Tag Archives: Opinion

Basic questions arising for the City, unpublished by the newspaper

Received from John Evans
Tue, 17 Jan 2017 at 7:47 p.m.

From: John Evans
Date: Monday, January 16, 2017
Subject: KPI
To: ODT editor

The Editor, ODT

Sir,

We are often regaled by company directors, CEOs and bureaucrats with discourses on the importance of KPIs. KPIs?

Key Performance Indicators – one of many PR corporate speak Buzzwords.

Wikipedia’s definition is pretty broad but basically it means that certain measures designed by the company or board are measured against actual performances.

Recently, the term gained another meaning when KEY performance [was] reassessed in the light of John KEY’s resignation. Unfortunately his stellar career as Prime Minister seemed to be judged poorly by those political pundits doing the assessment.

The key word is Performance, the measure of which is judged in order to provide an increase in salary or measures which might lose the judged their position if they failed to meet the KPIs included as part of the employment contract.

The test is what performance is paramount and who is it paramount to.
These tests are important in worldwide businesses but is there a different reality in New Zealand? It seems to me that either the KPIs are set incorrectly or there is a disconnect because no one seems to fail, to not meet their predetermined KPIs.

[infront.com]

One example is the role of council lawyers. Why would council lawyers write in an employment contract a clause which gave the employee a golden parachute even if they failed to meet their KPIs? Or was it the employees themselves who wrote the KPIs for their own future benefit? Surely if this was so, the lawyers acting for the company or body they represent would refuse to condone the parachute for employees and directors after proven incompetence.

The Dunedin City Council and its management, and the council owned companies, are surely charged with KPIs and, one surmises, about the results of such indicators and the resultant effects on the council and its employees. Can we analyse a few actions of the council and what the KPIs may have been and whether they would meet them and perhaps the consequences of meeting them or not.

The first and most obvious one is the theft of 152+ cars.
What was the measure of acceptable theft? Was it 20 cars, 100 cars or was 150 cars sufficient to tip them over the edge. And as another example, what was the Police’s key indicator on this matter? Do they prosecute for the theft or conversion of 1 car or does it take 160 cars to prosecute somebody for being involved either in the theft or knowing receipt of a car or cars?

The next is the investment in land and development projects by Delta.
Was failure in one, two or three such projects acceptable or is the magic number 5 (Delta will do it again and we have not quite got there yet).

The Dunedin stadium KPIs. Is a running cost of some $20million acceptable as an annual loss to the ratepayers or should the losses be only $15million or shock horror only $5million. Or should the ratepayers be released from the financial burden which was never the choice of the majority?

Sewage Treatment KPI – Is it acceptable to process sewage to a point that it pollutes the ocean two kilometres out or are we entitled to potable water ex site at Tahuna?

Mudtank cleaning KPI – How many mudtanks cleaned would be an acceptable result, would a flood in South Dunedin suggest that measure was incorrect? Contractual performance and payment for same. Would a KPI for the DCC CEO include overall managing payments to contractors? If a contractor did not perform to those KPIs set within the mudtank cleaning contract, should the contractor be still paid?

Wastewater treatment – Is it an acceptable KPI for wastewater treatment that in high rainfall such overflows are discharged into the pristine Otago Harbour?

Delta KPI on pole replacement. Is 100 unreplaced tagged poles acceptable? Is 1000 acceptable? On suspect poles, is a KPI that the company changes so that they did not breach a previous KPI acceptable or should every company and council just change their KPIs to avoid failure, blame or the legal consequences?

Richard Healey, the “whistleblower” on Delta’s failures seems to have personal ‘built-in’ KPIs —including integrity, high quality job performance, peer safety and corporate responsibility. Just why do the CEO and directors’ KPIs apparently differ from these such that Healey has to resign for them to take note?

On Directors of the council owned companies, do their KPIs reflect their responsibility under the law or are they designed to protect the directors from prosecution under the law despite failure by other measures?

And where does the buck stop?

Just what are the KPIs upon which we judge the mayor, based? Is the only measurement his electability?

Are we the ratepayers not entitled to expect a KPI that includes retribution against failings in any DCC departments or DCHL companies? If we do not reward success and prosecute failure in some way are we not missing the whole point of Pavlov and his dogs? Should we not then close our prisons and let the perpetrators of violence, antisocial acts and any injustice roam free, surely this is the logical nett result of such an attitude of no judgement.

The analysis of John Key’s contribution would suggest that electability and performance may well be poles apart. Perhaps that is the greatest lesson we can learn from the errors of judgement of recent times in our city.

John P. Evans
Otakou

[ends]

Posted by Elizabeth Kerr

This post is offered in the public interest.

2 Comments

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ODT circulation mutterings

L A S T ● W E E K ● T H E ● O D T ● P A Y W A L L ● H I T

This week a new reader at What if? Dunedin, Jonathon O’Donohue, mentioned he’d heard that “ODT circulation has dropped 40%”.

With no timeframe to qualify that, we rang around only to be told that “at peak” (whenever that was ?) ODT had had a circulation of 55,000 —now dropped to about 33-34,000.

Welcome to the Internet.

Interestingly, this came to one of my Twitter accounts yesterday from ODT’s Chris Morris. Thanks! Depressing graph [click to enlarge].

ABC on NZ newspaper circulation Received 8.8.16 10.08 am from @JournoMan

█ Find out more at the New Zealand Audit Bureau of Circulations Inc (ABC):
http://www.abc.org.nz/about.html
http://www.abc.org.nz/ (magazine and newspaper circulations)

█ For more at What if? Dunedin, use the search terms *allied press*, *odt* or *editor* in the search box at right.

Posted by Elizabeth Kerr

Election Year. This post is offered in the public interest.

32 Comments

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DCC meeting and apology NOT Enough— #SouthDunedinFlood

Election Year : The following post is offered in the public interest. -Eds

Received today.

android-email-app [carleton.ca]From: Hilary Calvert
To: Dave Cull
Cc: Golds [Godfrey Dodd], All Elected Members, Vaughan Elder [ODT]
Subject: Re: Flooding

Thanks for copying us in.

May we know when you requested that the mudtanks were cleaned thoroughly?

I had thought that it was an initiative from Ruth Stokes, as part of the looking into and reporting back on the flood.

I am also interested in your “fact” that the stormwater system is not capable even at optimal condition and performance……. Do you mean that it was not then, or that it would not be even if we made adjustments and sorted out the mudtanks and fixed the screen/pump and made changes which we have signalled to the general stormwater system which flows through South Dunedin?

If council modelling showed the extent of the flooding would be precisely as it was in the event of that magnitude, what relevance had the problems with the screen/pump and the mudtanks? I guess all the problems in South Dunedin during the flood were localised problems and many of them as a result of water lying about, so did our modelling show that as well?

I understood that there was still more work to be done to understand what we could best do particularly about the interconnection between the water from various sources and what we could afford of the options available.

Do you see the governance part of the Council completely blameless in this process?
Since you have apparently arranged for the mudtanks to be cleared, surely you/we could have done something sooner.

Do we have a role at all in your view, apart from advising people they are wrong when it turns out we may have incomplete information?

As seems true for all of the information surrounding this horrible flood, the more information we receive the more questions we have.

Kind regards,

Hilary

_______________________________

On 26/04/2016, at 5:30 AM, Dave Cull wrote:

Dear Mr Dodd,
Thank you for your email. I am puzzled by the apparent assertion that I have blamed the 2015 June flooding on Climate Change. While that may be the root cause I don’t recall saying that. The cause of the flooding, as has finally been comprehensively reported (for a meeting today) was the fact that the stormwater system in South Dunedin is not capable, even at optimum condition and performance, of coping with the amount of rain that fell over that period. That is a simple calculation given the capacity of the system in both volume and pumping terms, and the severity of the event. The mudbank maintenance failure was reprehensible from both a contractor and staff oversight perspective, especially as exactly the same issue had been raised some four years ago and assurances given that it would not happen again. The fact that some mudbanks were not up to scratch may have caused some localised problems and perhaps prolonged the water lying, but they did not cause the extent of the flooding. That was exactly as Council’s modelling showed it would be in an event of that magnitude.
Six years ago Council received reports stating (among other conclusions) two things. First that more frequent and severe rain events were likely. Second that the stormwater system in South Dunedin was not capable of handling those. So flooding was very likely. Last year the Parliamentary Commissioner for the Environment issued a report showing that rising ground water, pushed up by sea level rise will increasingly afflict South Dunedin.
It’s most important to recognise that while stormwater and groundwater can each affect the other, they are different and have different causes.
The failure was operational and managerial as Council was repeatedly assured that maintenance was up to scratch.
Council’s challenge now is to address both stormwater and groundwater issues. We have already, at my request, ensured that the stormwater system is in the best shape possible as winter approaches, by having all the mudbanks cleaned properly. Additionally the screen at the Portobello Rd pumping station, which was blocked by debris carried by the overwhelming amount of water, will be replaced by July.
Council will consider that report which has taken such a frustratingly long time to get to us, and determine the next necessary steps.
At your request I have copied this to all elected members.

Dave Cull

_______________________________

From: Golds [Godfrey Dodd]
Sent: Monday, April 25, 2016 7:07 PM
To: mayor @dcc.govt.nz
Subject: FW: Flooding

Dear Mayor
I am sending you this email in that it may make you understand how one ratepayer views your complete failure in the flooding in South Dunedin
WE all know that climate warming is a fact but your glib PR spin and articles in the paper does nothing for your credibility and your lack apology shows that you and the council do not except responsibility for this lack of governance
It is sad that only one of the council appears to have enough bottle to ask you to do in an old fashion way the decent thing
My wish is that you pass this email as part of an agenda item a the next council meeting on how one ratepayer views your lack of understanding in the way a Mayor should carry out his role
I would interested in your reply

Regards
Godfrey Dodd

_______________________________

From: Golds [Godfrey Dodd]
Sent: Friday, April 22, 2016 10:00 AM
To: Andrew Whiley [DCC]
Subject: Flooding

Hi Andrew
It is with disappointment reading the failure of governance by the council I was a chairman in those days that was the title of a high school board If the school had a problem which effected the community you had to stand up and take the blame
I do not expect the council elected members to clean mud tanks but when there is failure of this size then the expectation of the community that something is seriously wrong with the governance of the council The glib excuses as regards rise in sea level is the catch cry of the council which you as a member are part of
In my view the council members should of put on gumboots and gone out with the CEO and inspected the mud tanks instead of waiting a year for a report It saddens me to find that people in South Dunedin were not accorded this Instead we had articles written that showed how out of touch the council members were These articles were part of the green PR spin which now blights any decision that this particular council makes All that was needed was clean mud tanks and clear governance by the members of the council not excuses I hope that this is a lesson that you as a council member takes on board when making decisions in the future
Kindest Regards

Godfrey Dodd

ODT 25.4.16 (letter to the editor)

ODT 25.4.16  Letter to editor Vandervis p10

Tue, 26 Apr 2016
ODT: Vandervis forcing mud-tank issue [+ Letters]
A series of emails released by Dunedin city councillor Lee Vandervis show he was raising concerns about the state of Dunedin’s mud-tanks as long ago as 2011. Cr Vandervis said he released the emails because only publicity forced the council to change its ways. “This publicity is going to make sure it really is sorted once and for all this time.” The release of the emails follows a report released by the Dunedin City Council last week into last June’s flood, which found 75% of mud-tanks in South Dunedin were not properly maintained.

Tue, 26 Apr 2016
ODT: Staff apology for mud-tank failure
Council staff were responsible for not properly overseeing mud-tank maintenance in South Dunedin, not councillors or the mayor, a senior staff member says. Council infrastructure and networks general manager Ruth Stokes started today’s council infrastructure services committee meeting by apologising on behalf of council staff for the failings identified in a report on last June’s flood. Dunedin Mayor Dave Cull and Crs David Benson-Pope and Lee Vandervis were among those who had raised mud-tank performance prior to the South Dunedin floods, and been given incorrect information by staff. “For that I would like to, on behalf of the executive, apologise,” Ms Stokes. The failure was a management failure and not governance one, she said.

lee pushing head in mudtank words [Douglas Field 26.4.16] detailDouglas Field 26.4.16 (detail)

Comment at ODT Online:

Mayor Dave Cull outraged
Submitted by JimmyJones on Tue, 26/04/2016 – 1:49pm.

Mayor Cull says he is outraged at the failure of Fulton Hogan and council staff to adequately ensure that the mudtanks were in working condition. He should also be outraged at his own poor leadership and failure to respond to developing problems. Under his leadership the city continued to build up a backlog of worn-out stormwater pipes and equipment waiting for funding to be allocated. With this lack of funding we have seen the inevitable result of a deteriorating stormwater system. The poor state of the stormwater system was the primary cause of the severity of the flooding at Kaikorai, Mosgiel and South Dunedin last year.

This under-funding of the stormwater renewals is not an accident. Every year the DCC Mayor and councillors decide and vote on this spending – and every year they vote to under-fund the stormwater renewals because they think that a new stadium and a new swimming pool and more bicycle lanes are more important than a functioning stormwater system. The Annual Plan shows that the under-funding will continue next year. Expect the deterioration to continue.

Related Post and Comments:
20.4.16 DCC Politics : Release of Infrastructure Report #SouthDunedinFlood

█ For more, enter the term *flood* in the search box at right.

Posted by Elizabeth Kerr

*Email image: carleton.ca – android-email-app

53 Comments

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Delta #EpicFail —Noble Subdivision : set to music …

Text and images by Christchurch Driver [CD]
Monday, 25 April 2016 8:19 p.m.

Noble subdivision 0648 CD 1Noble subdivision 0646 CD Str1

With apologies to Helen Reddy and the composers of Delta Dawn….,

Delta boys what’s that picture you have on ….

Could it be a faded road from days gone by ?….

But did I hear you say, there’s a meeting in here today,

To take your debt to that mansion in the sky….

It’s 41 (months) and Grady still says it’s Ok, gents and ladies….

All the folks in Dunedin say he’s crazy….,

Cause he walks to Harcourts, with a suitcase in his hand,

Looking for a mysterious dark haired man….

In younger days they called it Citiworks, son….

Most profitable contractor you ever laid eyes on….

But a man of Noble degree came to their side,

Broke all promises and took them for a ride….

█ For more, enter the term *delta* in the search box at right.

Tanya Tucker / Helen Reddy – Delta Dawn (The McClymonts Cover) https://youtu.be/2vkzhj0E-6I
Published on Jul 14, 2014
From the The McClymonts album Here’s To You & I.

Posted by Elizabeth Kerr

1 Comment

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DCC Politics : Release of Infrastructure Report #SouthDunedinFlood

Election Year : The following post is offered in the public interest. -Eds

Flooding South Dunedin June 2015 photo by Paul Allen [listener.co.nz]Photo: Paul Allen

New Report [excerpt]—
DCC Flood Report 2 (2016) excerpt

Next meeting of the Infrastructure Services Committee will be held on Tuesday, 26 April 2016 at 1:30 pm or at the conclusion of the Planning and Regulatory Committee meeting (whichever is later) – Edinburgh Room, Municipal Chambers

PUBLIC AGENDA
1 Public Forum (page 4)
2 Apologies (4)
3 Confirmation of Agenda (4)
4 Declaration of Interest (5)
PART A REPORTS (Committee has power to decide these matters)
●● 5 South Dunedin Public Infrastructure Performance during June 2015 Flood Event Follow up (6-27)
6 Recycling Markets and Bin Contamination (28)
7 Northern Wastewater Schemes’ Options (34)
PART B REPORTS (Committee has power to recommend only on these items
8 Resolution to Stop a Portion of Peel Street, Allanton (44)
9 Road Name – Three Hills Subdivision (54)
PART A REPORTS (Committee has power to decide these matters)
10 Notification of Agenda Items for Consideration by the Chair

Agenda – ISC – 26/04/2016 (PDF, 6.3 MB)
The agenda and reports are located together in this file.

Dunedin City Council – Media Release
Report on South Dunedin infrastructure performance during June 2015 flood released

This item was published on 20 Apr 2016

The report on the South Dunedin infrastructure performance during the June 2015 flood event was released today as part of the agenda for the Infrastructure and Services Committee meeting next week.

The report concludes that while a number of factors contributed, the main factor was the highest 24-hour rainfall total in Musselburgh since 1923.

General Manager Infrastructure and Networks Ruth Stokes says the report outlines the known challenges with managing the South Dunedin catchment and highlights concerns about the performance of mudtanks and the Portobello Road pumping station during the event.

“Changes in the South Dunedin catchment since the stormwater network was designed, combined with operational challenges and high ground water levels, all contributed to the effects of the extreme rainfall event that occurred in June 2015.”

Mrs Stokes says the report shows that mudtanks weren’t maintained as required. As a result, a number of steps, including a full review and retendering of road maintenance contracts have been adopted. Other measures include accurately capturing data on the status of the mudtanks, a redesign of the Portobello Pumping station screen and the development of a communications plan to inform the community of the local infrastructure challenges and how to best plan for future events.

“However, given the volume of rainfall and the system at capacity during the June event, the water would have been unable to enter the network even if all mudtanks were clear.”

She says the DCC must now look at what measures can be taken to mitigate such events in future.

The DCC will soon be engaging with the community about these issues and what the long term responses might be.

Contact Ruth Stokes, General Manager Infrastructure and Networks on 477 4000.

DCC Link

Otago Daily Times Published on Jun 4, 2015
Raw aerial video of Dunedin Flooding
Video courtesy One News.

█ For more, enter the term *flood* in the search box at right.

Posted by Elizabeth Kerr

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Delta #EpicFail : Strategic Reasons & Outrageous Logic

Election Year : The following opinion is offered in the public interest. -Eds

Delta - AuthorUphillBattle - The Books [blog.smashwords.com]

Received from Christchurch Driver [CD]
Tue, 19 Apr 2016 at 10:48 p.m.

Readers, tonight’s exposition is to examine the Dunedin City Council (DCC) worldview that does not contemplate a sale of Delta at less than $45M. Your correspondent says that will never happen on any rational economic basis, so the next best thing is to pretend that it would not be in the ratepayers’ best interests to sell at all, seemingly at any price.

However, annoyingly, logic and reasons must intrude at some point, and in the recent report on DCHL asset values, the DCC have a crack at pushing the Delta water uphill.

Agenda – Council – 11/04/2016 (PDF, 1.6 MB)
Item 22 Dunedin City Council Investments and Returns (pp 109 – 123)

Tonight, readers, we shall dwell on and allow the TWO big “strategic reasons”, the DCC propose to retain Delta, to stand in splendid isolation, while readers allow the cool chill of logic to bring these clouds of hot air back to reality.

We shall also overlay some markers over Delta’s financial figures that give support to your correspondent’s contention that Delta is at risk. (careful words needed here, readers !)

Safely camouflaged at para 55 (page 117), deep in the DCC report, the following statements appear : “If Delta were to be sold by the DCC, one likely outcome…. [it could be] purchased by a competing company in the same field. One consideration…. is the potential ‘head office’ job loss to Dunedin if Delta were to be sold to an existing company which is not locally owned.”

Stop right there, readers. The DCC say the first, most important consideration in retaining Delta is to retain the Delta ‘head office jobs’ in Dunedin. At one level we can take this to mean that the DCC are very fearful that the current occupiers of the Delta head office jobs in question would not find similar work in Dunedin. Your correspondent thinks that is a very well-founded fear. But the DCC head of economic development tells us the city is growing and it is hard to attract executive staff to the city…. it is a taxing puzzle why the authors of the report ignore their own staff…. At the next level, your correspondent is vexed at the concern shown by the DCC for the six figure inhabitants of the Delta Head Office suite. (Note, there are 70 people earning in excess of $100,000 at Delta, your correspondent guesses that the Head Office inhabitants occupy the highest echelons of those salaries). This brings a whole new meaning to the (draft) Statement of Intent requirement to be a “socially responsible …. corporate citizen”. At a higher level again, the DCC appear to say that the welfare and future of the head office positions rank ahead of the core task of providing returns to the ratepayers.

Readers, remember that DCC provide these reasons as reasons not to sell Delta even if someone paid the massive premium of 300-400% over the $15.804M shareholders equity (which is about to suffer a severe Noble induced virus).

Your correspondent is very sure these revolutionary themes of Soviet Style central planning and corporate welfarism were not intended in the Delta ‘Statement of Intent’ which is meant regulate how the company is run.

Next up as the DCC apologia for retaining Delta is the statement, “the loss of Delta from the local contracting market, particularly if through acquisition from an existing contractor, would remove an element of competition from an already limited local market”.

This is illogical. Let us count the ways:

1. If competition is “limited” then margins will be high, and demand for skilled staff intense, so any logical purchaser would leave the Delta structure alone to continue its high margin work…. but of course, if there is limited competition and Delta are not making good profits, then there is a problem…. and Delta should be sold to an entity that can generate good profits in a limited market.

2. It can be safely assumed that Delta’s local competitors Fulton Hogan, Downer, SouthRoads, Whitestone, Asplundh, Waste Management, and any of the local power contracting companies are not stupid and they would have no interest in paying the DCC $45-60M for $15.804M of equity (on a good day). If Delta expired, the limited competition just got less, and paydays all round for all left standing. Your correspondent says then that any purchaser is likely to be someone who does not have a presence in the market, and sees potential for profit in this market, allegedly with limited competition. If that were true they would leave Delta as it was, maybe even with some of its precious head office jobs, to continue their (merry and profitable ?) way. (For the time being at least).

3. The bottom line is your correspondent posits that Delta will never be sold in its current form, because its competitors know, even if DCC Treasury does not, that Banks have certain standards for lending money to companies, and an important one is the debt to equity ratio. Delta has $26.9M of debt and $15.804M of equity. That is a debt : equity ratio of 183 % which this correspondent says is far too high for a contracting company. A debt : equity of 100 % or less is usual in this sector. Another is the Liquidity (Quick) Ratio which is Current Assets / Current Liabilities. Contractors should have a minimum of 1.35 and many accountants would say 2. (What would Mr McLauchlan say ….?). Delta has $17.5M of current liabilities and just $220,000 of cash in the bank. This is one seriously undercapitalised contracting company.

Delta will no doubt say their quick ratio is fine because the accounts show $25.244M in receivables, but this includes the very non-current and very illiquid Noble debt of $13.2M. They do have $2.84M of Work In Progress (WIP) which is included under inventories. They then have proper current assets of $0.22M cash, $2.84M WIP, and $12.2M Receivables, ($25.24-13.2M) for a total of $15.08M and a quick ratio of 0.88. The bottom line is : even putting aside the elephantine $26.9M in debt, Delta have serious cash flow issues with a quick ratio of less than 1, and if they have a further problem contract, or even just a delay of a month or two getting paid on a larger contract, they are not just on a cashflow knife edge, but in serious trouble. Delta has basically no cash reserves as at June 2015. Of course, Mr Cameron did not dwell on that factoid in his report….

Readers, the quality of the excuses made in support of retaining Delta are of the same quality as the prediction of its value at $45-60M.

[ends]

█ For more, enter the term *delta* in the search box at right.

Posted by Elizabeth Kerr

1. factoid

*Image: blog.smashwords.com – AuthorUphillBattle, tweaked by whatifdunedin

5 Comments

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Delta #EpicFail Noble Subdivision : Avanti Finance —Feeding at the Delta Trough

Election Year : The following opinion is offered in the public interest. -Eds

Received from Christchurch Driver [CD]
Monday, 18 April 2016 11:03 p.m.

Readers may remember that in an earlier post, ‘Gold Band Finance – The Little Finance Company that did (Delta)’ March 2016 – your correspondent was lacking information on what transpired between Avanti Finance and Delta.

Your correspondent indulged in some dark speculations about what Delta might or might not have done. But recently your correspondent has received email information shining a light on that transaction, a welcome piece of disinfectant as Justice Brandeis would say. While we no longer see through a glass darkly on this matter, the disinfectant metaphor is apt, as yet again, Delta suffers another grievous and substantial financial wound, this time, a deliberate and self-inflicted one. It seems that in order to save or salvage something from the Noble debacle, it is first necessary to destroy the Delta financial reserves.

The conversation must have gone like this : “Dear Avanti, you have gate-crashed our game of Monopoly and you have further erred in somehow gaining a piece of the Noble subdivision that we simply must have ! Poor form, poor form indeed. Now chaps, we can do this the easy way or the hard way ! There is no way in this whole wide world we are prepared to pay you the 37 % per annum interest rate that your friends at Gold Band are charging on their part of the mortgage…. That was then, and this is now !! Take it or leave it, our offer is…. not a penny more than…. 34.50 % !!”

Yes readers, Delta in March 2015, paid Avanti $2.19M for its interest in the Noble Investments (NIL) first mortgage. Avanti had paid Gold Band $1.5M for the same interest just 16 months before in November 2013. A gain of $690,000, or 34.50 % per year. Let’s see, only 350 times the rate of inflation. Avanti made out like a bandit, but then, they are a finance company…. and Delta are, well, Delta.

Delta CEO Mr Cameron confirmed that Delta spent $3.3M “strengthening its position”. We now know how that went : $1.2M to Gold Band, $2.19M to Avanti, which all pans out, taking into account a rounding error.
What we do not know is the timing of the $3.3M, but that is not a central issue at the minute.

Readers should bear in mind that if the situation is resolved by June 2016, then the first mortgage of $1.75M lent by Gold Band around 2004, could have spawned the amazing sum of $11.8M, and at least $9.1M. Gold Band and Cup Investments (CIL) will have lent out $1.75M and received $3.1M plus $2.7M received from Avanti and Delta. That is a total of $5.8M. Huge. Delta have paid $3.3M for a part security and if they are charging around the same interest as the others, then their figure will be around $5.5-6M. That is, the first mortgage securities of Gold Band and Delta will consume the first $10M of the mortgagee sale. Not looking good for Delta’s core debt of $11.35M of lower ranked securities….

ODT 18.4.16 front page small [allied.press.co.nz] 1bYour correspondent is desperate to see a Councillor ask for confirmation about this and the Gold Band and Avanti ‘premium’ they paid. Perhaps then the Otago Daily Times might sense that Delta paying $1M plus over the face value to Gold Band and Avanti for part of a first mortgage in an attempt to get a better recovery on their lower ranked securities is News, and not in a good way. Heaven knows they could do with some – Building Consent Delays on the front page – Good Lord what next ! more cat pictures ?
The Wash ?

Your correspondent can’t wait to read the emails around that board decision…. when the Auditor-General releases them. Will there be another email from a Delta Director stating in effect “if the subcommittee agrees then I agree with them?” (As there was for the ill-fated decision to proceed with Luggate).

Next we shall look at the “Strategic” reasons the DCC put forward as compelling reasons for retaining Delta in its report…. Irony and comedy abound….

[ends]

█ For more, enter the term *delta* in the search box at right.

Posted by Elizabeth Kerr

*Image: alliedpress.co.nz – ODT 18.4.16 front page sml

5 Comments

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