Tag Archives: Consolidated accounting

Total ratepayer impact: 6-month stadium operation estimated at $10.2m

Comment received.

JimmyJones
Submitted on 2012/05/19 at 9:59 am

…keeping the DVL 6-month loss out of the media was a PR success for the McKerracher Group. The size of the loss ($5.2 million) is very significant and so it is inconceivable that Dave Cull and Paul Orders were unaware of it. The idea of pretending that the stadium is completely represented by DVML is DCC policy. The plan was that DVML’s finances could be manipulated to break-even and all the losses would end up in DVL. DVL was to be swept under the carpet and not talked about.

This deception is the likely purpose of having both DVL and DVML. The real financial horror story is seen by simply adding the results of DVML and DVL and the DCC.

The size of the DCC costs is undisclosed, but my guess is maybe $3 million. So we have for the total ratepayer impact for the 6 months of operation $2.0m (DVML loss – not $1.9m) + $5.2m (DVL loss) + $3m (DCC costs) = $10.2 million.

It is a reasonable assumption that the full-year ratepayer impact will be double the 6-month result, i.e. $20 million (remember the $3m is a guess). I expect this to continue for the lifetime of the stadium. It is easy to hide this from the councillors, but the awareness and collaboration of Dave and Paul is shown by them promoting the “only $1.9m loss” spin.

Read the full comment here.

Posted by Elizabeth Kerr

39 Comments

Filed under Business, DCC, DCHL, DVL, DVML, Economics, Events, Media, People, Politics, Project management, Property, Site, Sport, Stadiums

DCHL chief executive replies to critics

In his letter to the editor, Bevan Dodds explains that DCHL was established to allow Dunedin City Council-owned companies to operate commercially at arm’s length from the council while returning a dividend which the council can then use to offset rates. Although in conclusion he asks, “Why would you not smile at payments of $19.8m that help keep your rates down?”, this doesn’t begin to address – and doesn’t have to – the signalled rate increases ahead. Ahhh, the convenience of that arm’s length between truth or dare.

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[here abridged]

### ODT Tue, 20 Oct 2009 (page 8)
Letters to the editor
Inconvenient truth: DCHL did well
By Bevan Dodds
Chief Executive, Dunedin City Holdings Ltd

Several “Letters to the Editor” have claimed ‘spin’ or challenged the expenditure of ratepayers’ money on celebrating, via a half page advertisement in your newspaper, the 2008-09 financial results posted by the Dunedin City Holdings Ltd Group of companies.
The payments made by DCHL to the council of $19.8 million comprised $9.5 million dividends and $10.3 million of interest, reflecting the investment in DCHL made up of both loans and shares. The breakdown is carefully set out in the annual report.
After tax profit figures calculated under NZ accounting standards for a group such as DCHL will never match cash or “what is left over in the bank”. Note 34 to the DCHL accounts lists 20 reconciling items between the accounting profit and the cash generated by the group from its business activities.
The total of the profits of the subsidiaries plus the profit of the parent company will only in very rare situations match the consolidated profit of an accounting group. There is no magic here, or mysterious losses because if there was Audit New Zealand and indeed the ODT’s own business reporters would make this very clear, just the pure principles of consolidated accounting.
{continues}

The full letter is available in print and digital editions of the Otago Daily Times.

Posted by Elizabeth Kerr

12 Comments

Filed under Business, DCC, DCHL, DCTL, Economics, Hot air, Media, Name, People, Politics, Project management, What stadium