Constructive Fraud).

DO NOT sell the ‘fragments remaining’ of the Otago Power Network (as bleated by some in power who can’t/won’t maintain a local body balance sheet – like you trust them, already?!) – to overseas corporates who will hike power prices disastrously to satisfy their shareholders.

Proceed carefully, OTAGO.

ASK QUESTIONS. RESEARCH. DO YOUR SUMS.
DON’T BE TOLD WHAT TO DO. ACT RESPONSIBLY FOR THE FUTURE PROSPERITY OF YOUR KITH AND KIN.
DO NOT PLACE FAITH IN OLD SPIN MAESTERS AND THEIR DEPUTIES.

We’ve seen them all before and have the new $1+ BILLION ‘invoice’ from Aurora Energy to prove it. Yes, we thought we had already paid over that amount in electricity and lines dues.

The suited ones bringing the clamour are looking after themselves – not US, not OUR COMMUNITY.

This is now a ransom.

The UGLY sister companies remain joined at the hip : Delta is Aurora Energy’s “preferred contractor”. And Steve is new, so don’t blame him! ….Really?

****

[propaganda – Aurora Energy]

After facing unrelenting pressure to up its game, Aurora Energy says it has stepped up to the challenge.

Sat, 27 May 2017
Dawn of a new Aurora era
By Vaughan Elder
Aurora chairman Steve Thompson said it had been under the “spotlight and the heat lamp” since accusations broke last October that it was endangering the public and workers by leaving its network, and in particular power poles, to deteriorate. That pressure turned ugly at times and workers had been verbally abused, including while out doing their supermarket shopping. Mr Thompson blamed the abuse on what he described as unfair criticism and media coverage. But Mr Thompson said in the face of adversity, Aurora and its sister company Delta had achieved a “hell of a lot” in a short space of time. The two companies were well on their way to splitting up in a divorce which Mr Thompson said would cost money in the short-term but reap huge benefits in the long-term. Aurora was also mid-way through an ambitious accelerated pole replacement programme and this week announced a $720million plan to upgrade its ageing network.
….Mr Thompson said its actions should help renew the public’s faith in both companies, but emphasised he believed that faith had been unfairly shaken by what he described as over-the-top criticism in the past seven months. He said safety concerns about the 2910 red-tagged poles across Dunedin, Central Otago and Queenstown Lakes had been overblown. At the same time, Delta and Aurora’s efforts to confront the problem, both before and after the story broke in October, had been under-reported, he said.
….Despite his anger at the way Aurora had been treated by critics and in the Otago Daily Times, he was under no illusion the network was in top shape, saying it was the second oldest network in New Zealand and acknowledged major work was needed to improve it in the next 10 years. But he would not be drawn on whether the situation had come about as a result of decades of underinvestment, which has been one of the main criticisms levelled at Aurora since October. He said he was not in a position to comment given he only started midway through last year.
Read more

CRITICAL ABHORRENCE FOR TOP CHAPS IN THE AURORA / DELTA / DCHL ‘EXECUTIVE’ (PAST AND PRESENT) WILL CONTINUE UNABATED IN THE PUBLIC SPHERE UNTIL THEY AND THEIR FRIENDS ARE OUSTED AND MADE ANSWERABLE TO HIGHER AUTHORITIES.

Otago people must busy themselves.
Time for formal inquiries. Time to REMODEL.

—

Related Post and Coments:
24.5.17 SCANDAL : Aurora Energy Ltd set to burden Otago ratepayers and residents with massive rates increases

█ For more, enter the terms *aurora*, delta*, *epic fraud*, *poles*, *healey* or *dchl* in the search box at right.

—

Posted by Elizabeth Kerr

This post is offered in the public interest.

NZ Economy —if you’re not Treasury

Either an interest rate hike or rising unemployment, together with falling migration, would spell “the end of the party”….
Due to the Reserve Bank putting restrictions on lending and other measures, the underlying economy was in good shape to withstand “a shock”. –Dominick Stephens, Westpac Chief Economist

### radionz.co.nz Fri, 10 June 2016
Nine to Noon with Kathryn Ryan
The risks of rising household debt
9:08 AM. NZ household debt has reached half a trillion dollars. That’s $100,000 of housing and personal debt for every man, woman and child. Nine to Noon speaks to Westpac Chief Economist, Dominick Stephens and Massey University’s Dr Jeff Stangl about the risks that poses to the economy. Link
Audio | Download: Ogg MP3 (30′19″)

****

### radionz.co.nz Sat, 11 Jun 2016 at 12:15 pm
RNZ News
Tough times coming as debt soars, warns economist
Record high household debt levels are not sustainable, warns a leading bank economist. At half a trillion dollars, housing and personal debt has hit 162 percent of the average household’s annual disposable income – higher than levels before the global financial crisis.
Westpac Chief Economist Dominick Stephens told Nine to Noon the decline in dairy prices was hurting the regions, but the downturn following the end of the Canterbury rebuild would be more severe than most people were prepared for. The rebuild played a huge role in the “rock star economy” between 2012 and 2014, with the international reinsurance industry dropping $20 billion on New Zealand and the government pumping in another $10b. As that money dried up, some business owners could find their businesses were not as robust as they thought, Mr Stephens said. What was less certain was when the “borrow and spend” dynamic – fed by skyrocketing houseprices – would come to an end.
Read more

Harry’s View 19 Jan 2016 [scmp.com]

—

Posted by Elizabeth Kerr

DCC: What happened to $20 million cash on hand? #LGOIMA

1. Council had $22 million cash on hand.
2. Council spent $20 million (cash) on “capital projects”.
3. Council won’t account for the $20 million.
4. Council seeks open cheque to make discovery.

█ Report – FIN – 08/09/2014 (PDF, 2.3 MB)
Interim Financial Result – 12 Months to 30 June 2014

—

On 8 September 2014, the Council’s interim financial result for 12 months to 30 June 2014 was tabled at a meeting of the Finance Committee. A week later, ODT (15.9.14) reported Mayor Cull as saying there was a “significant improvement” to the Council’s core debt position.

In the same item, “Council group chief financial officer Grant McKenzie said the turnaround was partly due to a significant change in the amount of cash held by the council. 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.” ODT Link

What if? flagged the ‘cash-no-longer-on-hand’ illumination with a post:
● 15.9.14 Cull’s council spent the cash

Capital projects?
How was the money spent, and who by?
Then, we completely lost sight of it.
As the following correspondence shows, Council spent $20 million of ratepayer funds but refuses to declare where the cash went. Mr McKenzie plays the convenient game of obfuscation —like so many before him, and alongside him now at DCC.

█ Apparently, I’m to be personally charged for demanding relevant paperwork to track down the Public Money.

Accountability? Transparency? What the HELL is that?
NOT something DCC values, that’s a dead cert.

[begins]

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.”

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

__________________________

From: Sandy Graham [DCC]
Sent: ‎Wednesday‎, ‎24‎ ‎September‎ ‎2014 ‎9‎:‎01‎ ‎a.m.
To: Elizabeth Kerr
Cc: Grace Ockwell [DCC]

Thanks Elizabeth

I have forwarded to staff to consider and a response will be provided as soon as possible but in any event within twenty working days. It may be that I need to come back to you with questions of clarification or refinement depending on how this information is stored/held but I will be in touch as required.

Warm regards
Sandy

__________________________

From: Elizabeth Kerr
Sent: Friday, 31 October 2014 1:42 p.m.
To: Sandy Graham [DCC]
Cc: Grace Ockwell [DCC]
Subject: Re: LGOIMA request [DCC expenditure of $20M cash on hand]

Dear Sandy

The official information request I made on 23 September 2014 (see emails [above]) is yet to have a response, we are now well outside the twenty working day limit.

Please provide update on how soon the information will be released.

Many thanks, and kind regards

Elizabeth

__________________________

From: Sandy Graham [DCC]
Sent: ‎Friday‎, ‎31‎ ‎October‎ ‎2014 ‎2‎:‎03‎ ‎p.m.
To: Elizabeth Kerr
Cc: Grace Ockwell [DCC]

Sorry Elizabeth.

My fault. I had been supplied with a response and had not forwarded it.

The Group Chief Financial Officer advises:

“This request cannot be completed for what they are requesting as I do not know what capital and operating activity we would assign to the $20 million. In addition the work involved in getting the invoices etc would be significant. What has happened is that we have used our cash on hand to fund council activity (operating and capital) instead of borrowing to do this.”

If you would like me to pursue the possibility of tracking down invoices, I would need to consider charging for this work because there would be significant collation and research required, and even then, we may not be able to fully answer your question. Let me know if you would like me to investigate this further.

The GCFO has indicated he is happy to meet and talk through the issues but is unable to provide any further information at this stage.

Again, apologies for my tardiness.

Sandy

__________________________

From: Elizabeth Kerr [mailto:ejkerr@ihug.co.nz]
Sent: Friday, 31 October 2014 2:05 p.m.
To: Sandy Graham [DCC]
Cc: Grace Ockwell [DCC]; Grant McKenzie [DCC GCFO]
Subject: Re: LGOIMA request [DCC expenditure of $20M cash on hand]

Dear Sandy

Thanks for getting back to me promptly today. I acknowledge receipt.

I’m considering your response fully and as a consequence looking into all my options.

Kind regards, Elizabeth

[ends]

—

Serendipitously, the same day (31.10.14), I heard from Cr Lee Vandervis —unbeknownst to me, a couple of days earlier he had voiced a similar query about the [MISSING PRESUMED DROWNED] $20 million “cash on hand”, and more, following his study of the Council’s Annual Report 2013-14.

█ Report – Council – 30/10/14 (PDF, 2.5 MB)
Approval and Adoption of Annual Report

[begins]

—— Forwarded Message
From: Lee Vandervis
Date: Tue, 28 Oct 2014 22:38:15 +1300
To: Sue Bidrose [DCC], Sandy Graham [DCC]
Conversation: Annual Report
Subject: Annual Report

Hi Sue,

The beginning of the Annual Report seems very reassuring with your highlighting our billion dollars worth of saleable assets, and our debt levels in pretty good shape and improving.

Looking further into the body of the report there is a lot of tabulation of various kinds of assets, but I seem not to be able to find the same depth of discussion on debt or the historical debt graph that I fought for years to finally get included. [A Consolidated term liabilities figure of $622,843,000 does appear on p199. I had been led to expect a historical graph of DCC debt and of total consolidated debt]
Is it possible to also have a graph of all inclusive historical staff costs included? There was one a while ago but it seems to have been dropped again.

At the end of the document I find a number of graphs that feature a fetching orange colour bar that seems to indicate that our “thriving and diverse economy” under Affordability has exceeded our LTP quantified limit on rates income in 2013 and 2014, exceeded the quantified limit on rates increase this year, slipped below the balanced budget benchmark, and also slipped below the essential services benchmark for this year.
It is no surprise to me that Citipark has not achieved targets, but I am surprised that your opening comments are so upbeat when the closing benchmarks are not met and the quantified limits seem to be exceeded.
These benchmark and limit graphs may have been misinterpreted by me because despite reading them several times I remain unsure of their real import.
Is it possible for someone to explain to me how the ‘pretty good shape and improving’ overview is supported, especially in light of the $20 million cut [from $22 million] in cash on hand and various sales that we have apparently recently instituted, combined with further expected constraints on DCHL subvention payments?

Looking forward,
Lee
__________________________

—— Forwarded Message
From: Lee Vandervis
Date: Fri, 31 Oct 2014 15:34:29 +1300
To: Debbie Porteous [ODT], Nicholas GS Smith [ODT]
Conversation: Annual Report
Subject: FW: Annual Report

Hi Debbie,
The Tuesday 28th email [above], which still remains unanswered, may help explain some of what deeply concerns me regarding yet another DCC Annual Report presented as up-beat.

Kind regards,
Cr. Vandervis
—— End of Forwarded Message
—— End of Forwarded Message

[ends]

If there was a plot to hide the way $20 million slid from sight, it thickens.
Not done yet, because I’m not a turkey dinner.

—

Posted by Elizabeth Kerr

interest.co.nz on today’s Dunedin City bond issue

Simply…

### interest.co.nz October 8, 2014 – 04:00pm
Post by David Chaston
A review of things you need to know before you go home on Wednesday; record beef prices, new Wtgn quake faultline, fewer home loan approvals, Dunedin borrows $70 mln, swap rates fall
Link

Crap!

—

Tweets:

What if Dunedin (@whatifdunedin) tweeted at 10:09 PM on Wed, Oct 08, 2014:
@sue_bidrose news today Dunedin City is doing more borrowing – to be precise, it has issued $70 million of bonds at 4.88% #laughorcry :(

Sue Bidrose (@sue_bidrose) tweeted at 10:14 PM on Wed, Oct 08, 2014:
@whatifdunedin yep – money comes off term borrowings and gets refixed. Not new borrowings – our debt continues to decline (very slowly)

What if Dunedin (@whatifdunedin) tweeted at 10:18 PM on Wed, Oct 08, 2014:
@sue_bidrose unfortunately, it’s gone out on interest.co.nz website as MORE borrowing so Dunedin City has a little PR problem

Sue Bidrose (@sue_bidrose) tweeted at 10:21 PM on Wed, Oct 08, 2014:
@whatifdunedin Thanks. Bugger.

—

Updated post 13.10.14 at 10:55 a.m.

Total debt of the council group of companies was $621 million on June 30.
Move saves city $1 million a year in interest on seven-year loan.

### ODT Online on Mon, 13 Oct 2014
City debt overhaul to save millions
By David Loughrey
Dunedin is set to save $7 million after better economic times meant the city council was able to renegotiate a $75 million loan. Council company Dunedin City Treasury has renegotiated the loan through ANZ and Westpac.
Read more

—

Posted by Elizabeth Kerr

DCC considers sale of “149 properties”

Tomorrow’s ODT carries carefully arranged details…

Kevin Taylor, City Property “good, bad and ugly” manager

—

Updated post 19.9.14 at 11:29 a.m.

### ODT Online Fri, 19 Sep 2014
$10m property sell-off possible
By David Loughrey
Houses, empty sections and parkland are among 149 parcels of property across Dunedin being considered for sale, as the city council looks to add $10 million to its coffers. The council released its “work in progress” list after a Local Government Official Information and Meetings Act request from the Otago Daily Times. […] Council infrastructure and networks general manager Tony Avery yesterday said the list was a starting point.
Read more

—

News conferred last week:
█ Cr Lee Vandervis now sits on the DCC Audit and Risk Subcommittee. [ Minutes ]

—

Related Posts and Comments:
15.9.14 Cull’s council spent the cash
11.9.14 DCTL: New treasury manager
1.9.14 DCC Fraud: Further official information in reply to Cr Vandervis
30.8.14 DCC Fraud: Cr Vandervis states urgent need for facts and the record…
27.8.14 DCC whitewash on serious fraud, steals democracy from citizens
26.8.14 DCC: Forensics for kids
23.8.14 DCC public finance forum 12.8.14 (ten slides)
22.8.14 DCC: Deloitte report referred to the police #Citifleet
7.8.14 DCC issues shoddy treatment to Caledonian Bowling Club
● 30.7.14 Dunedin City Council | Consolidated council debt
● 28.4.14 DCC loses City Property manager in restructuring
24.1.14 Stadium: It came to pass… [stadium review]
14.10.13 DCC: New chief financial officer
21.3.13 DCC: Opportunity created by Stephens’ departure
6.3.13 Carisbrook: Cr Vandervis elaborates
20.11.12 Dunedin City Council vs Anzide Properties decision…
9.6.12 City Property to compete more obviously in the market…

—

Posted by Elizabeth Kerr

*Image: odt.co.nz (tweaked by whatifdunedin) – Kevin Taylor blackened, a bit

Cull’s council spent the cash

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. –Grant McKenzie

The council had also agreed to another $20 million in carry-forwards for debt-funded project budgets, which shifted allocated funding for delayed projects from one year’s budget to the next. –Grant McKenzie

### ODT Online Mon, 15 Sep 2014
Cull warns debt still hurdle for council
By Chris Morris
The Dunedin City Council cannot afford to get “complacent” despite a significant improvement to its core debt position, Mayor Dave Cull says. Council figures released last week showed its core debt – excluding companies – had dropped by nearly $5.5 million, from $227 million to $221.5 million, in the last financial year. […] the drop was the first time the council’s core debt had decreased since 2002-03, except for when stadium-related debt was transferred from the council to Dunedin Venues Ltd in 2010-11.
Read more

—

DCC Sep 14, 2014

Dunedin City Council – Finance Committee – September 8 2014
Coverage of the Dunedin City Council Finance Committee held on Monday, 8 September 2014. Minutes, agendas and reports related to this meeting can be found at http://goo.gl/UumsOI

—

Report – FIN – 08/09/2014 (PDF, 2.3 MB)
Interim Financial Result – 12 Months to 30 June 2014

Report – FIN – 08/09/2014 (PDF, 668.6 KB)
Financial Result – 1 Month to 31 July 2014

Report – FIN – 08/09/2014 (PDF, 391.2 KB)
Waipori Fund Quarterly Report to June 2014

—

Related Posts and Comments:
11.9.14 DCTL: New treasury manager
● 9.9.14 Mangawhai, Kaipara: Latest news + Winston Peter’s speech [relevance]
1.9.14 DCC Fraud: Further official information in reply to Cr Vandervis
30.8.14 DCC Fraud: Cr Vandervis states urgent need for facts and the record…
26.8.14 DCC: Forensics for kids
23.8.14 DCC public finance forum 12.8.14 (ten slides)
28.4.14 DCC loses City Property manager in restructuring
30.1.14 DCC broke → More PPPs to line private pockets and stuff ratepayers
● 29.1.14 Mangawhai, Kaipara —we hear ya! [relevance]
17.12.13 DCC, Dunedin City Treasury and 3 big banks [Interest Rate Swaps]
10.12.13 DCC putting up cover, walls paper thin [risk exposure VERY HIGH]
14.10.13 DCC: New chief financial officer
4.7.13 Carisbrook: DCC losses

—

Posted by Elizabeth Kerr

DCC, Dunedin City Treasury and 3 big banks [Interest Rate Swaps]

WHICH THREE BANKS, DCC ??????

Comments received.

Rob Hamlin
Submitted on 2013/12/17 at 3:02 pm

As some of you may recall I have been very interested in DCTL and its large gains and losses on interest rate swaps. The following article http://nz.finance.yahoo.com/news/comcom-issue-proceedings-against-asb-194400510.html describes today’s announcement by the Commerce Commission to investigate ANZ, ASB and Westpac for mis-selling interest rate swaps to farmers – causing massive losses to these borrowers.

My interest has been further piqued by the arrangement between DCTL and three ‘independent’ banks called a ‘secured multi-option note facility’ within which these swaps are sold to DCTL by said ‘independent’ banks. The ‘secured’ as I have mentioned previously involves an ‘on call’ capital commitment by DCC to DCTL that has been deliberately put in place to circumvent Section 62 of the Local Government Act, which specifically prohibits council guarantees to trading companies. At $850 million of capital (which the DCC does not have), this amounts to some $17,000 for every ratepayer in this city – and you are liable for it.

As I have mentioned before, the very large annual fluctuations in gains and losses reported by the DCC due to interest and currency derivative exposure indicates that the DCC, via its $850 million guarantee to DCTL, is very deep indeed into this particular festering pile of poo.

I have lodged an LGOIMA request with the DCC for the identity of the three banks who are in the ‘secured variable rate note facility’ swap fest with DCTL. However, my unofficial sources indicate that the membership may be between 67% and 100% in common with the three banks mentioned in the ‘Stuff” report on large-scale interest rate swap mis-selling – Time will tell. But might be an idea to find the hammer and your piggy bank.

****

Russell Garbutt
Submitted on 2013/12/17 at 4:13 pm

Rob, I simply cannot understand the role of the OAG in all of this. The OAG provides auditing services to the Dunedin City Council and is supposedly the watchdog that ensures things are all tickety-boo in City Hall. But as we have already seen in the Kaipara case that the OAG now says that it is terrible that all of this borrowing took place, but that THEY ARE NOT ACCOUNTABLE. Surely to goodness that they have seen the actions of the CFO of the DCC to subvent the point and purpose of Section 62 of the LGA. Equally puzzling is how they have not been warning of the ramifications of these infernal legalised Ponzi schemes as they have been described elsewhere.

I distinctly remember the sacked Athol Stephens explaining to me in his office that many of the financial dealings of the DCC were to avoid tax liabilities. Athol was both a Director of a Council Board and an employee of the Council as I recall at the time.

There is enough smell round this issue to warrant a lot of interest by the OAG and the mainstream media, but sadly it is just too plain in the case of the OAG that they really aren’t interested in pursuing anything that would show that they themselves have been slack and incompetent, nor are they interested in pursuing anything that involves them in any serious work.

In the case of the media, it’s all just too hard. TV simply isn’t capable and is more interested in turning news into entertainment, and the financial reporters in the papers can’t seem to get their heads round anything substantial.

A case of the fox inside the henhouse and another one on the outside, looking out for the farmer.

—

Posted by Elizabeth Kerr

DCC meeting, Monday 7 October Annual reports

Meeting of the Dunedin City Council
Monday 7 October 2013 at 1.00 PM
Council Chamber, Municipal Chambers

Agenda – Council – 07/10/2013 (PDF, 73.5 KB)

Report – Council – 07/10/2013 (PDF, 42.4 KB)
Annual Reports of Dunedin City Holdings Ltd and Group Companies. The individual reports can be found at: www.dunedin.govt.nz/dchl

Report – Council – 07/10/2013 (PDF, 41.7 KB)
Annual Reports from Dunedin Venues Management Ltd and Dunedin Venues Ltd 2013. The individual reports can be found at: www.dunedin.govt.nz/dvml and www.dunedin.govt.nz/dvl

Report – Council – 07/10/2013 (PDF, 70.8 KB)
Delegations during the Election Period

Report – Council – 07/10/2013 (PDF, 112.6 KB)
Otago Rural Fire District Proposal

Report – Council – 07/10/2013 (PDF, 2.2 MB)
Approval and Adoption of Annual Report

—

### ODT Online Sat, 5 Oct 2013
Staff numbers down, wage bill unchanged
By Debbie Porteous
The Dunedin City Council now has 41 staff earning more than $100,000, but spending on key management personnel is less than it was two years ago, chief executive Paul Orders says.
The council’s annual report for the year to June 30 showed that while the total number of council employees had declined, the council’s total annual wage and salary bill remained about the same. The report was published yesterday and will be considered at a full council meeting on Monday.
Mr Orders said overall the report revealed a series of positive trends. While staff numbers were reducing, service levels were being maintained.
Read more

● The DCC annual report shows a small operating surplus of about $8 million.
● It confirms the council’s consolidated debt – spread across the Forsyth Barr Stadium, the council and its companies – rose to $623 million, up from $616 million at the end of the 2011-12 financial year.
● The report notes 2012-13 was the last year of capital expenditure on a number of large debt-funded capital projects and upgrades.
● Core council debt is expected to continue to rise from $225 million at June 30 to peak at $272 million in 2015-16, before beginning a gradual decline.

Related Post and Comments:
26.9.13 DCC: Council consolidated debt $623 million

—

Posted by Elizabeth Kerr

DCC Annual Plan 2013/14

DCC IS PULLING THE WOOL OVER YOUR EYES, DUNEDIN

### ODT Online Tue, 25 Jun 2013
Rates rise of 4% adopted; staff efforts praised
By Chris Morris
There were words of praise, but also of caution, as the Dunedin City Council yesterday locked in a 4% rates rise for the coming financial year. Councillors at yesterday’s full council meeting voted to adopt the 2013-14 annual plan, and the 4% rates rise, after months of discussion, debate and public consultation. The changes would come into force on July 1, but prompted little further debate yesterday, as councillors instead praised chief executive Paul Orders and his staff for their efforts.

Confirmation of the budget meant a $400,000-a-year events attraction fund for Dunedin Venues Management Ltd, the company running Forsyth Barr Stadium, and other budget proposals were confirmed.

Finance, strategy and development committee chairman Cr Syd Brown said the increase included headroom within the budget. That had allowed debt repayments to be accelerated, saving the council millions in interest payments, while keeping the rates increase within the goal of no more than 4%. Without the debt repayments, the increase would have been closer to 2%, Cr Brown said. ”I think that’s a sterling effort by the chief executive and his staff and I think the city’s been well served,” he said.
Read more

—

What is Cr Syd Brown really saying?

Is he saying the stadium debt, the council’s consolidated debt, the council’s lack of insurance for infrastructure, the seedy DCHL’s lack of traction, and DVL/DVML running significant losses requiring ‘unheard of’ ratepayer funds, is Okay and everything’s well in hand?

Or is he snide, skipping out of council before the engulfing mudslide hits, the one he’s made with help from the Good Old Boys.

Nothing like an old fox, or an old fool.
Syd Brown’s personal fortunes have been tidily aided by his position on council for the implementation of Taieri plan changes, council spending on ‘localised’ drainage, roading systems, and more. Then there are the persistent rumours about connections to pokie trusts and big brothers in racing and rugby. It’s not a clean slate.

Can you believe anything Syd Brown has to say about your council’s financial position? DCHL will soon report to councillors on the results of a review of its subsidiary companies. This will be interesting. Cr Richard Thomson opines that from the figures it appears the only way DCHL can meet its dividend payment forecasts will be by borrowing or selling assets, either of which would cause ”considerable concern”.

—

Report – Council – 24/06/2013 (PDF, 4.7 MB)
Dunedin City Council, 2013/14 Annual Plan for Adoption on 24 June 2013

Report – Council – 24/06/2013 (PDF, 72.5 KB)
Adoption of the Annual Plan 2013/14

Report – Council – 24/06/2013 (PDF, 703.3 KB)
Setting of Rates for 2013/14 Financial Year

Report – Council – 24/06/2013 (PDF, 26.6 KB)
Statements of Intent of DCHL Group Companies

Report – Council – 24/06/2013 (PDF, 306.1 KB)
Statement of Intent – Dunedin City Holdings Ltd

Report – Council – 24/06/2013 (PDF, 284.2 KB)
Statement of Intent – Aurora Energy Limited

Report – Council – 24/06/2013 (PDF, 251.0 KB)
Statement of Intent – Delta Utility Services Ltd

Report – Council – 24/06/2013 (PDF, 375.1 KB)
Statement of Intent – City Forests Ltd

Report – Council – 24/06/2013 (PDF, 351.4 KB)
Statement of Intent – Dunedin City Treasury Ltd

Report – Council – 24/06/2013 (PDF, 440.3 KB)
Statement of Intent – Taieri Gorge Railway Ltd

Report – Council – 24/06/2013 (PDF, 241.9 KB)
Statement of Intent – Dunedin International Airport Ltd

Report – Council – 24/06/2013 (PDF, 218.0 KB)
Statement of Intent – Dunedin Venues Limited

Report – Council – 24/06/2013 (PDF, 235.4 KB)
Statement of Intent – Dunedin Venues Management Ltd

Report – Council – 24/06/2013 (PDF, 728.7 KB)
Statement of Intent – Tourism Dunedin

Other reports tabled at yesterday’s meeting of the Dunedin City Council.

Related Post and Comments:
22.1.13 DCC Draft Annual Plan 2013/14 – ‘Liability Cull’ and council chasten for election year

—

Posted by Elizabeth Kerr

DCC Draft Annual Plan 2013/14 for consultation #RIOTmaterial

Email received from Lee Vandervis this evening.

My overview regarding the Annual Plan that has gone out for consultation today is that little has changed.

Rates rises continue to be disguised, first by getting DCHL to borrow up to $23 million on our account, continuing to take more than policy allows from the Waipori Fund [proposed relaxing Waipori rules to justify], continued significant underspending on drains, and now buying $3 million in paid-up share capital of DVML – yet another multi-million dollar gift to bail out overspent Stadium operations.

The official result – the long heralded 4% rates rise.

I believe the real rates rise to be somewhere between 25% and 30%, as the DCC continues to amass all kinds of liabilities and debt that will have to be paid for in the future. CEO Paul Orders has made real gains finding significant DCC staff efficiencies, but most are simply going to bail out Stadium operational inefficiencies.

Stadium annual drains on the ratepayer now include:
● $1,666,000 rates subsidy via a ‘Stadium Differential’ [LTP 2013/14 – 2021/22 p8]
● $750,000 annual ‘Stadium Community Access’ fund
● $725,000 ‘Stadium Capital Repayment’ fund for each of the next 4 years
● Annual $400,000 ‘Stadium Event Attraction’ fund.

The Dunedin City Council is now going to buy the events that the Stadium was supposed to attract by itself. These further Stadium subsidies will only prolong the currently unaffordable wasteful Stadium operations, and entrench the directorships, fat contracts, and rugby cronyism that plague current Stadium costs.

If anyone can think of any other type of ‘fund’ that might possibly go to the Stadium please don’t tell the DCC or we will shortly be paying that annually too.

From an email I sent to senior staff and the Mayor last Monday:
“I have been uncomfortable with the timing and presentation advantages enjoyed by DVML in being perfectly positioned to come into our workshop and present and pluck us for millions yet again, but I accept that their issues needed to be addressed.”

Many Annual Plan issues have not been addressed but they have been bought into.

The predetermined Plan has just happened again.

—

Posted by Elizabeth Kerr

Editorial spin, disagrees?!

The Editor’s reply (ODT 23.1.13):
Russell Garbutt: Thanks for your comments but we don’t agree with them.

[Email]

From: Russell and Bev Garbutt
Sent: Tuesday, 22 January 2013 10:46 a.m.
To: ‘editor@odt.co.nz’
Subject: Letter for publication

[Contact details deleted. -Eds]

The Editor
Otago Daily Times
Dunedin

Dear Sir

Your editorial on the urgent need for an austerity budget for Dunedin is too little too late.

For years now at Council Plan consultation meetings also attended by your reporters, the financial stupidity of the Council’s decisions have been graphically pointed out by a long line of submitters. The practice of Council owned companies being forced to borrow to pay dividends which you now describe as being “worse than poor” was emphasised by a large number of submitters, but largely ignored by the ODT for many years.

While ultimately all of the spending decisions made by the Council are those of the Councillors – many clearly out of their depth – the weight of public opinion assisted by informed and investigative stories by the City’s only daily paper, has no small part to play in what has happened in this town over recent years. It is hard to see why the ODT has failed to meet its obligations or role in this regard. Many believe that it is because the ODT is a strong supporter of the stadium which has caused a major part of this debt, and of its proponents and major user.

While the ODT has adopted a position of supporting the new rugby stadium, even now that the full costs of the stadium are more or less known, your position is that you appear to be supporting the establishment of a significant fund to subsidise the use of the stadium – despite your reluctant acknowledgement that while the fund will cost the ratepayers dearly, there is no believable data that shows any tangible benefit.

I look forward to the ODT being part of the process in holding those that have made the decisions that have put Dunedin into these astronomical levels of debt responsible and accountable – but I’m not holding my breath.

Russell Garbutt

Read Russell’s comments in reply here.

—

Related Post and Comments:
22.1.13 ‘Liability Cull’ and council chasten for election year

—

Posted by Elizabeth Kerr

DCC Draft Annual Plan 2013/14 – ‘Liability Cull’ and council chasten for election year

“Levels of debt are still high … you cannot say we are in a comfortable position – far from it.” -Orders

### ODT Online Tue, 22 Jan 2013
Tight years ahead for Dunedin
By Chris Morris
A decade of discipline is needed to protect the Dunedin City Council’s fragile finances until debt repayments ease the fiscal squeeze, council chief executive Paul Orders says. The warning came as Mr Orders confirmed the council was set to remain beyond a self-imposed debt ratio limit for at least the next three-year council term. The council’s 2013-14 pre-draft budget – to be considered by councillors later this week – showed the council would begin repaying more debt than it was borrowing for the first time in 10 years.

Mr Orders said the council would still have “little or no” headroom for new spending until 2022.

However, the size of the council’s debt meant it would still be operating beyond its self-imposed limit, which sought to restrict interest as a percentage of total revenue to no more than 8%, until 2016-17, Mr Orders confirmed.
Read more

****

### ODT Online Tue, 22 Jan 2013
Mayor’s rates warning
By Chris Morris
Dunedin city councillors will have to choose between a 2.8% rates rise and extra spending on key priorities – including debt repayment – that will drive up the bill for ratepayers. The choice was presented in the 2013-14 pre-draft annual plan, to be considered by councillors in public for the first time this week. [Chief executive] Paul Orders said the cost-cutting had been achieved in part by reduced staff costs, including not filling all vacancies, absorbing inflation and strictly controlling the council’s capital spending programme.

Overall operational costs had increased by just $500,000 as costs were cut in other areas, while capital spending had been cut in half, from $105 million in 2012-13 to less than $50 million in each of the next three years, Mr Orders said.

Key reports were yet to be made public, including one discussing the financial future of DVML, the stadium and the need for a new events fund. Others would consider options for the Waipori Fund, car park operations in Dunedin and the city’s aquatic facilities, as well as the future of the council’s investment property portfolio.
Read more

****

[On council companies…] The practice of businesses having to borrow to pay dividends is worse than poor.

### ODT Online Tue, 22 Jan 2013
Editorial: Dunedin’s austerity budget
The local government annual plan season is beginning, with councils facing austerity budgets. Some, as in Dunedin or Queenstown Lakes, have gorged on debt, and must face the slow process of digesting it. Others will be aware that communities have had enough of rates increases continually topping annual inflation. The Dunedin City Council, easily Otago’s largest council, has feasted on new projects and on high general costs, and its consolidated debt is peaking beyond the extraordinary figure of $600 million. Although it includes council company debts, it is still an astronomical figure. As projects small and large – like the Toitu Otago Settlers Museum, the Town Hall, the water and sewerage system upgrade and the stadium – came up for discussion, the annual interest costs were often the financial focus.

[ODT blondness…] To make the stadium a success and to compete with other centres, the council might have to seriously consider an events fund. This will again cost ratepayers, but could benefit the city overall.

The long-term accumulation of debt and cumulative interest totals could be sidelined behind an unrealistic optimism, leaving a legacy of commitments to years of whopping rates increases. Fortunately, the folly of this course has been recognised, and vigorous efforts are being made to turn to a sustainable direction.
Read more

—

Related Post:
16.1.13 DCC Draft Annual Plan 2013/14 – Aaron Hawkins on the money

—

Posted by Elizabeth Kerr

DScene: Dunedin needs “decisive leadership”

Register to read DScene online at
http://fairfaxmedia.newspaperdirect.com/

### DScene 28 Nov 2012
Editorial
DCC needs to shape up (page 7)
By Mike Houlahan
Land transactions under investigation, illegal road building, a debt mountain, monumental building projects, possible credit downgrades. No, not some obscure Balkan country or African military dictatorship, but our home town. There is a vociferous body of opinion that Dunedin is going to hell in a hand cart and events of recent weeks have done nothing to persuade them otherwise.

Delta’s land transactions coming under Audit Office investigation, and a damning court verdict – which has seen Dunedin City Council cop a six-figure court costs order over the State Highway 88 realignment – follow an auditor’s report trying to establish the final cost of building the Forsyth Barr Stadium, and a controversial bailout of the Otago Rugby Union.

A “we will fight them on the beaches” opinion piece from Mayor Dave Cull last week sounded desperate. The announcement soon after from Standard and Poor’s Ratings Services that it had revised its outlook of Dunedin City Council from stable to negative made it look desperate, too. A negative outlook means a one-in-three chance of a credit downgrade in the next two years – unwelcome news for a city well in hock before it borrowed millions more to build the stadium.

The agency does offer a ray of hope – if the DCC’s budgets strengthen, as forecast, its rating could revert to stable. But having just stated doubts the DCC could achieve the financial targets in its long-term plan, Standard and Poor’s are going to take a lot of convincing all is well.

In response, Cull – sounding like a rugby captain before a test – said Dunedin “was up to the challenge of continued financial belt-tightening.” Sadly, in this comparison Dunedin is probably Scotland rather than the All Blacks. Quiet reassurance is no longer enough. If ratepayers are to have faith in the DCC as chamberlains of their assets, they will want to see decisive leadership.
#bookmark

—

Posted by Elizabeth Kerr

D Scene broke the news

Register to read D Scene online at
http://fairfaxmedia.newspaperdirect.com/

### D Scene 3-8-11
Lights, camera… (page 1)
The spotlight has been turned on the Forsyth Barr Stadium. The new venue is under scrutiny not just because it is being officially opened on Friday, but because a major row has erupted over servicing Dunedin City Council’s debts – including money intended to fund the stadium project.
See pages 3, 5 and 21. #bookmark

****

Grand stadium opens (page 3)
By Wilma McCorkindale
Dunedin is invited to the opening of Forsyth Barr Stadium on Friday. At an early morning ceremony, the facility will receive a formal Maori blessing and Prime Minister John Key will do the official opening honours. Media and dignitaries are expected to attend the hour-long 7am event, which will unveil the facility, the only multi-purpose arena in the world with a fixed roof and a natural grass turf.
{continues} #bookmark

What the stadium means to me now – Bev Butler (page 3)
For me, the physical reality of the stadium is a constant reminder of a divided community…It has never added up, financially, as a prudent project for the council to spend money on. The consultants’ reports told us so. Even David Davies, Dunedin Venues Management manager, has admitted that the stadium’s “bread and butter” will be “conferences and meetings”.
{continues} #bookmark

What the stadium means to me now – Malcolm Farry (page 3)
While controversy may continue to cause debate over the coming year or two, there is no doubt that history will show this achievement to be a milestone in the development of Dunedin and the region…The benefits in economic impact, quality and vibrancy of life will be seen to be a major step forward.
{continues} #bookmark

****

Solutions would be tabled along with the two reviews at the next full council meeting set for Wednesday, August 10.

Council living beyond means (page 5)
By Mike Houlahan ad Wilma McCorkindale
Dunedin City Council (DCC) is in damage control this week in the wake of revelations last Friday it was facing a financial crisis. In an early evening press release, mayor Dave Cull announced an $8 million funding annual revenue shortfall, revealed in two internal reviews tabled at the previous day’s Finance, Strategy and Development Committee meeting. The reviews, one by the council’s Council-owned Companies (CCO) liaison group, the other by consultant Warren Larsen, found Dunedin City Holdings Ltd (DHCL) would not be able to continue paying $5 million annual dividends anticipated by council.
{continues} #bookmark

****

Personality debate ignores real issues (page 20)
By Wilma McCorkindale
Dunedin Mayor Dave Cull is defending his 11th hour announcement last Friday night that the city is in financial trouble…Cull is adamant council has been trying to pin down Dunedin City Holdings Ltd (DCHL) on what dividends it could sustain, in the wake of concerns during the past year on its ability to pay out…Cull said he was among those who voiced concerns about hiking demands on council company dividends, as far back as 2008.
{continues} #bookmark

Sources close to council say the Larsen report is scathing of DCHL.

Cr refuting claims of board neglect (page 20)
Dunedin City Holdings Ltd (DCHL) Chairman, Cr Paul Hudson, is refutung claims his board neglected to clarify its ability to meet dividends expected by Dunedin City Council (DCC). Hudson said the facts had been misrepresented in a press release announcing a city financial crisis on Friday, after Thursday’s Finance, Strategy and Development Committee meeting tabled the findings of two reviews…Councillors voted it was not appropriate for him to remain in the meeting, given his DCHL role…Hudson said he spent the weekend digging out documents to back up the DCHL stance on the matter.
{continues} #bookmark

—

Posted by Elizabeth Kerr

Bond bank for local councils

## stuff.co.nz Last updated 05:00 10/10/2010
Councils prepare to flex borrowing muscle
By Rob Stock – Sunday Star Times
A bond bank to give local councils access to cheaper borrowing and offering local authority debt for ordinary mum-and-dad investors could be in place as early as August next year. The bond bank, which had its genesis in a brainwave by prime minister John Key when he was in opposition, is being backed by all major councils with the exception of Dunedin City, which came under fire last week from an election candidate over its borrowing process.
The bond bank would enable local authorities to combine their borrowing power. It would manage a portfolio of council debt, and issue liquid securities with high credit ratings secured against it. The securities would be marketed not just here, but overseas where yields are low, driving council borrowing costs down.
Read more

—

Posted by Elizabeth Kerr