Monday, August 23, 2010


Dunedin is wonderful city, with a fantastic future. But right now that future is vulnerable: vulnerable economically, environmentally and socially. Dunedin’s community has never been more disillusioned with how Council makes decisions, how it listens, or not, to the community, how Council takes responsibility, or not, for major spending decisions with long-term consequences. These are consequences that include maxing out Councils and Council company debt, so that the companies may not be able to pay expected dividends to the ratepayers in the next few years! It is that bad.

The challenges ahead are considerable. But we can achieve that fantastic future. We have to. We can achieve it if we replace secrecy with transparent processes and provide responsible leadership that listens and is up-front with the community about debt and costs. If we do that we can turn disillusion into a shared and inclusive vision for the city.

So imagine what YOU want Dunedin to be like in 20 years.

Imagine Dunedin with:
• a thriving economy featuring high value jobs and businesses that keep families living here
• suburbs of well-built, healthy houses
• streets of beautiful, rejuvenated heritage buildings being put to productive use
• renewable resources being utilized for lower cost energy.
• measures already taken to address climate change and peak oil
• well maintained civic amenities not saddled by a mountain of debt that ratepayers have to repay
• top notch infrastructure including comprehensive Broadband coverage everywhere
• a smooth coordinated public transport system and cycle and pedestrian network
• an accessible and well-protected surrounding environment full of nature’s treasures

Previous Councils and this current one, have not tried to imagine such a future and not planned to achieve it. They have ticked the boxes of bland Council vision statements, reacted to pet ideas dished up by special interest groups, and lurched from one to the next, piling a huge debt on all our shoulders in the process. At the same time some of our suburbs are mouldering from neglect; our digital infrastructure is falling behind other NZ communities; jobs are ebbing away and families are leaving for greener pastures.

I and my team want to help turn that all around. We want to take our city’s future back. There have been three Greater Dunedin Councillors on Council this past term. It hasn’t been enough to achieve what was needed. So I have brought together a team of talented, intelligent candidates with a diverse range of interests and experiences, but with one common goal – working together for our City’s future!

I am offering myself for the mayoralty. My colleagues are putting themselves forward for Council. There is a lot to be done. There are many community voices to be listened to, young and old.

For the community’s sake, for your children’s future, you need to vote our team in to replace this Council. Dunedin needs new blood, new thinking, new energy, new people.

Vote for a Greater Dunedin Mayor and Council

Wednesday, August 18, 2010

Plastic and energy

The machine developed for turning plastic waste into bricks is a great example of turning action that MUST be taken for the environment, into a business opportunity. It's like recycling waste heat and saving on electricity costs. Dunedin City Council Energy manager Neville Auton is already working on a few innovative ideas for creating enormous savings and efficiencies in Council operations. We need them! Indeed energy and its cost should be a focus of Council thinking into the future. It is one of only a few variables that determine the viability of businesses, industries and communities and will become much more important as energy costs inevitably rise. If Dunedin could get into a situation where our energy was not only increasingly renewable, but its costs were lower than other centres that would give us a competitive advantage in attracting businesses and residents.
It should be part of our long term vision for the city.

Tuesday, August 17, 2010

Fighting Yesterday’s Battles. But what about tomorrow?

Fighting Yesterday’s Battles. But what about tomorrow?

As the election approaches there is a predictable but undiscriminating rush of blood to the head in some quarters about the new stadium. Old accusations and grudges are dusted off, trotted out and sprayed around like effluent on a Southland dairy farm. Oddly, or perhaps not so oddly, given the motivation of some commentators, Councillors on both sides of the argument are targeted. Individual Council decisions and votes are reprised, omissions or even comments are dug up as evidence of Councillor neglect, incompetence and even virtual criminality.
As a Councillor who opposed public funding, and the debt it entailed for the Forbar stadium, I am comfortable with the stands I took, the votes I cast and the statements I made. I am comfortable with my nearly six hours of arguing against proceeding on March 17th 2008, with casting an emphatic “no” vote on Feb 9th when the definitive vote to proceed was taken. I am comfortable that with Councillors Staynes and Wilson we personally contributed or sourced over $2,000 for the independent University of Otago Marketing Dept public opinion survey that concluded a clear majority in the Dunedin community did not want to pay for the stadium, and comfortable with trying to convince the rest of Council to listen to that. I am comfortable with what I said to 1,800 people at the Town Hall meeting on the stadium issue. Indeed some of my predictions then are now being vindicated.
What I regret is that we didn’t have the numbers in Council. Council decisions always come down to numbers: to having a majority or not. I, we, could not convince our Councillor colleagues of the reckless folly of what they were doing.

But that is in the past. The stadium is being built. What concerns me now is the future. That decision, and the debt it entailed, particularly on top of already committed debt for other projects, has taken Dunedin City to the brink: to the limit of its credit. Neither the Council nor the Council companies on which the debt was loaded, are in a position to borrow any more. That is a concern because we don’t know what is around the corner: what else we may have to spend on at a moment’s notice, like the Middle Beach sand dunes or flooding in South Dunedin for instance. It is a concern because the community has other aspiring projects like the South Dunedin Library and a new pool for Mosgiel that are now threatened. On top of all that is the real likelihood of operating losses at the stadium, and what they would do to rates rises. They wouldn’t bring rates down.
So the incoming Council faces an enormous challenge to cut costs, limit on-going losses after the stadium is completed and still take the city and the community forward with all of the other things that Dunedin needs to progress. What will it take to have some hope of achieving that? It will take a Council that is disciplined, innovative and united in its resolve. It will take thoughtful imagination and tough decisions. It will take a Council in which the majority of Councillors can cooperate and reach consensus on a way forward: a Council that can achieve the numbers.
Clearly the current Mayor and the bulk of Council do not fit that description. After all, its majority decisions are what got the city in the bind it is, with the debt it carries and the massive rates rises that are projected. Council abdicated responsibility for investigation and development of the stadium project to a self-appointed and self-interested Carisbrook Stadium Trust, and following from the front, the Mayor led most of Council behind them.
Just as clearly only changing the Mayor would not be enough. The Mayor has only one vote. That is particularly the case with a Mayor who couldn’t foster consensus and collegial decision-making in Council: an aspiring mayor who by his own admission is not a team player: a man who has always alienated rather than united: leading from behind. It would not matter who was elected to Council under such a Mayor. It would be dysfunctional.

Greater Dunedin offers a diverse team of independent thinking but collegial Council candidates and a Mayor, myself, committed to achieving a vision going forward by consensus building. That is the only way on offer that Dunedin can settle to the task of drawing back from the brink, regrouping and going forward to what has to be a challenging but bright future. Greater Dunedin is not a party. We share principles, aims and aspirations, but not strait-jacket policies. There is plenty of room for difference but a will for cooperation.

During my term on Council I have chaired the Digital Strategy and the Harbour Cone Steering Groups. Both contained Councillors, Council staff and community and stakeholder representatives. Both consulted widely and genuinely with the community. Both produced strategies that have won wide acceptance, approval and enthusiastic support. Building consensus produced great results.

The die is cast with the stadium. It is being built. Dunedin carries the debt for that. We could beat our chests and swear vengeance on those responsible. We could determine to make sure the project fails completely and costs the ratepayers millions more. Or we can sum up the challenges, address what has to be done and collectively with the community develop a bright vision for Dunedin’s future. The future for our kids in an even Greater Dunedin.

Monday, August 16, 2010


I received my first campaign donation the other day, unsolicited and from friends. It is a greatly appreciated supplement to the considerable funds that I and my Greater Dunedin colleagues have to provide to mount a serious campaign for Council. I’m touched to have that faith shown in me and my team. It underlines the responsibility our effort involves. It reminded me how important it is to so many people in the community that we get a sense of responsibility and openness back into Council, that we unite the community with a positive vision for the future. That will also involve the hard work of reducing costs and rate rises while maintaining services, tackling debt and genuinely leverage the city’s assets.It’s a big job a


There’s been a fair bit of comment about Council buying Carisbrook from the ORFU. Criticisms of the purchase include:
• the DCC paid way above a realistic valuation
• it should not have bought the ground at all
Subsequently Council has been consulting the community about what it should do with the property. This has led to the further criticism that if Council didn’t have a use or purpose in mind, why did it buy it?

Shortly after the purchase the rationale presented to the public by DCC CEO Jim Harland was two fold. Council wanted to ensure the financial viability of the ORFU as the main user and therefore main income generator in the Forbar Stadium. Dunedin is short of handy industrial land and Carisbrook is (mostly) zoned industrial. So Council can on-sell to industrial users.

That’s fine but why did the DCC have to be the purchaser? Why couldn’t the ORFU have simply sold on the open market. The ORFU would still have got its money and Carisbrook would still be zoned industrial. Maybe there was concern that the full $7 million that the ORFU needed to cover its debt and still retain sufficient working capital to trade on, would not be obtained.

I did not support the purchase. I felt Council was borrowing enough money already without borrowing more to bail out a fragile business, and I didn’t think we had enough information. I was on the losing side of that vote and it was purchased.

So what is my position now the Council owns Carisbrook? Let’s look at the context. South Dunedin is a depressed area in a number of ways: socially, economically and infrastructurally. I believe that this end of our city already needs some much overdue attention and TLC. Closing down Carisbrook as a sports arena is depriving the area and its community of yet another asset. It is important that whatever replaces it should be a positive asset for the local community. Arguably industries that provide jobs could have benefits but it would be best if the jobs were for the people who live in that area. There are other uses that could be potentially detrimental. Imagine if a developer bought all or part of the site (and there are several parts to it) and applied for Resource Consent to erect mid-size retail premises, a bit like the strip on ex-railway land along southern Cumberland St. Historically Dunedin has not been good at protecting industrial zoned land from retail development. Look at Anderson Bay Road. Retail of just about any kind on the Carisbrook site could potentially harm the retail viability of both the central city retail area and South Dunedin. In fact it could be an economic and town planning disaster for the city. So Council needs to be very careful about what uses it allows the Carisbrook site to be put to. 

Here’s where I see turning a flawed decision into an opportunity. I believe that we should look at Carisbrook in the context of the whole South Dunedin area. And I believe we should look at the area, not now, but as we would like it to be in 20 years time. How might the re-use of Carisbrook contribute to the big picture: the big vision for South Dunedin? There’s no doubt the area will need a drastic overhaul before then. Much of the housing is way past its use-by date. It is mouldering, damp, unhealthy and horrendously expensive to heat. Some of the reticulated infrastructure, like pipe-work is very old. Sea level rise will present enormous challenges and demand innovative solutions for an area that is partly below the high tide level now. Yet it will I believe, remain an important suburb. Being flat and close to the central city, it is ideal for older homeowners. There is potential to re-develop areas more intensively, rationally and sustainably. As energy costs rise a compact city will become even more important. 
The re-use of Carisbrook could contribute significantly to the 20 year vision for South Dunedin. I don’t yet have a preference. Suggested uses include older peoples’ housing, light industrial, training facilities, and retaining the sports complex or part of it. I suspect that the final re-use plan will be a combination of uses. They should be uses that contribute to the big picture of South Dunedin’s future, and the South Dunedin community needs to be intimately involved in painting that picture.

The Debt Mess

A good number of questions and discussions here revolve around the debt mess the new Council will inevitably inherit. It’s actually worse than that, because until the new Council gets to “open the books” we won’t really know what we have to contend with. It’s not like the real situation is ever broadcast, even to Councillors. For example what extra funding demands might appear for the stadium? I’ll address the specifics of that later since the possibilities range from “absolutely essential if the stadium is to operate” to “let’s spend a squillion bringing U2 and the Stones out to promote it!”. Just as important in the long run is whether Council owned companies are being pressured to take on more debt to cover those costs. Ultimately the issues of debt and Council cashflow merge into one toxic brew. Debt, once has been taken on, has to be serviced and repaid. Not something that can be done in a hurry. Even then, if $1 million is retired, the saving to the ratepayer is only some 10% of the principle sum per annum. Reduced operating costs on the other hand, produce immediate relief. Cut a dollar and that’s a full dollar the ratepayer does not have to pay. So a hard look at operating costs will be task number one for the new Council. The trick will be to get the savings from efficiencies and not from cutting services. Providing services is what Council does (or ought to). Cutting services to save the ratepayer money is denying them what they pay rates for. That is not acceptable. We will need to be innovative and it we will need to do it transparently. Fancy that for a change.

The stadium is being built but new concerns keep rearing up.
The most trenchant revolve around predictions that additional money will be requested for the stadium and whether Council should agree to such requests. Let’s be clear. These predictions are valid. More funding requests/needs are surely not far away. Already the building cost has risen $10 million and some $3 million has been allocated to set up Dunedin Venues Management Ltd (DVML): the operating company, and mount opening events. It seems no-one in City Hall realized such things cost money before DVML’s CEO was hired and informed us. In fact extra costs were on the cards from day one, but had they been acknowledged, the total projected cost would have soared past the mythical $188 million and scared even the most ardent supporters. They are still not being made public. That might have something to do with a looming election.

What might further funding be requested for? 
• construction budget blow outs
• extra payments to contractors because of scope changes or delays
• features lopped from the original concept, or “reprioritised” to reduce cost - like artificial pitch reinforcement
• additional facilities and/or services needed to bring the complex up to acceptable standards. E.G. Will our “world class” stadium have enough toilets for a capacity crowd or will it be “Portaloo Village on University Plaza”?
• operational expenses not budgeted for
• an enlarged marketing and promotional budget required to attract events.
• the Highlanders/ORFU needing a financial underwrite to ensure their position as the stadium’s only major income generator.
• suggested add-on facilities to enhance the stadium’s appeal.
• an operating loss for the stadium year after year.
• capitalised interest on borrowing
• any combination of the above.

These run across a spectrum from almost essential if the stadium is to operate, to “nice to have” frills.
Obviously the first question to ask is "Why was this not in the budget in the first place?". Then the benefit versus cost of any spending proposal has to be assessed. What do ratepayers get for the money? But the additional question must be asked, “What will the cost to ratepayers be, if Council decides NOT to spend the money?” Take artificial reinforcement of the playing surface as an example (with hypothetical figures). Imagine that without reinforcement, the pitch can sustain only two first class matches a season, compared with say five needed to produce sufficient revenue for the stadium to cover operating costs. The cost of reinforcement is $1 million. The projected annual loss without it is say $5 million. Many opposed to building the stadium in the first place will argue it is good money after bad, and certainly if reinforcement is necessary the cost should have been included honestly at the planning stage. It wasn’t. Neither were a number of other features. But the decision to reinforce the pitch or not has to be made on the basis of the situation NOW. Simply that is: either spend $1 million of ratepayer money to upgrade the pitch …… or spend $5 million of ratepayer money to cover the losses. That looks a simple choice, but is hypothetical. Reality is likely to be more complex and less predictable. A request for a larger promotional budget to off-set dropping revenue would be much more problematic: much more of a gamble. Operating losses and/or capital spending requirements in the next few years could reach a point where bad money and the good money being thrown after it, become very difficult to distinguish one from the other. In any case, other fledgling (or even core) Council projects cannot be allowed to starve because the stadium cuckoo is swallowing all the fat financial worms, no matter how hungry it is. 
I would oppose any extra funding for the project unless it was absolutely necessary for the stadium to open its doors, and the alternative was even higher on-going costs. It is impossible to categorically say "no more funding" when so much associated with the costs of this project was fudged and even hidden. We simply don't know what is ahead. What we do know is that the stadium is fast approaching completion. It costs money just sitting there. So the sooner it is open and able to earn something to off-set its operating costs the better.

Where any extra money (or borrowing) would come from is also of concern. Council itself is already neck-deep in debt. In addition its demands on its companies have forced them to borrow to pay dividends to Council. The companies are now fast approaching their own debt limits. Worse, the continual draining of their reserves by spendthrift Councils has constrained the companies’ ability to seek investment opportunities. Council’s companies, the geese that have laid golden eggs over years for our ratepayers, cannot grow. For want of capital they cannot expand their operations and thereby their profits. They have no more to give without changing their capitalization ratios to allow them to borrow more. In other words they would have to do what Council has already done: exceed their prudential debt limits. There is already pressure on them to do just that.

The stadium is the most expensive project ever embarked upon by Dunedin’s Council, and it is overwhelmingly funded by debt. It can’t help impacting on financial choices, opportunities and decisions well into the future. In the next few years Council is likely to have very little room for financial manoeuvre. Very hard decisions will have to be made. Foremost among considerations must be how best to limit the cost to ratepayers. The irony is that there will may be demands for spending coming for the stadium, where it is cheaper for the ratepayers to pay up than not. 

Agreeing to every request for spending on stadium extras is plainly untenable. But insisting that no more should be spent on the stadium for any reason whatever is short-sighted too. Either position, held unconditionally, risks costing ratepayers millions more. That is an insidious result of an irresponsible decision to embark on a debt-funded project whose full cost was deliberately obscured, and for which a business case was not made.

To avoid unaffordable rate increases year on year, Council will need to be extremely disciplined in cutting costs. That is a given. Council did not control or take responsibility for the stadium development process. In many areas it has no knowledge of the costs incurred or even who incurred them. As stewards for the ratepayers that is reprehensible. Leadership, discipline, oversight, vision and flexibility will be required. Council must take back responsibility for major issues and projects, review and control them. It must cut operational costs without degrading services. By these means, and by promoting Dunedin’s economic welfare by utilizing local providers of goods and services, the city may start to claw its way out of the debt morass we have been landed in.