Allegations and threats flew when a Dunedin City Council
meeting erupted yesterday over claims the organisation was
relying on millions of dollars in loans to keep rates down.
Cr Lee Vandervis began a verbal melee at yesterday's meeting
by claiming borrowing by Dunedin City Holdings Ltd continued
to offset council rates.
The suggestion was quickly rejected by DCHL chairman Denham
Shale, who last night confirmed to the Otago Daily Times the
practice had ceased under the company's new board as of July
"Under our reign there will be no borrowing to pay
Cr Vandervis had earlier told yesterday's meeting the council
holding company would borrow $6 million to help fund dividend
payments to the council in the 2012-13 year.
The council would also draw another $3 million from the
Waipori Fund in the same period, and taking money from other
"places it doesn't exist".
Without the "smoke and mirrors", the council's rates rise for
2012-13 would be much higher than the 5% agreed during budget
"We don't have a 5% rates increase this year. We have a 14%
rates increase," Cr Vandervis said.
His claims prompted heated exchanges.
Mayor Dave Cull labelled the suggestions "untrue".
Cr Kate Wilson went further, denying the council was
engaged in "trickery" and describing Cr Vandervis' comments as
"The word liar is an open invitation for defamation," Cr
Cr Wilson was forced to apologise after Mr Cull chastised her
"unfortunate" choice of words, but she remained concerned the
efforts of council staff in trimming costs to keep rates down
was being called into question.
She stressed Cr Vandervis' claims were "not the accepted
Cr Syd Brown, chairman of the finance, strategy and
development committee, said the community should be reassured
the 5% rates increase had been struck for 2012-13.
That followed a democratic process accepted by councillors,
which had also been "given the all clear" by Audit New
Zealand, he said.
He also reassured councillors DCHL had committed to paying
dividend payments without borrowing to do so.
Mr Shale's confirmation of that was the first time the
company had acknowledged that borrowing for dividends
payments had ceased.
The company had earlier reduced its annual dividend from
$18.2 million to $15.7 million, beginning in the 2012-13 year.
DCHL chief executive Bevan Dodds said last year loans would
still be needed to part-fund dividend payments, and in June
this year refused to confirm or deny that would continue.
Councillors yesterday signed off on reports on the Waipori
Fund, Dunedin Venues Ltd and Dunedin Venues Management Ltd,
already presented to last month's finance, strategy and
Cr Vandervis said the council appeared not to have learned
the lessons of the PricewaterhouseCoopers report into Forsyth
Barr Stadium costs, which criticised overly complicated
financial reports to councillors.
That practice appeared to be continuing, he said.
Councillors voted to accept the reports, with Crs Vandervis
and Teresa Stevenson voting against.