Good reason for concern

Dunedin City Council critic CalvinOaten, of Pine Hill, backs Cr Hilary Calvert over Mayor Dave Cull in her assessment of council-owned company accountability.

Cr Hilary Calvert (ODT, 13.4.15) expressed concerns councillors were being excluded from the full picture regarding the health of the operations of the various subsidiaries which were in turn overseen by Dunedin City Holdings.

Therefore, they were unable to perform duty of care to the ratepayers.

She cited the instance when they were invited to a meeting for their opinions on the ''statement of intent'' proposed for 2015-16 for the group.

This was designated a secret meeting, meaning they are unable to disclose the details. That of course leaves the shareholders - the ratepayers - none the wiser.

Mayor Dave Cull (ODT, 17.4.15) rejected Cr Calvert's comments saying they were ''factually wrong''.

He then says what is more worrying is the potential damage to the value of ratepayer assets such misrepresentation can cause.

That can only be seen as a rebuke.

But is this fair?

Let's look at Delta as an example.

Cr Calvert says in its ''statement of intent'' Delta indicates it will expand and grow its business, but councillors have no useful mechanism to express any concern they might have as to whether they were disappointed in its last foray into growth and may prefer it does not try again.

Is it growing?

If we look at the year-end 2014 report we see Delta had completed its exit from its water and civil construction operations during the year, and also entered into unconditional contracts for the sale of its remaining development properties.

With the removal of these activities, Delta can now concentrate on its core activities, which will have a positive impact on the profitability of the group as a whole.

Does this tell of an expanding growth business?

It is public knowledge the property participation resulted in losses of several million dollars being written off.

Revenue for 2014 was $96.6 million with a net profit of $4.4 million, compared with 2013's $104.233 million and $4.675 profit.

For 2012 the figures are $108.633 million and a loss of $5.880 million because of the property deals.

Costs of operations don't impress either, with 66 staff receiving incomes of $100,000 a year and up to one receiving $480,000, the total in this band being $7.5 million alone.

Mayor Dave Cull says these historic problems lay at the feet of the previous Delta board.

All in all, it would appear that Cr Calvert was correct to have her reservations and the mayor is somewhat disingenuous in his dismissing her as likely to damage the values of an already shrinking asset.

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