Debate emerges periodically about the roles of local councils.
Should they stick to their core roading, water and sewage functions, with allocations for a swimming pool or two, libraries and gardens? Should they extend to museums, art galleries and sports support? Do they spend money encouraging business development? Does their concern include the social health of cities or districts? And, crucially, should they be owning businesses?
The ratepayers of Dunedin have been fortunate their forebears built up assets and created income streams, in particular in electricity. Over the past decade, many millions of dollars have been returned to Dunedin in dividends from Aurora, the lines company, with Delta, the infrastructure business, making good contributions.
In its day, the council's electricity department earned good money for ratepayers, too. Half-owned Dunedin International Airport has mostly been a steady earner and the sale of the Waipori dams created a fund that helped subsidise rates. City Forests has done reasonably well, while never quite - like the forestry industry generally - fulfilling the promise predicted for it.
The council-owned companies have done well when they have had a monopoly, or near-monopoly. Hence, the success of the lines company and the airport. On the flip side, note the losses from Citibus in the years before its sale last year. Without the very shrewdest of senior management, the council company could not compete successfully in what is an intensely competitive area.
It is sometimes suggested private owners are more motivated to keep costs and wages tighter.
Managers answer through boards to owners or shareholders with direct financial stakes, rather than to boards and through them to the shareholding councils responsible for other people's money and not their own. These days, more than ever, many councillors lack business acumen.
There might still be some financial skill on the Dunedin City Council, but it would be less than, say, 20 to 25 years ago. Additionally, councillors by their very nature are political, rather than profit-driven. That affects their thinking, even when they imagine it does not.
What did happen in Dunedin's case is demands for dividends from the council grew to exceed the earning power of the companies, placing pressures on the holding company and the individual companies which were not resisted sufficiently. Council companies were in the invidious positions of borrowing to pay the council. One wonders, too, about other influences exerted directly or indirectly. How much was the setting up, type and capacity of the City Forests sawmill at Milburn, now leased to a Southland company, influenced by outside pressures?
The issue is arising again with news of possible multi-million-dollar writedowns in the value of Delta property investments in Queenstown and Luggate in 2008 and 2009. Even with the benefit of hindsight, one wonders about the wisdom of an infrastructure company extending into what in essence is property speculation.
Real estate prices had already peaked and finance companies had begun falling over. Now, the council-owned company faces either cutting its losses or holding on in the hope that, eventually, section prices might recover enough to recoup more, plus the ongoing financial cost.
Various councils inherited businesses as their works divisions were commercialised.
If they can be made to succeed financially, that is well and good, but any attachment to them needs to be pragmatic and realistic.
Times have changed and business is much more national, international and often either small and more nimble or on scales councils would find hard to match.
If councils have built-in advantages, like preferential tendering, that is unfair. If they do not, they could well find it hard to compete.
Likewise, council-company management and directors should, fundamentally, be careful and conservative when it comes to expansion.
Being prudent with precious ratepayer money is the best course in today's world.
