$11m dividend to council expected

Photo: ODT files
Photo: ODT files
The Dunedin City Holdings Ltd trading companies will be expected to make an $11 million dividend to the city council in the 2024-25 financial year.

This will be supplemented by a $5.9m interest payment to make a total annual distribution of $16.9m.

The Dunedin City Council this week approved a draft letter of expectations to the DCHL board, which also included comment about climate change.

"The council supports the approach that DCHL is taking to become net carbon-zero as a group initially.

"However, DCHL must not lose sight of the goal of each company achieving the 2030 target."

Cr Lee Vandervis was content with the part of the messaging that related to the dividend request.

"In a way, it’s a shot over their bow to remind them what they’re actually here for," he said.

Group activities range from forestry and providing an electricity network to managing Forsyth Barr Stadium and hosting events.

Its major trading companies are Aurora Energy, Delta Utility Services and City Forests and it owns half of Dunedin Airport.

Cr Vandervis, who chairs the council’s finance and council-controlled organisations committee, noted a lack of dividends generated in recent years.

"The dividend that we’ve asked for ... of $11m is not a commercial return," he said.

"It’d need to be something nearer $45m or $50m to be a commercial return, but it’s a start," Cr Vandervis said.

He was opposed to the companies being saddled with "unreasonable" provisions about climate change, Cr Vandervis said.

The companies were essentially being asked to do the impossible, by producing a dividend on the one hand and "then not being able to run their businesses efficiently on the other".

Cr Vandervis voted against approving the letter of expectations, because of the climate change clauses.

Cr Carmen Houlahan said achieving carbon-zero would be challenging for some of the businesses, "but all we can hope for is that they try".

"I think it’s fair for us to put an expectation there."

Dunedin Mayor Jules Radich said the companies were being asked to contribute to the council’s zero-carbon work programme, which was not the same as issuing a "harsh impost".

Mr Radich said the companies existed to serve the council and ratepayers.

"They are there to be investments for council and the ratepayers and make a return."

The group of companies was also requested to deliver an $11m dividend from the current financial year, as well as $5.9m in interest.

For the 2022-23 year, DCHL provided a dividend of $5.5m to the council, and $5.9m in interest.

DCHL chairman Keith Cooper said in October this was a good result for ratepayers.

"We are working hard not just to lift the performance of our companies, but to ensure they’re performing for all our residents."