D Scene

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The D Scene has closed and its final publication was on 29 May 2013.

The following is the original letter sent into the editor at the D Scene. The highlighted passage was cut by the sub editor and printed without noting it was abridged.

Dunedin Debt Denial

At last week’s DCC Finance Strategy and Development meeting where the last quarter’s financial results were presented, Cr McTavish 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 $4million, 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 cut backs 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 Poors 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.

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

5 Dec 2012 | DScene | Opinion | View Page

2012-12-05 Debt-laden council needs to change tack

Investigation request was declined a year ago 

21 Nov 2012 | DScene | By WILMA MCCORKINDALE

Dunedin lobbyist Bev Butler says the Office of the Auditor-General (OAG) declined to investigate controversial Delta land purchases when she approached it in August 2011.

Last Wednesday the OAG announced it would investigate the Delta land purchases after a request from Dunedin Mayor Dave Cull. Butler said she asked for an OAG investigation a year ago, based on issues in Newtons Coachways (1993) Ltd statement of intent and annual reporting, an error in the Dunedin City Holdings Ltd annual report, and Dunedin stadium-related issues.

In a response to Butler the following month the OAG declined to look at matters raised by her. Councillor Lee Vandervis had also conducted research into the Delta deals over the past two years, Butler said.

She was concerned Delta was now refusing to answer official requests because of the OAG investigation.

Butler had been making Local Government Information and Meeting Act (LGOIMA) requests to Delta chief executive Grady Cameron questioning aspects of the land purchases.

Some requests had been met, but last Friday Butler received a response from Delta declining her latest request on the grounds the OAG was investigating.

Butler believed the information requested as crucial to establishing what happened in the Jack’s Point/Luggate land deals carried out by Delta in 2008 and 2009. Delta released a statement last week which Cameron says welcomed ‘‘an independent review of the decision-making processes’’.

‘‘Delta will be co-operating fully with the Office of the AuditorGeneral and will ensure any recommendations for improvement are adopted,’’ Cameron said. ‘‘Delta will not be making any further public comment until the inquiry has concluded and any findings are released.’’

Related:

  • Audit office looking at land deal (see below).

Audit office looking at land deal

21 Nov 2012 | DScene | View Page

Pressure to front about Lakes District property investments has come to bear on Dunedin ratepayer-owned Delta Utility Services Ltd. Wilma Mccorkindale recaps the Delta land grab saga.

In 2008 – and again in 2009 – Dunedin City Council-owned company Delta bought land in the Central Otago Lakes District, at Luggate and Jack’s Point.

The multi-million dollar investment was controversial. Many questioned why Delta – a Dunedin company whose core business is designing, constructing, and managing and maintaining infrastructure – needed to buy land in Central.

Delta chiefs have remained tightlipped on matters related to the purchases since D Scene broke the issue as front page news.

Three years ago D Scene put the following questions to then DCHL chairman Paul Hudson, Delta chief executive Grady Cameron, Delta chairman Ray Polson, and Delta director Mike Coburn (former director of the Jack’s Point development):

  • Why did Delta get into the property market? What was the catalyst?
  • Who brokered the deals, signed them, and when?
  • What are the projected returns (based on what)?
  • Why did Delta not use the money it spent on the investment returning dividends to ratepayers to offset hiking rates?

All declined to respond, although Hudson stood by the purchases, saying they were tabled at the council. He did not see them as high risk.

D Scene is still to get the answers to those questions.

What do we know so far?

In 2008 a Delta subsidiary, Newtons Coachways (1993) Ltd – renamed Delta in 2011 – acquired a 50 per cent interest in a joint venture for residential property development at Luggate, spending $5.3 million in 2008.

In 2009, Newtons acquires 9.4ha of land at Jack’s Point at $8.82m, for the same purpose.

In September this year, through D Scene, Dunedin councillor Lee Vandervis posed more questions about the investments to DCHL directors. The response – to his dismay – was minimal, prompting him to call for the Audit Office to investigate.

Last month Delta released its financial statements, which revealed it had reduced the value of the Jack’s Point/Luggate land by $7.5m, because there had been less demand for the residential sections than expected. New DCHL chairman Denham Shale said when Delta’s board decided to buy the land, ‘‘it was thought by them to be beneficial’’.

Announcing DCHL was writing down the value of that land, he said: ‘‘That writedown is predicated on the basis of value if a sale of those properties was forced to be made at this time.

‘‘No actual loss has yet occurred, and will not, until the properties have actually been sold’’.

Around the same time, Dunedin mayor Dave Cull and chief executive Paul Orders contacted the office of the Auditor-General, which last week decided to launch an inquiry.

The Auditor-General’s office said its inquiry into the purchases would examine:

  • The nature of the related decision-making process by the Delta board;
  • How the board identified and managed conflicts of interest;
  • The extent of its consultation with the council on the transactions; and
  • Its legislative compliance.

Cull welcomed news of the inquiry. ‘‘The decision to conduct an independent investigation is a necessary step,’’ he said.

‘‘Council companies operate within a framework of public sector accountability. It is essential therefore, that decisions made by council companies are able to withstand the rigorous public scrutiny that the AuditorGeneral represents,’’ he said.

‘‘Given the matter is now under investigation, no further comment will be made while the inquiry is under way.’’

No comment is a familiar refrain where this deal is concerned.

 Can this stadium make money . . .
 . . . Or better to close facility?

7 Nov 2012 | DScene | By WILMA MCCORKINDALE | View Page

DUNEDIN City Council is about to unwrap its pre-christmas sack of submissions on how it can make beleaguered Forsyth Barr Stadium work. found the battle lines remain drawn between those for and against the stadium. WILMA MCCORKINDALE reports.

AMONG those optimistic Dunedin’s $200 million-plus Forsyth Barr Stadium will work is Prime Minister John Key. On a visit to Dunedin last week Key issued his support for the venue without hesitation. ‘‘The stadium was a very important piece of infrastructure for Dunedin, and the right step.’’ Dunedin had to give people a good reason to want to come down to the city, and the stadium was part of necessary progress, he said. ‘‘You’re competing with other cities around New Zealand and you’ve always got to have selling features. The stadium is part of that.’’ Key acknowledged stadiums were lenging pieces of infrastructure’’. ‘‘They often don’t make money. That’s one of the reasons why the government put in $15m. We were happy to make a contribution. But it’s there now and the challenge is to make it as viable as we can.’’ Unsurprisingly, the man behind the stadium project, Carisbrook Stadium Trust (CST) chairman, Malcolm Farry, contends the venue will be successful. ‘‘Of course it will work. Dunedin has the best stadium in New Zealand. With good and careful management, control of costs and a degree of entrepreneurship, the Forsyth Barr Stadium will return to its original projections and not only will it retain its title as the best in New Zealand and beyond but [it will] also be seen as one of the most successful.’’ Anti-stadium lobbyist Bev Butler was also suggesting ways to make the facility work, albeit tongue-incheek. ‘‘The Dunedin City Council could put it to Malcolm Farry, Sir Eion Edgar, Ron Anderson and other high profile multi-millionaire businessmen who support the stadium, to buy the ‘asset’ and its liabilities, and show that the stadium can be made to profitably work and be the success they always claimed it would be,’’ Butler said. ‘‘If they show no interest, well, what do you think this proves?’’ Ultimately, Butler believed the stadium would not work. ‘‘It was a costly mistake. Our stadium is destined to share the same fate of other failed stadiums.’’ An independent cost/analysis might show it was cheaper to close the facility, the mountain of ratepayer debt it had created too high, rendering the venue unsustainable, Butler said. More positive was event promoter, Wellington-based Phil Sprey. He said his company loved the venue and he believed it had huge potential. ‘‘There’s no reason why you couldn’t [make it work]. After all, you’ve got a unique venue. You’ve got a venue with a roof. That’s your advantage.’’ Dunedin had to think big and support big ideas for the facility,

Malcolm Farry he believed. It needed to dream up some big new unique events to draw others in the city. However, the city’s high student population could, at times, become a big audience. Sprey also advocated more city council funding to fund or subsidise attracting events like Auckland, Wellington and Christchurch councils did. Dunedin councillor Lee Vandervis said historically, regional stadiums world-wide failed to achieve direct or indirect net financial returns. Claims the stadium would deliver – in spite of its first-year multimillion-dollar losses – were deluded, he said. ‘‘This first year had all the advantages of the World Cup, Elton John, a closed Town Hall and Glenroy, an internationally experienced stadium manager and the novelty effect.’’ Also saying the venue would not work was fellow stadium opponent Rob Hamlin. ‘‘It was stupid idea then and I think it’s a stupid idea now.’’ Representatives from the stadium’s owner Dunedin Venues Ltd and Dunedin Venues Management Ltd declined an invitation to comment.

Search for answers

24 Oct 2012 | DScene | By WILMA MCCORKINDALE

Dunedin city councillor Lee Vandervis is refusing to relent on criticism of Dunedin City Holdings Ltd (DCHL) performance as it announces a lacklustre annual return.

Vandervis has been on the warpath over the Dunedin City Council group of companies, demanding directors answer questions about subsidiary company Delta’s foray into property development at Queenstown’s Jack’s Point and at Luggate. Vandervis said just one shared response, from DCHL chief executive Bevan Dodds, and Dunedin City Council financial chief Athol Stephens, had been received. The pair denied any involvement in the investments, including any prior knowledge of the plan to invest.

The DCHL figure showing an annual loss of more than $5 million has steeled Vandervis’ resolve to out those responsible for what he believed were unwise investments.

‘‘Of all the individuals who I expected to have had decision-making input, [M Coburn, N Evans, R Liddell, R Polson, S McLauchlan, P Hudson, B Dodds, G Cameron, A Stephens], the only individuals to reply to my questions are those claiming to have had no part in the speculative Jack’s Point/Luggate property purchases that have cost our ratepayers so many millions,’’ he said in a written statement.

‘‘It is of deep concern to me as an elected representative that I am unable to get any director, chief executive, chairman or secretary, to confirm having voted against, or to confirm advising against the Jack’s Point/Luggate property speculation.’’

DCHL identified a reduction in asset value and goodwill for Delta on past business acquisitions, and land at Luggate and Jack’s Point, among influencing factors on its annual results.

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Related: Council report makes for suspicion, By MIKE HOULIHAN, Editor

D Scene – Page 3 – Wednesday, 26th September 2012

2012-09-26 Councillor on the warpath - Dscene 2
2012-09-26 Councillor on the warpath - Dscene

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Related: Councils should stay away from business, by Tim Hunter

D Scene – Page 2 – Wednesday, 4th April 2012

2012-04-04_dscene_-_rewind

D Scene – Page 8 – Wednesday, 4th April 2012

2012-04-04_dscene_-_secrecy_denied_dave_cull

D Scene – Page 3 – Wednesday, 21st March 2012

2012-03-21 DScene - Fury over bail-out of ORFU

D Scene – Page 5 – Wednesday, 14th March 2012

2012-03-14 DScene - Apology

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My response to the D Scene article:

From: Lee Vandervis <lee@vandervision.co.nz>
Date: Thu, 08 Mar 2012 18:29:15 +1300
To: Editor Dscene <editor@dscene.co.nz>, Wilma McCorkindale (STL) <wilma.mc@dscene.co.nz>
Subject: Delta pursues damages from Councillor – misinformation

Dear Mike and Wilma,

“Delta pursues damages from Councillor – misinformation
I was very disappointed in your 7/3/12 article ‘Delta pursues damages from Councillor’, because of its judgemental presentation of untruths.
The damage done to a power cable by me is only alleged at this point, and did not happen last September as claimed but 18 months ago prior to the last local body election.
The claims that I personally hit a steel peg that pierced the cable and that it exploded are false, as the more accurate ODT articles on the issue in 2010 made clear.
The claim that Delta had heard nothing from me is false as I have verbally invited Delta to produce their evidence when they have rung.
Also false is the claim that my election sign was erected about 20 metres south of the Council designated site, as 2010 ODT photographs show.
If DScene staff had read relevant 2010 ODT reports, or told me what was claimed in this article, this belated misinformation could have been avoided.”

In the interests of accuracy and on-going good relations, I would appreciate you running this letter with similar prominence to the offending article in next week’s Dscene.

Regards,
Cr. Lee Vandervis

D Scene – Page 5 – Wednesday, 7th March 2012

2012-03-07 DScene - Delta pursues damages

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Related:

2012-01-25_dscene_cr_sticking_with_city_rebuild_idea
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