Screening tonight: Paradigm Episode 2! Local Government Corruption in NZ #Sky #YouTube

Updated post
Tue, 15 Sep 2015 at 1:25 a.m.

███ A “MUST” WATCH
Vincent Eastwood Published on Sep 14, 2015
Local Governance & Corruption, Paradigm Episode 2 Vinny Eastwood
Episode 2 of PARADIGM broadcasted on Face TV Sky Channel 083 on September 14th 2015 at 9pm NZT

TOPIC: Local Governance & Corruption
GUESTS: Bruce Rogan from the Mangawhai Residents and Ratepayers Association with activist and Mayoral candidate Penny Bright.
● How privatisation and secretive powerful roundtable groups (comprised mostly of large companies) have led to the rise of unelected, unaccountable officials.
● The utter refusal of EVERY SINGLE AUTHORITY in New Zealand to investigate corruption.
The police, the judiciary, the ombudsman, the minister for local government, the auditor general, political parties, the list goes on, every authority whose job is to investigate, prevent or punish corruption actually supports it!
● Why local citizens have no rights and why local government has no rules.

FACE FACT KIWIS
Believing NZ is corruption free was the very mechanism by which criminals took control of our country. The only reason NZ is #2 on Transparency International’s “perceived” least corrupt countries in the world list, is we’re the 2nd best in the world at concealing our corruption.

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Vincent Eastwood Published on Sep 12, 2015
Paradigm Episode 2 coming soon! Local Government Corruption
PLEASE SHARE THIS!
Help me get as many people as possible to watch the show tomorrow night!
9pm NZT

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Received. [names deleted]
Mon, 14 Sep 2015 at 4:00 p.m.

Re: DOCO ON CORRUPTION, AND MEMBERSHIP RENEWAL.

Tonight (14 September, 9:00pm) on Sky channel 83 there will be an episode of Paradigm which will feature the Kaipara Scam. Paradigm is a program that is the brainchild of a guy called Vinny Eastwood, and it is not an exaggeration to say that Vinny has picked up the ball that John Campbell (or rather Channel 3) dropped. Promo for the programme is at https://www.facebook.com/vincenteastwood/videos/10153220793607879/
Vinny has a deceptively casual and disarming manner that belies a very serious commitment to exposing corruption and fraud (he calls it scumbaggery).
As an MRRA member you will already be aware of the degree of scumbaggery besetting Kaipara, but it is highly unlikely that your friends and relations will grasp the scale of what is happening in New Zealand. Please do yourself a favour and send this email to everyone in your circle, especially your adult children, who are going to be wealth-stripped by the corporates that are taking over. Add your personal plea that they take a few minutes away from Coronation Street and watch something that might actually affect their lives.
Our financial year ends on 31 October. We want everyone to renew their membership please and we want new members from all over the country (world!) as we mount the final campaign to get justice for the country’s ratepayers. Please renew – don’t just leave it to the other guys to carry all the water. What other association can you think of that supplies over forty free informative newsletters per year?!, and has an executive team that is prepared to go to jail to defend your rights! (informative might be stretching it, but beauty is always in the eye of the beholder, going to jail is still a real possibility!).
The annual sub is still only $15.00 per family, or $10.00 single, and we have put no limit on donations, because we do not want to discourage that philanthropic person out there with $100,000 they have no further use for.
The account number is 38 9012 0318164 00 or cheques to MRRA at Box 225 Mangawhai 0540. Make sure please to include your membership number […], and if you are a new member please provide a name and phone number so we can call you and get all the details.

Kind regards,
MRRA Executive Committee.
[Mangawhai Residents and Ratepayers Association]

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█ More at Kaipara Concerns (online news):

LOCAL GOVERNMENT CORRUPTION SCAM 14.09.2015
Tonight, Monday night (14 September 2015), 9pm on Face (access) TV. Sky network channel 83.

NZ’s MASSIVE Local Government Corruption Scam, Paradigm Episode 2

Bruce Rogan (Mangawhai Ratepayers) and Penny Bright interviewed by Vinny Eastwood on council corruption in New Zealand.

See the promo video here. #Facebook

See Bruce Rogan’s rates revolt speech here. #YouTube

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Related Posts and Comments:
28.8.15 Joel Cayford: ‘Mangawhai Ratepayers at Court of Appeal’
2.2.15 LGNZ run by Mad Rooster Yule, end of story
27.11.14 Auditor-general Lyn Provost #Resign
31.10.14 Whaleoil on “dodgy ratbag local body politicians” —just like ours at DCC
9.9.14 Mangawhai, Kaipara: Latest news + Winston Peter’s speech
19.7.14 Whaleoil / Cameron Slater on ratepayers’ lament
12.6.14 Fairfax Media [not ODT] initiative on Local Bodies
29.5.14 Mangawhai Ratepayers and Residents Assn wins at High Court
11.4.14 Councils: Unaccountable, ready to tax? #DCC #ORC
31.3.14 Audit services to (paying) local bodies #FAIL ● AuditNZ ● OAG…
29.1.14 Mangawhai, Kaipara —we hear ya!
3.12.13 LGNZ: OAG report on Kaipara
12.11.13 Northland council amalgamation
29.6.13 Audit NZ and OAG clean bill of health —Suspicious!
21.4.13 Councils “in stchook” —finance & policy analyst Larry.N.Mitchell
19.3.12 Local government reform
21.2.12 Kaipara this time

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Posted by Elizabeth Kerr

Joel Cayford: ‘Mangawhai Ratepayers at Court of Appeal’

Link received. [Hooray!]
Fri, 28 Aug 2015 at 10:50 a.m.

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### joelcayford.blogspot.co.nz Thu, 27 August 2015
Mangawhai Ratepayers at Court of Appeal

Joel Cayford [‘Reflections on Auckland Planning’] updates the Court of Appeal hearing (25-26 August) – Mangawhai Ratepayers and Residents Association v Kaipara District Council – in front of Justice Rhys Harrison, Justice Mark Cooper, and Justice Forrest Miller.

Mangawhai Ratepayers and Residents Association (MRRA) is represented by Matthew Palmer QC and barrister Kitt Littlejohn. David Goddard QC represents the council.

Cayford summarises the “causes of action for this hearing – which followed the judicial review heard by Justice Heath (posts here and here)”:

“that the Kaipara District Council (KDC) does not have the power to rate for unlawful purposes. That KDC acted unlawfully in deciding to enter into and expand the Ecocare Wastewater Scheme, and that it could not then enforce rates on ratepayers.

“that the Validation Act did not retrospectively validate ALL matters stemming from those unlawful decisions. It only validated various historic rating defects. Significant matters – including the additional $30,000,000 loan were not dealt with or validated by the Validation Act.

“that the KDC acted inconsistently with the Bill of Rights Act by initiating Validation Legislation which had an effect of undermining MRRA judicial review proceedings – to which they had a right.”

Of critical interest, Cayford says Matthew Palmer, in his closing, “told the Justices, to the effect: “a consequence of adopting the arguments of my learned friend would mean that any Council in New Zealand can breech Local Government Act provisions with impunity, leave ratepayers with the bill, and mean that Long Term Plans all become window-dressing, ratepayer submissions become meaningless. That cannot have been what Parliament intended.””

█ Read Cayford’s excellent post and reader comments here.

LinkedIn: Joel Cayford

Although the Court of Appeal ruling is some way off, fallout might very well illuminate effects of the Dunedin stadium rort, council debt loading and issues of general competency.

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Related Posts and Comments:
2.2.15 LGNZ run by Mad Rooster Yule, end of story
27.11.14 Auditor-general Lyn Provost #Resign
31.10.14 Whaleoil on “dodgy ratbag local body politicians” —just like ours at DCC
9.9.14 Mangawhai, Kaipara: Latest news + Winston Peter’s speech
19.7.14 Whaleoil / Cameron Slater on ratepayers’ lament
12.6.14 Fairfax Media [not ODT] initiative on Local Bodies
29.5.14 Mangawhai Ratepayers and Residents Assn wins at High Court
11.4.14 Councils: Unaccountable, ready to tax? #DCC #ORC
31.3.14 Audit services to (paying) local bodies #FAIL ● AuditNZ ● OAG…
29.1.14 Mangawhai, Kaipara —we hear ya!
3.12.13 LGNZ: OAG report on Kaipara
12.11.13 Northland council amalgamation
29.6.13 Audit NZ and OAG clean bill of health —Suspicious!
21.4.13 Councils “in stchook” —finance & policy analyst Larry.N.Mitchell
19.3.12 Local government reform
21.2.12 Kaipara this time

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Posted by Elizabeth Kerr

Hundreds of DCC Staff receive fraud detection/prevention training #OMG

RORTS, SORTS, JUNKETS, BACKHANDERS, MAKE-WORK SCHEMES, AGENDA 21-DRIVEN IDEOLOGY, OVERSPENDING, DEBT FUNDING, LIES, CORRUPTION & FRAUD

Total immersion into “fraud-excellence” at DCC ….ain’t gonna clean up with belated classing, Grant.

The means to de/fraud is not a static thing.

And, the downright convenient use of white paint —what of that? About stadium DEBT, about DELTA (Luggate, Jacks Point, Noble Village), about CITIFLEET and CITIPARK, about Carisbrook, about years of UNDECLARED ratepayer subsidy to professional Otago Rugby (ORFU + Highlanders), about the black-tie dinner with Ms Mains benefitting firstly, about DVL/DVML (no good words to say), about the council-owned CST files and the merely indicative Screaming Orgasm cocktails, about Mosgiel-Taieri private wealth garnered with help from DCC planning decisions (with loss of HIGH CLASS SOILS), about the Town Hall redevelopment project, about City Forests, about AURORA, about the Representation Review, about consolidated council debt, about OVERexposure to the IRS market, about the conduct hearing, about the South Dunedin cycle network stuff-up, about the South Dunedin flood and blocked mud tanks, about the number of council staff, about the number of staff managers, about FULL RATEPAYER FUNDING of the proposed Mosgiel pool. The fairytale about lights for professional Cricket. The wreckless dependence on multipliers for PR/propaganda.
The distortions and coverups about everything we’re too lazy to type…..

On it goes.
Issue after sordid issue to take money OFF THE RATEPAYERS.

This without detailing frequent JUNKETS. Or mentioning GIGATOWN.
No wonder the effortless queasy media silence of the executive.

█ See tomorrow’s ODT about the ‘training’, shall we.

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Posted by Elizabeth Kerr

Stadium #TotalFail

### ODT Online Fri, 14 Nov 2014
Opinion: Your say
Learning from stadium-related mistakes
By Rob Hamlin
One of the few good things about making mistakes is that you can learn from them, and avoid making the same kind of mistake again.
It is pretty clear that the FB Stadium has been a mistake on the part of the Councillors that voted for it. It has not come close to delivering the economic or social benefits that were predicted by its backers at the time. The figure arrived at in an earlier response to the above article [ODT Online] of $22 million loss per year, appears to be about right for this facility’s current annual cost to the community once all the cross-subsidies and clever fiscal two steps have been eliminated. On the social front, unlike the Moana Pool and Edgar Centre facilities that it is often compared with, the Stadium lies empty 95%+ of the time. Both these failures might just be forgiven if it was an attractive structure – but the Taj Mahal it ain’t.
Read more

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Another oft-cited council asset…….

Moana Pool | Swimming New Zealand

### ODT Online Sat, 15 Nov 2014
Party to mark long success of sporting and social hub
By Chris Morris
Moana Pool’s golden jubilee is to be marked with a splash, and Mayor Dave Cull is confident the facility has plenty of life still left in it. The 50th anniversary of the pool’s opening on November 14, 1964, was celebrated yesterday with the unveiling of a photographic exhibition of the pool’s early days.
Read more

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The ‘convenient’ shonky comparison lives on…….

### ODT Online Sat, 15 Nov 2014
Moana Pool paid off, despite price
By Chris Morris
Forsyth Barr Stadium is not the first controversial building to capture headlines in Dunedin. Fifty years ago, a decade of debate, disagreement and concerns about the cost preceded the opening of Moana Pool.
Read more

█ For more, enter *stadium*, *dvml*, *review*, *terry davies*, *directors* or *rugby* in the search box at right.

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Posted by Elizabeth Kerr

Stadium: Liability Cull warns ratepayers could pay more to DVML

### ODT Online Wed, 8 Oct 2014
Ratepayers ‘inevitably’ pay losses
By Chris Morris
Dunedin Mayor Dave Cull says the future funding model for Forsyth Barr Stadium will be more transparent to put an end to a “money-go-round” draining the council’s coffers. But it was still too soon to say whether ratepayers would end up carrying more of the cost, before the public release of the review’s findings next month, he said. Mr Cull was commenting after appearing to suggest, in the council’s latest newsletter, that a funding increase could be possible for Dunedin Venues Management Ltd.
Read more

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Mayor’s Desk 03 Oct 2014
The Council has started planning for the 2015 budget. Next year is also a Long Term Plan (LTP) year. The LTP is a 10 year plan that is refreshed every three years. In addition, the Government has imposed new and urgent requirements on councils around certain important policies. The three work streams are interconnected so there is a huge amount to consider and decide on. The extra work wouldn’t be so demanding if the 2015 budget weren’t already challenging.
While the Council has a financial strategy limiting rates increases to 3%, we face reducing dividend streams from our Council companies, probable higher requirements to get the Forsyth Barr Stadium on to a sustainable footing, greater government regulatory requirements and on going Council reviews. These place considerable demands on resources.
We also need to continue to implement our key strategies. For instance, the Economic Development Strategy aimed at job and business creation, the cycleway network addressing safety and transport options, debt reduction and heritage building enhancement. Our strategic framework is the interconnected road map to the future of our city. Without it Dunedin goes backwards. So savings will be made, tough choices taken and development momentum maintained at the same time. The 2015 budget will be a delicate balancing act.
Contact DCC on 03 477 4000. DCC Link

█ FYI Issue 22 October 2014 (PDF, 458.3 KB)

█ Back issues of FYI Dunedin

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Comment by Calvin Oaten
Submitted on 2014/10/05 at 12:39 pm

“FYI DUNEDIN” The latest FYI landed in my letterbox on Friday. Reading from the ‘Mayor’s Desk’ I was taken by Dave’s verbose message. The Council has started planning for the budget. “The work would be demanding if the 2015 budget weren’t already challenging.”

He says: “While the Council has a financial strategy limiting rates increases to 3%, we are facing reducing dividend streams from our Council companies, probable higher requirements to get the Forsyth Barr Stadium on to a sustainable [there’s that word] footing, greater government regulatory requirements and on going Council reviews. These place considerable demands on resources….”

Does he read that stuff? Indeed, did ‘HE’ write it or some muppet in the PR department? A real ‘Churchillian’ rally to the flag entreaty. Nowhere does he address the solution to the main points of the strategies. Are there any real solutions? I don’t know. But I will make some guesses. As I see it, three things are possible.

First, and ideally, there is a massive rush of blood to the head and Dave and all councillors do the right thing and call a halt on all plans, projects and lock the cheque book in the top drawer till future finances allow it to come out again. ‘Fugetaboutit’ it is not in his genome to know anything about prudence.

Second, there will be a massive shift in the rates quotient, on the plea of: ‘jeez’ times have got really tough, and the business cycle has turned against DCHL’s enterprises and the dividend stream is going to be much less than expected. So, it’s shoulders to the wheel and all must do their bit for the good of the city. We must not let it go backwards. Not a hint of reducing the department’s demands and dreams.

Third, a massive change of plan on the debt reduction front. It currently sits north of ($610 million) and we know that the city entered into a ‘multi note facility’ up to but not exceeding ($850 million). So there is around $240 million of freeboard available. Just a silent, unobtrusive drift upwards could be justified, again to tide us over till better times return.

Realistically, there is not one major programme which could not be deferred till the ship is brought back into balance. “Without it Dunedin goes backwards.” News for you Dave, Dunedin is going backwards now! and all your nonsense is accelerating the process.

“STOP!” You already are stuck with the one big “Tar Baby”, in the FB Stadium. If you think you can get that onto a ‘sustainable’ (that word again) footing without pouring vast additional capital into it then you are dreaming. Patronage is the proof in the pudding. It never has reached anything like a feasible level, and is actually in decline at the principal activity, rugby. It is being intravenously dripped to the maximum by around $8 million pa by Aurora now, and we are served notice that this could be in jeopardy due to DCHL’s situation. You have already upped the ratepayers’ input to $2m pa to supposedly shorten the payback period. The rent to DVL is heavily subsidised due to DVML’s inability to generate enough to pay out of revenue. If you look at the DVL reports it is treading water furiously. It has reduced its stadium debt from $146.6 million over four years to $138.586 million, and at the same time brought forward a ($13.656m) deficit. To me that looks like $5.642m backwards. That is notwithstanding capital call ups of the $2 million from the shareholder for the attempt to shorten the loan period. The directors of DVL have comfort in the knowledge that when DVL was established it was capitalised on the basis of 245,000,000 $1 shares, of which to date only 79,688,931 have been called and fully paid up. So you can see that 165,311,069 shares are still available to be called. Dave, you just don’t seem to realise the predicament which the ratepayers (shareholders) are in. That you believe that the FB Stadium can ever crawl out of the financial swamp is tantamount to your understanding of the position.

So, I wonder just how many good folk will be taken in by your ‘glib’ summary as outlined in the FYI bulletin? My guess, not many.

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Posted by Elizabeth Kerr

DCTL: New treasury manager

Dunedin City Council – Media release
DCC Appoints Treasury Manager

This item was published on 10 Sep 2014

Richard Davey has been appointed to the new position of Dunedin City Council Treasury Manager. Mr Davey, who is originally from Dunedin, has had more than 21 years of banking experience in New Zealand and Australia. His experience centres on dealing with corporate treasuries and solving their risk management and funding issues.

As Treasury Manager, Mr Davey will oversee Dunedin City Treasury Ltd – a DCC-owned company provides funding and financial services to other companies in the Dunedin City Holdings Ltd group. Mr Davey will report to Group Chief Financial Officer Grant McKenzie.

Mr McKenzie says, “We are delighted to announce Mr Davey’s appointment. His extensive skills and experience mean he will be a welcome addition to the DCC’s financial team.”

Mr Davey says, “I am very pleased to be part of the DCC’s financial team, especially given the diverse treasury operations and exposures the group has. It’s also pleasing to be able to live in Dunedin and progress my career further with the Council.”

Mr Davey was most recently Director Corporate and Institutional Markets with the National Australia Bank in Melbourne. He has a Bachelor of Commerce and a Postgraduate Diploma in Commerce from the University of Otago.

The new Treasury Manager role was created following the retirement of Dunedin City Treasury Ltd Chief Executive John Knight, who left last month. Mr Davey starts in his new role on Monday, 15 September.

Contact Group Chief Financial Officer on 03 477 4000.
DCC Link

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### dunedintv.co.nz September 11, 2014 – 5:56pm
DCC in a better financial position
The Dunedin City Council is in a better financial position than it had forecast for the financial year just finished. An interim result for the council during the last twelve months was presented to councillors this week. And while there are things to be celebrated, it’s not all good news on the council’s books.
Video

█ Report – FIN – 08/09/2014 (PDF, 2.3 MB)
Interim Financial Result – 12 Months to 31 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:
23.8.14 DCC public finance forum 12.8.14 (ten slides)
14.10.13 DCC: New chief financial officer

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Posted by Elizabeth Kerr

*Image: odt.co.nz (tweaked by whatifdunedin) – Richard Davey

Mangawhai, Kaipara —we hear ya!

Received from our northern friends (html email partially rebuilt here).
Wednesday, 29 January 2014 4:10 p.m.

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Getting the Validation Bill ready for Parliament

● The new Mangawhai Ratepayers and Residents Association (MRRA) website can be viewed here.
● “When Government Goes Bad” – see the MRRA video on YouTube.

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The KAIPARA VALIDATION BILL

KAIPARA’S PROBLEMSParliament “solves” the problems of Kaipara with the Validation Bill

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LATEST NEWS
● OAG report: Summary
● OAG report: Full Report* (click the sections on the left)
*Link to download report (PDF, 2.6 MB; 423 pages) is broken at OAG website.

A MESSAGE FROM THE MRRA
3 February 2014
The day that JUSTICE finally comes to Kaipara
Come to the Court Case in Whangarei 3-7 February
The High Court is located at 105-109 Bank Street Whangarei
The hearing commences at 10 AM.
You have paid for this, so come and watch it play out. Those who came last time were glued to their seats for the whole day. Watching our justice system in action when the matter is one you are involved in is a riveting experience.
[Six days at court] might be needed but we won’t know until Feb 3rd. The hearing should play out as follows: Administrative stuff first, then MRRA puts its case (possibly all of Monday and some of Tuesday), then KDC puts its case Tuesday and all of Wednesday. Then MRRA replies, which will take part of Friday. The judge will then sum up and indicate what he is going to do, and perhaps reserve his decision which he would then hand down in writing some time later.
The Judge has instructed that a second courtroom be made available with closed-circuit TV to accommodate the large number expected to attend this hearing.
In an earlier decision the Judge said that this judicial review raises important legal questions of wide public interest.
It may be one of the most important cases in connection with Local Government that has ever gone to trial in New Zealand. The issues at stake are of fundamental significance to everyone who lives in this country. This is not a tiff over rates. This is a test of what power elected and appointed officials really have to take money from ratepayers and taxpayers and use it in any way they choose. The Government and the Kaipara District Council (KDC) both say that councils must have the power to take any amount of money they want, for any purpose whatsoever, and the ratepayer has no say at all in the process.
If you think that’s OK, then we have not reached you. If you think it is not OK but nothing can be done about it, please be assured that something can be done — and it is in the High Court where that will happen. Eventually, the people will call a halt to the madness.

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COUNCIL INCOMPETENCE 29.01.14
Frank Newman comments here on the Dunedin City Council’s fancy $230 million covered stadium that “will forever be a black hole that eats ratepayer money”.
There will be no easy fix for Dunedin’s ratepayers. Their elected representatives of the day were reckless and ratepayers will be punished for a very long time because they (as a society) elected a reckless bunch of people to make decisions on their behalf.
I do not know of the Dunedin Councillors complied with the law and consulted with ratepayers but Kaipara ratepayers find themselves in a very similar situation.
The debt for EcoCare is completely unmanageable for a small council such as the KDC but the Commissioners and the Banks have so far delayed the inevitable day of judgement by mesmerising ratepayers with promises of only three percent rate increases over the next ten years.
How can that happen, you might ask, when there is such a massive debt to pay? The answer is that it can’t. But to levy high rates now and charge extra capital payments per household right across the district would result in a massive rate strike and civil disobedience and the collapse of the KDC.
To prevent that, the Commissioners and the Banks have made promises of minimal rate rises that cannot be substantiated and are so dishonest that they border on the criminal. They are nothing more than a confidence trick and the reality is that, sooner or later, ratepayers across the district will be billed for the principal of the debt. Generations of Kaipara ratepayers will pay for the EcoCare folly just as generations of Dunedin ratepayers will pay for their Stadium folly.
The only difference is that the MRRA has challenged the validity of the Kaipara debt in the High Court and is asking that Court for a ruling that ratepayers are not responsible for an illegal debt that was secretly entered into by the Councillors.
Never before have ratepayers made such a challenge and no doubt many ratepayers across the country will be awaiting the outcome.
If Councils can operate outside the law with utter impunity, with all the watchdogs sound asleep, and the ratepayers have to pay all the bills, then we have been conned into being the peasants at the bottom of a 21st Century feudal system.
That is not a good place to be but unless we get behind the MRRA and support its action, then that is where we will end up.

[ends]

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LAST WORD from What if? Dunedin…
Will DCC’s stadium review be enough? Answer: NO
We’re staying busy —can’t blog it.

Related Posts and Comments:
3.12.13 LGNZ: OAG report on Kaipara
12.11.13 Northland council amalgamation
29.6.13 Audit NZ and OAG clean bill of health —Suspicious!
21.4.13 Councils “in stchook” —finance & policy analyst Larry.N.Mitchell
19.3.12 Local government reform
21.2.12 Kaipara this time

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Posted by Elizabeth Kerr

DCC Annual Report 2012/2013

The annual report is now available at the DCC website and below.
It is provided by sections in .PDF format.

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Standard & Poor’s
Standard & Poor’s Financial Services LLC, provides independent financial information, analytical services, and credit ratings to the world’s financial markets. For more information go to Standard & Poor’s.

● S&P Full Analysis Dunedin City Council (PDF, 321 KB)

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Annual Report Documents
Annual Report 2012/13 Full version (PDF, 1.2 MB)
Organisational and Financial Management Report, Significant Activities Report and Council NZIFRS Financial Statements

Annual Report 2012/13 Section 1 (PDF, 399.4 KB)
Organisational and Financial Management Report

Annual Report 2012/13 Section 2 (PDF, 448.8 KB)
Significant Activities Report

Annual Report 2012/13 Section 3 (PDF, 361.1 KB)
Council NZIFRS & Financial Statements

Annual Report 2012/13 Appendix (PDF, 172.6 KB)
Community Outcome Monitoring, Supplementary Information

Annual Report 2012/13 Summary (PDF, 531.8 KB)
Dunedin City Council Annual Report Summary

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OPEN MEETING ABOUT DCC FINANCES
When: Wednesday 27 November 5:30pm-7:00pm
Where: Meeting Room One, Municipal Chambers
ALL WELCOME – hosted by DCC Finance Committee

Related Posts:
23.11.13 DCC: Finance Committee [public forum] 27 November
17.11.13 DCC Finance Committee: Public meeting 27 November [INVITE]

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Posted by Elizabeth Kerr

Northland council amalgamation

### radionz.co.nz Tuesday 12 November  -  12:20 pm NZT
(Updated 38 minutes ago)
RNZ News
Single council for Northland proposed
The Local Government Commission has recommended a single unitary council for the whole of Northland.
The commission at Waitangi on Tuesday revealed its draft proposal for reorganising local government in the region. It proposes one council and one mayor for Northland and a second tier of community boards.
A new nine-member council, to be based in Whangarei, would replace Far North District Council, Whangarei District Council, Kaipara District Council and Northland Regional Council.
The commission also proposes a special council committee to represent Northland’s large Maori population.
RNZ Link

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Related Posts and Comments:
29.6.13 Audit NZ and OAG clean bill of health —Suspicious!
21.4.13 Councils “in stchook” —finance & policy analyst Larry.N.Mitchell
19.3.12 Local government reform
21.2.12 Kaipara this time

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Posted by Elizabet Kerr

DVML works media/DCC to spend more ratepayer money

Dunedin Venues Management Ltd (DVML) has been testing the stadium sound system since February, and has discovered it is only working at 20% of what is needed.

Queries about the sound system were only some of a barrage of questions from Dunedin city councillors before they adopted the annual reports of DVML and Dunedin Venues Ltd this week.

### ODT Online Sat, 12 Oct 2013
Stadium PA fix up to $800,000
By Debbie Porteous
Permanently fixing problems with Forsyth Barr Stadium’s public address system would cost between $500,000 and $800,000.
DVML chief executive Darren Burden said the cost did not include permanently fixing sound issues with the wider auditorium, such as those experienced at concerts. They would continue to be addressed by temporary measures installed by promoters.
He said DVML had been working with acoustic engineers and sound system experts, including the company that installed the system. There were problems with the transmission of sound from microphones on the pitch to the sound box that delivered sound to speakers around the stadium.
The solutions, which ranged in price depending on what standard of sound delivery was wanted, involved improving the sound transmission from the field and installing more speakers around the stadium.
The cost of fixing it had to be dealt with internally by DVML.
Read more

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Head in the Sand Award?
Cr Richard Thomson said he appreciated Mr Burden (pictured) might wonder why he bothered when faced with such a barrage of questions from councillors. ”But it is really important for the city that this delivers as much revenue as possible.” (via ODT)

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Comment at ODT Online:

Who is accountable?
Submitted by russandbev on Sat, 12/10/2013 – 9:06am.

Just another example of the difference between reality and hype. Ratepayers have been assured since the building of this rugby stadium that the PA system was state of the art. Indeed, the hype from the Carisbrook Stadium Trust before the build indicated that it was even better than that. Now ratepayers are told that it will cost the best part of a million to get right for the most basic of requirements, and that the costs of running the stadium will rise. Who is being held accountable? Not those responsible for this ongoing shambles, but only the ratepayers.

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Related Posts and Comments:
7.10.13 DCC councillors, no idea of annual cost of owning and operating…
4.10.13 DVML . . . | ‘Make the stadium work’ losses continue
20.8.13 DVML foists invoices on DCC
20.6.13 Stadium: DVML, DVL miserable losers! #grandtheftdebt
30.12.12 To DVML Board, from Ian Tayor [sic]
11.12.12 Stadium: DCC runs amok with $750K annual subsidy to DVML
2.11.12 Stadium financials: Calvin Oaten on DVML, DVL and DCHL
2.11.12 Stadium financials: JimmyJones v Peter Hutchison (DVML)…
19.10.12 LGOIMA request: Breakdown of DVML recruitment costs [emails]
19.10.12 Weak boys, Cull and Burden on rugby stadium
11.10.12 Darren Burden plays LGOIMA game like Davies #DVML #PsychoAnswer

For more, enter the terms *dvml*, *darren burden* or *stadium* in the search box at right.

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Posted by Elizabeth Kerr

DCC councillors, no idea annual cost of owning, operating FB Stadium

Updated 2013/10/08 at 10:47 am.

Platitudes — and much more, including seriously remiss untruths about the ‘value’ of councillor contributions — flew at yesterday’s city council meeting. Dunedin City Council members farewelled five long-serving councillors at their final meeting: Neil Collins, Syd Brown,
Bill Acklin, Fliss Butcher and Colin Weatherall.

Councillors said Cr Brown was a fair-minded and trusted member, a consistently hard worker who made a ”very substantial” contribution, especially on financial issues and as a strong advocate for Mosgiel, in his 15 years on council. ”He is a wise old owl. When he speaks, I listen and know we all do,” Cr Collins said.

Read more at ODT Online.

——————

Comment received.

JimmyJones
Submitted on 2013/10/07 at 6:31 pm

The average DCC councillor still has no idea of the annual cost of owning and operating the FB Stadium. They have been misled by the way the annual reports are arranged and they get confused because there are two stadium companies with similar names, as well as an interest cost to the DCC for the loan to buy the shares to buy the stadium.

Jim Harland, Paul Orders and their staff have been asked many times to disclose the total financial impact of the stadium. Mr Orders eventually promised to do this at an annual plan public meeting, but it hasn’t happened.

The annual reports of the stadium companies (DVL & DVML) to be approved today by our hapless councillors, have enough info to calculate a good estimate of the total cost.

These figures are from the annual reports page 6 (DVL) and page 9 (DVML). Remember that in these reports the term “subvention payment” means “subsidy” and has the effect of disguising the size of the companies’ losses. The city’s renters and ratepayers end up paying for both the disclosed losses and the subsidies so we need to add them together to get the total impact.

Total Stadium Impact:
Item:___Disclosed Loss_____Subsidy_______Total Loss
DVL:______$4.8 million______$7.3 million_______$12.1 million
DVML:_____$1.0 million______$0.6 million_______$1.5 million
Cost of interest on debt for DVL shares:________$5.1 million
Cost of rates subsidy for DVML (approx):_______$2.0 million
Total Ratepayer Impact (approx):_______$20.7 million

The DCC held stadium debt is $78 million and I have chosen the interest rate to be 6.5%. There might be some other costs that I haven’t thought of. The actual interest rates paid by DVL seems unrealistically low to me at 5.87%. Most DCC projects are charged 7.00%, so DVL’s low interest rate could amount to a secret subsidy of $1.6 million.

Anyway, $20.7 million per year is a lot of money and citizens and councillors need to know what is going on. We have heard DCC mayors and councillors promise financial transparency, but it seems that some of them have wanted to keep this figure quiet.

[ends]

—

Posted by Elizabeth Kerr

*Image: odt.co.nz – departing city councillors who brought you the stadium, one way or the other . . .

Audit NZ and OAG clean bill of health —Suspicious!

Received from Martin Legge
Saturday, 29 June 2013 9:53 a.m.

Learn how the Kaipara council was repeatedly given a clean bill of health by Audit NZ despite the massive debt and obvious governance problems.

Compares with how OAG assured me they were closely monitoring the TTCF investigation into how it was that ORFU and Racing were able to fleece $7 million from the South Auckland community. The truth is, DIA lost that file and therefore didn’t investigate and instead deliberately covered the loss up. OAG appear OK with this and issued DIA with a clean bill of health.

Our trust and faith in the work of these well resourced “highly educated desk jockeys” is misplaced!!!

—

### NZ Herald Online Saturday, 29 Jun 2013 8:48 AM
Fresh probe begins into debt-ridden council
By Andrew Laxon
The commissioners of debt-ridden Kaipara District Council have begun a new inquiry into its past financial decisions, including the advice it received from former chief executive Jack McKerchar. The tiny Northland council is struggling under an $80 million debt, a long-running rates strike and court action by its own ratepayers over more than $17 million of illegally set rates dating back to 2006. Its former councillors stepped down last year in response to a damning report, making way for Government-appointed commissioners.

Three inquiries are under way into what went wrong. They consist of

● An Auditor-General’s investigation into how the cost of a sewerage scheme at Mangawhai blew out from $11 million in 1999 to $62 million, creating most of the council’s debt.
● An independent inquiry into how the Audit Office failed to notice the excessive debt and repeatedly gave the council a clean bill of health.
● The commissioners’ investigation into other financial transactions they have discovered since taking over last September and see as questionable.

Northland MP Mike Sabin told Parliament ratepayers had been woefully let down by the council’s “mismanagement, incompetence, carelessness and dysfunctional governance”. Mr Sabin, who is sponsoring a local bill to retrospectively validate the illegal rates, said the bill was necessary to keep the council functioning but it would not allow anyone responsible for poor decisions to duck the consequences.
The separate inquiry into the Audit Office’s actions, undertaken by Auditing and Assurance Standards Board chairman Neil Cherry, was not finished.
Read more

—

Related Posts and Comments:
21.4.13 Councils “in stchook” —finance & policy analyst Larry.N.Mitchell
31.3.13 DIA and OAG stuff up bigtime #pokierorts
21.2.13 DIA, SFO investigation #pokierorts
3.11.12 Stadium: DCC caught in headlights
29.10.12 DCC consolidated debt substantially more than $616m
21.2.12 Kaipara this time

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Posted by Elizabeth Kerr

Stadium: DVML, DVL miserable losers! #grandtheftdebt

### ch9.co.nz June 20, 2013 – 6:18pm
DVML forecasts small profit
The company that runs Forsyth Barr Stadium has forecast a small surplus for the first time in 2015. DVML has been running at a loss, but forecasts that will change to a $10,000 surplus. But the company that owns the stadium, DVL, has forecast its loss will be about $1 million more than expected, at more than $5 million. DCC chief executive Paul Orders said both were just projections, and the DVL loss was due to tax changes. The forecasts will be considered by the council on Monday.
Ch39 Link [no video available]

SURPRISE
Reports for the Council meeting to be held on Monday 24 June 2013 at 1pm not yet available at the DCC website.

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Posted by Elizabeth Kerr

Councils “in schtook” —finance & policy analyst Larry Mitchell

Received Sun, 21 Apr 2013 14:45:37 +1200
Topic ring a bell? We are using DCC and Kaipara as the salutary case studies.

Larry N. Mitchell
Finance & Policy Analyst (Local Government)
PO Box 404 103, Puhoi 0951, Auckland, New Zealand
Phone: 09 422 0598 Mobile: 027 479 2328
Email: larry@kauriglen.co.nz

Read here or scroll to end of post to download this paper.

Councils “in stchook”
… their debt is way too high … it matters … so do proper disclosures

Dealing as I do, with matters of New Zealand Council finances, the one area that produces most comment, sometimes heated debate, is Council debt. Public discussion of Council debt is muddled, an often fractious difference of opinion generating more heat than light.

For example, the most recent (March 2013) Office of the Auditor General’s report of their findings from New Zealand Local Government audits concludes that Councils have their debt levels “within a reasonable range”. Recent New Zealand Local Government Association press releases concur.

Compare these reassuring findings to those of the 2013 NZ LG League Table where the lowest ranked 15% (10 in number) of New Zealand Councils are revealed as exhibiting unfavourable financial sustainability and community affordability issues. Both contradictory positions can’t be right. Unfortunately, the debate over Council debt is complicated by unsatisfactory public reporting-disclosures.

Discussions of Council debt are often compounded by current Council practices. These amount to opaque, imprecise Council debt accounting and “smoke and mirrors” disclosures. It is tempting to suggest that these are deliberate attempts to suppress discussion of Council debt on a “don’t scare the horses” basis.

This is particularly evident for use of the term by Councils of “Internal Borrowing”, a meaningless label, better described as “Robbing Peter”, covering as it does Council treasury management dealings involving a clear misuse (some might say misappropriation) of asset replacement funds.

Add to these sleights of hand a motivation for the more highly indebted Councils to keep their heads down when their debt totals soar, along with a tendency toward misinformation.

Stupid bid for two-way highway ditched for now #DCC

The way Dunedin City Council has conducted itself through the spatial plan exercise, including the (rigorously un-critiqued) central city framework, plans for (curiously gentrifying) amenity improvements in the warehouse district, the (nasty, cheap-looking) South Dunedin mainstreet programme and the proposed (hyper expensive $71+ million) South Dunedin cycling network to name but a few ‘vanity’ schemes, you would think the local authority has money to burn, or some virulent disease of the skull chamber. Probably, both.

The mayor, councillors and council staff might be thick as planks but that’s only the beginning of it. There is no money, no council surplus, for ‘own-legacy’ presents of the Cull years (hopefully, to end in October).

There is, now, a well-exceeded $660 million council debt and not far over 50,000 rate accounts to meet that debt at the same time Council continues spending on ill-conceived luxuries, questionable amenities, fripperies and non-necessities. Imperative infrastructure works that we shall refer to as “core council business”, are languishing for want of budget.

Things, thanks to DCC, are terrifically ‘hit or miss’ in the Dunedin district – rural and metropolitan.

All this “imbalance” occurs on a city council platform that refuses to be transparent and fully accountable to the Dunedin community. Council processes and financial (mis)management are a longstanding impenetrable ‘blind’.

—

Give us strength…
The contentions are not historic heritage and its redemption. Rather, the proponents of the council spend in the warehouse district have subordinated a 40-50 year community (spatial) plan to an accelerated 3-5 year rats nest of conflicted interests chiming in on microcosmic private property speculation – a blip on the radar, despite all manner of talking up by the suits, jean-wearers and council domeheads, and a mayor after another term of office.

Proposed two-way Crawford St, Dunedin

Proposed Warehouse Precinct

### ODT Online Fri, 8 Mar 2013
Council parks two-way roading plan for city
By Debbie Porteous
A key component of Dunedin’s Warehouse Precinct Revitalisation Plan – making Crawford and Cumberland Sts two-way – has been shelved because of its controversial nature and a lack of funding. But city council staff say it is not vital anyway, as momentum behind the reuse of buildings in the city’s historic warehouse precinct continues to grow without the roads being altered.
Road Transport Association lower South Island representative Alan Cooper was pleased to hear the proposal was off the table, even if only temporarily.

”It was a stupid idea anyway. They’d be better putting that money into doing up the buildings.”

The council will reword its plan to instead look at ”options” for reducing the negative impacts of Crawford and Cumberland Sts, which are one-way arterial routes on either side of the warehouse district.
Read more

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Posted by Elizabeth Kerr

DCC debt —Cr Vandervis

Email received.

From: Lee Vandervis
To: Elizabeth Kerr
Sent: Wednesday, December 05, 2012 10:12 PM
Subject: DScene opinion.

I thought my DScene Debt Update was not bad for a 400 word limit, but despite coming within the limit [382 words], the Editor cut the Mayoral criticism out of my opinion, and more importantly my solutions to worsening debt, without noting abridgement! {See comment. -Eds}

—

Dunedin Debt Denial

At last week’s DCC Finance, Strategy and Development meeting where the last quarter’s financial results were presented, Cr MacTavish asked “Are we doing things differently?”

The DCC net debt chart [attached] shows the past ten years of the same massive debt spending, with future projections hoping for small annual reductions.

These future debt reductions are currently vain hopes.

Despite the earnest efforts of our new CEO to reduce ridiculously high DCC operational costs, unplanned extra debt keeps arriving.

DCHL’s planned annual funding profit of $23 million turned out to be a $5 million loss, DVL lost $4 million, DVML lost $3 million, the Milburn Wood Processing Plant suffered a $3 million write-down, the Chinese Garden continues to lose half a million annually, Toitu Settlers losses will dwarf this, another half million at least has been lost due to the Anzac Avenue site access dispute, the expected $5 million ‘saving’ from Town Hall cutbacks has evaporated, the budgeted Carisbrook sale ‘profit’ of $4 million still hasn’t eventuated, and $3 million of unearned dividend has been spent from the Waipori Fund.

Then there are some less obvious reservoirs of mounting debt.

Development Contributions income has stalled for another year, our lines company Aurora has apparently failed to keep up lines maintenance of a rumoured $40 million in recent years, and our unseen drainage system maintenance/renewals backlog may dwarf the Aurora maintenance bill.

In short, we have bought a new Stadium and much else without being able to pay for it.

Standard and Poor’s threaten an interest-increasing downgrade especially if the Jacks Point/Luggate debacle blows up, and the fuse has already been lit.

To answer Cr MacTavish’s question, we are not yet doing things differently.

The direction of this Council remains unsustainable. Soothing talk by our Mayor Cull of ‘no drop in service levels’, ‘no slash and burn staff cuts’, ‘no witch hunt’ of directors, ‘no heads will roll’, means that the same heads will continue to inflate Dunedin’s debt disaster.

We must do things differently and cut service levels, staff numbers, consultant use, habitual tenders, outside directorships and bring our DCC owned companies’ governance back in-house where we can know what they are doing. [cut out by DScene Editor without noting abridgement]

In a rapidly changing world, it is only by doing things differently that Dunedin can reach its wonderful and sustainable potential.

[ends]

DScene 5.12.12 Debt-laden council needs to change tack #bookmark

—

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

Cull COVERS UP COUNCIL #massage

National Radio says Dunedin City Council’s debt has increased to $620 million.

@@@@ Actually, the debt is likely to be much higher than this.

Mayor’s shambolic response to botched SH88 realignment:

Asked if heads would roll over the council’s handling of the saga, Mr Cull replied “No”. “I think things in hindsight could have been handled better … Given the circumstances before the World Cup, there was a lot of pressure to get things done in a hurry. A few things slipped, it’s fair to say. At the time, council did not make the best decisions, but they probably made it in good faith, so that is the way it is.” ODT Link

### ch9.co.nz November 22, 2012 – 7:00pm
Nightly interview: Mayor Dave Cull
Dunedin Mayor Dave Cull has warned city council cost-cutting will continue next year, as the local authority looks to again cut into the rates increase. He suggested in an opinion piece in the Otago Daily Times debt and economic development were the headline issues. He is here to tell us why.
Video

### ODT Online Wed, 21 Nov 2012
Opinion
Debt reduction, economic development focus
Dunedin Mayor Dave Cull lays out what he sees as the challenges facing the city council next year. This year has been a time of challenge and achievement for the Dunedin City Council. Costs and rate rises were substantially contained despite significantly reduced cash-flows. Information flow and public transparency have been enhanced, council confirmed a visionary spatial plan and council company governance has been substantially overhauled and improved.
Read more

—

STANDARD & POOR’S Rating Services
Dunedin City Council
http://www.standardandpoors.com/prot/ratings/entity-ratings/en/us/?entityID=272160&sectorCode=GOVS

S&P Statement:
Outlook On New Zealand’s Dunedin City Council Revised To Negative; Ratings Affirmed At ‘AA/A-1+’
Publication date: 20-Nov-2012 23:07:36 EST
http://www.standardandpoors.com/prot/ratings/articles/en/us/?articleType=HTML&assetID=1245343655677

MELBOURNE (Standard & Poor’s) Nov. 21, 2012–Standard & Poor’s Ratings Services’ said today that it has revised its outlook on New Zealand’s Dunedin City Council (Dunedin) to negative, from stable. At the same time, the ‘AA/A-1+’ issuer credit ratings on Dunedin were affirmed. The outlook on Dunedin City Treasury Ltd. was also revised to negative, and the issuer credit ratings were affirmed at ‘AA/A-1+’.

“The negative outlook reflects our view that there is a one-in-three chance of a downgrade in the coming two years,” said credit analyst Anthony Walker. “This is based on our view that Dunedin may not achieve its financial targets outlined in its Long-Term Plan, with its after-capital account deficits not improving as quickly as forecast. If this scenario were to materialize, we consider that Dunedin would have limited budgetary flexibility to improve its financial position without deferring asset renewals, which may lead to future infrastructure backlogs.”

Further downward pressure could be placed on the ratings depending on the Auditor General’s investigation into the management of Dunedin’s council-controlled trading organization (CCTO)–Delta Utility Services–which may weaken our assessment of Dunedin’s management of CCTOs; or if there was a change in policy direction such as the introduction of a hard rates cap, or a revised capital-expenditure program without an offsetting increase in revenue which would result in Dunedin’s after-capital account deficits not improving as forecast.

“The ratings could be revised to stable if the council’s budgetary performance strengthens as it forecasts, specifically if the council achieves after-capital account deficits of about 2% of consolidated operating revenues in 2014 and beyond, while maintaining its current budgetary flexibility, and a stable political setting,” said Mr. Walker.

Dunedin City Council’s (Dunedin) individual credit profile reflects the predictable and supportive institutional framework available to local and regional councils within New Zealand, plus our very positive view of Dunedin’s financial management, and the council’s modest contingent liabilities. In our view, these strengths are partially offset by Dunedin’s high debt burden relative to international peers, and low debt-servicing ratio.

—

Comments received.

Martin Legge
Submitted on 2012/11/22 at 7:46 pm
The reality is most Government Regulatory Agencies are now filled with academics (usually law graduates) who love writing endless reports but lack the capacity, desire or hard edge to conduct interviews where the hard searching questions now being demanded by the “What if” mob will ever be asked.
The OAG have obviously held a cordial chat with the Mayor over this and I bet boundaries of the investigation have been set. OAG didn’t listen to Bev Butler, but the Mayor of Dunedin – he’s a man of importance so let’s get down there!!!!

Anonymous
Submitted on 2012/11/22 at 9:10 pm
The thing with the Delta transactions is that there is a fairly clear trail of what was purchased, where it was held and where the original money came from. The investigation should have Newtons Coachways and Delta Investments Ltd in its scope. If it doesn’t then it is toothless.

—

Related Posts and Comments:
18.11.12 DCC Annual Report to 30 June 2012 – borrowing and interpretation
12.11.12 Delta purchases | Vandervis OAG complaint accepted

—

Posted by Elizabeth Kerr

Afternoons with Jim Mora: The Panel today [DCC interest rate swaps]

### radionz.co.nz Monday 5 November 2012
Afternoons with Jim Mora
http://www.radionz.co.nz/national/programmes/afternoons

The flirtations of our local bodies with money mechanisms on money markets that may be getting ratepayers into schtuck.

16:35 The Panel with Garry Moore and Finlay MacDonald (Part 2)
Topics – Every schoolboy used to know that, at the height of the empire, almost a quarter of the atlas was coloured pink, showing the extent of British rule. An Otago University academic says Dunedin ratepayers should be very concerned about losses on interest and currency swap schemes that appear in the council’s annual report. Millionaire Kim Dotcom would be putting his money where other investors wouldn’t if he goes ahead with plans to relaunch Pacific Fibre, according to Prime Minister John Key. (24′42″)
Audio | Download: Ogg Vorbis MP3 | Embed

16:50 Jim Mora, Dr Robert Hamlin and guests discuss Auckland City Council and Dunedin City Council activities with respect to interest rate swaps (IRS). Together, the councils may have squandered up to $200 million of ratepayer funds. Is a royal commission of inquiry required? In Dunedin City Treasury’s case, interest swap rates and financial derivatives may be being used to ‘assist’ stadium financing, and much more. In the city council annual report the IRS activity goes unexplained, being recorded as (multi-million dollar) losses (see page 146).

****

The (NZ) Banking Ombudsman suggests some customers & their advisers don’t understand the product. [IRS and Derivatives]

http://en.wikipedia.org/wiki/Interest_rate_swap

****

### stuff.co.nz Last updated 05:00 04/11/2012
Business
Banks ‘plundering society’ globally
By Rob Stock
Claims banks missold interest-rate swaps to businesses and local authorities have been making headlines around the world. Interest rate swaps are a derivative financial tool used by sophisticated businesses with skilled treasury functions to limit interest rate risk. But it is becoming clear that in places such as Britain, Italy and America, interest-rate swaps were sold by banks to organisations that did not understand the risks they were taking. In case after case, interest rate swaps often sold in 2007 and 2008 as “protection” against interest rates rising sharply have served mainly to protect bank profits by locking businesses and local bodies into high levels of interest ahead of those rates falling.
Read more

****

This article is from the May/June 2012 issue of Dollars & Sense magazine.

The Swap Crisis
We have your city. Pay up, or else!
Interest rate swap deals have allowed the big banks to hold local governments and agencies hostage for tens of millions of dollars.
By Darwin BondGraham
In 2002 a little-known but powerful state agency in California and Wall Street titans Morgan Stanley, Citigroup, and Ambac consummated one of the biggest deals to date involving a type of financial derivative called an “interest rate swap.” A year later the executive director of the Bay Area’s Metropolitan Transportation Commission, Steve Heminger, proudly described these historic deals to a visiting contingent of Atlanta policymakers as a model to be emulated. Swaps were opening up a brave new world in public finance by extending the MTC’s purchasing power by $200 million, making a previously impossible bridge construction schedule achievable in a shorter timeframe. The deal would also protect the MTC from future volatile swings in variable interest rates. To top it off, the banks would make a neat little profit too. Everybody was winning.
Then in 2008 it all came crashing down. The financial system’s near collapse, the federal government’s unprecedented bailouts, and global economic stagnation mean that the derivative products once touted as prudent hedges against uncertainty have instead become toxic assets, draining billions from the public sector.
Read more

—

Posted by Elizabeth Kerr

Stadium: DCC caught in headlights

Blindsided?

The Otago Daily Times (1.11.12) states:
“Dunedin city councillors are pointing fingers after some were blindsided by a $3.2 million loss by the company running Forsyth Barr Stadium. Some councillors spoken to by the Otago Daily Times yesterday admitted they were unaware they had accepted reports detailing the loss at Monday’s council meeting. Other councillors were aware of the reports, but were still yet to read them properly.” ODT Link

Blissfully unaware, or deliberately avoiding and shielding knowledge of the fact, thereby keeping the public and media at arm’s length from the true state of council finances relating to the stadium project?

That is a question for all elected representatives at Dunedin City Council, the council’s chief executive, the executive management team (EMT), and the governance manager.

Sadly, the annual reports don’t tell the full story of the ‘stadium effect’ – that is, the figures that Dunedin renters and ratepayers will be facing, and unable to pay, when the whole system is called to ‘correct’.

Fire away, Dunedin public.

—

It’s as if the newspaper editor has suffered a blunt contusion. Sees the problem then runs away to John Wilson Ocean Drive (closed from August 2006), and ends weakly, out of steam, with the hope that those in power “will turn their full attention to making our new stadium a profitable investment of which the city can be proud”, and would they please read the annual report[s].

### ODT Online Sat, 3 Nov 2012
Editorial: Council must keep eye on the ball
Just as it seemed the Dunedin City Council was determined to focus on a different attitude towards debt, revelations that a worse-than-expected $3.2 million loss by the company running the Forsyth Barr Stadium was not even discussed at this week’s full council meeting have put it back in the firing line and raised questions about its priorities. The loss – nearly $1 million greater than forecast – was recorded in Dunedin Venues Management Ltd’s (DVML) 2011-12 annual report, which was released a day later to this newspaper. But it had flown under the radar at the council meeting, with no mention of the reports on DVML or Dunedin Venues Ltd (DVL), which owns the stadium, on the meeting’s public agenda, and no indication those reports had been circulated publicly and to media – as required under the Local Government Official Information and Meetings Act – ahead of the meeting. The reasons for that are unclear and convoluted.
Read more

—

From our Northland cuzzies, some clues for rabbit hunting…

Image: NZ Herald

### New Zealand Herald 5:30 AM Saturday Nov 3, 2012
Inside Kaipara’s ratepayers revolt
By Andrew Laxon
Many residents of a small coastal town are refusing to pay for a $58 million debt that has crippled their local council and left them with the bill.
The Mangawhai Ratepayers and Residents Association chairman Bruce Rogan has at least 500 local residents refusing to pay an estimated $1 million in rates this year because the Kaipara District Council secretly ran up an unsustainable $58 million debt building a sewerage treatment scheme for about 2000 people who own homes here.
Read more

—

Dare we say, Dunedin, the amount currently owed by each city ratepayer well exceeds that owed by the good ratepayers of Mangawhai, on the Kaipara.
So, what now?

—

Posted by Elizabeth Kerr

Stadium financials: Calvin Oaten on DVML, DVL and DCHL

### ODT Online Fri, 2 Nov 2012
Opinion
DCHL covering DVL and DVML losses
By Calvin Oaten
Stadium finances dismay, says the headline (ODT, 31.10.12). The story states Dunedin Venues Management Ltd (DVML) as posting a loss of $3.214 million. Mayor Dave Cull says “it is not sustainable”.

But let’s look at the combined performance of DVML and Dunedin Venues Ltd (DVL) and we see a fuller picture. Let’s face it, these two entities are joined at the hip and are no more than an arrangement of convenience, for the dispersion of liabilities attached to the stadium. DVML’s loss at $3.214 million is arrived at after receiving revenue of $6.093 million, offset by expenses of $6.395 million.

It then pays DVL $3.667 million rental for the use of the stadium. This is offset by receiving a (subvention) payment of $782,000 from Aurora. Net loss $3.214 million. But we then need to add the carried forward loss of $3.256 million from the previous period to disclose the consolidated loss at $6.470 million.

Turning now to DVL, we find the declared position is: Revenue $3.672 million, expenses $16.051 million for a loss of $12.379 million. This is offset by a (subvention) payment from Aurora of $7.292 million leaving a loss of $5.087 million.

This is offset by a tax credit of what could be $775,000 for a net loss of $4.312 million To this is added interest rate swap losses (a totally incomprehensible concept) of $8.579 million for a total consolidated loss of $12.891 million.

So combining the two scenarios we have a total consolidated loss attributable to the stadium of $19.361 million. This, Mr Cull, is really what is not sustainable.

Interestingly, nowhere in either set of accounts can one find any evidence of income derived from the much vaunted private funding. Why? Is it because as the PwC report says, it can only be treated as operational revenue, and therefore goes direct to the events promoters such as the ORFU?

Looks like it. They in turn simply pay – or not – a rental to DVML for the use of the stadium by event. This is what is expressed in DVML’s revenue statement. All this raises the question: what happens if DCHL is unable to produce those subvention payments?

It has already served notice that since July 1, 2012, it will no longer borrow to provide payments of $23.2 million to the DCC which consisted of, $10.450 million dividend, $5.25 million capital repayment of stadium debt, and subvention payments to DVL and DVML. As can be seen this amounts to $17.25 million offsetting the already considerable losses incurred.

There is no doubt but that the stadium will figure very largely in the city’s future funding difficulties, which are so manifest.
ODT Link

—

Posted by Elizabeth Kerr

Stadium financials: JimmyJones v Peter Hutchison (DVML) on accounting method

### ODT Online Wed, 31 Oct 2012
Stadium finances dismay
By Chris Morris
Dunedin Mayor Dave Cull says the Forsyth Barr Stadium’s finances are “not sustainable”, after confirmation the company running the venue lost nearly $1 million more than expected in its first year of operation. The result was contained in Dunedin Venues Management Ltd’s 2011-12 annual report, released to the Otago Daily Times yesterday, which showed the company lost $3.2 million in its first year. […]A copy of Dunedin Venues Ltd’s annual report was also released yesterday, and showed the company that owned the stadium – and received rent from DVML – recorded a $4.312 million loss for the same period.
Mr Hutchison cautioned against adding the two losses together, as they overlapped, and because DVL’s results were largely accounting losses – not cash – and expected. “It [DVL] is behaving exactly as it should do.”
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More ‘fallout’ stories at the Otago Daily Times:
● Wed, 31 Oct 2012 – Report about stadium loss slips under radar
● Thu, 1 Nov 2012 – Councillors blindsided by DVML results
● Thu, 1 Nov 2012 – Stadium loss rates fears
● Fri, 2 Nov 2012 – Stadium rate ‘tax on being busy’

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The following comments appear at ODT Online, in reply:

DVL loss not as expected
Submitted by JimmyJones on Thu, 01/11/2012 – 2:56pm.

DVL and DVML director Peter Hutchison says that the size of DVML’s $4.3 million loss was as expected. This statement does not match with the official forecast in DVL’s Statement of Intent which predicted that the year’s result for 2012 would be $6.5 million (before the ratepayer subsidy). This latest result is a loss of $11.6 million (before ratepayer subsidy) – so this is much worse than expected.
The loss of $11.6 million is much bigger than the official $4.3 million loss because this doesn’t include the $7.3 million DCC subsidy. It is wrong to exclude the DCC subsidy when considering the overall effect on the finances of the DCC and the ratepayers. Both DVL and DVML are paid a subsidy that doesn’t show-up in their net profit/loss figures.

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Stadium losses add up
Submitted by JimmyJones on Thu, 01/11/2012 – 11:47pm.

Mr Hutchison, the director of the stadium owning company DVL, says that the losses of DVL and DVML can’t be added together because they overlap. This is misleading and seems to go against the basic principles of accounting. Each of the companies is a separate entity and they have separately audited accounts. To say that the losses overlap is to claim that one or both full year results are wrongly stated. As a director, Peter Hutchison did however vote that these accounts were true and correct; Their auditor has agreed with this. There is no overlap, and they can be added together.

Adding the two losses gives $3.2m + $4.3m = $7.5 million. The real loss is, however, a lot more than $7.5 million because this figure does not include a number of disclosed and undisclosed subsidies, paid either directly or indirectly by Dunedin’s renters and ratepayers. The DCC has so far actively avoided providing the total of all the ongoing losses and costs of their stadium.

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Big, real, ugly, stadium loss
Submitted by JimmyJones on Thu, 01/11/2012 – 11:57pm.

Mr Hutchison says that “DVL’s results were largely accounting losses – not cash – and expected”. In saying this he is implying that the year’s loss is mostly not a real loss. Our accounting system has evolved over a few thousand years to provide the most “real” measure of profit/loss. This is about the best we can do, and that means that both cash and non-cash items are included. If Mr Hutchison thinks he has a better way, he should write a book about it, but in the mean time he needs to stick to the standard NZIFRS method. His statement is in fact wrong, because most of DVL’s expenses are actually cash expenses and because the loss is a real, authentic, auditor certified loss. DVL’s finances are a sensitive area for the DCC, and Mr Hutchison should not be seen to be promoting any particular viewpoint.

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Posted by Elizabeth Kerr

Weak boys, Cull and Burden on rugby stadium

One year on from the All Blacks winning the World Cup at Eden Park, what is the state of rugby at the so-called “Stadium of Four Million”? APNZ reporters Patrick McKendry, Daniel Richardson and Matthew Backhouse investigate.

### nzherald.co.nz 4:16 PM Friday Oct 19, 2012
Sport
Rugby: What is the state of our game?
By Matthew Backhouse, Patrick McKendry, Daniel Richardson
Andrew Maddock will be at EcoLight Stadium in Pukekohe early today for Counties-Manukau’s biggest game of the season, an ITM Cup semifinal against Southland. The Counties Rugby Union chief executive will be at work about 8am for a game which kicks off at 2.05pm and which he expects will attract only 4000-5000 spectators. “It’s a little bit hard to know as it’s Labour Weekend,” he says. “That for us is a reasonable crowd because we’re a pretty small community.” When that match kicks off the All Blacks will be preparing for tonight’s Bledisloe Cup match against the Wallabies in Brisbane which will attract a full house of more than 50,000 to Suncorp Stadium and a worldwide audience of millions. Such is the divide in New Zealand rugby, a ravine growing by the year despite, or perhaps because of, the All Blacks’ success in the World Cup, which on Tuesday will be exactly 12 months ago.

Mr Cull says there was a great atmosphere during the tournament, but whether that justified the expenditure was another matter.

One year on from the Rugby World Cup, the tournament’s costly and sometimes controversial stadium projects have left a legacy of ongoing debt and questions over their future.[…]For NZRU chief executive Steve Tew, the World Cup’s legacy is a positive one, despite doubts remaining over Eden Park which had a massive overhaul before the tournament and now mostly sits empty apart from when the All Blacks play there.

“We’ve got a sound platform to build on going forward. Of course there are significant challenges ahead financially, but when I look to the future events that we’ve got coming up, the events calender is looking pretty robust.” -Darren Burden, DVML

Dunedin’s Forsyth Barr Stadium is struggling to attract the big events it needs to remain financially viable, while Auckland’s revamped Eden Park has been dragged into a review of the city’s stadiums as it looks to shake off $55 million in debt. Critics say the tournament failed to deliver on its promised financial returns and are questioning the long-terms gains of the $555m spent nationally on upgrading stadiums. – APNZ
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Posted by Elizabeth Kerr

Darren Burden plays LGOIMA game like Davies #DVML #PsychoAnswer

DVML’s attempts to deceive ratepayers continues under Burden’s control. Mayor Dull is fully complicit.

### ODT Wed, 10 Oct 2012
Letters to the editor (page 8)
Concern over attendance of rugby games
Recent national news stories regarding widespread concern over the NZRU’s ITM Cup competition, which report that the number of spectators are down in significant numbers, along with reduced ratings on Sky TV for their coverage of these matches, lead to some financial concerns for Dunedin ratepayers.
Can Darren Burden, chief executive of DVML who runs and manages the stadium used for these professional rugby matches, confirm that:
1. The average attendance at these matches at the Forsyth Barr Stadium is in the region of 5000.
2. The average ticket price for these 5000 attendees is approximately $20.
3. The gross income from ticket sales is, therefore, approximately $100,000.
4. The NZRU returns approximately 10% of gate sales revenue to the venue operator.
5. The income to DVML from gate sales is, therefore, approximately $10,000.
6. The cost of opening the stadium for a professional rugby match is approximately $100,000.
7. These matches held at the stadium therefore lose approximately $90,000 each time they are held.
If Mr Burden disputes these figures, can he supply in detail his version of the above statements, as well as an accurate profit/loss statement for the ITM matches held at the stadium?

Russell Garbutt
Wakari

[Dunedin Venues chief executive Darren Burden replies: “The ITM Cup provides variety and entertainment to our event schedule and has value to the stadium beyond just financial. The cost of opening the stadium varies depending on the size of the event. However, it is nowhere near $100,000 for an ITM cup match, as suggested. The information requested by Mr Garbutt is complex. I invite him to contact Dunedin Venues directly and we’ll happily review his request for information.”]

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Posted by Elizabeth Kerr

The End of The Golden Weather?

Received from Calvin Oaten

Are we coming to the end of the ‘Golden Weather’? I say this, not in the meteorological sense, but rather in the sense that perhaps our society and its economic construct might be on the verge of a catastrophic change. Why? Well it seems that many signposts are pointing to an approaching collapse of the present model of the economy as constructed. This requires constant growth in order to sustain an ever increasing social budget. That in turn requires full or near full employment, a buoyant consumer market and a consequent ever increasing supply of energy and raw materials. None of these are finite, neither in New Zealand nor the Planet. The current model has, in order to foster this growth, taken upon itself to ‘jazz up’ consumption by cultivating a culture of instant gratification, fueled by intensive marketing, planned obsolescence, and last but not least, very easy credit.

This easy credit has been promoted heavily by governments, local bodies, banks, retailers and all manner of financial institutions. This has brought about a dynamic shift in society’s attitude to debt. It has encouraged folk to spend beyond their immediate ability, to the point where their indebtedness is assuming dangerous proportions. This is manifested by ‘economic bubbles’ forming, none more so than our own housing market. The people in the industry, real estate companies, banks, financial institutions all rev up the market by convincing people that property is a great investment which will always hold its value. But we only have to look at Ireland, the UK, the USA, and lately Australia to see the lie of this claim. Property can always go down just as it can go up. Take a look at Japan. Its property bubble burst in 1989 and has never recovered. Off by as much as 70-80%.

The result of all this is a hugely indebted developed world, including NZ. What caused this to happen? It seems to date back to around 1971, when then President Nixon was experiencing difficulty in financing the Vietnam war. At that time printing of money was constricted with the dollar being pegged to what is known as the gold standard. This meant that the amount of currency in circulation was limited by how much gold was held by the federal government. By leaving the gold standard the federal treasury was free to set its own parameters and to print accordingly. That resulted in a vast increase in all paper currencies around the world with a burst of inflation throughout the 1970s and 1980s.

Historically, all monies eventually revert to the mean, and this has always been to a standard unit of value, GOLD. Throughout history, even before Roman times this has always prevailed. Trust in paper currencies sooner or later fail and there is a collapse.

We’ve seen it in modern times with Germany (in the 1920-30s), Argentina (several times), Greece, and very recently Iceland. The USA federal government has just breached its self-imposed debt ceiling of $16 trillion. If anyone wonders what $1 trillion represents, look at it as a time equivalent. Let’s say one was to repay $1 trillion at the rate of $1 per second. Working 24/7, 360 days per year it would take “32,000 YEARS”. So multiply that by 16 and it is easy to see that this debt will never be repaid. Worse, it is growing as we speak.

Those with the power are unbalancing the fairness factor.

This reckless attitude has permeated into the human psyche and we see evidence of it here in little old Dunedin. Our society has degenerated into a selfish me world. Those with the power are unbalancing the fairness factor.

Take remuneration for example, fewer and fewer people are taking a greater share of the economic cake, and are quite blatant about it. Wealth is flaunted while many are moving into poverty. Financial rewards are all out of line with production balance.

It is noticeable that many of the highest remunerated are drawing their rewards from the public’s purse, without so much as a blush. Here in Dunedin we have a local MP tabling a bill in Parliament seeking a minimum wage of $15 per hour. This, on a 40-hour week equates to $600 per week. It would be up from $13.50 per hour or $540 per week. This is being vigorously opposed by many. But on the other hand we see public servants and others receiving enormously higher rewards. We have seen several instances in the last few weeks.

The retiring CEO of the Otago Museum with a salary of $310,00 per annum (pa) or $5,961 per week (pw). The DVML CEO receives $250,000 pa or $4,807 pw. The council owned company Delta, where the CEO is paid $380,000 to $390,000 pa or $7,500 pw. 41 additional staff paid over $100,000 pa or $1923 pw. Our own DCC CEO is rewarded with between $340,000 and $360,000 pa or $6,730 pw. The Vice-chancellor of our University of Otago receiving over $500,000 pa or $10,000 pw. Our DCHL group of companies last year paid its 7 directors $725,444 for what would optimistically involve about four weeks equivalent work each. This is repeated up and down the country and if anyone thinks this is sustainable they have to be in “cloud cuckoo land”.

On our local public scene we have seen the city’s debt burgeon from $212.486 million as at 30 June 2005 to $602.008 million at 31 December 2011. We now know that this has considerably changed for the worse, since. The stadium is a financial disaster, in serious damage control, the Otago Settlers Museum is over $40 million, the Town Hall/Conference Centre is over $50 million, and we are looking at somewhere near $100 million for the Tahuna upgrade. No-one in office seems to either understand, or simply passes it off as someone else’s problem.

We elect these people to conserve and look after our treasure, and what happens? It just goes from bad to worse, with all manner of rascals leaching off us in different ways. If only someone in office had the intestinal fortitude to stand up and say, “enough, this has got to stop”. But sadly, it gets back to that culture I mentioned. “I’m OK Jack”, never mind anyone else.

Is all this sustainable? Ask yourself. We don’t know when the situation will break, but it is certain that it will. The whole developed world is awash with debt and frantically creating more by the day, in a desperate move to save the situation. But it is pretty simple, how can more debt solve a chronic debt malady? It is pretty much synonymous with supplying a chronic alcoholic with more whisky. We are in for very interesting times.

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Posted by Elizabeth Kerr