A raft of possible feedback on Dunedin City Holdings Ltd (DCHL) group companies’ intentions for the coming financial year will be considered at today’s council meeting.
This includes a request for a ‘‘significant increase’’ in DCHL’s dividend to the council for the 2026-27 financial year, ‘‘to help mitigate the proposed increase in rates, in light of the financial pressures currently facing ratepayers’’, a report to councillors said.
The council signalled a 10.5% rates rise in February, based on draft annual budgets.
Last month, following questions from Cr Andrew Simms, DCHL chairman Tim Loan told councillors a $5million dividend from council-controlled company Aurora was feasible, but it had been agreed with its board none would be paid until the company left its customised price-quality path, which was imminent.
The path was put in place by the Commerce Commission in March 2021 to allow the company to recover a set amount of revenue from customers over five years, as it improved its network.
Increased dividends and other draft feedback for DCHL were discussed further at a non-public workshop last week.
Company critic and former Delta employee Richard Healey said he supported the move, although the situation was complex. He said subvention payments — payments from a profitable company to a loss-making company — made by Aurora meant it was ‘‘already coughing’’ to support council operations.
In last year’s annual report, Aurora recorded a $1.4m subvention payment to Dunedin Stadium Properties Ltd, part of $3m in tax compensation payments to group members.
‘‘There are countervailing arguments that Aurora needs the money to reinforce its network, but it’s in a very good position to just borrow what it needs.’’
There was precedent for the request, as Christchurch City Council had made a similar one, although not without strife, he said.
In May 2024, The Press reported four Christchurch City Holdings Ltd board members resigned, citing in-part the council’s demand for $47million in dividends over three years to help ease the rates burden.
Mr Healey said as Aurora operated across Otago, dividends paid by the company would be ‘‘effectively Central Otago and the Lakes District subsidising the rates’’.
Cr Simms said he believed DCHL could deliver planned dividends earlier, in recognition of the ‘‘extreme pressure’’ the community was under.
‘‘I think that’s the intent of the discussion is to tease that out and my view is that that is entirely possible and that it would be entirely appropriate.’’
He said the previously referenced $5m dividend would be appropriate.
