Tag Archives: Local Government Act

Dunedin City Council | Consolidated council debt

DCC mayor and councillors (2013-14) + council staffheads should roll

Recent ODT stories:

██ Mayfair Theatre, South Dunedin, learnt on Monday an adjacent public car park on the corner of King Edward St and Cameron St used by often elderly patrons was for sale, with tenders closing this week.
Car park sale ‘kick in guts’

██ Anger from Caledonian Bowling Club members, who last Friday learnt the council would sell the Andersons Bay Rd land the 135-year-old club was on.
Dismay as club hears of sale plans
Community institution feels the pinch
Bowlers buoyed by support over council sell-off plan
Club will fight sale

██ Council to sell up to 150 plots of surplus land and property over the next two to three years in a move expected to raise about $10 million, targeted for paying off debt.
Councillors urge rethink of land sale
Council may net $10m in sales
Southern suburbs among poorest 10%

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### ODT Online Wed, 30 Jul 2014
Councillors urge rethink of land sale
By David Loughrey
Some Dunedin city councillors are urging a rethink on the sale of a council-owned car park near the Mayfair Theatre, but Mayor Dave Cull is adamant the sale should not be a political decision. Mr Cull said yesterday council chief executive Sue Bidrose had been delegated to make the sale, and it was not a matter for councillors. “That’s her job.” But three councillors want at least a discussion on the issue.
Read more

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Incompetence dcc

SOUTH DUNEDIN CYCLE NETWORK
“Based on what it now knew about costs […] the council would only be able to build 12km of the original 25km cycleway network within its original $4.5 million budget. The network would cost as much as $7.85 million if built as originally approved by the council.” (ODT)

### ODT Online Wed, 30 Jul 2014
Cycle project scaled back
By Debbie Porteous
The Dunedin City Council has been forced to pare back original plans for the controversial South Dunedin Cycle Network, as the true costs of the project become apparent. Despite being reduced by almost half, the curtailed network is expected to cost about $5.5 million – $1 million more than original estimates for the whole network. The blowout may eat into funding set aside for the rest of the city’s cycle network.
Read more

“I’m not surprised given the dickheads we’ve got around that table. It’s just another nail in Dunedin’s coffin; we’ve got a council not focused on business and focused on cyclists, but there are no cyclists.” –Roger Fewtrell

### ODT Online Wed, 30 Jul 2014
Threat to move over cycleway
By Debbie Porteous and Chris Morris on Wed, 30 Jul 2014
A Dunedin business owner potentially affected by changes to an intersection on the route of the new harbourside cycleway has threatened to move his enterprise to Auckland. […] Southern Hospitality managing director Roger Fewtrell said the council’s decision meant his company would consider its options at its board meeting early next month.
Read more

Cycle lane 2 copy24.12.13 Daaave’s $47 million Christmas present to Jinty. We’re paying.

█ For more on DCC’s cycle network project for Dunedin, enter the terms *cycle*, *transportation* or *disaster* in the search box at right.

Posted by Elizabeth Kerr

14 Comments

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Whaleoil / Cameron Slater on ratepayers’ lament

whaleoil 18.7.14 - len brown cartoon by SonovaMin (1)

Cartoon of the Day (Len Brown by SonovaMin)
Posted by Cameron Slater on July 18, 2014 at 11:00am

Len Brown’s failures will cause Auckland headaches for decades
Posted by Cameron Slater on July 18, 2014 at 11:30am
A Local Authority like Auckland Council plans capital expenditure for urban projects – like the pretty CBD road and footpath improvements. The problem with infrastructure maintenance is that it is very expensive, and it occurs in the future. Competing against the pretty high profile projects it suffers because it takes second place. On the Audit NZ website is a document that records an audit of the performance of Local Government that is pertinent to this topic.
Read more

Posted by Elizabeth Kerr

125 Comments

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LGNZ #blaggardliars

Received from Anonymous
Thu, 26 Jun 2014 at 3:17 p.m.

Horowhenua Chronicle 25.6.14 (1)Horowhenua Chronicle 25.6.14

[Anonymous] “Another report by another highly paid expert, strategically placed on the front page to calm the masses only weeks after Horowhenua District Council (HDC) announced rate hikes of 10%.”

[Evidence] No-one believes his crap. Slippery Lawrence Yule treated like yesterday’s scrumpled chip paper.

Our reading preference:

The Ratepayers’ Report is based on data collated by the Taxpayers’ Union, a lobby group, from councils’ annual reports. It also includes information collected independently from the Department of Internal Affairs and Statistics New Zealand. All of this has been checked and sent to the 67 councils involved for them to review. See local government league tables published by analyst Larry Mitchell since 2010.

Related Post and Comments:
12.6.14 Fairfax Media [not ODT] initiative on Local Bodies
21.4.13 Councils “in stchook” —finance & policy analyst Larry.N.Mitchell
30.5.12 Larry.N.Mitchell: 2012 Local Govt League Table Executive Summary

Posted by Elizabeth Kerr

16 Comments

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Fairfax Media [not ODT] initiative on Local Bodies

The Taxpayers’ Union in collaboration with Fairfax Media has launched the “Ratepayers’ Report”. (Link)

Comment received from Russell Garbutt
Submitted on 2014/06/11 at 10:04 am

The Fairfax initiative on Local Bodies is an excellent one.

It can be found at http://www.ratepayersreport.co.nz/

It seems that this whole thing has stemmed from the excellent work of Larry Mitchell, in trying to educate Local Bodies as to some financial nous, and also to alert ratepayers to what circumstances their local body has put them in.

I know from experience over many years of trying, that my recommendations to local Councillors to contact Larry Mitchell and learn from his experience as an independent consultant on Local Government fell on totally deaf ears. They seemed to know better. Yeah, right.

Now it is out there in a form that is very readable and comparisons can be easily seen.

What is totally amazing is the views of the DCC in this. Yes, the second highest debt per ratepayer, but the DCC says that it has the second highest value of assets. Crap. This is just rubbish and it can’t sell those assets. Every Council has water, roading etc which it must provide and can’t sell, but in the case of the DCC it has the stadium. Not an asset as we all know but a fearful liability, but it appears in the books as an asset. Well, sell the bloody thing. It isn’t needed.

I know that this story won’t be picked up by the ODT as it is a Fairfax story, but the other point in here of course is that the ability of Aucklanders (who have the highest debt levels) to pay. Dunedin doesn’t. Its population is well below that of Auckland when it comes to average income per household.

The other thing that the ODT won’t cover is the local comparisons. While the DCC has a debt level of $15,093 per ratepayer, the Central Otago District Council has only $327 per ratepayer, with virtually the same equity value per ratepayer. What’s the difference? As the CODC says of the area “A World of Difference”. I know which Council I admire the most.

[ends]

Posted by Elizabeth Kerr

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Stadium: DCC proposes extra funds for stadium debt repayment

Comment received from Mike
Submitted on 2014/05/11 at 12:42 pm

Now is a great time to remind people of section 63 the Local Government Act which reads:

Restriction on lending to council-controlled trading organisation
A local authority must not lend money, or provide any other financial accommodation, to a council-controlled trading organisation on terms and conditions that are more favourable to the council-controlled trading organisation than those that would apply if the local authority were (without charging any rate or rate revenue as security) borrowing the money or obtaining the financial accommodation.

http://www.legislation.govt.nz/act/public/2002/0084/latest/DLM171886.html

Which as I read it means that the council can’t fund DVML in a more advantageous way than it would receive itself from its own bankers – my reading of this is that just bailing DVML because it’s losing money would be illegal, they have to loan them money at a comparative rate to what they would get from the bank.

It’s an obvious target for a ratepayer’s injunction …..

The reason for this law is pretty obvious, the government wanted CCOs to compete with private enterprise on a level playing field – if DVML wants to rent out space it shouldn’t be able to undercut a competing landlord who can’t tap the ratepayers’ pockets to charge a rent below cost.

[ends]

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Dunedin City Council – Media Release 9 May 2014
Extra Funds Proposed for Stadium Debt Repayment

The Dunedin City Council will consider using savings to repay more debt associated with the Forsyth Barr Stadium. The Council will next week consider approving a one-off payment of $2.271 million to help balance the Forsyth Barr Stadium accounts. Of that, $1.77 million would be used to repay DVML debt, with the balance to fund a cash shortfall. The payment would be funded from DCC savings made in the current financial year. DCC Group Chief Financial Officer Grant McKenzie says, “A one-off payment to reduce debt further would be good for all parties and would clearly respond to community demand for the DCC to reduce its overall debt level.” Read more

Download the Forsyth Barr Stadium 2014/15 Budget Report (PDF, 200KB)

Media Stories:
9.5.14 ODT Stadium debt reduction to be considered
9.5.14 Stuff (Fairfax News) Stadium could cost Dunedin ratepayers millions
10.5.14 ODT Stadium payment may rise

Related Post and Comments:
9.5.14 DCC Draft Annual Plan 2014/15 Submission by Bev Butler
10.5.15 (via comment) ODT In Brief: Stadium review sought

Posted by Elizabeth Kerr

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DCC: Growth v development contributions

Worth a read —Whaleoil link received from Anonymous
Tuesday, 11 February 2014 8:11 p.m.

Whale Oil Beef Hooked logo### whaleoil.co.nz February 10, 2014
Why do Property Developers hate development contributions?
By Cameron Slater
A property developer writes:
“Lately Developers and Councils have been busy preparing submissions on the proposed changes to the Local Government Act relating to development contributions. There are many issues. Firstly, the issue with charging developers for improvements that have nothing to do with growth.
(1) Hiding the real cost apportionment and charging developers for improvements that [have] nothing to do with new development growth:
When developing up capital works and budgeting the Annual Plan councils develop formula and apportion some of the costs to ‘growth’ – which is then charged to developers. Councils argue that as cities grow and intensify – the costs of that growth include replacing or improving infrastructure. Hence they want new developments to pay for it.
Developers take issue however with the amount of money required from them to pay for the infrastructure improvements not that they have to pay for their share of growth. As such the argument is about whether the right pro-rata apportionment is applied.
Obfuscating the debate is that all Councils must replace infrastructure as it ages and is due for replacement. Additionally, most Councils are in recent times adopting new development standards that increase the capacity of assets and they improve assets as technology advances.
Replacing assets is supposed to occur from a built sinking fund that is generated over the life span of an infrastructure asset. Council receive money over the lifespan in cash as depreciation as part of rates. Over time, and subject to annual revaluation each asset builds up a depreciation sinking fund that should be sufficient to replace it. Developers are concerned that Councils spend that money through internal loans to OPEX and other creative accounting and then hope to use ‘growth’ as a mechanism for replacing the assets. A psuedo ponzi scheme with ratepayers the duped investors.”
Read more

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DCC: Development Contributions Policy
Development contributions are charges paid by property developers to meet the increased demand for infrastructure resulting from growth.
The Council is proposing some significant changes to its Development Contributions Policy.
In April 2011, the Council released a Statement of Proposal to adopt a Draft Revised Development Contributions Policy (the Draft Policy). The proposal included a schedule of charges which could apply if the Draft Policy was adopted. Submissions on the Draft Policy closed in July 2011 and were followed by hearings in November 2011. After beginning its deliberations the Hearings Committee decided that more information was required from Council staff before the Draft Policy could be considered further. Deliberations started again in December 2012 with Council staff reporting back to the Committee on the information it requested. The Committee has yet to conclude its deliberations.
As a final decision on the Draft Policy is yet to be made, the Council’s existing Development Contributions Policy applies until further notice. Read more

DCC: Spatial Plan for Dunedin
‘Dunedin Towards 2050′ (The Spatial Plan), sets the strategic direction for Dunedin’s growth and development for the next 30+ years. It outlines a broad set of principles, strategic directions, policies, and actions and visually illustrates how the city may develop in the future. It will be used to guide land-use planning in the city as well as influencing how future infrastructure and services may be provided or limited. The Spatial Plan is primarily, but not solely, concerned with Dunedin’s urban form and design. Urban form and design refer to the spatial arrangement of a city, in other words, the shape of a city as seen from the air including the overall pattern of development, activities, and infrastructure as well as the design or ‘look and feel’ of the city and how it functions. Urban form and design have a significant impact on the sustainability, liveability and economic performance of cities.

DCC: Second Generation Plan for Dunedin
The Dunedin City District Plan controls what people can do on their land and how it can be developed. While there have been some changes and new zones added (eg the Stadium, Airport and Harbourside zones), most of the current Plan has not been reviewed since 2006 and a lot of it dates back to the 1990s. The council is reviewing the Plan as a whole to fix the parts that are not clear or working properly, to recognise the changes to land use and development within Dunedin, to discourage poor development and to align with changes in national policy guidance. The review will produce a second generation plan (2GP), which is the second plan prepared under the Resource Management Act 1991. This is a long process with a lot of research and analysis, and input from stakeholders and the community.

DCC: Strategic Directions
The Strategic Directions of the second generation plan will establish the overall management approach for the 2GP, stating the important outcomes for the city:
● Dunedin is Environmentally Sustainable and Resilient
● Dunedin is Economically Prosperous
● Dunedin is a Memorable and Distinctive City with a Strong Built and Natural Character
● Dunedin has Strong Social and Cultural Capital
● Dunedin has an Attractive and Enjoyable Built Environment
● Dunedin has Affordable and Efficient Public Infrastructure
● Dunedin has Quality and Affordable Housing
● Dunedin is a Compact City with Resilient Townships

On the local . . .
Meanwhile, developers across the Taieri are champing at the bit to re-create ‘Wanaka sprawl’ on the flood plain with little regard for the protection of high class soils —despite the objectives of the spatial plan that places wise emphasis on the rural area becoming the city’s food basket (resilience).

Pearl of the Plain (Mosgiel sign) 3### ODT Online Wed, 12 Feb 2014
Benefits seen for Taieri area
By Rosie Manins
Mosgiel, Middlemarch and the wider Taieri area will benefit from a new marketing approach by the Dunedin City Council, chief executive Sue Bidrose says. The establishment of an in-house marketing agency at the council, replacing Tourism Dunedin, would offer ”more bang for buck”, she said. The agency would use existing council staff, such as those in human resources and finance, and run alongside the council’s economic development unit.
Read more

sue bidrose [whatifdunedin]New chief executive Sue Bidrose says the council will review performance of the in-house marketing agency after 18 months, with a view to assessing if in the longer term the agency should become a council-owned company. (via ODT)

Other ODT stories:
Riccarton Rd widening set to begin Asked if the upgrade was designed to accommodate more heavy vehicle traffic, Mr Matheson played down those concerns. [Evan Matheson hasn’t referenced the revising ‘district plans’ then]
Trail trust awaits talks outcome The group behind a project aiming to provide a cycle link between Mosgiel and Dunedin is awaiting the result of crucial land negotiations.
Crematorium not yet begun Hope and Sons is yet to begin construction of its new Mosgiel crematorium, but hopes to have it operating this year. Managing director Michael Hope said it was still working on gaining building consent.
Police presence of concern
Town’s population to disappear Mosgiel’s Pearl of the Plain sign in Quarry Rd is to lose its population figure and receive a general spruce-up. [spot feathery bill]
Hope signal problems fixed

Syd Brown Mosgiel sign 1Syd Brown, Taieri property developer and ex city councillor/FSD chairman

Related Posts and Comments:
10.2.14 University of Otago major sponsor for Highlanders [rugby, a pool]
5.2.14 Mosgiel pool sluts get their tops off for ex ORFU guy
4.2.14 DCC: Mosgiel Pool, closed-door parallels with stadium project . . .
30.1.14 DCC broke → More PPPs to line private pockets and stuff ratepayers
20.1.14 DCC Draft Annual Plan 2014/15 [see comment & ff]
18.11.13 DCC: New chief executive
16.11.13 Community board (Mosgiel-Taieri) clandestine meetings
7.10.13 DCC councillors, no idea annual cost of owning, operating FB Stadium
23.6.13 DCC Community Boards
21.4.13 Councils “in stchook” —finance & policy analyst Larry.N.Mitchell
6.12.12 Local Government Act Amendment Bill
6.12.12 DCC debt —Cr Vandervis
6.9.12 DCC pays out $millions to cover loss making stadium and rugby…
30.11.11 amalgamation, Anyone?
8.11.11 Development contributions
9.8.11 CRITICAL Dunedin City Council meeting
25.7.11 DCC Finance, Strategy and Development Committee – meeting postponed
16.7.11 Major Dunedin City Council infrastructure assets NOT INSURED
7.7.11 More than $1 billion of infrastructure assets NOT insured
23.3.11 Dunedin City Council’s rock and its hard place

Posted by Elizabeth Kerr

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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.

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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

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