DCC Plans More Big Rates Rises

The ODT reports that the Dunedin City Council is planning more big rates rises. After suffering large increases over the last two years, ratepayers face paying 8.7% more next year, and then 10.5% and 7.2% in following years.
And next year, less of the budget debate will be in public, with the usual three-day hearings cut to one day and secret "workshops" held instead. With local-body elections scheduled for next year, councillors are sensitive about publicly exposing their free-spending ways.
A team of senior Council staff has been looking at ways of trimming costs, but their efforts seem to have resulted in only minor savings. No fat has been trimmed from the bloated bureaucracy, but turkeys are never going to vote for an early Christmas.
It was claimed that councillors also needed to be aware of ratepayers on fixed incomes:

There is some concern about their ability to pay. The council is mindful of that.

It has hard to see any concern for ratepayers ability to pay in the Council's past or planned rates increases.
Council chief executive, Jim Harland, said that "The council isn't broke". Standard & Poor's has recently confirmed the council's AA- rating, saying that the Council

benefited from minimum legal limitations in regard to increasing its property taxes

i.e. the Council can raise rates any time it pleases, which is exactly what it is doing!

No Worry From Sea Level Rise

Despite the scare-mongering headline, the details of this ODT story indicate that Dunedin does not have too much to worry about from sea-level rise. The best news is that tidal-gauge data, from the Harbour Basin, is rising at just 1.3 mm a year, which is a continuation of the long-term trend. This shows that increasing carbon-dioxide in the atmosphere has not accelerated sea-level rise. (News reports of inundation of islands such as Tuvalu, neglect to mention that their land is sinking).
But even most extreme predictions of a 1.5 metre rise by 2100, would affect only a relatively small area of land, mostly around the Upper Harbour. The latest predictions of the IPCC only predict a rise of 0.6 metres which would affect an even smaller area.
Anyway, the theory of catastrophic global-warming is looking increasingly doubtful as the predicted increasing temperature has come to a halt, and there has been no rise since 1998. The Climategate leak shows that scientists have had to resort to dubious selection and manipulation of data to try and make it fit the theory. Time will tell who is right in this controversy.

Cairns Doesn't Want Campaigning

Otago Regional Council chairman, doesn't want "premature" campaigning for next year's local body elections. In effect, what he is saying is that councillors shouldn't consider the views of the ratepayers who elect them. He said he didn't want "trivialising distractions" from major issues facing the Council.
The major issue facing residents is the massive increase in rates over recent years, partly due to levies for the new Stadium. The Council is under further financial pressure due to the new Regional Council headquarters fiasco, the Leith flood protection scheme cost blowout, and overly-ambitious changes to bus services.
I am sure that ratepayers would welcome any councillor who looked for their support in next year's election by challanging the current culture of reckless spending in the Council.

Greater Dunedin For Financial Responsibility

The three councillors who were elected to the Dunedin City Council under the Greater Dunedin Banner, Dave Cull, Kate Wilson and Chris Staynes, are looking for candidates to join them for next year's election.
Dave Cull said that the council needed to be "much more transparent and financially responsible". I am sure that this will strike a chord with many voters, as the current Council could be described as financially reckless.
Greater Dunedin need to get enough councillors elected to form a majority on the Council, for there to be a change of direction.

Honeymoon Over For Chinese Garden

After a busy period when the Chinese Garden was first opened, visitor numbers are now well down. This was probably to be expected as Dunedin residents initially went to see what it was like, and now the hard reality is setting in. The hope of this Garden paying it's way is well gone, and ratepayers will have to pickup the tab.
Maybe those who said that the Chinese Garden would be a White Elephant, are right.

Merry Christmas, Ratepayers

By Christmas, the Council should have given an indication of how big next year's rate's increase will be. I predict that it will be over 10%: the third year in a row with a big increase.
Hat Tip: Patricia McCarty

DCC Venture Capital Fund?

Last week's "The Independent' magazine has a story (not on-line), reporting that the Dunedin City Council and local business incubator, Upstart, are co- funding study to look at establishing a "side-car" investment fund for investors. This fund would co-invest with Upstart's Angel investors, who are used to analysing startup companies.
Upstart chief executive, Norman Evans, is quoted as saying:

Anything that stops people putting their money into bad investments by spreading their risk is a good idea

Evans tells of a local farmer who had invested $1,000,000 in a local IT company:

I thought, "poor guy, he’s just blown a million bucks in a sector he knows nothing about trying to do the right thing to help a young company get going". There should be a place for people like this to invest

Such a venture capital fund is not a bad idea. I would consider investing in it myself. But I would be interested in knowing the performance of the investments that the Upstart Angels have made so far.
And wasn't the farmers unfortunate investment very like the investment of the Dunedin City Council in "The Street" where $700,000 was lost. Norman Evans was on the board of "The Street".

Bus Shelter Ripoff

The cost that the Dunedin City Council is charging the Otago Regional Council for constructing a bus shelter has increased from $6000 to between $12,000 and $15,000 since 2007. One third of this cost is for the consent process. This means that $4,000 to $5,000 is being charged for consent to build a bus-shelter.
This can only be described as a rip-off.

Emissions Trading Scheme Stupidity

The Emissions Trading Scheme bill was reported back to Parliament this week, with Treasury reporting that the cost to taxpayers if New Zealand can't meet its international obligations could rise to about $100 billion by 2050 -- twice as much as originally estimated. This is about $2,000 a year per taxpayer.
This money will be given to the United Nations which will pass it on to countries such as Russia, or other corrupt regimes.
As temperatures fail to increase as predicted, the wheels are falling off the global warming theory. And even if it is true, and other countries fulfill their obligations (unlikely), then the Kyoto Treaty will do very little to solve the problem.
It is hard to imagine more stupid politics : the rest of the world is laughing at us.

Whose Tree Is It Anyway?

The Dunedin City Council is deciding whether landowners in Taieri Road will be allowed to remove a 27 metre sequoia tree which is on the Council's "significant tree" list. The owners say that the tree damages driveways, drops debris and causes "huge stress and anxiety". They were supported by 23 submissions with 3 against.
But Council planner, Karen Bain, has recommended that the consent be denied but that the Council contribute $6,000 of the $12,000 required to deal with the problems created by the tree. The owners would have to pay the other $6,000.
It is good to see that an organisation called the Protect Private Ownership of Trees Society supporting the owners. There are few voices in today's society which stand up for private property rights.
The Council panel should respect the rights of ratepayers to manage trees on their own property, and reject the recommendation of the Council bureaucracy.

Climate Change Debate At Last

When I first started expressing skeptical opinions on global warming many years ago , I felt lonely with few others willing to go public with similar views. Perhaps they did not want to look foolish because "the science was settled" and "deniers" were betraying our planet Earth.
But times have changed: there is a vigorous debate going on in the ODT, with many skeptics joining in.
I think that the main reason for the change is that people can see that the predicted increase in temperatures has not happened. Remember, the Central Otago ski-fields were going to be out-of-business by now. But there has just been two Ski Seasons with metres of snow. And Dunedin has just had a very cold winter.
Rather than relying on assurances from scientists, people are seeking out information for themselves. More balanced articles are appearing in magazines and other media. "Investigate" magazine has produced a free on-line magazine, "Climate Reality". For those seriously interested, I thoroughly recommend Professor Ian Plimer's superb book, "Heaven and Earth", a history of the Earth's climate up to the present day.

No Pay Rise Good Public Relations

Dunedin City Council chief executive, Jim Harland, and most of the Council's senior have declined a pay rise this year, due to economic circumstances. This is certainly good public relations, especially given the large pay rise recently given the Christchurch Council's chief executive.
But Jim Harland already well-enough paid after last year's 10% increase to $335,000. In any case, he could hardly have expected much more than the 2.5% increase that he has recently negotiated with DCC staff. And after recent Council blunders, such as the parking debacle, the Council's Performance and Appraisal Committee may have found it difficult to justify any pay rise at all.
Jim Harland talks of negotiation but any change must be agreed by both sides. If an employee is not happy with their salary, then they are free to find an employer who will pay them more.
Council management soon faces the challenge of producing a budget for next year with a reasonable rates rise. Jim Harland has shown a talent for spending money in good times, he is yet to show that he can save money in difficult times.

350 Campaign Flops

The highly-promoted "350" Day of Action on Climate Change was under-whelming, and drew little support both locally and internationally. They will not admit it publicly but I am sure that the organisers are disappointed. The ODT story is here: many of the 400 people in Railway Station were probably attracted by the Spring Food Festival and free plants, and there were only 50 surfers at St Clair, instead of the hoped-for 350.
The low turnout was similar world-wide as can be seen here on the "Whats Up With That?" website.
The tide seems to have turned in the Global Warming debate, as people see for themselves that temperatures are not increasing. Polls show that that widespread and increasing skepticism, and articles on the Global Cooling are appearing in the main-stream media e.g. "Whatever happened to global warming" on the BBC website
And the prestigious Wall Street Journal describes New Zealand's first-in-the-world Emissions Trading Scheme as "global warming lunacy".

Orokonui Ecosanctuary Opening Soon

The Orokonui Ecosanctuary will be opening soon. There was a open day on Saturday for members and volunteers to show off the new Visitors Centre and Cafe. It is an excellent building with stunning views over Waitati Valley and the Silverpeaks. There is a well-gravelled loop walk through the bush showing off the kanuka and podocarps, and birdlife. It will be many years before the benefits of being pest-free allows the bush and birds to fully return to their natural state, but the Ecosanctuary is already a wonderful asset to the City.
Congratulations to all those who have contributed to this project: it has been a real community effort, and done with little burden on ratepayers.
I hope that the Ecosanctuary becomes part of Dunedin's tourist circuit. What is really needed is a vehicle ferry from Portobello to Port Chalmers so that visitors can visit the Albatross colony and then cross over to Port Chalmers and then visit the Ecosanctuary.
The ODT story is now here.

Great Buddy Holly Show in Mosgiel

We went to the Taieri Musical Society's production of Buddy Holly in Mosgiel: one of the best shows we've seen in Dunedin for a long time. Local talent playing Buddy's early Rock and Roll classics with an old-style bass, girl backing singers and a brass section. A good night's entertainment.

Calvin Says Council Run By Bureaucrats

Calvin Oaten continues excellent analysis of Dunedin affairs with an opinion piece in the Otago Daily Times:
Is the DCC being driven by its bureaucrats?

Why Not "Polluter Pays"

The Blanket Bay residents pollute their own neighbourhood, and other ratepayers in the City are going to have to pay 80% of the cost of resolving the problem. Whatever happened to the principle that those who cause pollution should pay the full cost of cleaning it up?
The ODT story is here, or download the full Council Report (pdf).
Unfortunately a precedent was set when dealing with a similar situation at Allanton, as I discussed in a previous blog post.

$2.5 Million To Keep Public From Council Staff

The Dunedin City Council is going to spend $2.5 million to redevelop the Civic Centre to keep the public away from members of the public. This is after "near misses" with unhappy ratepayers. There is growing anger at the Council from the community, over issues including the cost of the new Stadium, big rates increases, and the parking debacle.
The irony is that this is yet another example of extravagance, and will only worsen the ill-feeling towards the Council.
The ODT article about this is here.

Lawyer's Head Fence Likely to Be Publicly Notified

I emailed the Dunedin City Council expressing my concerns that the proposed fence at Lawyer's Head will affect the iconic views from the area.
Business Development Team Leader, Greg Sligo, replied saying that no decision on a fence had yet been made.

Should the Council make that decision, the next step would be for an application (for resource consent to build the fence) to be made. Once an application for resource consent is lodged, there will be an opportunity for all affected parties to have a say. It is most likely that an application for a security fence in this location will be publicly notified; that is to say it will be publicly advertised, and anyone (ie. everyone) will have the opportunity to make a submission.

The Ad That The ODT Would Not Print

The National Business Review has a article about an advertisement for Queenstown restaurant threesixty which the Otago Daily Times decided was "too suggestive" to print.

Hattip: Kiwiblog

Free New Zealand Topo Maps

The new series of New Zealand topographical maps can now be downloaded from:
http://www.linz.govt.nz/topography/index.aspx
Maps for the whole country are available and are free for download. After download, an area can be selected and a map printed out. Note that the files are large (about 50 Mb).
This should save dollars for outdoor types such as trampers and mountain-bikers.

Daffodils At Lawrence

Yesterday we paid a visit to the Daffodil display at Weatherstone's, near Lawrence. A million daffodils were planted about 1895 on 25 acres around Hart's Black Horse Brewery. In recent years, the daffodils have come to life as the land has be tidied up.

Public Hearing Required For Lawyer's Head Fence

Golfers are concerned that the proposed fence at Lawyer's Head will ruin the iconic views from the area (see ODT here). Such a fence would have a significant effect on people's enjoyment of an important public area. A public hearing is should be held before a resource consent is granted. Public input may help in siting the fence where it has minimum impact on the views, from the golf course and from the turning circle. As the recent parking bungles have shown, the wisdom of the City does not exclusively reside in the Town Hall.

Calvin's Letter In DScene

Calvin Oaten has a fine letter in DScene about DCC Company, Delta's, property speculation in Central Otago.
It is good to see that Dscene is now available online. It is free, unlike other Fairfax papers, but does require a logon for full access.

---

DScene
16 Sep 2009

Recycling Submission

This is my submission to the Dunedin City Council on the proposed changes to Recycling:

I support the preferred Option C Proposal if:
1. Householders have a choice of recycling bins : i.e they can chose to use an alternative to the new 140-litre wheelie bin if they believe that it is more convenient for them.
2. That the cost is not more than the estimated $70. There is a serious risk that this proposal could be approved by the Council but the actual cost could turn out to be significantly higher. Any
approval should be conditional on a guarantee of the maximum cost.
Otherwise the current recycling system should be retained.
For non-recyclable rubbish, I support the current black rubbish-bag and private-contractor system because user-pays encourages waste minimization.

It is interesting that the Council now seems to be offering households a choice of recycling bins, despite voting against Councillor Walls' proposal for choice (see my previous post).
City Talk says:

For example,larger households will be able to get 240 litre bins for their recycling needs, and people with low recycling needs or access issues will be able to use small 40 litre stacking bins.

And the DCC website says:

Note: a choice of container size will be available for co-mingled recycling specific to individual requirement. Refer to pamphlet in the Consultation documents.

The ODT also has an article on Recycling. In the sidebar (but not online): the Council aims to increase recycling per year per household from 114 kg to 150 kg by 2016. We will see: there will be some increase from more types of plastics being recycled, but I am not convinced that people are not recyling material because their current bin is not big enough.
Another solution is not to create the rubbish to begin with. Our household has recently had a considerable reduction in the volume of recycling, by putting up a "No Junk Mail" sign!

$50,000 For Sustainability Bureaucracy

The Dunedin City Council has decided to spend$50,000 on a it's "sustainability" project. I predict that there will be much more money to follow. Michael Guest was the only councillor to disaprove. He said parts of a report on sustainability were "from the loony left", and urged the council not to treat the idea as a religion. The ODT report is here.
That being said, much of sustainability is just a return to old-fashioned values of "waste not, want not" and frugal living. I will treat any proposals from the Sustainability Working Party on their merits, but I feel there will be hare-brained schemes to analyze.
The full Council report can be downloaded from here(pdf).

Michael Deaker On Buses

Michael Deaker, chairman of the ORC policy and resource planning committee, has written an
opinion piece in the ODT on Buses. It is much more positive than the recent "hospital pass" comment by ORC chief executive, Graeme Martin (my blog post about that here).
Michael talks of "gradual, prudent and practical improvements to buses". I do not consider an increase in bus costs from $2,154,129 to 4,823,951 in two years as "gradual" or "prudent".
He also says:

The The ORC's policy is to split the cost of contracted services over and above the government subsidy, 50-50 between bus users and transport rates.

I believe that this is incorrect. The policy is to split the cost of contracted services 50-50 between bus users and transport rates, and that this is a requirement of to receive the Government subsidy (which currently 25% of costs). The interpretation of this policy will have a significant effect on whether bus fares need to be raised further. I am sure that this will be clarified in the future.
I agree that it will be rising fuel prices which eventually triggers a significant increase in bus use.

Recycling Consultation Questions

On Friday morning, I sent an email to the Dunedin City Council with some questions on the proposed changes in Recycling. I will post the answers when, and if, I receive them.

• What % increase in recycling volumes are you expecting with Option C?
• How much of this increase do you expect will come from having bigger bins?
• You estimate $20 extra for Option C. Does this take into account improved returns from separation of recycling material? If so, how much?
• How much slower do you expect recycling rounds to be with wheeled bins?
• What percentage of households do you expect to be approved to use alternatives to the new standard 140 litre bin?

My previous post on Misleading Recycling Consultation is here.

Extra Bureaucrats For DCC

Most Dunedin people are tightening their belts, but the Dunedin City Council bureaucracy is expanding: three new urban designers and a heritage policy planner have recently been employed. Details can be found in this post on "What if?".
It is hard to disagree with the editorial in the ODT:

Nevertheless, one of the disturbing features of what is happening is the commitment of council resources to its own bureaucracy and overheads.
Supposedly, with the stadium, the wastewater processing and other ongoing commitments, the city cannot cut costs, and hefty rate rises have to continue.
Somehow, though, a budget is found for the three new urban designers and a heritage policy planner to boost the city's design expertise.

I have no doubt that the consequence of these extra staff will be more expensive projects for ratepayers to fund, and more rules and regulations telling Dunedin residents what they can and cannot do on their own properties.

Botanic Gardens Delight

The Upper Gardens are wonderful just now with the Magnolia's in full bloom and the Rhododendrons beginning to bloom, and the settled Spring weather allowing them to show their best.

ORC Drops Ball On Buses

Otago Regional Council chief executive, Graeme Martin, says that Dunedin bus services were a hospital pass but it is more accurate to say that the ORC has dropped the ball. Expenses have been allowed to increase so much that fares now only cover 35% of costs, much less than the 50% required as a condition of Government subsidies. Cuts in bus services and more fare increases will be difficult to avoid.
There has been some increase in patronage , but most of this is due to older people traveling free with their Super-Gold cards (The Government pays their fares).
The Regional Council has not explained why costs have increased so much. Only a small part can be attributed to an increase in services. The main reason is probably new requirements for high-tech buses: "raising standards". But the end consequence may be to lose passengers because of the resulting higher fares.
The full Regional Council document can be found here

	Contract	Subsidy per	Patronage	Fare
	Costs ($)	passenger		revenue ($)
2001/02	932,533	$0.68	1,376,755	1,737,205
2002/03	866,492	$0.63	1,381,760	1,781,244
2003/04	901,937	$0.64	1,403,758	1,890,465
2004/05	1,055,725	$0.88	1,195,783	1,659,990
2005/06	1,931,483	$1.49	1,292,458	1,802,223
2006/07	2,154,129	$1.65	1,305,121	2,005,873
2007/08	3,113,891	$2.17	1,437,341	2,093,360
2008/09	4,823,951	$2.92	1,651,878	2,581,122

Auckland Events Lose Millions

The Dunedin City Council has appointed directors for Dunedin Venues Management Limited, the company which will manage the Stadium. The board will be chaired by Sir John Hansen, a former Judge, who has little business experience and seems to have been appointed to give a respectable facade. Many of the finance companies which have failed in recent times, have had this type of appointment on their board.
The deputy-chairman of DVML will be Peter Stubbs, who is chairman of The Edge, which manages the venues of the Auckland City Council. He certainly knows about the risks of event management: The Edge lost $1.9 million promoting My Fair Lady in August. This is even more than the $1.8 million Auckland Regional Council lost on David Beckham.
The other DVML directors are Stewart Barnett, Bill Baylis, Peter Brown, Malcolm Farry, Peter Hutchison, Jennifer Rolfe and Kereyn Smith. There can be little complaint about the calibre of those chosen.
But event promotion is a risky business, particularly in cities with a low population base such as Dunedin. I think that there should be a public debate on whether DVML should take the risk of event promotion, or it should just hire the venue. I seem to recall Euan Soper, of the Carisbrook Stadium Trust, saying it would just be venue hire.
The ODT story is here.

No Sunday Drive On John Wilson

The Dunedin City Council has changed it's mind again and decided John Wilson Drive will only be open to vehicles on weekdays (story in the ODT here). This is described as a "compromise" between those who want it reopened and those who want it open to walkers only. But it hard to disagree with Councillor John Bezett who said, "This to me is trying to please everybody. We are going to end up pleasing no-one".
This decision puts an end to the long tradition of taking elderly and infirm relatives on a Sunday Drive to John Wilson. And those who work for a living will largely miss out.
The Council has lost the plot yet again. I am sure that this decision will be revisited before long.

"Darwin Lives" At Museum

We spent a great evening last night in the Animal Attic at the museum, with Charles Darwin. He was impersonated in a one-man show by Ken Benn, who brought to life Victorian times and the great Evolution controversy between Science and the Church. Darwin's breakthrough was to discern the mechanism of evolution: natural selection. He was influenced by the flora and fauna that he saw on his travels around the world on the Beagle, and his observation of the changes in domestic animals as a result of selective breeding.
Last night's show was $5 with tea and cakes, but there are free shows at other times.The show accompanies the "Charles Darwin: Evolutionary Thinking" exhibition at the museum. 2009 is the year of Darwin and marks a double celebration – not only is it 200 years since the scientist’s birth, but also 150 years since The Origin of Species was first published.
Ken Benn has also impersonated Leonardo da Vinci and Ernest Shackleton, to to accompany their respective exhibitions.

Misleading Recycling Consultation

The Dunedin City Council promotional material for the consultation on Recycling changes (pdf here) features a smiling Solid Waste Manager, Ian Featherston, alongside the various "choices" of recycling bins. Anyone reading this material would expect to have a choice of bins, if the proposed scheme is implemented.
But in the official consultation proposal (pdf here), there is no choice: everyone must use the new 140-litre wheelie-bin, unless they apply and are approved on a "special needs" basis. In fact, the Council recently considered and rejected the suggestion, by Councillor Richard Walls, of giving house-holders a choice of bins (ODT story here).
It will be interesting to see how the Council deals with this apparent blunder, during the consultation process. It will be sensitive to criticism following the Parking fiasco.
I think that that choice of recycling bins would be a good thing because no size will suit everybody. There are thousands of households where a 140-litre wheelie-bin would not be suitable because they have steps or do not have room. Now that the "choice" genie is out of the bottle, it will be hard to put back in again.

Calvin Questions Town Hall Business Plan

A letter from Calvin Oaten to Dscene:

I have read the report by senior manager Kate Styles to councillors on the proposed town hall/conference centre upgrade.
I was not so so much impressed by what it enclosed as by what it did not. It was in effect a synopsis of the more elaborate presentation by the architect consultants Opus Ltd. Ms Styles twice mentions her business case in support of the project. What business case? We don’t know, because she does not elaborate on it. I doubted there was one until I read the latest LTCCP.
It is planned to refurbish the town hall in conjunction with expanding and fitting out the concert chamber and parts of the municipal building in order to
create an international standard conference centre.
The idea was floated at a cost of $14m. It then developed with the controversial Harrop St "glass clip-on", at a revised price of $18.5m. Later it became $29.2m, but at the same time strong opposition over the clip-on brought about a rethink, resulting in a revised design developed more within the building
footprint. However, the estimate of capital, plus costs, are now $51.245m.
Annual expenditure in operating the centre is shown as ranging from $1.679m in 2009/10 to $1.974m in 2011/12, by which time the planned development will be complete. The operating costs then take an incremental leap to $6.727m in 2012/13 and remaining at this} level through the remainder of the LTCCP.
When the cost was at $18.5m, former manager Peter Brown claimed there would be at least an additional six conferences per year for Dunedin, with an expected
economic benefit to the city of around $3m per year. When the project cost moved to $29.2m, Ms Styles said there would be an increase of 16 conferences per year prov1ding an economic benefit of some $16m.
Now that the cost is over $50m, will she explain her business case, explaining how many extra conferences she now plans for, and the empirical evidence to
substantiate her projections?
What would be the the economic benefits now accruing, bearing in mind the huge increase in debt servicing and operating costs being imposed on the ratepayers?

Calvin Oaten,
Pine Hill

Council Guarantees Otago Rugby Debt

The Dunedin City has confirmed that it has purchased Otago Rugby's Carisbrook property for $7 million dollars. Otago Rugby will lease Carisbrook back for three years and pay for operational and debt-servicing costs. In addition, the Council has agreed to guarantee the interest on the ORFU's seasonal debt.
Mayor Peter Chin claims that:

"This is good news for the ratepayers and for the ORFU. It represents a sound investment based on a rigorous independent valuation of the current and future values across a range of land uses, all of which makes this a canny investment."

Note that there has been no proper registered valuation, as would be expected in a deal of this type, and that the valuation includes "future values". $7 million seems significantly higher than current market value taking into account the cost of demolition and the interference by the Historic Places Trust. When the lease ends after three years, the Council will be faced with servicing the $7 million debt. It is hard to see how it is a "canny investment".
The Council is relying on Otago Rugby for most of the revenue for the new Stadium. Otago Rugby has had to be bailed out of financial difficulty because the product that it is selling in not attracting enough paying customers. This hardly inspires confidence in the success of the Stadium.

Stephens Cairns' Two Hats

Letter to the ODT:

Otago regional councillors Gerry Eckhoff and Bryan Scott are right to pursue ORC chairman Stephen Cairns over the appropriateness of his dual ORC and real estate roles. Either actual or perceived conflicts of interest are something any organisation has to be vigilant about.
It is on public record that Mr Cairns has acted for many years for multimillionaire developer Earl
Hagaman, as his real estate agent. Mr Hagaman owns a very large portfolio of property throughout the city, including the largest proportion of stadium land until it was sold to the Dunedin City Council. There is nothing wrong about this, per se, but to have a real estate
agent, Mr Cairns, in his other position as ORC chairman is simply not right.
Being chairman of the ORC places Mr Cairns in a very powerful andvinfluential position. The argument that he is entitled to an outside job is only partially true. If Mr Cairns was a hairdresser, owning his own salon, there is no likely conflict of interest having such an outside job. The problem here is he is a real estate agent.

Peter Attwooll
City Rise
[This letter was referred to Stephen Cairns, who did not wish to comment.]

There may be a Code of Conduct complaint at the Otago Regional Council arising out of this issue.
In March, Stephen Cairns denied a conflict of interest.

Dunedin Does Not Need New Library

There has been speculation that the Library is going to be moved to the Old Post Office at a cost of $20 million, the latest being Peter Entwhistle's article in today's ODT.

But does not need a new Library:

• The current Library is adequete for current and future needs. Libraries are not as important as they used to be because the Internet has taken over as the primary source of information in the community.
• The current Library's location is excellent because it is close to other places which people visit regularly anyway. I believe that a move to the Exchange will result in a drop in the number of visits to the Library.
• Dunedin cannot afford it. It is true that the funding is already in the Plan, but this requires large rate increases to pay for it.
  
• A new Library is a "want", not a "need".
  

DCC Has Lost The Plot on Facebook

Great to see local politics is going on-line with the DCC Has Lost The Plot Facebook group. It now has 2500 members. The ODT coverage is here.
It is great to have a forum where analysis and opinion can be expressed outside the control of the Dunedin City Council and the Otago Daily Times. I have avoided Facebook so far in spite of encouragement from my children, but this will be the trigger for me to join.

North Queensland Road Trip

We are back from a break from the Dunedin Winter, doing a road trip in Tropical North Queensland, from Mackay to Cape Tribulation. It is a wonderful place for a holiday, especially at this time of year when the temperature is just right for sandals and shirt-sleeves.
Mackay is a boom town on the back of the mining industry, with 40 ships queued off-shore waiting to load coal to China. In the nearby Eungella National Park, we saw platypus in the wild.
Townsville was a real city with happy locals, not a resort, and seemed good place to live in the Dry Tropics compared to the Wet Tropics to the north.
Our favourite place was The Sanctuary at Mission Beach: huts in the Rain-forest with a fine restaurant, where we were lucky to see some cassowaries. Port Douglas is an international-class resort close to the Great Barrier Reef. After croc-spotting on the Daintree river, it is Rain-forest to the end of the tar-seal at Cape Tribulation where we stayed and enjoyed tropical fruit at the Cape Trib Farmstay.

DCC Buys Jacks Point Sections

The Dunedin City Council has bought 100 section in the Jacks Point development in Queenstown.
This story is by the National Business Review's Chris Hutchings.
Time will tell if it is a wise investment.
The NBR has scooped the ODT again.
But the ODT catches up here
and here.

Misleading Staff Report on "350" Campaign

The Dunedin City Council Staff Report on the "350" campaign only tells one side of the story. Others have also taken issue with this Report in comments on the ODT web-site.
I consider myself quite "green": I grow vegetables, have a compost-heap and worm-farm, go to the Farmer's Market, collect huhu grubs for the kakas at the Eco-Sanctuary, and cycle to work. But I do not believe that global-warming is a problem. I did an honours degree in Physics many years ago and have followed Climate Science all my life. I work as a computer programmer and am aware of the limitations of computer modeling in complex systems like the Earth's atmosphere.
The predictions of Global Warming are based on the output of computer models. But the Earth's temperature has not increased as predicted by the models.
Have a look at the temperature record here.
If the global warming predictions were correct, then the graph would be off the top of the chart. The peak in 1998 triggered the initial alarm but is now agreed to be due to El Nino. Since then the temperature has got nowhere near the 1998 peak and now seems to be trending down.
It is nonsense to suggest that there is "consensus" in this area, and that the science is "settled". 30,000 American scientists recently signed a petition saying that that the scientific evidence did not support global warming.
Note how the term "climate change" is now used rather than the original "global warming". This change has been made because the warming has stopped, and because with "climate change" every drought, storm, flood or snow-fall can be blamed on carbon emissions, even though they have always happened.
There is no dispute that carbon-dioxide causes some increase in temperature. What is in dispute is whether there are the runaway "feed-back loops" predicted by the global warming advocates, or whether the increase in temperature will be small and not significant compared to other influences on the Earth's climate. Runaway feedback loops are rare in natural systems which have existed for a long time, such as the Earth's climate, and do not seem to show in measured temperatures.
A little warming is a good thing: it is the warm periods of history which have been the times of the greatest flowering of civilisation, when crops have flourished and surplus wealth was available for human progress (Roman times and the Middle Ages were warmer than now). And Dunedin would be almost perfect if it was a degree or two hotter!
It is cold which is the greater threat to the world. It has been long recognised that there is correlation between global temperature and sun-spot activity (although no mechanism for this has yet to be scientifically established). The high sunspot activity that has occurred since 1950 has ended, and there have now been no sunspots for two years. Based on this, some scientists are predicting cold spell for the Earth over the next twenty years. Time will tell who is right.
Who is James Hansen?
NASA's James Hansen is a controversial scientist and eco-activist. He made headlines in the USA last week when he was arrested in an anti-coalmine protest. He has been accused of a great many things including selecting and adjusting data to suit his theories, and siting his temperature-recording devices next to the heat-outlets for air-conditioning systems.
From the Staff Report: "an example is the large loss of Arctic sea ice in the summer of 2007"
Here is a graph of the area of Global Sea Ice over the last 20 years.
There was less Arctic sea ice in 2007, but also more Antarctic sea ice. The current area of ice is no different than it was twenty years ago.
Why is Global Warming so widely believed?
"The Emperor has got no clothes!" I think that "sustainability" has become a kind of eco-Religion where the dogma cannot be challenged. This has become aligned with left-wing political interests who are looking for an excuse for state-control. And now there is a large bureaucracy which depends on global warming for it's existence. There are determined efforts to ignore or suppress opposing views, comparing them to denying the Holocaust. The latest example:
In the USA, the Environmental Protection Agency is having hearings to decide is carbon-dioxide should be classified as a pollutant, and it asked for a report which reviewed the current science. The review questioned global warming, then the EPA suppressed the report, and announced that there would be no review of the science in the hearings. Fortunately the report was leaked and can be found here.
Why are other organisations supporting the "350" campaign?
Some are environmental organisations which you would expect to, others may be following along with the crowd, or have eco-activists in position of influence. The Ministry of the Environment does not appear to be supporting the event.
The Council is being asked to support a controversial political activity, but is not in a position to properly make a judgment the issues involved.
It is the job of the Council to administer local affairs, it is not the role of the Council to be involved in such political campaigns. Not supporting it does not mean that the Council is opposed to it: it is just leaving it up to individuals or organisations in the city to support it, if they wise to do so.

Possum TB Vaccine Is Stupid

Landcare Research are trialling a tuberculosis vaccine for possums. It hard to think of a more ridiculous waste of money. If possums can be given a vaccine, then they can be killed or poisoned.

DCC Answers Your Prayers

The Dunedin City Council Propaganda Department has outdone itself this time.
Your prayers have been answered if you have prayed for:

• An increase in parking fees
• Paid parking in areas which previously were free
• Paid parking at times which were previously free
  

Bus Route with Empty Buses Canned

The "City Loop" bus route, which has averaged one passengers per trip, has finally been abandoned by the Regional Council. I have advocated for this service to be stopped, at the last two years Regional Council Annual Plan hearings. $400,000 has been wasted on this route: it should have been terminated long ago. Attention should also be paid to other poor-performing routes. If few people are using a bus, then the Regional Council should not be subsidising it.

DCC Wise To Fix Stadium Loan

The DCC has locked in $90 million, of the $109 million Stadium loan, at 6.4 % from 2011 to 2016.
This is a wise move as interest rates are rising steadily, and seem certain to continue rising, due to massive borrowing from Governments world-wide to pay for their "stimulus" spending.
The Stadium loan is for 20 years so there is still an interest rate risk after 2016, but the Council move is the best that could be done.

Mid-Winter Lantern Parade Photos

Eckhoff Opposes Waterfront HQ

Otago Regional Councillor, Gerrard Eckhoff, has an excellent article in the ODT, opposing the building of of the new Regional Council HQ on the waterfront.
He challenges the claim the money will not increase rates:

The proposed office block on the harbour basin is to be funded from reserves.
While the proponents of the new harbour site building argue it will not affect rates, there is an opportunity cost to the use of ratepayer reserves, which can be spent, saved or used in many ways.
The ORC effectively had a choice to fund the stadium ($37.5 million) or the proposed new building ($34 million) out of reserves.
Either way, the run-down in reserves will no doubt be rebuilt over time, so the rate take will need to continue at the current levels.

And comments on the Waterfront weather:

Some believe the enhanced amenity value to Dunedin's public will offset the significant cost in building on such a site.
Comparisons have also been made with the Auckland Viaduct Basin, which super-yachts and the America's Cup (briefly) call home; and where a thriving café culture exists in the almost subtropical climate.
Dunedin has no such opportunity, given the east wind off the harbour makes itself felt most days.

I am can comment on the Waterfront climate as much as anybody as I have worked in the Port Otago Building for the last ten years, cycling to and from St Clair most days. The micro-climate of the Waterfront is windy and cold. I often have to put my jacket on when I leave work, but take it off again when I reach St Clair because I am hot. The cafe scene at St Clair has thrived with crowds regularly enjoying the outdoor tables. But you rarely see people outside at the Customhouse.
The Queenstown Lakes District Council has the right idea, shelving their plans for a $30 million HQ.

More On Otago Rugby's Bailout

Following on from the letter from Calvin Oaten last week, this week's Dscene has a story saying Carisbrook will be sold to the Dunedin City Council for $7 million.

Dscene asked an experienced property valuer for an estimate of Carisbrook's worth and was given an off-the-cuff figure of "ballpark $4 million".

But $7 million will enable Otago Rugby to pay off it's debts. DCC chief executive , Jim Harland, has said:

The council’s concern is to ensure the ORFU is in a viable financial position looking into the future.

If Dscene's $4 million is correct, then Dunedin rate-payers are bailing out Otago Rugby to the tune of $3 million.
Today the ODT, also has a story: "Carisbrook Deal believed to be $7 m" (but does not acknowledge Dscene's scoop).

Mr Harland said the sale price was not included in the $198 million cost of the new Forsyth Barr Stadium, and was "based on" a market value agreed after the council sought "valuation advice".
Mr Harland would not say whether the price was inflated beyond market value to help the ORFU clear its debts. "I can't comment on that question. I'm not saying no, and I'm not saying yes."

Note that it is "valuation advice", not a valuation.
Factors which have reduced the market value of Carisbrook include:

• The currently depressed property market, particularly for development land
• The difficulty of obtaining finance
• Rising interest rates due to world-wide Government deficits
  
• The cost of demolishing the existing structures
• The involvement of the Historic Places Trust
• The industrial zoning of the site
• The two-year wait for Otago Rugby to vacate the site

There are still many questions to be answered:

• How will the Council fund the purchase?
• Will the rent paid by Otago Rugby cover the operating and holding costs?

Watch this space.

DCC Bails Out Otago Rugby

The Dunedin City Council has admitted that a reason that the DCC is buying Carisbrook is to resolve Otago Rugby's financial situation.

Calvin Oaten's letter to the ODT:

In all the triumphal utterances of the Carisbrook Stadium Trust, the Dunedin City Council and general supporters of the proposed stadium, one important matter seems to have slipped under the radar. Neither the DCC nor the plentiful opponents have made much of the fact that the DCC has purchased Carisbrook from the Otago Rugby Football Union. Why? Is it not a very pertinent point of the whole debate?
Indeed, why did the DCC need to purchase it at all? Surely, if the ORFU needed to sell it, why did it not simply go on the open market? I fail to see what value there is for the citizens intaking ownership of a stadium about to be made redundant by the very same representatives of those citizens.
Some serious questions need to be answered by the DCC chief executive is Jim Harland:
• Why did the DCC buy Carisbrook?
• What price did the DCC pay?
• Did the price agreed take into consideration the $2 million debt that the ORFU owes the DCC?
• Was the purchase-price factored in as part of the budgeted $198 million cost ofthe Awatea St stadium? If not; why not?
• What use does the DCC see for the purchase and what costs are budgeted for in order to demolish existing improvements, thus making way for reuse or sale of the site?
• Did the purchase include the ORFU’s other properties on Burns St and parking areas on Neville St?
These questions are essential details which the public are entitled to know if they are to be able to assess the value of the council’s decision to make the purchase. After all, we have just seen where the relative land purchases at the Awatea St site cost $35.6 million, up from an original estimate of $15 million. A full explanation of the above points at the earliest convenience would be appreciated.

Jim Harland, chief executive, Dunedin City Council, replies:

Why did the DCC buy Carisbrook?
To assist the ORFU as anchor tenant in the new stadium and to secure a piece of industrial land for the future of the city.
What price did the DCC pay?
This information is confidential until negotiations have been concluded.
Was the purchase price factored in as part ofthe budgeted $198 million cost ofthe Awatea St stadium?
No. The council’s concern is to ensure the ORFU is in a viable financial position looking into the future.
What use does the DCC see for the purchase and what costs are budgeted for in order to demolish existing improvements, thus making way for reuse or sale of the site?
No decisions have been made on the future use ofCarisbrook. The modelling prior to purchase took into account likely demolition costs.
Did the purchase include the ORFU’s other properties on Burns St, and parking areas on Neville St?
Yes.

Risks of Council Debt

Yet another great post from Calvin Oaten on ODT online, on the risks of Council debt
I think that the biggest risk facing the heavily-indebted Dunedin City Council is rising interest rates. When the projected cost of the Stadium blew out by $20 million, the Council conveniently reduced the interest rate it expected to pay on the loans from 9% to 7%, saying that there would then be $20 million less interest to pay. But, because of the massive borrowing presently required by Governments around the world, long-term interest rates are rising steadily. Dunedin ratepayers have good reason to be worried.

Neil Ashby on Building Consent Fees Gravy Train

A Letter to the ODT by Neil Ashby:

Many of us occupied in the building industry are dismayed at the ease with which the Dunedin City Council notifies the monotonous requests for hikes in the cost of building consent fees (ODT, 3.6.09).
These fees have been aggressively increased annually over the past 10 years at least, although a precedent was set in this current year — they actually increased twice. The increase this time was 25%. How nice it would be if those of us active in the private sector ofthe industry could increase our charges in such increments and at such regular intervals.
A graph showing inflation and DCC consent charges over the past 10 years would clearly illustrate how outrageous the evolving situation is becoming.
Those members of the Dunedin public contemplating doing a $150,000 alteration/addition to their home will now face a base fee, for the building consent to do that work, of approximately $5200 (i.e., after these new increases are implemented). If you had a house in Waihola (under the jurisdiction of the Clutha District Council), the equivalent fee would be $1288.
One of the feeble reasons given for the installation of this last increase was that they wished to regain revenue due to the lower number of, and the lower value of building consents currently being issued. I wonder if the DCC has given any consideration to the possibility that one ofthe reasons there is currently less building work being proposed might be that the accumulation of costs local government has levied on building work may be putting building beyond reach of many consumers.
It should be understood also that building-consent fees are set proportionately to the value of building work to be done. Given that building work generally increases in cost with the effects of general inflation, that in effect provides the council with an ongoing revenue increase. There should be no need for additional adjustments to the "gravy train" discharge values.

Wasted Time on Jury Duty

I was on Jury Duty last week. On Monday morning, I waited for two hours before being told the trial was delayed until tomorrow. On Tuesday, the trial started and I was not chosen to be on the jury. On Thursday, I waited for two hours before being told the trial was delayed until the afternoon. In the afternoon I waited for an hour before being told that the trial was canceled for the week. I spent most of my time on Jury Duty waiting for delayed or aborted cases. Surely it is not too much to expect that pre-trial issues are sorted out before the appointed trial start time, and to hold lawyers to account when they are not.
There are clearly problems with the organization of Jury trials and the Government wants to do something about it. But limiting the right to a Jury trial would be a backward step. There have been many events which raise doubts about Judges and Police. They should not be allowed to impose significant prison sentences on people without the opportunity to be judged by a jury of their peers.
It is better management of the Court system which is required, not the watering down of long-held rights from our English legal heritage.

Calvin's Analysis of Stadium Finances

Calvin Oaten has written a letter to the ODT, analysing Stadium finances. It will be very interesting to see the Council's response to Stadium submissions, when it comes out.
There is a thread on this topic on the ODT site.

Dunedin City Council CEO Jim Harland is working very hard on a standard but "very detailed response" to stadium submissions, including the history of the project, that councillors would be able to debate before sending it to all submitters in an attempt to "de-confuse them". That should be an interesting exercise, which I hope the recipients appreciate. After all, we have spent over $20 million endeavouring to get the council to
understand it and, by all accounts, it is not even certain that they do yet.
It really is quite simple. The plan is to build a stadium at a cost of some $200 million. The DCC is to contribute $85 million, the Otago Regional Council $37.5 million, the Otago Community Trust $7 million, the University of Otago $10 million and the private sector $45.5 million. The Government contributes $15 million, making a total of $200 million. The DCC is to put up an additional $6.4 million, set aside as a capital maintenance fund. The $91.4 million DCC portion is to be paid off by the council-owned company DCHL at the rate of $5 million per annum over 20 years. This means that DCHL’s dividend to the DCC over that period will be reduced by $5 million per annum. This will be made up by the ratepayers at an average cost of $66 per annum on their rates. This leaves a conundrum or two to be considered.
The $100 million of DCHL’s debt at 7% interest over 20 years will cost $70 million, or $3.5 million per annum. Then there is the fact that the private funding has not eventuated in time for the construction period. In fact, there will only be $2.9 million available with the balance of $42.6 million required to be bridged by the DCC. The balance is is now projected to come in progressively through to 2021. Assuming it is equally spread through to 2021, this could mean an interest charge of $1.5 million per annum for 10 years. So, we have an additional $5 million per annum to be found.
Mr Harland will tell us that this will be paid by the venues management company (DCVL) out of its operational revenue. That’s right — a profit of not less than $5 million a year, over and above all expenditure, maintenance and depreciation etc. Of course, with 10-12 rugby matches a year that should be a breeze. But if this does not eventuate then guess who pays?
If the $5 million dividend loss is to cost us $66, then it is reasonable to assume that the $5 million interest costs would also cost us $66 if DCVL does not achieve its projected returns. This means an average total of $132 per ratepayer. Oh yes, I almost forgot - we will all also be paying the ORC for its
contribution, which could easily be an average of $45 per ratepayer. Total now $177.
Then, of course, we should take into account the lost opportunity of the dividend. By this I mean if the stadium was not happening, we would save $66
and get the dividend. This means we in effect pay twice. So, in real terms, the deal could cost the average ratepayer $243 per annum. I will bet dollars to
doughnuts that Mr Harland’s explanation will not tell us that. After all, when he and his counsel were asked by Justice Chisholm to explain how the $66 per ratepayer was arrived at, they admitted that they could not.
Whom to believe? It is your choice.

Calvin Oaten
Pine Hill

Regent Upgrade Will Add $4.7 Million To DCC Debt

$4.7 million towards an upgrade of the Regent Theatre has been sneaked into Dunedin City Council Annual Plan at the last minute. Chief Executive, Jim Harland, said that, because this was "Health and Safety" work, it could be carried out without consultation. But there appears no reason why this item could not have been made public earlier so that the public would have had the opportunity to comment. "Health and Safety" was also used as to justify the Town Hall upgrade.
There was a suggestion that this work be funded by endowment funds. And the doubtful claim was made, that the Regent could fulfill the need for a 800 seat theatre by the putting up of partitions.
The $4.7 million will be funded by loans. This will add to the Dunedin City debt which Calvin Oaten calculated would reach $666 million next year.
The ODT has the story here.

Calvin's Analysis of DCC Finances

Calvin Oaten does some of the best insights into the finances of the Dunedin City Council. His latest analysis is on-line on the ODT site.

Letter From Cull, Wilson and Staynes

An excellent letter has been sent by Dunedin City Councillors to the ODT:

NOW the final decision to build the stadium has been made, a chorus of unqualified support has been attributed to some of us who have opposed the project. Let us be clear. The cost of this project being imposed on the majority in our community against their wishes carries enormous risks and we remain very concerned about these. However, the die is cast and like every other council facility, the stadium should be supported and promoted to the full. In order to reduce the liability of this new facility on our ratepayers, we have to strive to make it work and maximise any possible potential for viability.
We need to proactively seek solutions to the risks this project poses such:

• The very real chance that the cost will rise further.
• The potential for future opportunities having to be passed up in order to contain rates increases within an affordable range.
• The Dunedin City Council-owned companies becoming unprofitable due to the extra debt burden imposed by the stadium.
  

To counteract these, we will need to identify ways in which to minimise the rating burden through:

• Delaying or deleting other capital projects to limit overall borrowing costs.
• Reducing council operational costs.
• Not allowing the private sector funding effort to flag. It is more important now than ever.
  
• Ensuring the ongoing management and promotion ofthe stadium is efficient and of the highest quality to minimise operational deficits. .
  

In addition, it will be imperative that:

• The community supports and uses the stadium facility where possible.
• The tertiary sector openly commits to using the facility and the opportunity it presents for growing the education sector in the city.
  
• The city’s reputation as a centre of excellence for high-performance sport is significantly enhanced.
  

Even if these are realised, the next council will still face the daunting tasks of curtailing community expectations in other areas for lack of funding and of rebuilding the trust in the council eroded by the stadium process.

Crs Dave Cull, Kate Wilson and Chris Staynes
Dunedin

Biking Around Like Hawea

I joined the hundreds who mountain-biked around Lake Hawea in the Contact Epic and Classic. The weather was fine and clear, ideal to enjoy the superb scenery, which is not usually accessible to the public. It is a tough ride due to the rocky nature of much of the route.
I often take part in the regular Saturday AOK Social Rides, traversing the many hills and trails around Dunedin. Mountain-biking is a great way to keep fit and enjoy the outdoors in good company.

Opinion Piece On Blogging

Good to see the ODT has an opinion piece on blogging:
Media commentators see bloggers' political credence increasing

Stadium Contract Signed

The contract has now been signed: Dunedin is now committed to a new Stadium. For the sake of Dunedin ratepayers, I hope it is a success, and earns enough revenue to pay it's way. The Councillors who voted for the Stadium deserve credit if it goes well and will be held to account if it does not.

Broken Assurances And Evaded Truth

Dunedin City Councillor, Dave Cull, gives an excellent opinion piece in the ODT on the Stadium issue, before next Monday's DCC meeting when approval may be given to sign the contract.

Online Mall Still Not Open

The online mall, Mall Plus, based on software developed by Dunedin company, The Street, is still not open. The Dunedin City Council will be lucky to get a return on the $700,000 that it has invested in The Street. I have contributed to the discussion in the ODT.
The ODT removed this link, to Silicon Valley's Paul Graham's discussion of startups, from my comments post.

Reopen John Wilson Drive

It is good to see that City Councillors, such as Michael Guest, are taking notice of the desire of Dunedin people to reopen John Wilson Drive. There have been many letters to the ODT including this one.
John Wilson Drive has long been an area where the elderly and invalid can enjoy the great views of the Sea and the City. There are enough areas already closed off for wild-life on the Peninsula which are accessible only to the more mobile.
The Council will be discussing this next week.

Town Hall "No Stadium" Meeting

When was the Dunedin Town Hall last full for a political meeting?. I am sure it was a long time ago.
Six excellent excellent speeches from well-respected citizens expressing their concerns about the Stadium project, chaired by broadcaster Dougal Stevenson:

• Dunedin ex-Mayor, Sukhi Turner

• Alistair Broad, who worked with the legendary entrepreneur Howard Paterson

• Otago Regional Councillor, and ex-MP, Gerry Eckhoff

• Dr Robert Hamlin of the University of Otago School of Business

• Natural History NZ Chief Executive, Michael Stedman

• Dunedin City Councillor, Dave Cull

Themes were the risk of the "Guaranteed Maximum Price" contract, the reliance on Rugby which is in decline, and the unaffordability in these uncertain times.
I have no doubt that the greater majority of Dunedin people oppose the project. Dave Cull would be elected mayor, if a vote was held today.
Read the report in the ODT.
But I don't think it will make any difference : the Dunedin City Council will build the Stadium anyway..

David Farrar Visits Dunedin

Leading New Zealand blogger, David Farrar, visits and has good impressions of Dunedin

Visiting Professor Skeptical On Global Warming

This evening, Professor Aynsley Kellow, Head of the School of Government at the University of Tasmania, gave an Open Lecture on "The Environmental Debate: Climate Change in the 21st Century". He was returning as a graduate of Otago University, and has published a book on this subject.
Professor Kellow expressed concern at the politicization and extremism of the Global Warming proponents, and pointed out much evidence which raises doubts about the theory. Skepticism should be the proper attitude of Science, and not used as an insulting term.
Several "Greenies' in the audience walked out, showing their intolerance of differing viewpoints.
I think that the tide is turning on the Global Warming debate. There is also a skeptical article in this week's student magazine, "Critic", something unlikely to have happened in the past.
As global temperatures fail to increase as predicted, the theory is becoming increasingly in doubt.

ODT opposes Regional Council Palace

Good to see the ODT editorial opposing the spending of $30 million on a new Otago Regional Council headquarters on the waterfront.

Highlanders at Risk

The ODT reports:

Highlanders chief executive Richard Reid says people in the South need to realise there is a risk they may lose the Highlanders.

If there is a risk that Dunedin may lose the Highlanders, then it is too risky to build the new Stadium. The financialHighlanders chief executive Richard Reid says people in the South need to realise there is a risk they may lose the Highlanders. viability of the Stadium relies on large crowds at rugby. But projected crowds are based on those during the golden years of Otago Rugby in the 1990's. Otago Rugby has now lost its fan base. The fundamental problem expressed by Richard Reid is the same as that expressed by opponents of the Stadium: Dunedin just does not have a big enough population base to support it. It is notable that Richard Reid has waited until the decision has been made to proceed with the Stadium, before expressing these views. Over the last couple of years, Otago Rugby has been very quiet about the crowd numbers at Carisbrook.

But once Dunedin is commited to the Stadium and needing rugby to maintain cashflow, then we can be held to ransom by Otago Rugby: "subsidise us or lose the franchise".

The Stadium Will Be Built

Following the decision of the Government to underwrite Stadium funding with $15 million from the Rugby World Cup budget, the Stadium will be built.
But can it be built in time for the World Cup?
This is related to price. It may cost more if there is a deadline, so will the Dunedin City Council be faced with an extra bill if, as a condition of the underwriting, the Government requires the Stadium to be finished in time for World Cup Rugby.

New ORC Headquarters : The Next Battle

In an Opinion piece in the ODT, Otago Regional Councillor Doug Brown raises questions over the Council's new harbour front office project. This will be the next ratepayers battle, after the Stadium debate is decided, one way or the other, in the coming days.
Doug puts forward these issues:

• Lack of consultation
• The large increase in cost
• The requirement of funds for other projects

The funds for the new building may come from Port Otago dividends, but it is not true to say that this spending does not affect rates. The dividends could just as easily be used to cover other spending which is ratepayer funded.

We do not need a palace for bureaucrats and politicians.

Reponse From Rodney Hide

I have had a response from Minister of Local Government, Rodney Hide to my email opposing Government funding for the Stadium.
It includes this : "We have deliberately set a very high threshold for publicly funded infrastructure projects. We will not commit public funds to projects that do not make an enduring contribution to the economy and our national productivity".
Rodney cannot be suggesting that the Stadium would pass this test, can he?
It almost implies that the Government is going to refuse to contribute to the Stadium.

Dunedin Politicians Debate Online

It is good to see two Dunedin politicians joining the online debate.

Richard Walls on the ODT site discusses Carisbrook crowds.

Sacked Otago District Health Board Chairman, Richard Thomson argues his case on Kiwiblog. He he has come out strongly as a Labour man and he has admitted that this is one of the reasons that he was appointed. The Government is entitled to appoint someone in whom they have confidence. The way Thomson has acted in the last few weeks shows that he could not have the confidence of a National Government.

National Business Review Gives Stadium Figures

Today's National Business Review has an article on the Stadium with information that I have not seen published elsewhere. Unfortunately, it is not on-line, but here is a portion:

Athol Stephens said that the effect on forecast dividends to the Council remained the same as forecast in March last year - a reduction of $5 million.
This was achieved because while the amount of debt taken on by the council-owned companies to help fund the project had increased from $92.3 million to $108.8 million, the 2% cut in interest (from 9% to 7%) would make a "material difference" to their ability to service it.
Mainly because of the reduction in interest rates, the average residential property in Dunedin would pay no more than the originally anticipated $66 a year in general rates to fund the stadium, Mr Stephens said.

By my calculations:
$92.3 million borrowed for 20 years at 9% means about $10 million a year payment.
$108.8 million borrowed for 20 years at 7% also means about $10 million a year payment.

Because interest rates have dropped, the Council can borrow the increased amount required while still making the same $10 million a year payment on the loan (includes interest and capital repayment).

Note that $5 million of the $10 million is coming from rates, the other $5 million comes from Dunedin City Holdings Ltd. Without the Stadium, the dividend to the Council could be increased by $5 million rather than being reduced by $5 million, and rates decreased by $66 a year rather increased by $66 a year. The effective of this Stadium loan is that rates will be $132 a year more than they would have been without the Stadium.

By the way, why is that the National Business Review's Dunedin correspondent, Mark Pearl, consistently providing better analysis of Dunedin issues than is found in the Otago Daily Times.

Cost Cuts Keep Auckland Rates Rise At 2%

I hope that this does give Peter Chin and the Dunedin City Council an idea.

Mr Banks said cost-cutting extended to a freeze on staff wage and salary increases, and a demand for council consultants, contractors and suppliers to "sharpen their pencils" if they wanted to keep the council's custom.

Bernard Darton on Stadium

Ex-Dunedinite Bernard Darton writes on the Stadium.

When politicians suggest these grandiose schemes, I always think of Sapurmurat Niyazov, the recently dead president of Turkmenistan. He wrote his own sequel to the Koran, renamed months of the year after himself, and erected an enormous gold statue of himself in the centre of Ashgabat, the country’s capital. The statue slowly rotated during the day so that the sun always shone on his face. And it cost less than a new rugby stadium.

I hope that doesn't give Peter Chin, or Malcolm Farry, an idea.

Roger Kerr on Stadium

At last, the proposed new Dunedin Stadium is getting national attention.
This time it is Roger Kerr writing an article, suggesting that it should not be built without a referendum.
He may be a bit late: the Otago Regional Council today supported contributing to the Stadium, subject to the Government also chipping in.

Bernard Hickey Down On Stadium

Leading economist, Bernard Hickey, has a scathing article on the Stadium.

The Carisbrook Stadium Trust has failed in it's primary objectives:
To build the Stadium for $188 million, and to raise the required money.

But the Dunedin City Council is carrying on regardless. The $25 million deal with the Government looks as though it is on, to cover the $7 million increase in land cost, the $3 million missing from the Community Trust of Otago, and the $15 million shortfall in private funding. There will be no relief for Dunedin ratepayers.

I expect the Regional Council to rubber-stamp the deal tomorrow.

ODT slags "Blogosphere"

Today's editorial on the Stadium in the Otago Daily Times includes:

During the past two years, some of the letters received by this newspaper, many unsigned, some of the various diatribes published on the "blogosphere", again made with the protection of anonymity, and the utterings of some who have descended to schoolyard behaviour over personalities, have been nothing short of a disgrace.

I am not sure what they mean by the "blogosphere" because there is very little blogging in Dunedin. Perhaps they mean the "Stop The Stadium" web-site. In any case, anonymity in blogging, or issue, sites is unusual. Even if a pseudonym is used, the writer's real name is readily available.

The ODT continues:

We would argue such attacks have been, at least in part, fuelled by a vacuum of forthright leadership from various officials and representatives during the debate.

The accompanying lack of hard facts - even if that is only a perception - in the public arena has resulted in a cacaphony of emotional outbursts both for and against the stadium as predictable as they were, in many cases, objectionable.

Perhaps the ODT would have been fulfilling it's role better if it had done some analysis of the Stadium project rather than just reporting the spin from the Carisbrook Stadium Trust and the Council. Blogs have helped fill the vacuum. And it is notable that some of the best reporting on the Stadium issue has come from the national weekly, the National Business Review. To give the ODT credit, they have printed opinion pieces from writers such as Calvin Oaten and Peter Entwhistle.

Carisbrook Sale Bailout For Otago Rugby

The agreed purchase of Carisbrook by the Dunedin City Council is unnecessary for the new Stadium, but it does get the Otago Rugby Football Union out of a financial bind. Otago Rugby has made substantial losses over recent years and this will enable it to repay it's debts.

But how much will it cost the City Council to cover the loss in operating Carisbrook and renting it to Otago Rugby?

And will the sale go ahead even if the new Stadium is not built?

National Bloggers On ODHB Fraud

Accountability in the Otago District Health Board over the $17 fraud by the former CIO, Michael Swann, has attracted the attention of national bloggers:

Why the Otago District Health Board Chair and CEO should be sacked in Kiwiblog

Health board head expects minister to give him sack in Whale Oil Beef Hooked

Calvin Explains Stadium Funding

Calvin Oaten has done an excellent analysis of the Stadium funding.
Proponents claim that the Stadium will not cost more than $66 a year for the average household.
But Calvin shows that the Stadium will also reduce the income the City receives from Dunedin City Holdings by $11 million a year, which will have to be made up for from rates.
The effective cost to the average household is actually over $300 a year.

ODT calls for Every Dollar to Count

A good editorial in the ODT today:

But nevertheless, now is the time for councillors, the mayor and the chief executive to show effective leadership, and to overhaul council operations so they are lean, efficient and focused - so that every dollar spent and borrowed does indeed count.
Every single private business in the city and most householders are doing just that, so why should local government be the exception? Now is the time to halt the ongoing march of rates increases.

I am not holding my breath for the Dunedin City Council to take any notice.

DCC Rates Increase Gets Bigger

The recent Dunedin City Council budget hearings have resulted in the proposed rates increase for next year rising from 6.7% to 7.8%. Suggestions for reducing spending have come to nothing and instead new spending has been added.

But Councilor Guest did speak some sense (from the ODT):

He began voicing a long list of council departments and estimates receiving "phenomenal increases" - something that took several minutes and prompted Mayor Chin to interject. Cr Guest urged councillors to focus on those areas, saying the final rates increase could be reduced by as much as 3% if they did.

It will be interesting to see if anything comes of this when the hearing resume on February 2.

Projected rates rises for the following years are 10.4%, 9.3% and 9.4%. These are driven by major spending on the Town Hall project, Sewerage Treatment and the Stadium. Unless some serious economies are made, Ratepayers are in for an unhappy time.

Government $25 million for Stadium ?

A source in the building industry tells me that the Government is expected to agree to give $25 million towards the new Stadium.
This makes sense : the Government is looking for infra-structure projects which are ready-to-go, to spend money on so it looks as though it is "doing something" about the economic situation.
This Government money will not reduce the burden on Dunedin ratepayers : it will merely fill in the hole left by the failure of private fund-raising.

Holiday Road Trip

I'm just back in Dunedin after visiting family and holidaying in Nelson and the Kapiti Coast. Things which stood out on my travels:

• The thriving crops and green grass throughout the South Island. It is a most productive Season.
• The traffic-jams on the Kapiti Coast: "Stuck in the traffic in Paraparaumu". The loss in productivity from inadequate highways is enormous. Let's hope that the new Government's infrastructure spending will help.
• The beauty of the Lewis Pass, Nelson, Golden Bay and the Marlborough Sounds.
• A renewed appreciation of Dunedin: the hills, the Harbour and the fine sands and fine dining at St Clair beach. If only it was just a little warmer.