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Opinion: City Chatter by Nobby Clark

Jun 07, 2019
2522 Views

Opinion: The great news is that by a one vote majority, ICC Councillors have voted that after the next elections, no Councillor can also hold a directorship in the Council owned HoldCo.
This is a reversal of a previous vote.
But before we think it puts to rest what many ratepayers see is a conflict of interest and excessive fees over and above their Councillor fees, this could yet be reversed again.

There is nothing to stop the new Councillors elected after this year’s local body elections to vote again. The best way to stop this is to not vote for the current bunch of Councillors who have continued to be in favour of these directorships or abstained from voting at the last vote.

They were Mayor Shadbolt and Councillors Thomas, Ludlow, Lewis, Karen Arnold and Soper. It is worthy to note that Shadbolt, Thomas, Ludlow, Lewis and until her bankruptcy recently, Karen Arnold, all hold fee paying Directorships and did not vote to remove them.
The next major issue for our city is the public consultation on whether ICC should invest in the CBD project (City Block project).

It is the view of our group that ICC should not be involved, given their disastrous track record with the Don Street project and Awarua Industrial Park non-development.
Having said that, we believe ICC will forge ahead anyway with this project and invest $30m by way of a loan, with ‘interest only’ annual repayments of $900,000.

In an ICC response to a question from me, I can advise that while stages 1,2 and 3 will start to have a positive cash flow by 2022, ICC will accommodate the needs of other investors and not get any positive cash flow returns until 2029. This is a worry.
So, our group has come to a ‘middle of the road’ approach to this. We will support the investment only if there is absolutely no increase to our annual rates from what has already been a determined increase set for 5 years.

We do not accept the ICC position that because HoldCo is cash strapped and withholding $2m, that any development automatically falls on to a rate increase for ratepayers.
Added to the City Block need for funding, is a potential additional $300,000 annual funding for Stadium Southland. This would add a further $3m over 10 years.

Our view is that rate increases should be the ‘last resort’ for funding projects and new initiatives, not the easy, first and only option.
We believe ICC should look at other options and get their house in order.

I presented the following list of funding options to our group recently, as how that $12m could be funded:

  • Cancel the strengthening of the Water Tower as Cr Thomas admitted that his committee has “yet to decide what public access there will be, after strengthening, if any” – this will save $1.3m
  • Use the funds currently in the Animal Services reserves – $250,000
  • Collapse the Invercargill City Property company as it achieved no returns and has cost us Directors fees.
  • Collapse HoldCo, removing 6 Directorships and the acting General Manager costs. Get the Airport and Electricity companies to report directly to the ICC Finance Committee quarterly – this saves $300,000 a year or $3m over the 10 years
  • Reduce staffing at ICC by 2% – that means holding vacant 6-7 of the 325 staff positions for 10 years – this saves at least $3.0m over the 10 years
  • Recover a majority of the $5.45m already spent by ICC in purchasing the land and buildings for demolition in the City Block project (Council have advised this will occur post demolition) – returns $5.0m
  • Sell Awarua Industrial Park farming land between City and Bluff. We assume that the land should be worth more than the $9.5m originally paid for the land and the $9.1m debt still owing, 13 years later.

This also removes the current $250,000 loss occurring each year – thus saving $2.5m over 10 years. This list of savings would provide $14.6m and is well above the $12m needed for the City Block project and additional funding for Stadium Southland.
These options do not include the latest announcement that ICC is to sell it’s forestry estate which should provide many millions in income, for projects that are in the 10 year Long Term Plan.

So, there is no need to push rates up, not once but twice, beyond what they have already increased our rates by for next year.
They just need to trim their cloth accordingly and better manage their existing financial debts or drains on funding.

One hopes that by now, we will know that ICC has listened to the wishes of it’s ratepayers and given the WasteNet (Recycling) contract back to Southland DisAbility Enterprises, thus keeping 82 of our citizens in employment and with a sense of community belonging. If that is not so, we should ensure there are unemployed around the top table at Town Hall, come election time.

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