Sparks flew as Mayor Dave Cull and Cr Lee Vandervis
clashed repeatedly over debt and dividends at yesterday's
Dunedin City Council meeting.
In what at times resembled a running battle, an angry Mr Cull
eventually accused Cr Vandervis of giving in to his
"obsession" and threatened to prevent him from speaking.
The pair found themselves at loggerheads over reports
detailing Dunedin City Holdings Ltd's latest financial
results and the council's annual report.
DCHL recorded a $5 million loss, but still delivered $23.2
million in dividends, interest and subvention payments to the
council and Dunedin Venues Ltd.
Cr Vandervis attacked the figures at yesterday's meeting,
claiming the entire $23.2 million - which helped keep council
rates increases to a minimum - had been funded from loans.
That was because DCHL's distribution "pretty much" matched
new borrowing recorded on the companies' books during the
same period, he argued.
Without it, the council's 4.9% rates rise would actually be
25%, he claimed.
That prompted Mr Cull to interject, warning Cr Vandervis to
"stick to the facts", as his claims were "not true" and
impugned the integrity of those writing the reports.
Cr Vandervis persisted, prompting another retort from Mr
Cull, who pointed out borrowing by DCHL or its companies did
not mean the loans were used only to fund dividends.
"I warn you, you are putting falsehoods in front of the
public and I won't have it," the Mayor said.
Cr Vandervis continued, saying an absence of clear
information in the reports made it "extremely difficult" for
ratepayers to assess the finances of the companies and the
council. He appealed for help from Audit New Zealand audit
director Ian Lothian, who was seated with council staff, saying
the council had a "severe problem" presenting information.
Mr Lothian did not reply, but Cr Richard Thomson did,
attacking Cr Vandervis' analysis as "so simplistic as to be
misleading" before reading out a page in DCHL's report
detailing company debt figures.
Yesterday's exchanges came two months after Cr Vandervis made
similar claims DCHL was continuing to borrow for its dividend
payments. The suggestion was ruled out at the time by DCHL
chairman Denham Shale, who said the practice ceased on July
1, making this financial year the first without debt-funded
He reiterated that position when presenting DCHL's results to
media last week, although Mr Cull yesterday conceded it was
clear some of the last $23.2 million distribution was
He did not say how much, but described it as a "relatively
insignificant amount" compared with Cr Vandervis' claims.
Councillors voted to accept the DCHL report, but the heated
exchanges continued when discussion turned to the council's
2011-12 annual report. It stated consolidated council
debtreached $616 million by June 30 but was to start falling
Cr Vandervis labelled the claims "overly optimistic or
outright blind", as debt levels would actually remain almost
flat initially before declining after "two or three" years.
After that, debt repayment would depend on the future
decisions of councillors.
Cr Vandervis' critique continued as he turned to the rest of
the report's contents, but Mr Cull appeared to have had
enough. He interjected again, warning Cr Vandervis for
straying off-topic and threatened to curtail his speaking
"Your obsession is getting the better of you," Mr Cull said.
"Now, last chance."
Cr Vandervis instead opted to take his seat, leaving other
councillors to praise the report, which Mr Cull said showed
the council had confronted debt and other challenges and had
a lot to be proud of.
Mr Cull concluded with one last parting shot directed at Cr
Vandervis claiming a 25% rates rise had been disguised by
DCHL borrowing. Any rates increase, he said, was what people
ended up paying.
"They are paying 4.9%. That's it."