Delta 'out of control'

Dunedin City Council-owned company Delta has been slammed as "out-of-control" after the revelation the number of its staff paid more than $100,000 annually has almost tripled  since 2008.

The infrastructure company’s annual reports revealed since 2008 the pay packet of its chief executive had increased from $320,001 to  $520,000.

The same reports show the number of staff earning more than $100,000 had risen  from 25 (or 4.52% of staff) in 2008 to 70 (12.24%) in 2015.

Cr Lee Vandervis says the increase was yet more evidence Delta was "out of control", after it  made poor decisions costing ratepayers millions over its involvements in Jack’s Point, Luggate and Yaldhurst subdivisions.

However, Delta capability and risk general manager Matt Ballard said the increase in numbers earning more than $100,000 was a result of "wage inflation, customer growth and business requirements for highly-skilled and qualified specialists, primarily in the electricity distribution sector".

"Delta’s executive remuneration is governed by the Board Remuneration Committee in accordance with company remuneration policy and in line with market benchmarks."

Cr Vandervis said the increases were part of a wider problem at the company.

"They are supposed to be a council-controlled organisation, but they better fit the description of a council-controlling organisation.

"They have continued to become even more top-heavy than they were to begin with and continued to pay themselves enormous amounts of money."

He believed the only solution was to sell  Delta, along with  sister company Aurora Energy.

"If we are able to sell Aurora and Delta, not only will those organisations benefit greatly from genuine business-orientated management, but the proceeds will help reduce the horrendous debt [the city has]."

A report tabled at a council meeting earlier this year estimated Aurora Energy was worth $200million to $275million, and Delta $45million to $60million.

Mayor Dave Cull said he had received an assurance from Dunedin City Holdings Ltd (DCHL), which oversees Delta and other council-controlled companies, that the processes used to set pay levels were appropriate and within industry guidelines.

He had also received an assurance DCHL was actively monitoring and expecting cost constraints within council-owned companies.

This meant he was confident pay levels at Delta were in line with similar organisations.

He did not accept Cr Vandervis’ assessment of Delta’s performance, but even if it was not performing the solution would be to "sort it out" rather than sell it.

Mr Ballard said in the eight years from 2008 its business grew 24% by revenue, and the mix of its business services changed.

In the same period, wage inflation stood at 19.6% and most of the staff earning more than $100,000 were in the $100,000 to $140,000 bands.

Delta managed electricity networks in Dunedin and Central Otago for  sister company Aurora Energy, and maintained the electricity networks in Nelson and Tasman.

"For this, we employ highly skilled and qualified specialists with specific industry and technical knowledge and experience.

"We often compete for these staff in an international market."

Delta chief executive Grady Cameron’s pay was benchmarked against the competition, which was necessary to "attract the right people".

"Employee remuneration, including the chief executive’s, is in line with market benchmarks."

● As of 2015, Delta employed 572 full-time equivalent staff.

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